ETC TRANSACTION CORP, S-4/A, 1996-11-13

ETC TRANSACTION CORP
S-4/A, 1996-11-13
MISC HEALTH & ALLIED SERVICES, NEC

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 13, 1996.
REGISTRATION NO. 333-07069

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 2

TO
FORM S-4

REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

ETC TRANSACTION CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
8099 75-2578619
ALBERTA, CANADA (Primary Standard Industrial (I.R.S. Employer
(State or Other Jurisdiction Classification Code Number) Identification No.)
of Incorporation or
Organization)

5025 Arapaho Road, Suite 515
Dallas, Texas 75248
(214) 980-0900
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)

L. CADE HAVARD
Chairman and Chief Executive Officer
ETC TRANSACTION CORPORATION
5025 Arapaho Road, Suite 515
Dallas, Texas 75248
(214) 980-0900
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)

COPIES TO:
Richard B. Goodner, Esq. David M. Goldenberg, Esq.
Looper, Reed, Mark & McGraw Beaumont Church
Incorporated 2200 AGT Tower
4100 Thanksgiving Tower 411 - 1st Street S.E.
1601 Elm Street Calgary, Alberta
Dallas, Texas 75201 Canada T2G 5E7

================================================================================

Approximate date of commencement of proposed sale of the securities
to the public:

AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT AND ONCE ALL CONDITIONS TO THE CONTINUANCE AND DOMESTICATION OF THE
REGISTRANT AS A DELAWARE CORPORATION AND THE MERGER OF ELECTRONIC TRANSMISSION
CORPORATION, A TEXAS CORPORATION, WITH AND INTO THE REGISTRANT PURSUANT TO THE
AGREEMENT AND PLAN OF MERGER DESCRIBED IN THE ENCLOSED PROXY
STATEMENT/PROSPECTUS, HAVE BEEN SATISFIED OR WAIVED.

If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]

CALCULATION OF REGISTRATION FEE

================================================================================
<TABLE>
<CAPTION>
Proposed Maximum
Title of Each Class of Securities Amount to be Offering Price Per Proposed Maximum Amount of
to be Registered Registered(1) Share(2) Aggregate Offering Price(2) Registration Fee(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value 10,949,146 $0.001 $10,949.15 $100.00
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Number of shares of common stock, $0.001 par value, of the Registrant to be
registered on the basis of the exchange ratio for such shares as applicable
to (a) the Registrant's existing shareholders and (b) the shares of common
stock to be issued pursuant to the Agreement and Plan of Merger with
Electronic Transmission Corporation.
(2) Estimated solely for calculation of the Registration Fee.
(3) This amount was previously paid with the initial filing.

Expenses to be incurred by the Registrant, excluding the Registration
Fee, are estimated to be $200,000.

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

The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.

================================================================================

<PAGE> 2
ETC TRANSACTION CORPORATION
5025 Arapaho Road, Suite 515
Dallas, Texas 75248

NOTICE OF THE COMBINED ANNUAL AND SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD ____________________, 1996

NOTICE IS HEREBY GIVEN that the Combined Annual and Special Meeting of
the Shareholders (the "Meeting") of ETC Transaction Corporation (the "Company")
will be held at the offices of Beaumont Church, Barristers and Solicitors, 2200
AGT Tower, 411 - 1st Street S.E., Calgary, Alberta, Canada T2G 5E7 on
____________________, 1996 at 2:00 p.m.
local time for the following purposes, namely:

1. To receive and consider the Annual Audited Financial Statements of the
Company for the fiscal year ended December 31, 1995 and the Auditor's
Report thereon.

2. To elect the directors for the ensuing year and to elect the
replacement directors to serve upon completion of the Continuance and
Merger, as hereinafter defined, if approved.

3. To appoint the auditors to serve until the close of the next annual
meeting of the Company and to authorize the directors to fix the
auditors' remuneration.

4. To consider and, if thought fit, to approve the following special
resolutions having the effect of approving the continuance (the
"Continuance") of the Company into the State of Delaware, U.S.A. The
effectiveness of the Continuance of the Company is expressly
conditioned upon the effectiveness of the merger (the "Merger") of the
Company with Electronic Transmission Corporation, a Texas corporation
("ETC-Texas").

"BE IT RESOLVED, as special resolutions that:

(a) The Company be and is hereby authorized to apply to the
Registrar of Corporations for the Province of Alberta and the
Secretary of State for the State of Delaware for
authorization to continue the Company into the State of
Delaware under section 182 of the Alberta Business
Corporations Act and section 388 of the Delaware General
Corporation Law (the "DGCL") as if the Company had been
incorporated under the DGCL pursuant to section 101 of the
DGCL and amendments thereto;

(b) The Certificate of Domestication and Certificate of
Incorporation under the DGCL (collectively, the "Filing
Documents") in the form presented at the Meeting are hereby
approved;

(c) Subject to acceptance of the filing of the Filing Documents
with the Delaware Secretary of State, the Filing Documents
and form of Bylaws presented at the Meeting are adopted in
substitution for the existing organizational documents of the
Company;

(d) Subject to the shareholders passing the special resolution
approving the amalgamation and merger of the Company with
ETC-Texas, the officers and directors of the Company are
hereby authorized and directed to do such things and to
execute such documents as may be necessary or desirable in
order to effect the continuance of the Company from Alberta
to Delaware; and

(e) The directors of the Company may revoke these resolutions
before they are acted upon without further approval of the
shareholders of the Company."

5. To consider and, if thought fit, to pass the following special
resolutions approving the amalgamation of the Company and ETC-Texas.
The effectiveness of the Merger of the Company and ETC-Texas is
expressly conditioned upon the effectiveness of the Continuance of the
Company into the State of Delaware.

"BE IT RESOLVED, as special resolutions, that:

(a) The Agreement and Plan of Merger (the "Merger Agreement"), to
become effective following the continuance of the Company
into Delaware, between the Company and ETC-Texas, a
corporation incorporated under the laws of the State of
Texas, with or without amendment, and all of the transactions
contemplated thereby, including the amalgamation and merger
of the Company with ETC-Texas, whereby the amalgamated or
survivor corporation shall be domiciled in the State of
Delaware under the name Electronic Transmission Corporation,
all as more particularly described

<PAGE> 3

in the enclosed Joint Proxy Statement/Prospectus and
Information Circular be, and are hereby approved;

(b) Subject to the shareholders of the Company passing the
special resolutions approving the continuance of the Company
from Alberta to Delaware, the officers and directors of the
Company are hereby authorized and directed to do such things
and execute such documents as may be necessary or desirable
in order to give effect to the Merger Agreement; and

(c) The directors of the Company may revoke these resolutions
before they are acted upon without
further approval of the shareholders of the Company."

6. To consider and, if thought fit, to pass the following special
resolution changing the name of the Company to Electronic Transmission
Corporation. The Company's name will not be changed unless the
Continuance of the Company into the State of Delaware and the Merger
of the Company with ETC-Texas are both approved and ratified.

"BE IT RESOLVED, as special resolutions, that:

(a) The name of the Company be changed to Electronic Transmission
Corporation if the shareholders of the Company pass the
special resolutions approving the continuance of the Company
from Alberta to Delaware and the Merger Agreement;

(b) The officers and directors of the Company are hereby
authorized and directed to do such things and execute such
documents as may be necessary or desirable in order to give
effect to the name change; and

(c) The directors of the Company may revoke these resolutions
before they are acted upon without further approval of the
shareholders of the Company."

7. To transact such other business as may properly come before the Meeting
or any adjournments thereof.

TAKE NOTICE that pursuant to the Alberta Business Corporations Act
(the "ABCA") you may until ____________________, 1996 (the day of the Meeting)
give the Company a Notice of Dissent by registered mail addressed to the
Company at c/o Beaumont Church, Barristers and Solicitors, 2200 AGT Tower, 411
1st Street S.E., Calgary, Alberta, Canada T2G 5E7, with respect to the above
special resolutions regarding the continuance of the Company into the State of
Delaware and the amalgamation and merger of the Company with Electronic
Transmission Corporation. Pursuant to section 184 of the ABCA, a dissenting
shareholder is entitled to be paid by the Company the fair value of the shares
held by him in respect of which he dissents, determined at the close of
business on the day before the Meeting. Details of your dissent rights and a
copy of section 184 of the ABCA are contained in the accompanying Joint Proxy
Statement/Prospectus and Information Circular.

All of the matters are more fully described in the accompanying Joint
Proxy Statement/Prospectus and Information Circular accompanying this Notice.
Shareholders of record on the Company's stock transfer records at the close of
business on ____________________, 1996 are entitled to notice of and to vote at
the Meeting or any adjournment thereof. A list of shareholders entitled to vote
at the Meeting will be available for inspection at the offices of Beaumont
Church, Barristers and Solicitors, 2200 AGT Tower, 411 -- 1st Street S.E.,
Calgary, Alberta, Canada T2G 5E7 at least ten (10) days prior to the Meeting.

If you are unable to attend the Meeting in person, please read the Joint
Proxy Statement/Prospectus and Information Circular enclosed herewith and then
complete and return the Proxy within the time set forth in the Joint Proxy
Statement/Prospectus and Information Circular. The enclosed Proxy is solicited
by management.

BY ORDER OF THE BOARD OF DIRECTORS

L. CADE HAVARD
Chairman and Chief Executive Officer

Dallas, Texas
____________________, 1996

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED REPLY ENVELOPE. IF YOU ATTEND THE
MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO SO EVEN THOUGH YOU HAVE SENT
IN YOUR PROXY.

<PAGE> 4
ELECTRONIC TRANSMISSION CORPORATION
5025 Arapaho Road, Suite 515
Dallas, Texas 75248

NOTICE OF SPECIAL SHAREHOLDERS' MEETING
TO BE HELD ____________________, 1996

A Special Shareholders' Meeting (the "ETC-Texas Meeting") of
ELECTRONIC TRANSMISSION CORPORATION, a Texas corporation ("ETC-Texas") will be
held at 5025 Arapaho Road, Suite 515, Dallas, Texas 75248 on
____________________, 1996 at 2:00 p.m., local time, for the following
purposes:

1. To consider and, if thought fit, to approve the following
special resolutions having the effect of approving the merger
of ETC Transaction Corporation, an Alberta, Canada
corporation (the "Company" and sometimes referred to as the
"Surviving Corporation"), with and into ETC-Texas (the
"Merger"). The effectiveness of the Merger is expressly
conditioned on the approval and effectiveness of the
domestication of the Company into the State of Delaware under
the identical name.

"BE IT RESOLVED, as special resolutions, that:

(a) To approve an Agreement and Plan of Merger (the
"Merger Agreement") between ETC-Texas and the
Company, with or without amendment, to become
effective following the continuance and
domestication of the Company into the State of
Delaware, and to approve all of the transactions
contemplated thereby, whereby the Surviving
Corporation shall be domiciled in the State of
Delaware under the name Electronic Transmission
Corporation, all as more particularly described in
the enclosed Joint Proxy Statement/Prospectus and
Information Circular;

(b) The directors of ETC-Texas are authorized to abandon
the Merger Agreement to merge ETC-Texas with the
Company, at any time, if in their sole discretion,
they consider it appropriate to do so, without
further approval of the shareholders of ETC-Texas,
and in such case, the relevant special resolution or
resolutions shall be deemed to have been rescinded;

(c) The effectiveness of the Merger of ETC-Texas with
and into the Company is expressly conditioned upon
the approval and effectiveness of the continuation
and domestication of the Company into the State of
Delaware; and

(d) Any one of the directors or officers be and each is
hereby authorized and directed to do, sign and
execute all instruments, deeds and documents,
including amendments thereof, necessary or desirable
to carry out the foregoing and to affix the
corporate seal as necessary."

2. To transact such other business as may properly come before
the ETC-Texas Meeting and any adjournments thereof.

TAKE NOTICE that pursuant to the Texas Business Corporation Act (the
"TBCA"), you may until ____________________, 1996 (the day of the ETC-Texas
Meeting) give ETC-Texas a notice of dissent by registered mail addressed to
ETC-Texas at 5025 Arapaho Road, Suite 515, Dallas, Texas 75248, Attention:
Secretary, with respect to the above special resolutions. As a result of giving
notice of dissent you may, on receiving notice of intention to act under
Article 5.12 of the TBCA, require ETC-Texas to purchase all your shares in
respect of which the notice of dissent was given. A copy of Articles 5.11, 5.12
and 5.13 of the TBCA is attached to the accompanying Joint Proxy
Statement/Prospectus and Information Circular.

<PAGE> 5

or adjournment thereof. A list of shareholders entitled to vote at the ETC-Texas
Meeting will be available for inspection at ETC-Texas' office, 5025 Arapaho
Road, Suite 515, Dallas, Texas 75248, at least 10 days prior to the ETC-Texas
Meeting.

If you are unable to attend the ETC-Texas Meeting in person, please
read the Joint Proxy Statement/Prospectus and Information Circular enclosed
herewith and then complete and return the Proxy within the time set forth in
the Joint Proxy Statement/Prospectus and Information Circular. The enclosed
Proxy is solicited by management.

BY ORDER OF THE BOARD OF DIRECTORS

L. CADE HAVARD
Chairman, President and Chief Executive Officer

Dallas, Texas
____________________, 1996

WHETHER OR NOT YOU PLAN TO ATTEND THE ETC-TEXAS MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED REPLY
ENVELOPE. IF YOU ATTEND THE ETC-TEXAS MEETING, YOU MAY VOTE IN PERSON IF YOU
WISH TO DO SO EVEN THOUGH YOU HAVE SENT IN YOUR PROXY.
<PAGE> 6

SUBJECT TO COMPLETION, DATED NOVEMBER 13, 1996

ETC TRANSACTION CORPORATION ELECTRONIC TRANSMISSION CORPORATION
(an Alberta, Canada corporation) (a Texas corporation)
5025 Arapaho Road, Suite 515 5025 Arapaho Road, Suite 515
Dallas, Texas 75248 Dallas, Texas 75248

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

JOINT PROXY STATEMENT/PROSPECTUS
INFORMATION CIRCULAR
------------------------

COMBINED ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS OF
ETC TRANSACTION CORPORATION
TO BE HELD ON ____________________, 1996

SPECIAL MEETING OF SHAREHOLDERS OF
ELECTRONIC TRANSMISSION CORPORATION
TO BE HELD ON ____________________, 1996

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

This Joint Proxy Statement/Prospectus and Information Circular ("Proxy
Statement/Prospectus") is being furnished to holders of Class "A" common shares
(the "Company Common Stock") of ETC Transaction Corporation (the "Company"), an
Alberta, Canada corporation, proposed to be domesticated into the State of
Delaware under the name "ETC Transaction Corporation" and subsequently the
merger of Electronic Transmission Corporation, a Texas corporation
("ETC-Texas"), with and into the Company, in connection with the solicitation
of proxies by the Board of Directors of the Company for use at the Combined
Annual and Special Meeting of Shareholders of the Company to be held on
____________________, 1996, at the offices of Beaumont Church, Barristers and
Solicitors, 2200 AGT Tower, 411 -- 1st Street S.E., Calgary, Alberta, Canada
T2G 5E7, commencing at 2:00 p.m., local time, and at any adjournment or
postponement thereof (the "Meeting").

This Proxy Statement/Prospectus is also being furnished to holders of
common stock, no par value, of ETC-Texas (the "ETC-Texas Common Stock"), in
connection with the solicitation of proxies by the Board of Directors of
ETC-Texas related to the merger of ETC-Texas with and into the Company for use
at a Special Meeting of Shareholders of ETC-Texas to be held on
____________________, 1996 at 5025 Arapaho Road, Suite 515, Dallas, Texas
75248, commencing at 2:00 p.m., local time, and at any adjournment or
postponement thereof (the "ETC-Texas Meeting").

At both the Meeting and the ETC-Texas Meeting, the holders of Company
Common Stock and ETC-Texas Common Stock, respectively, will be asked to
consider and vote upon a proposal to approve the merger of ETC-Texas with and
into the Company (the "Merger"), and the Agreement and Plan of Merger dated May
1, 1996, by and among the Company and ETC-Texas (the "Merger Agreement"),
providing for the Merger. Such approval is a condition to the continuance of
the Company into the State of Delaware, U.S.A. (the "Continuance"). In the
Merger (i) each outstanding share of ETC-Texas Common Stock will be converted
automatically into 1.25 shares of the Company's Common Stock, (the "Continued
Common Stock"), (ii) the Company will change its name to Electronic
Transmission Corporation, and (iii) the directors and officers of ETC-Texas
will serve as the directors and officers of the Company as continued into the
State of Delaware, all as more fully described in this Proxy
Statement/Prospectus.

This Proxy Statement/Prospectus constitutes a prospectus of the
Company, with respect to 10,949,146 shares of Continued Common Stock to be
issued in connection with the Continuance and the Merger.
________________________

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" COMMENCING ON PAGE TWELVE OF THIS PROSPECTUS
FOR A DISCUSSION OF CERTAIN FACTORS TO BE CONSIDERED BY INVESTORS.

THE SECURITIES TO BE ISSUED PURSUANT TO THIS JOINT PROXY STATEMENT/PROSPECTUS
AND INFORMATION CIRCULAR HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION NOR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

NO REGULATORY AGENCY OR STOCK EXCHANGE HAS IN ANY WAY PASSED UPON
THE MERITS OF THE TRANSACTIONS DESCRIBED HEREIN AND ANY
REPRESENTATION TO THE CONTRARY IS AN OFFENSE.

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

This Proxy Statement/Prospectus and the accompanying proxy forms are
first being mailed to shareholders of the Company and ETC-Texas, respectively,
on or about ________________, 1996.

The date of this Proxy Statement/Prospectus is _______________, 1996.
<PAGE> 7
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SOLICITATION OF PROXIES AND VOTING REQUIREMENTS . . . . . . . . . . . . . . v

APPOINTMENT AND REVOCATION OF PROXIES . . . . . . . . . . . . . . . . . . . v

VOTING OF SHARES AND EXERCISE OF DISCRETION OF PROXIES . . . . . . . . . . vi

THE MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

THE CONTINUANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

CONSUMMATION OF THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . vi

AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . vii

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Accumulated Deficit and Independent Accountants' Report
Referring to Going Concern Uncertainties . . . . . . . . . 12
Working Capital Deficit; Lack of Liquidity and Capital
Resources . . . . . . . . . . . . . . . . . . . . . . . . 12
Additional Financing Needed . . . . . . . . . . . . . . . . . . . 12
Limited Operating History; Absence of Profits . . . . . . . . . . 12
Probability of Continued Losses . . . . . . . . . . . . . . . . . 12
Dependence on Quality of Claims Processing Services . . . . . . . 13
Dependence on Major Client . . . . . . . . . . . . . . . . . . . . 13
No Fairness Opinion Obtained by Either the Company or
ETC-Texas . . . . . . . . . . . . . . . . . . . . . . . . 13
Interests of Certain Persons in the Merger . . . . . . . . . . . . 13
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Proprietary Rights, Risk of Infringement . . . . . . . . . . . . . 14
Dependence on Key Personnel . . . . . . . . . . . . . . . . . . . 14
Control by Existing Shareholders, Directors and Executive
Officers of ETC-Texas . . . . . . . . . . . . . . . . . . 14
Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . 14
Employee Leasing Agreement . . . . . . . . . . . . . . . . . . . . 15
Consolidation and Uncertainty in the Health Care Industry . . . . 15
Effect of Government Regulation . . . . . . . . . . . . . . . . . 15
Potential Anti-Takeover Effects of Delaware Law, Certificate
of Incorporation and Bylaws . . . . . . . . . . . . . . . 15
No Public Market; Possible Volatility of Stock Price . . . . . . . 16
Over-the-Counter Trading Market . . . . . . . . . . . . . . . . . 16
Risks of Low-Priced Stock . . . . . . . . . . . . . . . . . . . . 16
Limitation of Liability and Indemnification of Officers and
Directors . . . . . . . . . . . . . . . . . . . . . . . . 16
Payment of Dividends . . . . . . . . . . . . . . . . . . . . . . . 17
Prior Offerings . . . . . . . . . . . . . . . . . . . . . . . . . 17

THE CONTINUANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Right of Dissent . . . . . . . . . . . . . . . . . . . . . . . . . 17
Difference Between the Delaware Code and Alberta Business
Corporations Act . . . . . . . . . . . . . . . . . . . . . 18
Certain Canadian Federal Income Tax Consequences of the
Continuance and the Merger . . . . . . . . . . . . . . . . 21
Certain United States Federal Income Tax Consequences of the
Continuance . . . . . . . . . . . . . . . . . . . . . . . 23

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
General Description of the Merger . . . . . . . . . . . . . . . . 24
The Company's Reasons for the Merger; Recommendation of the
Company's Board of Directors . . . . . . . . . . . . . . . 25
ETC-Texas' Reasons for the Merger; Recommendation of
ETC-Texas' Board of Directors . . . . . . . . . . . . . . 26
Interests of Certain Persons in the Merger . . . . . . . . . . . . 26
Employment Arrangements . . . . . . . . . . . . . . . . . . . . . 27
Certain Canadian Federal Income Tax Consequences . . . . . . . . . 27
Certain United States Federal Income Tax Consequences . . . . . . 27
</TABLE>

-ii-
<PAGE> 8

<TABLE>
<S> <C>
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . 27
Rights of Dissenting Shareholders . . . . . . . . . . . . . . . . 28
Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . 30
U.S. Federal Securities Law Consequences . . . . . . . . . . . . . 30
Canadian Securities Law Consequences . . . . . . . . . . . . . . . 30

CERTAIN TERMS OF THE MERGER AGREEMENT . . . . . . . . . . . . . . . . . . . 30
Effective Time of the Merger . . . . . . . . . . . . . . . . . . . 31
Manner and Basis of Converting Shares . . . . . . . . . . . . . . 31
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . 31
Representations and Warranties . . . . . . . . . . . . . . . . . . 32
Certain Covenants; Conduct of Business Prior to the Merger . . . . 32
Certain Post-Merger Matters . . . . . . . . . . . . . . . . . . . 32
Termination or Amendment of the Merger Agreement . . . . . . . . . 33

COMPARISON OF SHAREHOLDERS RIGHTS . . . . . . . . . . . . . . . . . . . . . 33
Preemptive Rights; Cumulative Voting . . . . . . . . . . . . . . . 33
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Sale, Lease or Disposition of Property . . . . . . . . . . . . . . 34
Appraisal Rights . . . . . . . . . . . . . . . . . . . . . . . . . 34
Shareholder Action; Election of Directors; Voting . . . . . . . . 34
Business Combination; Takeovers . . . . . . . . . . . . . . . . . 35

THE MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Date, Time and Place . . . . . . . . . . . . . . . . . . . . . . . 35
Purposes of the Meetings . . . . . . . . . . . . . . . . . . . . . 35
Record Date and Outstanding Shares . . . . . . . . . . . . . . . . 35
Voting and Revocation of Proxies . . . . . . . . . . . . . . . . . 36
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . 36
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 36

ELECTION OF COMPANY DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . 37
General Information . . . . . . . . . . . . . . . . . . . . . . . 37
Nominees for Company Directors . . . . . . . . . . . . . . . . . . 37
Board Recommendation . . . . . . . . . . . . . . . . . . . . . . . 37
Directors and Executive Officers . . . . . . . . . . . . . . . . . 38
Information Regarding the Board of Directors of the Company . . . 38
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 38
Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . 38

ELECTION OF SURVIVING CORPORATION DIRECTORS . . . . . . . . . . . . . . . . 38
General Information . . . . . . . . . . . . . . . . . . . . . . . 38
Nominees for Company Directors . . . . . . . . . . . . . . . . . . 39
Board Recommendation . . . . . . . . . . . . . . . . . . . . . . . 39
Directors and Executive Officers of ETC-Texas and the
Surviving Corporation . . . . . . . . . . . . . . . . . . 40
Information Regarding the Board of Directors of ETC-Texas and
the Surviving Corporation . . . . . . . . . . . . . . . . 40
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 41
Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Employment Agreements . . . . . . . . . . . . . . . . . . . . . . 42
Nondisclosure and Noncompetition Agreements . . . . . . . . . . . 43

BENEFICIAL OWNERSHIP OF SECURITIES . . . . . . . . . . . . . . . . . . . . 44

CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

APPOINTMENT OF AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . 46

COMPANY NAME CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

THE COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Business Information Concerning the Company . . . . . . . . . . . 47
Business Information Concerning ETC-Texas . . . . . . . . . . . . 47
</TABLE>

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<PAGE> 9

<TABLE>
<S> <C>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S AND ETC-TEXAS'
FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . 52
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Development Stage Activities of ETC-Texas . . . . . . . . . . . . 52
Results of Operations of ETC-Texas . . . . . . . . . . . . . . . . 53
Nine Months Ended September 30, 1996 Compared to Nine Months
Ended September 30, 1995 . . . . . . . . . . . . . . . . . 54
Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . 54
Net Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . 54

DESCRIPTION OF COMPANY CAPITAL STOCK . . . . . . . . . . . . . . . . . . . 56
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . 56
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . 56

DESCRIPTION OF ETC-TEXAS CAPITAL STOCK . . . . . . . . . . . . . . . . . . 56
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ETC-Texas Common Stock . . . . . . . . . . . . . . . . . . . . . . 56
ETC-Texas Preferred Stock . . . . . . . . . . . . . . . . . . . . 56

DESCRIPTION OF SURVIVING CORPORATION CAPITAL STOCK . . . . . . . . . . . . 57
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Continued Common Stock . . . . . . . . . . . . . . . . . . . . . . 57
Surviving Corporation Preferred Stock . . . . . . . . . . . . . . 57
Certain Provisions of the Surviving Corporation Charter . . . . . 57
Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 57

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 58

INDEX TO FINANCIAL STATEMENTS OF THE COMPANY AND ETC-TEXAS . . . . . . . . F-1

AGREEMENT AND PLAN OF MERGER . . . . . . . . . . . . . . . . . . . . Appendix A

CERTIFICATE OF CHANGE OF AUDITOR . . . . . . . . . . . . . . . . . . Appendix B

CERTIFICATE OF DOMESTICATION . . . . . . . . . . . . . . . . . . . . Appendix C

CERTIFICATE OF INCORPORATION OF ETC TRANSACTION
CORPORATION (AS CONTINUED) . . . . . . . . . . . . . . . . . . . . . Appendix D

TAX OPINION OF FELESKY FLYNN, BARRISTERS & SOLICITORS . . . . . . . . Appendix E

TAX OPINION OF LOOPER, REED, MARK & McGRAW INCORPORATED . . . . . . . Appendix F

DISSENTERS RIGHTS UNDER THE ALBERTA BUSINESS CORPORATIONS ACT . . . . Appendix G

DISSENTERS RIGHTS UNDER THE TEXAS BUSINESS CORPORATION ACT . . . . . Appendix H
</TABLE>

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<PAGE> 10
SOLICITATION OF PROXIES AND VOTING REQUIREMENTS

THE COMPANY. The cost of soliciting proxies on behalf of the Company,
including the cost of preparing and mailing the notice of the Meeting and this
Proxy Statement/Prospectus, will be paid by ETC-Texas. Solicitation will be
primarily by mailing this Proxy Statement/Prospectus to all shareholders of the
Company entitled to vote at the Meeting. Proxies may be solicited by officers
of the Company personally, but at no compensation in addition to their regular
compensation as officers. The Company may reimburse brokers, banks and others
holding shares in their names for others for the cost of forwarding proxy
materials and obtaining proxies from their principals.

Only shareholders of record of the Company at the close of business on
____________________, 1996 (the "Record Date") may vote at the Meeting or at
any adjournment thereof. On the Record Date, there were 2,007,145 outstanding
Class "A" common shares of Company Common Stock, the only outstanding class of
securities of the Company. Each shareholder of record of the Company is
entitled to one vote for each share registered in his or her name. Cumulative
voting is not permitted. Meeting materials will be mailed to the registered
shareholders by the Company. Beneficial shareholders will receive materials
from intermediaries who hold shares of Company Common Stock on their behalf.
These materials will be delivered to the intermediaries by the Company for
redistribution to the beneficial shareholders.

Five percent (5%) of the shares entitled to vote, present in person or
represented by proxy, will constitute a quorum at the Meeting. Abstentions
will be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum, but an abstention as to any particular
matter does not constitute a vote "for" or "against" and will be disregarded in
calculating the votes cast as to such matter. "Broker non-votes" (i.e., where
a broker or nominee submits a proxy specifically indicating the lack of
discretionary authority to vote on a matter), if any, will be treated in the
same manner as abstentions.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN,
DATE AND RETURN PROMPTLY THE ACCOMPANYING PROXY IN THE ENVELOPE PROVIDED.

ETC-TEXAS. The cost of soliciting proxies on behalf of ETC-Texas,
including the cost of preparing and mailing the notice of the ETC-Texas Meeting
and this Proxy Statement/Prospectus, will be paid by ETC-Texas. Solicitation
will be primarily by mailing this Proxy Statement/Prospectus to all
shareholders of ETC-Texas entitled to vote at the ETC-Texas Meeting. Proxies
may be solicited by officers of ETC-Texas personally, but at no compensation in
addition to their regular compensation as officers. ETC-Texas may reimburse
brokers, banks and others holding shares in their names for others for the cost
of forwarding proxy materials and obtaining proxies from their principals.

Only shareholders of record of ETC-Texas at the close of business on
____________________, 1996 (the "ETC-Texas Record Date") may vote at the
ETC-Texas Meeting or at any adjournment thereof. On the ETC-Texas Record Date,
there were 7,153,601 outstanding shares of ETC-Texas Common Stock, the only
outstanding class of securities of ETC-Texas. Each shareholder of record of
ETC-Texas is entitled to one vote for each share registered in his or her name.
Cumulative voting is not permitted.

A majority of the shares entitled to vote, present in person or
represented by proxy, will constitute a quorum at the ETC-Texas Meeting.
Abstentions will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum, but an abstention as to any
particular matter does not constitute a vote "for" or "against" and will be
disregarded in calculating the votes cast as to such matter. "Broker non-
votes" (i.e., where a broker or nominee submits a proxy specifically indicating
the lack of discretionary authority to vote on a matter), if any, will be
treated in the same manner as abstentions.

WHETHER OR NOT YOU PLAN TO ATTEND THE ETC-TEXAS MEETING, PLEASE
COMPLETE, SIGN, DATE AND RETURN PROMPTLY THE ACCOMPANYING PROXY IN THE ENVELOPE
PROVIDED.

APPOINTMENT AND REVOCATION OF PROXIES

THE INSTRUMENTS OF PROXY ARE BEING SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY AND THE BOARD OF DIRECTORS OF ETC-TEXAS, RESPECTIVELY.

The Proxy for the Meeting and the ETC-Texas Meeting, respectively,
must be signed by an individual shareholder or by his attorney authorized in
writing executed by the shareholder. If the shareholder is a corporation, it
must either be under its common seal or signed by a duly authorized officer, or
if the shareholder is a partnership, it must be signed by either a general
partner, managing partner or duly authorized officer of the partnership.

A shareholder of either the Company or ETC-Texas who has given a Proxy
may revoke it at any time before it is exercised. In addition to revocation in
any other manner permitted by law, a Proxy may be revoked by a later dated
instrument in writing executed by a shareholder of the Company or a shareholder
of ETC-Texas or by their attorney authorized in writing

-v-
<PAGE> 11
and executed by the shareholder. If the shareholder is a corporation, it must
either be under its common seal, or signed by a duly authorized officer, or if
the shareholder is a partnership it must be signed by either a general partner,
managing partner or duly authorized officer of the partnership. A revocation
of a Proxy by a Company shareholder should be deposited with the Registrar and
Transfer Agent of the Company, Montreal Trust Company #600, 530 - 8th Avenue
S.W., Calgary, Alberta T2P 3S8. A revocation of a Proxy by an ETC-Texas
shareholder should be delivered to ETC-Texas at 5025 Arapaho Road, Suite 515,
Dallas, Texas 75248, Attention: Secretary. Revocation of a Proxy by either a
shareholder of the Company or ETC-Texas may be delivered at any time up to and
including the day of the Meeting and the ETC-Texas Meeting, respectively, or
any adjournment of either of the meetings at which the proxy is to be used. A
Proxy is also revoked if the shareholder is present at either of the meetings
and elects to vote in person.

VOTING OF SHARES AND EXERCISE OF DISCRETION OF PROXIES

THE SHARES OF BOTH THE COMPANY AND ETC-TEXAS REPRESENTED BY PROXY WILL
BE VOTED OR WITHHELD FROM VOTING BY THE PROXY HOLDER IN ACCORDANCE WITH THE
INSTRUCTION OF THE SHAREHOLDER ON ANY BALLOT THAT MAY BE CALLED FOR AND, IF THE
SHAREHOLDER SPECIFIES A CHOICE WITH RESPECT TO ANY MATTER TO BE ACTED UPON, THE
SHARES WILL BE VOTED ACCORDINGLY.

IN THE ABSENCE OF ANY INSTRUCTIONS IN THE PROXY, IT IS INTENDED THAT
SUCH SHARES WILL BE VOTED IN FAVOR OF THE MOTIONS PROPOSED TO BE MADE AT THE
APPLICABLE MEETING AS STATED IN THIS PROXY STATEMENT/PROSPECTUS.

THE ACCOMPANYING INSTRUMENTS OF PROXY CONFER DISCRETIONARY AUTHORITY
ON THE PERSONS NAMED THEREIN WITH RESPECT TO AMENDMENTS OR VARIATIONS TO
MATTERS IDENTIFIED IN THE RESPECTIVE NOTICES OF SPECIAL MEETING AND WITH
RESPECT TO OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETINGS. FOR
THOSE SHAREHOLDERS VOTING AGAINST THE PROPOSALS CONTAINED IN THE PROXY, THE
DISCRETIONARY AUTHORITY OF THOSE NAMED THEREIN WILL NOT BE VOTED TO ADJOURN ANY
MEETING. AT THE DATE HEREOF, MANAGEMENT OF THE COMPANY AND ETC-TEXAS,
RESPECTIVELY, KNOW OF NO SUCH AMENDMENTS, VARIATIONS OR OTHER MATTERS TO COME
BEFORE THE MEETINGS OTHER THAN THE MATTERS REFERRED TO IN THE RESPECTIVE
NOTICES OF MEETING.

THE MEETINGS

At the Meeting, shareholders of record of the Company as of the close
of business on the Record Date, will consider and vote upon (i) the election of
directors nominated by management, (ii) the appointment of auditors to serve
until the next annual meeting of the Company, (iii) a proposal to continue and
domesticate the Company into the State of Delaware under the name of "ETC
Transaction Corporation," (iv) a proposal to approve the Merger pursuant to the
terms and conditions of the Merger Agreement, a copy of which is attached to
this Proxy Statement/Prospectus as Appendix "A", with the Company being the
surviving corporation, (v) the change of the Company's name to "Electronic
Transmission Corporation" following consummation of the Merger, and (vi) such
other matters as may properly be brought before the Meeting or any adjournment
or postponement thereof.

At the ETC-Texas Meeting, shareholders of record of ETC-Texas as of
the ETC-Texas Record Date will consider and vote upon (i) a proposal to approve
the Merger pursuant to the terms and conditions of the Merger Agreement, (ii)
the election of directors to serve on the Board of Directors of the Surviving
Corporation (as hereinafter defined), and (iii) such other matters as may
properly be brought before the ETC-Texas Meeting or any adjournment or
postponement thereof.

THE CONTINUANCE

The Continuance contemplates that the Company will be continued and
domesticated into the State of Delaware, U.S.A., under the name "ETC
Transaction Corporation." Upon the effectiveness of the Continuance, holders
of issued and outstanding Company Common Stock, who do not exercise their
rights of dissent and appraisal, shall receive one share of Continued Common
Stock for each share of Company Common Stock held of record on the Record Date.
See "The Continuance."

THE MERGER

Simultaneous with the approval of and effectiveness of the
Continuance, the Merger will be consummated. See "The Continuance" and "The
Merger."

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<PAGE> 12
CONSUMMATION OF THE MERGER

Upon consummation of the Merger, each issued and outstanding share of
ETC-Texas Common Stock (other than any shares to which dissenters' and
appraisal rights are perfected) will be converted into one and one-fourth
(1.25) shares of Continued Common Stock (the "Exchange Ratio"). See "The
Merger -- General Description of the Merger."
________________________

No person has been authorized to give any information or to make any
representation other than those contained in this Proxy Statement/Prospectus in
connection with the solicitation of proxies or the offering of securities made
hereby and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company, ETC-Texas or any other
person. This Proxy Statement/Prospectus does not constitute an offer to sell,
or a solicitation of an offer to buy, any securities, or the solicitation of a
proxy in any jurisdiction to or from any person to whom it is not lawful to
make any such offer or solicitation in such jurisdiction. Neither the delivery
of this Proxy Statement/Prospectus nor any distribution of securities made
hereunder shall, under any circumstances, create an implication that there has
been no change in the affairs of the Company or ETC-Texas since the date hereof
or that the information herein is correct as of any time subsequent to its
date.

AVAILABLE INFORMATION

Neither the Company nor ETC-Texas are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Upon the effectiveness of the Continuance and the Merger, the Company
will become subject to the information requirements of the Exchange Act, and in
accordance therewith shall file reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements and other information to be filed by the Company, as continued
and domesticated into the State of Delaware, U.S.A., with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Regional Offices of the Commission at Room 1400, 75 Park
Place, New York, New York 10007 and Room 3190 Kluczynski Federal Building, 230
South Dearborn Street, Chicago, Illinois 60604. Copies of such material also
may be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549 at prescribed rates.

The Company has filed with the Commission a Registration Statement on
Form S-4, as amended (the "Registration Statement"), under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Continued
Common Stock to be issued as a result of the Continuance and the Merger. This
Proxy Statement/Prospectus does not contain all the information set forth in
the Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. Such additional
information may be obtained from the Commission's principal office in
Washington, D.C. Statements contained in this Proxy Statement/Prospectus as to
the contents of any contract or other document referred to herein or therein
are not necessarily complete, and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the Registration
Statement or such other document, each such statement being qualified in all
respects by such reference.

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<PAGE> 13

SUMMARY

The following is a brief summary of certain information contained
elsewhere in this Proxy Statement/Prospectus. Reference is made to, and this
summary is qualified in its entirety by, the more detailed information
contained in this Proxy Statement/Prospectus and the Appendixes hereto. Unless
otherwise defined herein, capitalized terms used in this summary have the
respective meanings ascribed to them elsewhere in this Proxy
Statement/Prospectus. Unless otherwise indicated, all dollar amounts are
stated in U.S. dollars. Shareholders are urged to read this Proxy
Statement/Prospectus and the Appendixes hereto in their entirety.

THE COMPANIES

ETC TRANSACTION CORPORATION. The Company was incorporated as Solo
Petroleums Ltd. on September 5, 1986 for the purpose of undertaking oil and gas
exploration efforts. In 1987, the Company completed a public offering of the
Company Common Stock as a Junior Capital Pool Company under the policies of The
Alberta Stock Exchange (the "ASE") and the Alberta Securities Commission (the
"ASC"). The Company Common Stock was subsequently listed for trading on the
ASE under the trading symbol "SOP". By 1990, revenues from oil and gas
exploration efforts had substantially declined and the Company began
experiencing financial difficulties. As a result, the Company liquidated
substantially all of its assets and underwent a significant change in
management during 1990. Management of the Company is currently seeking to
consummate an acquisition or merger transaction with a privately-held business
which the Company believes has significant growth potential, thereby allowing
the shareholders of both corporations to benefit by owning an interest in a
viable business enterprise. Since the Company has no significant assets or
operations, its principal potential for profits comes solely from operations it
may receive in an acquisition or merger transaction. Management of the Company
has identified ETC-Texas as a suitable merger candidate because of its position
in the emerging electronic medical claims processing industry and its potential
for significant growth. On March 21, 1996, the Company changed its name to ETC
Transaction Corporation and approved a one-for-five consolidation of capital of
the Company Common Stock to facilitate the effectiveness of the Merger. The
Company has loaned to ETC-Texas $779,575 to fund its marketing and product
development efforts and costs associated with the Merger. The loan bears
interest at 6% per annum and is due and payable on July 1, 1997. Unless
otherwise indicated herein, the outstanding shares of Company Common Stock have
been adjusted to reflect a one-for-five consolidation of capital of the Company
Common Stock. The principal executive offices of the Company are located at
5025 Arapaho Road, Suite 515, Dallas, Texas 75248, (214) 980-0900, The
registered office of the Company is located at 2200 AGT Tower, 411 - 1st Street
S.W., Calgary, Alberta, Canada T2G 5E7. See "The Companies -- Business
Information Concerning the Company."

ELECTRONIC TRANSMISSION CORPORATION. ETC-Texas was organized in
December 1994 under the laws of the State of Texas. In early 1995, ETC-Texas
paid to Sterling National Corporation ("Sterling") $210,000 and issued
3,965,100 shares of ETC-Texas Common Stock in exchange for certain assets of
Sterling related to its electronic medical claims processing business. L. Cade
Havard, the Chairman, President and Chief Executive Officer of ETC-Texas and
the Chairman and Chief Executive Officer of the Company, is the sole
shareholder of Sterling. See "The Merger -- Interests of Certain Persons in
the Merger" and "Certain Transactions." ETC-Texas has developed and markets an
electronic medical claims flow process. The primary business of ETC-Texas is
that of providing automated processing services for health care claims for (i)
self-insured companies that administer their own health care plans and pay
their own medical claims, (ii) third-party administrators that administer
health care plans and pay medical claims for self-insured companies, (iii)
preferred provider organizations, and (iv) other managed care organizations
that offer discounts on medical claims and which reprice those claims to
reflect discounts offered by health care providers to payors. ETC-Texas
processes more than 100,000 claims per month for five clients, the majority of
which are generated by a self-insured employer which manages its own health
plan. Utilizing its existing work flow process and imaging technology,
ETC-Texas processes standardized claim and plan enrollment forms by scanning
these forms at the client's facilities, with the scanned images being
transmitted to ETC-Texas' imaging center. Once received at ETC-Texas' imaging
center, the data is extracted using an optical character recognition process.
ETC-Texas then processes all data and manually reviews each claim. Once
reviewed, ETC-Texas transmits the claim to the respective managed care
organization, if applicable, then to the payor for adjudication. ETC-Texas is
compensated for these services on a per processed claim basis. See "The
Companies -- Business Information Concerning ETC-Texas."

During 1995, ETC-Texas began investigating the possibility of becoming
a public company in order to gain better access to equity capital for purposes
of enhancing its processing capabilities, facilitating its proposed growth
plans and to provide greater liquidity for the ETC-Texas Common Stock. After
assessing the costs and benefits of the various means by which ETC-Texas could
become a public company, the Board of Directors concluded that merging with an
existing public company would be the most desirable way to effect this business
strategy. Upon completion of its due diligence review, ETC-Texas determined
that the Company was a desirable candidate with which ETC-Texas could merge.
The principal executive offices of ETC-Texas are located at 5025 Arapaho Road,
Suite 515, Dallas, Texas 75248, (214) 980-0900. See "The Merger -- ETC-Texas'
Reasons for the Merger; Recommendation of ETC-Texas' Board of Directors."

SURVIVING CORPORATION. If the Continuance and the Merger are approved
by the Company's shareholders at the Meeting and the Merger is approved by the
ETC-Texas shareholders at the ETC-Texas Meeting, the Company shall be the
surviving corporation of the Merger (the "Surviving Corporation"). Pursuant to
the Merger Agreement, the Certificate of Incorporation of the Company, as
continued, shall be the Certificate of Incorporation of the Surviving
Corporation, the Bylaws of the Company, as continued, shall be the Bylaws of
the Surviving Corporation and the name of the Surviving Corporation will be
changed to Electronic

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<PAGE> 14

Transmission Corporation. The officers and directors of ETC-Texas will be the
officers and directors of the Surviving Corporation. See "The Merger" and
"Certain Terms of the Merger Agreement."

DATE, TIME AND PLACE

THE COMPANY. The Meeting will be held on ____________________, 1996,
at the offices of Beaumont Church, Barristers and Solicitors, 2200 AGT Tower,
411 -- 1st Street S.E., Calgary, Alberta, Canada T2G 5E7, commencing at 2:00
p.m. local time.

ETC-TEXAS. The ETC-Texas Meeting will be held on
____________________, 1996, at 5025 Arapaho Road, Suite 515, Dallas, Texas
75248, commencing at 2:00 p.m. local time.

RECORD DATES; SHARES ENTITLED TO VOTE

THE COMPANY. Only holders of record of shares of Company Common Stock
at the close of business on ____________________, 1996 (the "Record Date") are
entitled to notice of and to vote at the Meeting. On the Record Date, there
were 2,007,145 shares of Company Common Stock outstanding, each of which will
be entitled to vote on each matter to be acted upon at the Meeting.

ETC-TEXAS. Only holders of record of shares of ETC-Texas Common Stock
at the close of business on ____________________, 1996 (the "ETC-Texas Record
Date") are entitled to notice of and to vote at the ETC-Texas Meeting. On the
ETC-Texas Record Date, there were 7,153,601 shares of ETC-Texas Common Stock
outstanding, each of which will be entitled to vote on each matter to be acted
upon at the ETC-Texas Meeting.

QUORUM; VOTE REQUIRED

THE COMPANY. The presence, in person or by proxy, at the Meeting of
the holders of 5% of the shares of Company Common Stock outstanding and
entitled to vote at the Meeting is necessary to constitute a quorum at the
Meeting. The affirmative vote of the holders of sixty-six and two-thirds
percent (66-2/3%) of the shares present in person or by proxy at the Meeting is
required to approve and adopt the Continuance and the Merger Agreement, the
terms of which require the issuance and reservation for issuance of up to
10,949,146 shares of Continued Common Stock.

ETC-TEXAS. The presence, in person or by proxy, at the ETC-Texas
Meeting of the holders of a majority of the shares of ETC-Texas Common Stock
outstanding and entitled to vote at the ETC-Texas Meeting is necessary to
constitute a quorum at the meeting. The affirmative vote of the holders of
sixty-six and two-thirds percent (66-2/3%) of the shares of ETC-Texas Common
Stock outstanding and entitled to vote thereon at the ETC-Texas Meeting is
required under the Texas Business Corporation Act (the "TBCA") to approve and
adopt the Merger Agreement.

SECURITY OWNERSHIP OF MANAGEMENT

THE COMPANY. As of the Record Date, the directors and executive
officers of the Company neither owned nor controlled shares of Company Common
Stock. See "Beneficial Ownership of Securities."

ETC-TEXAS. As of the ETC-Texas Record Date, the directors and
executive officers of ETC-Texas owned shares of ETC-Texas Common Stock
representing approximately 55.5% of the outstanding shares of ETC-Texas Common
Stock entitled to vote at the ETC-Texas Meeting. L. Cade Havard, Chairman,
President and Chief Executive Officer of ETC-Texas, beneficially owns or
controls 2,845,368 shares of ETC-Texas Common Stock representing approximately
39.8% of the outstanding ETC-Texas Common Stock, which includes 745,368 shares
owned by Sterling of which Mr. Havard is the sole shareholder. Mr. Havard and
each of the other directors and executive officers of ETC-Texas have advised
ETC-Texas that they plan to vote or to direct the vote of all shares of
ETC-Texas Common Stock owned by them in favor of the Merger Agreement. See
"Beneficial Ownership of Securities."

COMPANY ANNUAL MEETING MATTERS

ELECTION OF DIRECTORS. At the Meeting, it is proposed that a Board of
Directors consisting of three members be elected. All three of the nominees
are current members of the Board of Directors of the Company. If elected at
the Meeting and upon the completion of the Continuance and the Merger, Edward
Bollinger and Katherine MacDonald have agreed to resign as directors of the
Company. It is proposed that a Board of Directors consisting of six members
also be elected at the Meeting to take office upon completion of the
Continuance and the Merger. L. Cade Havard, one of the nominees for the post-
Merger board is currently a member of the Board of Directors of the Company.
It is proposed that the Board of Directors of the Surviving Corporation be
comprised of L. Cade Havard, Elaine Boze, Timothy P. Powell, David O. Hannah,
Michael Eckstein and Rick L. Snyder, all of

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<PAGE> 15

whom are currently directors of ETC-Texas. See "Election of Company Directors"
and "Election of Surviving Corporation Directors."

APPOINTMENT OF AUDITORS. At the Meeting, the shareholders of the
Company will be called upon to appoint auditors to serve until the close of the
next annual meeting of the Company (or the Surviving Corporation) and to
authorize the Board of Directors to fix the remuneration of the auditors so
appointed. Hans P. Cremers, Chartered Accountant, of Calgary, Alberta, served
as auditor for the fiscal years ended December 31, 1991 to and including
December 31, 1995. Simonton, Kutac & Barnidge, L.L.P. has been authorized by
the Board of Directors of the Company to audit the books and records of the
Company for the fiscal years ended December 31, 1994 and 1995 and to prepare
financial statements for these periods in accordance with generally accepted
accounting principles recognized by the Commission for the purpose of including
such financial statements in the Registration Statement. Because the Company
will become domiciled in the United States upon completion of the Continuance
and the Merger and because of their familiarity with the books and records of
the Company, management recommends that the shareholders vote for the
appointment of Simonton, Kutac & Barnidge, L.L.P. of Houston, Texas to serve as
auditors until the close of the next annual meeting of the Company (or the
Surviving Corporation). See "Appointment of Auditors for the Company" and the
"Notice of Change of Auditor" attached to the Proxy Statement/Prospectus as
Appendix "B".

THE CONTINUANCE

The Company will change its jurisdiction from Alberta, Canada to
Delaware, U.S.A. by means of a process called a "continuance" under Alberta law
and a "domestication" under Delaware law. The Continuance will be effected
upon approval of the Certificate of Domestication to be filed by the Company
with the Secretary of State of the State of Delaware. A copy of the form of
Certificate of Domestication is attached to this Proxy Statement/Prospectus as
Appendix "C". Upon the effectiveness of the Continuance, the Company will
become a Delaware corporation as if it had originally been incorporated in that
jurisdiction and it will be discontinued in Alberta, Canada, with the Company's
shareholders becoming subject to the rights and privileges afforded under the
Delaware General Corporation Law. As a result of the Continuance, the Company
will issue an aggregate of 2,007,145 shares of Continued Common Stock to
holders of Company Common Stock, as of the Record Date. Effectiveness of the
Merger is expressly conditioned on approval and effectiveness of the
Continuance; as a result, a vote against the Continuance would have the effect
of a vote against the Merger.

The Company has elected to continue into the State of Delaware in
order to effect the Merger, as the majority of the shareholders of the
Surviving Corporation will be U.S. citizens. The Company also believes
Delaware provides a recognized body of corporate law, which is consistently
interpreted by Delaware courts, thus facilitating corporate governance by the
Company's officers and directors. Furthermore, both the Company and ETC-Texas
believe that by being a domestic corporation, the Surviving Corporation will
have fewer barriers to entry into U.S. capital markets.

THE MERGER AND THE MERGER AGREEMENT

TERMS OF THE MERGER. At the Effective Time (as hereinafter defined),
ETC-Texas will merge with and into the Company, with the Company being the
Surviving Corporation. In the Merger, each share of ETC-Texas Common Stock
outstanding at the Effective Time will be converted into 1.25 shares of
Continued Common Stock. As a result of the Merger, the holders of ETC-Texas
Common Stock will be issued 8,942,001 shares of Continued Common Stock,
representing approximately 82% of the total Continued Common Stock to be
outstanding after completion of the Continuance and the Merger.

RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS. The Board of
Directors of the Company has determined that the Continuance and the Merger are
fair to, and in the best interests of, the shareholders of the Company and
recommends that the shareholders of the Company approve the Continuance and the
Merger, including the reservation for issuance and the issuance of 8,942,001
shares of Continued Common Stock pursuant to the terms of the Merger Agreement.

Management of the Company believes that the Continuance and the Merger
are in accordance with the business purpose of the Company which is to seek out
and effect an acquisition or merger transaction with a business which the
Company believes has significant growth potential, thereby allowing its
shareholders to benefit by owning an interest in a viable business enterprise.
As the Company has no significant assets or operations, its principal potential
for profit comes solely from operations it may receive in an acquisition or
merger transaction. Management also believes that the Merger is fair to the
Company's shareholders because of the manner in which the terms of the Merger
were reached and potential value the Merger may bring to the Company's Common
Stock. As such, the Board of Directors of the Company has unanimously approved
the Merger as it believes that ETC-Texas is a viable enterprise which offers
the opportunity for significant growth in the emerging electronic medical
claims processing industry. See "The Merger -- The Company's Reasons for the
Merger; Recommendation of the Company's Board of Directors.

RECOMMENDATION OF ETC-TEXAS' BOARD OF DIRECTORS. The Board of
Directors of ETC-Texas has determined that the Merger is fair to, and in the
best interests of, the shareholders of ETC-Texas as it affords ETC-Texas the
most desirable method of achieving the business objective of becoming a public
company without substantially diluting the ownership interest of ETC-Texas'
existing shareholders. Management of ETC-Texas believes the Merger is fair to
the holders of ETC-Texas Common Stock given the manner in which the terms of
the Merger were negotiated, the public shareholder base offered by the Company,
the absence of liabilities related to the Company, and the $779,575 loaned to
ETC-Texas by the Company to facilitate in part ETC-Texas' marketing and product
development efforts. The Board of Directors recommends that the

-3-
<PAGE> 16

shareholders of ETC-Texas approve and adopt the Merger Agreement. See "The
Merger -- ETC-Texas' Reasons for the Merger; Recommendation of ETC-Texas' Board
of Directors.

MERGER CONSIDERATIONS. In considering the recommendation of the
Company's Board of Directors with respect to the Merger, the Company's
shareholders are advised that L. Cade Havard, the Chairman of the Board and
Chief Executive Officer of the Company is also the Chairman of the Board,
President and Chief Executive Officer and majority shareholder of ETC-Texas.
Mr. Havard has certain interests respecting the Merger apart from his interest
as shareholder of ETC-Texas. See "The Merger -- The Company's Reasons for the
Merger; Recommendation of the Company's Board of Directors." Furthermore, the
Company's shareholders are advised that upon consummation of the Merger they
will suffer immediate and substantial dilution to their ownership interest in
the Company. Upon effectiveness of the Merger, holders of Company Common Stock
will suffer dilution of approximately 81.7% at the time the shares of Continued
Common Stock become issued and outstanding. Also, the Company's shareholders
are advised that ETC-Texas has certain financial difficulties, including a
history of operating losses and a working capital deficit, which may result in
the Surviving Corporation operating without the potential for profitability for
the short term. See "Risk Factors -- Accumulated Deficit and Independent
Accountants' Report Referring to Going Concern Uncertainties; -- Working
Capital Deficit; Lack of Liquidity and Capital Resources; -- Additional
Financing Needed; -- Limited Operating History; Absence of Profits; and --
Probability of Continued Losses."

In considering the recommendation of the ETC-Texas Board of Directors
with respect to the Merger, ETC-Texas shareholders are advised that L. Cade
Havard, the Chairman of the Board, President and Chief Executive Officer of
ETC-Texas and the Chairman of the Board and Chief Executive Officer of the
Company, has certain interests respecting the Merger apart from his interest as
shareholder of ETC-Texas. Shareholders of ETC-Texas are advised that if the
Surviving Corporation is unable to establish a trading market for the Continued
Common Stock, it may be unable to take advantage of the access to equity
capital generally afforded public companies nor will its shareholders be able
to readily liquidate their ownership interests. Furthermore, shareholders of
ETC-Texas are advised that if the Merger is effected, the Surviving Corporation
will be obligated to file annual, quarterly and current reports with the
Commission, which reporting requirements will require the Surviving Corporation
to incur a significant increase in legal and accounting expenses. See "The
Merger -- ETC-Texas' Reasons for the Merger; Recommendation of ETC-Texas' Board
of Directors; -- Interests of Certain Persons in the Merger."

EFFECTIVE TIME OF THE MERGER. It is anticipated that the Merger will
become effective (the "Effective Time") as promptly as practicable after
approval by the Company's shareholders of both the Continuance and the Merger
and approval of the Merger by the shareholders of ETC-Texas and the filing of a
Certificate of Merger with the Secretary of State of the State of Delaware and
Articles of Merger with the Secretary of State of the State of Texas, or at any
later time stated in the Merger Agreement.

CERTAIN CONDITIONS TO THE CONSUMMATION OF THE MERGER

The obligations of both the Company and ETC-Texas to consummate the
Merger are subject to the satisfaction of certain conditions, including the
following: (i) approval by the shareholders of the Company of the Continuance
and the Merger Agreement; (ii) approval and adoption of the Merger Agreement by
the shareholders of ETC-Texas; (iii) the absence of any order making the Merger
illegal or otherwise prohibiting consummation of the Merger; and (iv) the
absence of certain regulatory conditions. None of the foregoing conditions
will be waived by either the Company or ETC-Texas. In addition, the
obligations of each of the Company and ETC-Texas are subject to the accuracy of
the representations and warranties of the other party and to compliance with
all agreements and covenants on the part of the other party contained in the
Merger Agreement. Either the Company or ETC-Texas may extend the time for
performance of any of the obligations of the other party or, except as
aforesaid, waive compliance with those obligations at its discretion. See "The
Merger" and "Certain Terms of the Merger Agreement."

If the Merger is not consummated, it is anticipated that the Company
will continue to seek a suitable acquisition or merger candidate with which it
can enter into a strategic alliance for the purpose of bringing value to the
Company Common Stock. Upon the failure to consummate the Merger, ETC-Texas
will continue its current business activities and investigate other methods of
addressing its short-term capital requirements, including private equity or
debt financings. ETC-Texas may also seek to enter into a similar arrangement
with an existing public company to avail itself of the advantages it believes
are available to public corporations.

TERMINATION OF THE MERGER AGREEMENT

GENERAL. The Merger Agreement may be terminated at any time prior to
the Effective Time (i) by mutual consent of the Company and ETC-Texas; (ii) by
either party if any final court or governmental order or ruling shall have
prohibited consummation of the Merger; or (iii) the required approvals of the
shareholders of the Company or ETC-Texas are not received at the applicable
meeting of shareholders.

BY THE COMPANY. The Company may terminate the Merger Agreement (i)
upon a breach of any material representation, warranty, covenant or agreement
on the part of ETC-Texas set forth in the Merger Agreement, or (ii) if any such
representation

-4-
<PAGE> 17

or warranty shall have become untrue, in either case such that the Company's
conditions to closing of the Merger would be incapable of being satisfied. See
"Certain Terms of the Merger Agreement -- Conditions to the Merger."

BY ETC-TEXAS. ETC-Texas may terminate the Merger Agreement (i) upon a
breach of any material representation, warranty, covenant or agreement on the
part of the Company set forth in the Merger Agreement, or (ii) if any such
representation or warranty shall have become untrue, in either case such that
ETC-Texas' conditions to closing of the Merger would be incapable of being
satisfied. See "Certain Terms of the Merger Agreement -- Conditions to the
Merger."

ASSUMPTION OF ETC-TEXAS STOCK OPTIONS AND OTHER OBLIGATIONS

ETC-Texas has granted to certain directors, officers and employees
options to purchase 666,667 shares of ETC-Texas Common Stock each at an
exercise price of $0.001 per share, which expire at varying times up to August
1, 1999. As of the Effective Time, the Surviving Corporation will assume each
option to purchase ETC-Texas Common Stock (the "ETC-Texas Options") that
remains unexercised in whole or in part. Accordingly, each ETC-Texas Option
will be deemed to remain outstanding as an option to purchase, in lieu of the
shares of ETC-Texas Common Stock previously subject thereto, an identical
number of shares of Continued Common Stock. The exercise price per share of
Continued Common Stock will be equal to the previous exercise price per share
under the ETC-Texas Option. See "Certain Terms of the Merger Agreement" and
"Election of Surviving Corporation Directors -- Stock Options."

Upon the effectiveness of the Merger, the Surviving Corporation will
assume certain contractual obligations of ETC-Texas. Specifically, the
Surviving Corporation will assume the employment agreements entered into by
ETC-Texas and its executive officers, a marketing agreement between ETC-Texas
and MS3, the principal owner of which is Rick L. Snyder, a director of
ETC-Texas, a consulting agreement with Michael Eckstein, a director of
ETC-Texas, and a lease agreement with Ironwood Leasing, Ltd., the principals of
which are shareholders of ETC-Texas. See "The Merger -- Interests of Certain
Persons in the Merger" and "Certain Transactions."

BOARD OF DIRECTORS

THE COMPANY. The Board of Directors of the Company is currently
comprised of three members including L. Cade Havard, Edward Bollinger and
Katherine L. MacDonald. At the Meeting, shareholders of the Company will be
asked to vote for each of the foregoing to serve as directors of the Company
until the Continuance and the Merger are completed or until the next Annual
Meeting of Shareholders. Upon completion of the Continuance and the Merger,
Mr. Bollinger and Ms. MacDonald have agreed to resign as directors of the
Surviving Corporation. See "Election of Company Directors."

ETC-TEXAS. L. Cade Havard, Elaine Boze, Timothy P. Powell, David O.
Hannah, Michael Eckstein and Rick L. Snyder currently serve as directors of
ETC-Texas. See "Election of Surviving Corporation Directors."

THE SURVIVING CORPORATION. Upon the effectiveness of the Merger, L.
Cade Havard, Elaine Boze, Timothy P. Powell, David O. Hannah, Michael Eckstein
and Rick L. Snyder will serve as directors of the Surviving Corporation. For
additional information regarding the relationships of each of the foregoing
with ETC-Texas and the proposed relationship of each to the Surviving
Corporation, see "The Merger -- Interests of Certain Persons in the Merger" and
"Election of Surviving Corporation Directors."

REGULATORY APPROVAL

The Company is in the process of filing for approval with the
Registrar of Corporations for the Province of Alberta to continue the Company
into the State of Delaware. Upon receipt of appropriate shareholder approval,
the Company will file a Certificate of Domestication and a Certificate of
Merger with the Secretary of State of the State of Delaware, and ETC-Texas will
file Articles of Merger with the Secretary of State of the State of Texas.
Once the Continuance and the Merger are approved by applicable provincial and
state authorities, no other regulatory approvals are necessary for consummation
of the Continuance and the Merger, other than compliance with applicable
securities laws.

APPRAISAL RIGHTS WITH RESPECT TO THE CONTINUANCE AND THE MERGER -- THE COMPANY

Pursuant to Section 184 of the Alberta Business Corporations Act (the
"ABCA"), a shareholder of the Company is entitled to dissent and is entitled to
be paid by the Company the fair value of his shares of Company Common Stock
determined as of the close of business on the last business day before the
Meeting. In order to dissent, a shareholder must send a written objection to
the Company on or before the date of the Meeting at which the Continuance and
the Merger are to be approved. Within 10 days following the date of the
Meeting, the Company will deliver to each shareholder who has filed an
objection notice in respect of any resolution, a notice stating the special
resolutions authorizing the Continuance and the Merger have passed at the
Meeting. After the Continuance has been approved, application can be made to a
court by either the Company or the dissenting shareholder to fix the fair value
of the shares. The Company, after application has been made, shall send an
offer to purchase the shares of Company Common Stock to the dissenting
shareholder for the fair value of the shares on the day before the Meeting.
The dissenting shareholder may either accept this amount or proceed to court
and have the court establish the fair value of the shares. See "The
Continuance -- Right of Dissent" and "The Merger -- Rights of Dissenting
Shareholders."

-5-
<PAGE> 18

APPRAISAL RIGHTS WITH RESPECT TO THE MERGER -- ETC-TEXAS

Should the Merger take place, shareholders of ETC-Texas who oppose and
do not vote for the Merger will be entitled to invoke appraisal rights pursuant
to Articles 5.11, 5.12 and 5.13 of the TBCA, and pursuant to applicable charter
provisions granting appraisal rights. In order to dissent, a shareholder must
file a written objection to the Merger prior to the date of the ETC Texas-
Meeting at which the Merger is to be approved. Within 10 days following the
date of the ETC-Texas Meeting, ETC-Texas will deliver notice to each dissenting
shareholder of the effectiveness of the Merger. The dissenting shareholder,
within 10 days of the notice from ETC-Texas, must then make a written demand
upon ETC-Texas for payment of the fair value of his shares of ETC-Texas Common
Stock. Within 20 days of the notice from the dissenting shareholder, ETC-Texas
must notify the dissenting shareholder of its intent to pay the amount demanded
by the dissenting shareholder or offer a different amount based on its estimate
of the fair value of the dissenting shareholder's shares. If the dissenting
shareholder and ETC-Texas agree to the fair value of the shares, ETC-Texas will
pay the dissenting shareholder the fair value for such shares within 90 days of
the effectiveness of the Merger. If the dissenting shareholder and ETC-Texas
can not agree, within 60 days from the effectiveness of the Merger, as to the
fair value of the shares, either party may file a claim with the court seeking
a determination of the fair value of the shares. See "The Merger -- Rights of
Dissenting Shareholders."

CERTAIN CANADIAN FEDERAL INCOME TAX CONSEQUENCES OF THE CONTINUANCE AND THE
MERGER AND OPINION OF COUNSEL

The Company has retained the law firm of Felesky Flynn, Barristers &
Solicitors, which has delivered its written opinion to the Board of Directors
of the Company stating that Canadian shareholders will not incur any Canadian
federal income tax liability solely by reason of the Continuance and the Merger
unless such shareholder exercises dissenters' rights in which case dividend
and/or capital gain taxes will apply. See "The Continuance -- Certain Canadian
Federal Income Tax Consequences of the Continuance and the Merger."

A copy of the tax opinion of Felesky Flynn, Barristers & Solicitors,
is attached to this Proxy Statement/Prospectus as Appendix "E". The Company's
shareholders are urged to read this opinion in its entirety for a complete
description of the assumptions made, matters considered and qualifications of
the opinion of Felesky Flynn, Barristers & Solicitors.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER AND
OPINION OF COUNSEL

ETC-Texas has retained the law firm of Looper, Reed, Mark & McGraw
Incorporated, which has delivered its written opinion to the Board of Directors
of ETC-Texas stating that the Merger is intended to qualify as a reorganization
under Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and should, therefore constitute a non-taxable transaction for the
Company, ETC-Texas and the holders of ETC-Texas Common Stock, respectively.
See "The Merger -- Certain Federal Income Tax Consequences."

A copy of the tax opinion of Looper, Reed, Mark & McGraw Incorporated
is attached to this Proxy Statement/Prospectus as Appendix "F". ETC-Texas'
shareholders are urged to read this opinion in its entirety for a complete
description of the assumptions made, matters considered and qualifications of
the opinion of Looper, Reed, Mark & McGraw Incorporated.

ANTICIPATED ACCOUNTING TREATMENT

The Merger is in effect a reverse acquisition and will be accounted
for as a recapitalization of ETC-Texas, with ETC-Texas as the acquirer.
Additionally, no goodwill or other intangible assets will be recorded. See
"The Merger -- Accounting Treatment."

EXCHANGE OF ETC-TEXAS STOCK CERTIFICATES

Promptly after the Effective Time of the Merger, the Surviving
Corporation will mail a letter of transmittal with instructions to each holder
of record of ETC-Texas Common Stock outstanding immediately before the
Effective Time for use in exchanging certificates formerly representing shares
of ETC-Texas Common Stock for certificates representing shares of Continued
Common Stock. No fractional shares of Continued Common Stock shall be issued
in the Merger. In lieu thereof, all fractional shares of Continued Common
Stock that a holder of ETC-Texas Common Stock would otherwise be entitled to
receive as a result of the Merger shall be automatically converted into the
right to receive one full share of Continued Common Stock. Certificates should
not be surrendered by the holder of ETC-Texas Common Stock until they have
received the letter of transmittal from the Surviving Corporation. See
"Certain Terms of the Merger Agreement -- Manner and Basis of Converting
Shares."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

As more particularly described in the "Beneficial Ownership of
Securities" section of this Proxy Statement/Prospectus, L. Cade Havard, the
Chairman and Chief Executive Officer of the Company, is also the Chairman,
President and Chief Executive Officer of ETC-Texas. Mr. Havard beneficially
owns or controls 2,845,368 shares of ETC-Texas Common Stock, representing
approximately 39.8% of the issued and outstanding ETC-Texas Common Stock.
After the Effective Time, Mr. Havard will beneficially own or control
approximately 3,656,710 shares of Continued Common Stock representing 33.4% of
the outstanding common shares of the Surviving Corporation. See "Risk Factors
- -- Interests of Certain persons in the Merger, "The Merger -- Interests of
Certain Persons in the Merger" and "Beneficial Ownership of Securities."

-6-
<PAGE> 19

COMPARATIVE RIGHTS OF ETC-TEXAS AND THE COMPANY SHAREHOLDERS

Rights of shareholders of ETC-Texas are currently governed by the
TBCA, and the Articles of Incorporation (the ETC-Texas Charter") and Bylaws
(the "ETC-Texas Bylaws") of ETC-Texas. Upon consummation of the Merger,
ETC-Texas shareholders will become shareholders of the Surviving Corporation
and their rights as shareholders of the Surviving Corporation will be governed
by the Delaware General Corporation Law (the "DGCL"), the Certificate of
Incorporation of the Surviving Corporation (the "Surviving Corporation
Charter"), and the Bylaws of the Surviving Corporation (the "Surviving
Corporation Bylaws"). A copy of the Surviving Corporation Charter is attached
to this Proxy Statement/Prospectus as Appendix "D". There are certain
differences between the rights afforded a shareholder under the TBCA and the
DGCL. See "Comparisons of Shareholders Rights."

MARKET PRICE DATA

THE COMPANY. The Company Common Stock was quoted on the ASE under the
trading symbol "SOP" between May 1987 and July 1992. On July 29, 1992, the
Company received a Cease Trade Order from the ASC for failure to file annual
audited financial statements for the year ended December 31, 1991 and first
quarter interim unaudited financial statements for the period ended March 31,
1992, and for failure to deliver the financial statements to the Company's
shareholders. Since July 1992, there has been no established trading market
for the Company Common Stock. On January 12, 1993, the shares of the Company
Common Stock were removed from the ASE. On March 21, 1996, the ASC varied its
Cease Trade Order for the purpose of allowing the Company to consummate the
Continuance and the Merger and ordered that the Cease Trade Order would be
revoked 48 hours after delivery to the ASC of verification that the
Registration Statement, of which this Proxy Statement/Prospectus is a part, has
been declared effective by the Commission and upon confirmation to the ASC that
the Company has issued a press release setting out the material terms of the
Continuance and the Merger. No cash dividends have been paid by the Company on
the Company Common Stock. See "The Companies -- Business Information
Concerning the Company."

ETC-TEXAS. There has never been an established trading market for the
ETC-Texas Common Stock. No cash dividends have been paid by ETC-Texas on the
ETC-Texas Common Stock. See "The Companies -- Business Information Concerning
ETC-Texas."

DIVIDEND POLICY

It is anticipated that future earnings of the Surviving Corporation
will be retained to finance the continuing development of its business. The
payment of any future dividends will be at the discretion of the Board of
Directors of the Surviving Corporation and will depend upon, among other
things, future earnings, the success of business activities, regulatory and
capital requirements, the general financial condition of the Surviving
Corporation and general business conditions.

RISK FACTORS PERTAINING TO THE CONTINUANCE AND THE MERGER

While the Boards of Directors of the Company and ETC-Texas are of the
opinion that the transactions contemplated herein are in the best interests of
the Company, ETC-Texas and their shareholders, respectively, there are business
risks related to such transactions, including, without limitation: (i) the
ability of the Surviving Corporation to continue as a going concern given the
accumulated deficit of both the Company and ETC-Texas, (ii) the Surviving
Corporation's lack of liquidity and capital resources given the prior
performance of both the Company and ETC-Texas, (iii) the Surviving Corporation
will require additional financing to continue as a going concern, (iv) the
success of the Surviving Corporation is dependent upon the continued quality of
the claims processing services currently provided by ETC-Texas and the
retention of the key management personnel of ETC-Texas, and (v) the uncertainty
that a viable public market for the Continued Common Stock can be developed or
sustained after the Merger. See "Risk Factors."

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<PAGE> 20

THE COMPANY

SELECTED HISTORICAL FINANCIAL INFORMATION

The following selected historical income statement and balance sheet
data for the periods ended December 31, 1994 and 1995 have been derived from
the Company's financial statements, which have been audited by Simonton,
Kutac & Barnidge, L.L.P., independent certified public accountants. The
selected financial data as of September 30, 1996 and for the nine months
ended September 30, 1995 and 1996 have been derived from the unaudited
financial statements of the Company, have been prepared on the same basis of
accounting as the other financial statements of the Company and, in the
opinion of the Company, include all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the financial
position and results of operations of the Company for such periods.

<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
------------------------------
Year Ended December 31, Unaudited
----------------------------- ------------------------------
1994 1995 1995 1996(3)
------------- ------------- ------------- --------------
(In thousands, except per share amounts and shares outstanding)
<S> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:

Expenses:
Interest on debentures . . . . . . . . . . . . . $ 121 $ 93 $ 90 $ 8
Other expense (income) . . . . . . . . . . . . . (1) 1 1 (1)
------------ ------------ ------------ -------------

Total expenses . . . . . . . . . . . . . . . 120 94 91 7
------------ ------------ ------------ -------------

Loss before extraordinary item . . . . . . . . . . . (120) (94) (91) (7)
Extraordinary item - gain on forgiveness
of interest . . . . . . . . . . . . . . . . . . . . - 392 - -
------------ ------------ ------------ -------------

Net earnings (loss) . . . . . . . . . . . . . . . . . $ (120) $ 298 $ (91) $ (7)
============ ============ ============ =============

EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT
SHARE:
Primary . . . . . . . . . . . . . . . . . . . . . $ (0.04) $ 0.09 $ 0.00 $ 0.00
============ ============ ============ =============
Fully diluted(1) . . . . . . . . . . . . . . . . $ (0.04) $ 0.06 $ 0.00 $ 0.00
============ ============ ============ =============

WEIGHTED AVERAGE SHARES OUTSTANDING:
Primary . . . . . . . . . . . . . . . . . . . . . 3,250,000 3,250,000 3,250,000 1,940,571
------------ ------------ ------------ -------------
Fully diluted(2) . . . . . . . . . . . . . . . . 3,250,000 4,821,784 3,250,000 1,958,071
------------ ------------ ------------ -------------
</TABLE>
<TABLE>
<CAPTION>

December 31, September 30, 1996
-------------------------------------- --------------------
1994 1995 Unaudited
----------------- ------------------ --------------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital . . . . . . . . . . . . . . . . . . $(1,279) $(981) $(151)
Total assets . . . . . . . . . . . . . . . . . . . - - 780
Convertible debentures . . . . . . . . . . . . . . 605 605 53
Total shareholders' equity . . . . . . . . . . . . (1,279) (981) 629

------------------------------
</TABLE>

(1) There was an anti-dilutive effect to earnings per share for the year
ended December 31, 1994 and for the nine months ended September 30,
1996. Fully diluted earnings per share is $(0.03) for year ended December
31, 1994 and $0.00 for the nine months ended September 30, 1995,
including the anti-dilutive effect.

(2) Fully diluted weighted average shares outstanding is the same as
primary earnings weighted average shares outstanding for year ended
December 31, 1994 due to the anti-dilutive effect of common stock
equivalents on earnings per share. Fully diluted weighted average
shares outstanding is 3,775,000 and 3,794,500 for year ended December
31, 1994 and the nine months ended September 30, 1995, respectively,
including the anti-dilutive effect.

(3) Shares outstanding for the nine months ended September 30, 1996
include the effects of the 1-for-5 basis stock split and conversion of
indebtedness on a 1 share-for-$1 basis.

-8-
<PAGE> 21

ETC-TEXAS

SELECTED HISTORICAL FINANCIAL INFORMATION

The selected historical financial information of ETC-Texas shown
below for the periods ended December 31, 1994 and 1995, have been derived
from ETC-Texas' financial statements, which have been audited by Simonton,
Kutac & Barnidge, L.L.P., independent certified public accountants. The
selected financial data as of September 30, 1996 and for the nine months
ended September 30, 1995 and 1996 have been derived from the unaudited
financial statements of ETC-Texas, have been prepared on the same basis of
accounting as the other financial statements of ETC-Texas and, in the opinion
of ETC-Texas, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the financial position and
results of operations of ETC-Texas for such periods.

<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
------------------------------
Year Ended December 31, Unaudited
----------------------------- ------------------------------
1994 1995 1995 1996
------------- ------------- ------------- --------------
(In thousands, except per share amounts and shares outstanding)
<S> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:

Service revenues, earned during development stage . . $ - $ 67 $ 103 $ 570

Costs and expenses:
Direct costs, incurred during development stage . - 41 19 284
Startup costs . . . . . . . . . . . . . . . . . . - 939 366 396
Research and development . . . . . . . . . . . . - 180 289 1,207
General and administrative . . . . . . . . . . . - - - 201
------------ ------------ ------------ -------------

Total costs and expenses . . . . . . . . . . - 1,160 674 2,088
------------ ------------ ------------ -------------

Net earnings (loss) . . . . . . . . . . . . . . . . . $ - $ (1,093) $ (571) $ (1,518)
============ ============ ============ =============

EARNINGS (LOSS) PER COMMON SHARE AND COMMON
EQUIVALENT SHARE:
Primary and fully diluted(1) . . . . . . . . . . $ (0.00) $ (0.32) $ (0.21) $ (0.22)
============ ============ ============ =============

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Primary and fully diluted(2) . . . . . . . . . . 53 3,377,069 2,713,011 6,824,522
============ ============ ============ =============
</TABLE>

December 31, September 30, 1996
-------------------------------------- --------------------
1994 1995 Unaudited
----------------- ------------------ --------------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital . . . . . . . . . . . . . . . . . . $ 1 $ 53 $ (57)
Total assets . . . . . . . . . . . . . . . . . . . 1 357 952
Long-term debt, excluding current portion . . . . . - - 873
Total shareholders' equity . . . . . . . . . . . . 1 191 (417)

------------------------------
</TABLE>

(1) There was an anti-dilutive effect to earnings per share for the year
ended December 31, 1995, and for the nine months ended September 30,
1995 and 1996. Fully diluted earnings per share is $(0.27) for the year
ended December 31, 1995, and $(0.18) and $(0.20) for the nine months
ended September 30, 1995 and 1996, respectively, including the
anti-dilutive effect.

(2) Fully diluted weighted average shares outstanding is the same as
primary earnings weighted average shares outstanding for the year
ended December 31, 1995, and for the nine months ended September 30,
1995 and 1996 due to the anti-dilutive effect of common stock
equivalents on earnings per share. Fully diluted weighted average
shares outstanding is 4,051,529 for the year ended December 31, 1995,
and 3,162,651 and 7,515,728 for the nine months ended September 30,
1995 and 1996, respectively, including the anti-dilutive effect.

-9-
<PAGE> 22

SELECTED UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following selected unaudited pro forma financial
information has been derived from and should be read in conjunction with
the unaudited pro forma condensed financial information and notes
thereto included elsewhere in this Proxy Statement/Prospectus. The
following unaudited selected pro forma combined financial information is
based on adjustments to the historical balance sheets and related
statements of earnings of the Company and ETC-Texas to give effect to
the Merger and account for the reverse acquisition by the
recapitalization of ETC-Texas, with ETC-Texas as the acquirer. The
unaudited selected pro forma combined after acquisition financial
information for the most recent full year and interim period give
effect to the Merger. The following selected unaudited pro forma
financial information may not necessarily reflect the financial
condition or results of operations of the Company that would have
actually resulted had the transactions referred to above occurred as
of the date and for the periods indicated or reflect the future
earnings of the Company.

<TABLE>
<CAPTION>
Pro Forma Combined(1)
-----------------------------------------------
Year Ended Nine Months Ended
December 31, September 30, 1996
--------------------- -----------------------
1995 (Unaudited)
--------------------- -----------------------
<S> <C> <C>
SELECTED INCOME STATEMENT DATA:

Service revenues, earned during development stage . . . . . $ 66,612 $ 570,025

Operating expenses:
Direct costs, incurred during development stage . . . . 40,764 283,613
Startup costs . . . . . . . . . . . . . . . . . . . . . 939,347 395,866
Research and development . . . . . . . . . . . . . . . 179,830 1,207,233
General and administrative . . . . . . . . . . . . . . -- 201,185
-------------------- ----------------------
Total operating expenses . . . . . . . . . . . . . 1,159,941 2,087,897
-------------------- ----------------------
Earnings (loss) from operations . . . . . . . . . (1,093,329) (1,517,872)

Other expense (income):
Interest expense . . . . . . . . . . . . . . . . . . . 93,375 7,875
Other . . . . . . . . . . . . . . . . . . . . . . . . . 807 (572)
-------------------- ----------------------
Total other expense . . . . . . . . . . . . . . . . 94,182 7,303
-------------------- ----------------------

Net earnings (loss) from continuing operations . . . . . . $ (1,187,511) $ 1,525,175
==================== ======================

EARNINGS (LOSS) PER COMMON SHARE AND COMMON EQUIVALENT
SHARE:
Primary and fully diluted(2)(3) . . . . . . . . . . . . $ (0.26) $ (0.18)
==================== ======================

WEIGHTED AVERAGE SHARES OUTSTANDING:
Primary and fully diluted(2)(4) . . . . . . . . . . . . 5,708,763 9,998,724
==================== ======================
</TABLE>

<TABLE>
<CAPTION>
December 31, September 30, 1996
------------------------ -----------------------
1995 Unaudited
------------------------ -----------------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital . . . . . . . . . . . . . . . . . . . . . . . $ (251) $ (208)
Total assets . . . . . . . . . . . . . . . . . . . . . . . . 357 952
Long-term debt, excluding current portion . . . . . . . . . . - 94
Total shareholders' equity . . . . . . . . . . . . . . . . . (251) 212

------------------------------
</TABLE>

(1) Pro Forma Combined columns represent the combined historical data of the
Company and ETC-Texas.

(2) Represents the Company and ETC-Texas on an equivalent pro forma
combined basis calculated by multiplying pro forma combined amounts
for ETC-Texas by the 1.25 Exchange Ratio and consolidating Company
shares on a 1-for-5 basis.

(3) There was an anti-dilutive effect to earnings per share for the year
ended December 31, 1995, and for the nine months ended September 30,
1996. Fully diluted earnings per share is $(0.22) for years ended
December 31, 1995, and $ (0.16) for the nine months ended September 30,
1996, including the anti-dilutive effect.

(4) Fully diluted weighted average shares outstanding is the same as
primary earnings weighted average shares outstanding for year ended
December 31, 1995, and for the nine months ended September 30, 1996, due
to the anti-dilutive effect of common stock equivalents on earnings
per share. Fully diluted weighted average shares outstanding is
6,855,723 for year ended December 31, 1995, and 11,352,731 for the nine
months ended September 30, 1996, including the anti-dilutive effect.

-10-
<PAGE> 23

HISTORICAL AND PRO FORMA COMPARATIVE PER SHARE DATA

Set forth below are the comparative net income and book value per
common share data of (a) each of the Company and ETC-Texas on an historical
basis, (b) the Company on a pro forma combined basis giving effect to the
Merger, and (c) ETC-Texas on an equivalent pro forma combined basis giving
effect to the Merger, in each case giving effect to the Merger as a reverse
acquisition accounted as a recapitalization of ETC-Texas, with ETC-Texas as
an acquirer, all on the basis described in the unaudited pro forma
condensed financial information and notes thereto included elsewhere in
this Proxy Statement/Prospectus. Neither company paid any dividends to
their shareholders during the periods presented.

The information set forth below should be read in conjunction with the
respective audited and unaudited financial statements and related notes of
the Company and ETC-Texas included elsewhere in this Proxy
Statement/Prospectus and the unaudited pro forma condensed financial
information and notes thereto included elsewhere in this Proxy
Statement/Prospectus.

THE COMPANY
PER COMMON SHARE DATA

<TABLE>
<CAPTION>
Year Ended Nine Months Ended
---------------------- -----------------------
December 31, September 30, 1996
---------------------- -----------------------
1995 (Unaudited)
---------------------- -----------------------
<S> <C> <C>
HISTORICAL:
Net earnings (loss) - primary . . . . . . . . . . . . . . . . . $ 0.09 $ 0.00
--------------------- ----------------------
Net earnings (loss) - fully diluted . . . . . . . . . . . . . . $ 0.06 $ 0.00
--------------------- ----------------------
Book value . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.30) $ 0.31
--------------------- ----------------------

ETC-TEXAS
PER COMMON SHARE DATA

HISTORICAL:
Net earnings (loss) - primary . . . . . . . . . . . . . . . . . $ (0.32) $ (0.22)
--------------------- ----------------------
Net earnings (loss) - fully diluted . . . . . . . . . . . . . . $ (0.32) $ (0.22)
--------------------- ----------------------
Book value . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.03 $ (0.06)
--------------------- ----------------------

COMBINED PRO FORMA
PER COMMON SHARE DATA

PRO FORMA COMBINED AFTER THE MERGER(1)(3):
Net earnings (loss) - primary . . . . . . . . . . . . . . . . . $ (0.15) $ (0.18)
--------------------- ----------------------
Net earnings (loss) - fully diluted . . . . . . . . . . . . . . $ (0.15) $ (0.18)
--------------------- ----------------------
Book value . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.02) $ (0.05)
--------------------- ----------------------

EQUIVALENT PRO FORMA COMBINED AFTER THE MERGER(2)(3):
Net earnings (loss) - primary . . . . . . . . . . . . . . . . . $ (0.26) $ (0.18)
--------------------- ----------------------
Net earnings (loss) - fully diluted . . . . . . . . . . . . . . $ (0.26) $ (0.18)
--------------------- ----------------------
Book value . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.02) $ (0.03)
--------------------- ----------------------

------------------------------
</TABLE>

(1) Represents the Company and ETC-Texas on a pro forma combined basis.

(2) Represents the Company and ETC-Texas on an equivalent pro forma
combined basis calculated by multiplying pro
forma combined amounts by the 1.25 Exchange Ratio.

(3) Pro forma per share data is presented based upon earnings from
continuing operations. See unaudited pro forma condensed financial
statements.

-11-
<PAGE> 24
RISK FACTORS

The following risk factors should be considered carefully in addition
to the other information in this Proxy Statement/Prospectus. Except for the
historical information contained herein, the discussion in this Proxy
Statement/Prospectus contains certain forward looking statements that involve
risks and uncertainties, such as statements of the Surviving Corporation's
plans, objectives, expectations and intentions. The cautionary statements made
in this Proxy Statement/Prospectus should be read as being applicable to all
related forward looking statements wherever they appear in this Proxy
Statement/Prospectus. The Surviving Corporation's actual results could differ
materially from those discussed here.

ACCUMULATED DEFICIT AND INDEPENDENT ACCOUNTANTS' REPORT REFERRING TO GOING
CONCERN UNCERTAINTIES

From inception, both the Company and ETC-Texas have incurred losses
from operations, and as of September 30, 1996 the Company and ETC-Texas had an
accumulated deficit of $1,075,800 and $2,821,201, respectively. On a pro forma
basis, as of September 30, 1996, the Surviving Corporation would have had an
accumulated deficit of $3,897,001 after the Continuance and the Merger. This
history of recurring losses indicates that the Surviving Corporation's
continuation as a going concern is dependent upon its ability to generate
sufficient cash flows to meet its obligations on a timely basis, to obtain
additional financing or capital and ultimately to attain profitable operations.
The independent accountants for both the Company and ETC-Texas, in their
reports regarding the Company's and ETC-Texas' financial statements for the
fiscal year ended December 31, 1995, respectively, stated that, since the
Company and ETC-Texas had a history of losses since inception and had a
significant working capital deficit, substantial doubt existed as to their
ability to continue as a going concern. See "Management's Discussion and
Analysis of the Company's and ETC-Texas' Financial Condition and Results of
Operations."

WORKING CAPITAL DEFICIT; LACK OF LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 1996, the Company had total current assets of $140
and total current liabilities of $150,946 resulting in a working capital
deficit of $150,806. Also as of September 30, 1996, ETC-Texas had total
current assets of $438,211 and total current liabilities of $495,696 resulting
in a working capital deficit of $57,485. On a pro forma basis, as of September
30, 1996, the Surviving Corporation would have had total current assets of
$438,351 and total current liabilities of $646,502 resulting in a working
capital deficit of $208,151. Prior to September 30, 1996, the Company
converted $837,428 of debt into 837,428 shares of Company Common Stock. The
ability of the Surviving Corporation to sustain its working capital, and to
obtain the necessary capital resources to fund future costs associated with its
operations and expansion plans is dependent upon: (i) improving claims
processing operations through cost reductions and increased market penetration;
(ii) entering into long-term claims processing contracts with self-insured
companies, third-party administrators and management services organizations;
and (iii) its ability to link the various medical claims processing activities
of payees and payors. Even if the Surviving Corporation achieves some success
with its operational strategy, there can be no assurance that it will be able
to generate sufficient revenues to sustain its working capital and have funds
available for growth. To achieve all of its objectives, the Surviving
Corporation may be required to raise additional working capital in the short
term by issuing debt and/or equity securities. If the Surviving Corporation is
unable to raise additional capital as needed, it could be forced to limit its
expansion plans. See "The Companies -- Business Information Concerning the
Company," "The Companies -- Business Information Concerning ETC-Texas" and
"Management's Discussion and Analysis of the Company's and ETC-Texas' Financial
Condition and Results of Operations."

ADDITIONAL FINANCING NEEDED

Without additional capital, the Surviving Corporation may have to
curtail its expansion plans, and there can be no assurance of the Surviving
Corporation's ability to raise additional capital in the future.

LIMITED OPERATING HISTORY; ABSENCE OF PROFITS

The Surviving Corporation will be assuming the business operations of
ETC-Texas as the Company has no significant operations or assets. ETC-Texas'
operations have a limited operating history upon which an evaluation of its
performance can be made. As such, the Surviving Corporation's prospects must
be considered in light of the risks, expenses and difficulties frequently
encountered in the establishment and operation of a new business in the medical
claims processing industry. There can be no assurance that the Surviving
Corporation will be able to generate operating income, and net income in the
future will depend on the Surviving Corporation's management of its existing
operations, the success of management's plans to sustain ETC-Texas' working
capital, the nature and extent of market penetration and expansion, capital
structure and general economic conditions.

-12-
<PAGE> 25
PROBABILITY OF CONTINUED LOSSES

ETC-Texas incurred losses of approximately $1,093,000 for the fiscal
year ended December 31, 1995 and $1,517,872 for the nine months ended September
30, 1996. In addition to the historical losses of ETC-Texas, the Surviving
Corporation expects to have continued losses in the short term primarily as a
result of (i) its accumulated deficit and (ii) capital expenditures related to
the installation of claims processing systems into client's businesses during
the initial 90-day no-risk review period. See "The Companies -- Business
Information Concerning ETC-Texas."

DEPENDENCE ON QUALITY OF CLAIMS PROCESSING SERVICES

Substantially all of ETC-Texas' revenues are currently derived from
electronic claims processing services provided to third parties. There can be
no assurances that ETC-Texas' processing methodology will meet the demands of
the marketplace in the future. The Surviving Corporation's future success and
financial performance will depend in large part upon its ability to provide an
increasing system functionality required by its customers through the linkage
of payees and payors of medical claims. There can be no assurance that the
Surviving Corporation will successfully implement electronic claims processing
applications that will meet the requirements of health care providers and
payors and thereby achieve market acceptance. Failure to meet the needs of
health care providers and payors will have a materially adverse effect upon the
business operations of the Surviving Corporation. See "The Companies --
Business Information Concerning ETC-Texas."

DEPENDENCE ON MAJOR CLIENT

For the nine months ended September 30, 1996, claims processing
services provided to Wal-Mart Stores, Inc. ("Wal-Mart"), ETC-Texas' largest
client, accounted for approximately 65% of ETC-Texas' revenues. For the
identical period, claims processing services provided to Willse & Associates
accounted for approximately 15% of ETC-Texas' revenues. The loss of either
client could have a materially adverse effect on the Surviving Corporation and
its business. No other client accounted for as much as 10% of ETC-Texas net
revenue for the referenced period. See "The Companies -- Business Information
Concerning ETC-Texas" and "Management's Discussion and Analysis of the
Company's and ETC-Texas' Financial Condition and Results of Operations."

NO FAIRNESS OPINION OBTAINED BY EITHER THE COMPANY OR ETC-TEXAS

The factors considered by the Boards of Directors of the Company and
ETC-Texas in establishing the Exchange Ratio included: (i) a dilution
percentage previously agreed upon by the shareholders of the Company during
management's initial efforts to find a suitable merger or acquisition
candidate, (ii) the public nature and existing shareholder base of the Company,
(iii) the operating and financial history of both the Company and ETC-Texas,
(iv) the benefits afforded to ETC-Texas in being a public entity, including
market credibility resulting in an expansion of ETC-Texas' existing client base
and the ability to raise additional capital, and (v) the potential for growth
in value of the Company Common Stock in light of the Company's present
financial condition, which includes no significant assets or operations. See
"The Merger -- Background to the Merger; -- The Company's Reasons for the
Merger; Recommendation of the Company's Board of Directors; and -- ETC-Texas'
Reasons for the Merger; Recommendation of ETC-Texas' Board of Directors."
Neither the Company nor ETC-Texas engaged an independent third party to review
the terms of the Continuance and the Merger and prepare a fairness opinion
related to the Exchange Ratio. As no independent third party reviewed the
terms of the Continuance and the Merger, shareholders of the Company and
ETC-Texas will be asked to make a decision regarding these transactions based
solely on the information provided by and opinions of management of the
respective companies without the benefit of an independent opinion as to the
fairness of either the Continuance or the Merger. Shareholders of the Company
and ETC-Texas are advised that as no independent review of the transactions
contemplated herein was obtained the fairness of certain benefits to accrue to
the officers and directors of ETC-Texas has not been assessed, which benefits
include continued employment with the Surviving Corporation at existing salary
levels and assumption of stock option agreements and other contractual
obligations by the Surviving Corporation. See "-- Interest of Certain Persons
in the Merger."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

If the Merger is consummated, certain of the officers and directors of
the Company and ETC-Texas, respectively, will derive certain benefits which are
in addition to their interests as shareholders of the Surviving Corporation.
Specifically, the Employment Agreement of L. Cade Havard with ETC-Texas will be
assigned to and assumed by the Surviving Corporation. Furthermore, Mr.
Havard's options to purchase 300,000 shares of ETC-Texas Common Stock at an
exercise price of $0.001

-13-
<PAGE> 26

per share, when vested, will be converted into options to purchase the
identical number of shares of Continued Common Stock. Edward Bollinger and
Katherine L. MacDonald, both directors of the Company, hold options to purchase
an aggregate of 20,000 shares of Company Common Stock at a purchase price of
$1.50 per share on or before June 15, 1997. Upon completion of the Merger, Mr.
Bollinger and Ms. MacDonald shall have the right to acquire the identical
number of shares of Continued Common Stock upon payment of the $1.50 exercise
price on or before June 15, 1997. The executive officers of ETC-Texas,
including Elaine Boze, Ann C. Dearmon, Louann C. Smith and Timothy P. Powell,
will have their employment contracts assigned to and assumed by the Surviving
Corporation, and all options to purchase shares of ETC-Texas Common Stock
granted by ETC-Texas to employees or affiliates of ETC-Texas will be converted
into options to purchase the identical number of shares of Continued Common
Stock at the identical exercise price. Also, Michael Eckstein, a director of
ETC-Texas, shall have the right to receive options to purchase 100,000 shares
of Continued Common Stock at an exercise price of $0.001 per share upon
completion of the Merger. Also, ETC-Texas has entered into a marketing
agreement with MS3. Rick Snyder, a director of ETC-Texas, is the principal
owner of MS3. The Surviving Corporation will continue to honor the terms of
this marketing agreement. It will be the Surviving Corporation's policy that
transactions between it and its affiliates will be on terms no less favorable
than could be obtained from unaffiliated third parties and approved by a
majority of the disinterested members of the Board of Directors. See "The
Merger -- Interests of Certain Persons in the Merger" and "Certain
Transactions."

COMPETITION

ETC-Texas is aware that there are many entities which offer either
electronic claims automation processing or paper claims conversion and
services, and there are many companies which provide contracting for discount
and repricing services for the benefit of participants in the market currently
served by ETC-Texas. Furthermore, ETC-Texas' claims processing methodology is
easily duplicated. There are certain insurance companies or other third party
administrators and management services organizations which are substantially
larger than the Surviving Corporation with much greater financial and technical
resources and longer operating histories than the Surviving Corporation which
provide certain of the services currently offered by ETC-Texas on a national
basis, including claims processing, data entry and medical claims repricing.
The Surviving Corporation may encounter additional competition if a segment
competitor offers the range of services provided by ETC-Texas in a format
similar to that utilized by ETC-Texas. Also, the Surviving Corporation will
face substantial competition as it expands within the health care industry.
There can be no assurance that the Surviving Corporation will compete
effectively within the health care industry. Furthermore, the Surviving
Corporation is subject to an industry characterized by constantly evolving
technology. There can be no assurance that the Surviving Corporation's
existing processing methodology will not become obsolete before the Surviving
Corporation has the resources to alter its work flow process, as needed, to
more efficiently serve the marketplace in which it operates. See "The
Companies -- Business Information Concerning ETC-Texas."

PROPRIETARY RIGHTS, RISK OF INFRINGEMENT

The Surviving Corporation will rely on nondisclosure and other
contractual provisions to protect its proprietary rights. ETC-Texas has
registered its service mark in the State of Texas and has made application to
do so in the States of Maryland and Arkansas. ETC-Texas has also copyrighted
its ETC Claims Flow Chart and Managed Care Claim Flow Chart. ETC-Texas has
made application with the United States Patent and Trademark Office to
copyright its Automated Claim Flow Options for Payor Chart and segments of its
marketing brochure. There can be no assurance that measures taken by ETC-Texas
to protect its intellectual property will be adequate or that the Surviving
Corporation's competitors will not independently develop services that are
substantially equivalent or superior to those of the Surviving Corporation.
There can be no assurance that third parties will not assert infringement
claims against the Surviving Corporation in the future or that a license or
similar agreement will be available on reasonable terms in the event of an
unfavorable ruling on any such claim. In addition, any such claim may require
the Surviving Corporation to incur substantial litigation expenses or subject
the Surviving Corporation to significant liabilities and could have a
materially adverse effect on the Surviving Corporation's business, financial
condition or results of operations.

DEPENDENCE ON KEY PERSONNEL

The Surviving Corporation will continue to be dependent to a
significant extent upon the efforts and ability of L. Cade Havard, its Chairman
of the Board, President and Chief Executive Officer. The loss of the services
of either Mr. Havard or any other executive officer of the Surviving
Corporation could have a materially adverse effect on the Surviving
Corporation. Neither the Company nor ETC-Texas maintains key-man life
insurance on Mr. Havard. However, it is anticipated that a key-man life
insurance policy will be obtained on the life of Mr. Havard, with the Surviving
Corporation as the sole beneficiary thereof, following the consummation of the
Merger. Mr. Havard has entered into employment and non-competition agreements
with ETC-Texas which will be assumed by the Surviving Corporation. In
addition, the Surviving Corporation's future growth will be dependent to a
significant degree upon its ability to attract and retain additional skilled
management personnel. See "The Merger -- Election of Surviving Corporation
Directors."

-14-
<PAGE> 27
CONTROL BY EXISTING SHAREHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS OF ETC-TEXAS

ETC-Texas's existing executive officers, directors and their
affiliates, will beneficially own approximately 55% of the outstanding
shares of the Continued Common Stock following the Merger. As a result, these
shareholders will continue to be able to elect all of the Surviving
Corporation's directors, will retain the voting power to approve most matters
requiring shareholder approval and will continue to have significant influence
on the affairs of the Surviving Corporation. Such concentration of ownership
may have the effect of delaying, deferring or preventing a change in control of
the Surviving Corporation. See "Beneficial Ownership of Securities."

CONFLICTS OF INTEREST

Certain officers, directors and related parties have engaged in
business transactions with ETC-Texas and the Company. ETC-Texas has entered
into consulting, marketing and leasing agreements, respectively, with certain
of its directors and shareholders. It is anticipated that upon effectiveness
of the Merger, these agreements will be assigned to and assumed by the
Surviving Corporation. Management of both the Company and ETC-Texas believe
that the terms of transactions with officers, directors and related parties of
the respective entities were as favorable as those that could have been
obtained from unaffiliated parties under similar circumstances. It will be the
Surviving Corporation's policy that transactions between it and its affiliates
will be on terms no less favorable than could be obtained from unaffiliated
third parties and be approved by a majority of the disinterested members of the
Board of Directors of the Surviving Corporation. L. Cade Havard, the Chairman
of the Board, President, Chief Executive Officer and the majority shareholder
of ETC-Texas, owns and participates in the management of a factoring company.
It is not anticipated that conflicts of interest will arise between Mr. Havard
and the Surviving Corporation as a result of his ownership and management of
this entity, nor will Mr. Havard be required to devote a significant amount of
his time to the management of this business. See "The Merger -- Interests of
Certain Persons in the Merger" and "Certain Transactions."

EMPLOYEE LEASING AGREEMENT

Since January 1, 1996, ETC-Texas has been a party to a Staff Leasing
Services Agreement with Network Employers Group, Inc. ("Network"). The Staff
Leasing Services Agreement, with the consent of Network, which is not expected
to be denied, will be assigned to and assumed by the Surviving Corporation upon
completion of the Merger. If Network failed to consent to the assignment (or
failed to meet its obligations under the agreement), the Surviving Corporation
would have to either locate a substitute employee leasing firm or directly
employ its labor force. In addition to the potential increased costs in
employing its own labor force or pursuing another leasing firm, worker's
compensation coverage through Network could be at a more favorable rate than
that available in the general worker's compensation pool for comparable classes
of employees from which the Surviving Corporation might be required to look to
for such coverage. Furthermore, should a payroll payment be tendered to
Network by the Surviving Corporation under the agreement, and should Network
not apply such payment toward a payroll payment to the Surviving Corporation's
work force for any reason, the Surviving Corporation may be required to cover
such deficiency to avoid the loss of its work force. See "The Companies --
Business Information Concerning ETC-Texas."

CONSOLIDATION AND UNCERTAINTY IN THE HEALTH CARE INDUSTRY

Consolidation of the payor and provider segments of the health care
industry could erode the Surviving Corporation's customer base and reduce the
size of the Surviving Corporation's target market. In addition, the resulting
enterprises could have greater bargaining power, which could lead to price
erosion of the Surviving Corporation's services. The reduction in the size of
the Surviving Corporation's target market or the failure of the Surviving
Corporation to maintain adequate price levels could have a materially adverse
effect on the Surviving Corporation's business, financial condition and results
of operations. The health care industry also is subject to change of
political, economic and regulatory influences that may affect the procurement
of contracts and the operation of health care industry participants. During
the past several years, the United States health care industry has been subject
to an increase in governmental regulation reform proposals. These reforms may
increase governmental involvement in health care, lower reimbursement rates,
and otherwise change the operating environment for the Surviving Corporation's
customers. The failure of the Surviving Corporation to retain adequate claims
processing efficiency or price levels as a result of legislative or market
driven reforms could have a materially adverse effect on the Surviving
Corporation's business, financial conditions and results of operations. See
"The Companies -- Business Information Concerning ETC-Texas."

-15-
<PAGE> 28
EFFECT OF GOVERNMENT REGULATION

The Surviving Corporation will not be subject to any direct federal or
state government regulation because of the nature of its business. There can
be no assurance that federal or state authorities will not in the future impose
restrictions on its activities that might adversely effect the Surviving
Corporation's business. The failure by the Surviving Corporation to obtain or
retain any applicable licenses, certifications or operational approvals could
adversely effect its existing operations and professional performance. There
can be no assurance that in the future the Surviving Corporation will be able
to acquire all the necessary licenses, permits or approvals, if any, necessary
to conduct its business or that the costs associated with complying with laws
and regulations affecting its business will not have a materially adverse
effect on the Surviving Corporation.

POTENTIAL ANTI-TAKEOVER EFFECTS OF DELAWARE LAW, CERTIFICATE OF INCORPORATION
AND BYLAWS

Certain provisions of Delaware law applicable to the Surviving
Corporation could delay or make more difficult mergers, tender offers or proxy
contests involving the Surviving Corporation. In addition, the Board of
Directors of the Surviving Corporation may issue shares of preferred stock
without shareholder approval on such terms as the Board of Directors may
determine. The rights of all the holders of Continued Common Stock will be
subject to, and may be adversely effected by, the rights of the holders of any
preferred stock that may be issued in the future. In addition, the Surviving
Corporation Charter and Surviving Corporation Bylaws eliminate the right of
shareholders to act by written consent without a meeting and eliminate
cumulative voting in the election of directors. All of the foregoing could
have the effect of delaying, deferring or preventing a change in control of the
Surviving Corporation and could limit the price that certain investors might be
willing to pay in the future for shares of the Continued Common Stock. See
"Management" and "Description of Securities."

NO PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

There is no public market for the Company Common Stock and there can
be no assurance that a viable public market for the Continued Common Stock will
develop or be sustained after the Continuance and the Merger have been
consummated. Factors such as market expansion, the development of additional
services, its competitors and other third parties, as well as quarterly
variations in the Surviving Corporation's anticipated or actual results of
operations or market conditions generally, may cause the market price of the
Continued Common Stock to fluctuate significantly if a trading market does in
fact develop. In addition, the stock market has on occasion experienced
extreme price and volume fluctuations, which have particularly effected the
market prices of many companies. These broad market fluctuations may adversely
effect the market price of the Continued Common Stock, if a trading market is
established.

OVER-THE-COUNTER TRADING MARKET

If the Surviving Corporation is unable to satisfy the listing
requirements of the Nasdaq SmallCap Market, and no assurance can be given that
the Surviving Corporation will meet such criteria, trading, if any, in the
Continued Common Stock will thereafter be conducted on The OTC-Bulletin Board.
Consequently, liquidity of the Surviving Corporation's securities could be
impaired, not only in the number of securities which could be bought and sold,
but also through delays in the timing of transactions, reduction in security
analysts and the news media coverage of the Surviving Corporation and lower
prices for the Surviving Corporation's securities than might otherwise be
attained.

RISKS OF LOW-PRICED STOCK

If the Surviving Corporation's securities are traded on The
OTC-Bulletin Board, they will become subject to Rule 15(g)-9 under the Exchange
Act, which imposes additional sales practice requirements on broker/dealers who
sell securities to persons other than established customers and accredited
investors (generally, individuals with net worths in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 together with their spouses). For
transactions covered by this rule, a broker/dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to sale. Consequently, such rule may
adversely effect the ability of broker/dealers to sell the Surviving
Corporation's securities and may adversely effect the holder's ability to sell
in the secondary market.

The Commission's regulations define a penny stock to be any non-Nasdaq
equity security that has a market price (as therein defined) of less than $5.00
or with an exercise price of less than $5.00 per share subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
Commission's rules require delivery, prior to any transaction in penny stock,
of a disclosure schedule prepared by the Commission relating to the penny stock
market. Disclosure is also required to be made about commissions to both the
broker/dealer and the registered representative in current quotations for the
securities. Finally, monthly statements are required to be sent disclosing
recent price information for the penny stock held in the account and
information on the limited market in penny stocks.

The foregoing required penny stock restrictions will not apply to the
Surviving Corporation's securities if such securities are listed on Nasdaq and
have certain price and volume information provided on a current and continuing
basis or meet certain minimum net tangible assets or average revenue criteria.
There can be no assurance that the Surviving Corporation's

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securities will qualify for exemption from these restrictions. In any event,
even if the Surviving Corporation's securities were exempt from such
restrictions, they would remain subject to Section 15(b)(6) of the Exchange
Act, which gives the Commission the authority to prohibit any person that is
engaged in unlawful conduct while participating in a distribution of a penny
stock from associating with a broker/dealer for participating in a distribution
of a penny stock, if the Commission finds that such restriction would be in the
public interest. If the Surviving Corporation's securities were subject to the
rules on penny stock, the market liquidity for the Surviving Corporation's
securities could be severely adversely effected.

LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS

Pursuant to the Surviving Corporation Bylaws, as authorized under the
DGCL, directors and officers of the Surviving Corporation will not be liable
for monetary damages for breach of fiduciary duty, except in connection with a
breach of the duty of loyalty, for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law. Furthermore,
the Surviving Corporation Bylaws will provide that the Surviving Corporation
may indemnify its directors, officers, employees or agents to the full extent
permitted by the DGCL, and the Surviving Corporation shall have the right to
purchase and maintain insurance on behalf of any such person whether or not the
Surviving Corporation would have the power to indemnify such person against the
liability. The Surviving Corporation intends to enter into indemnification
agreements with each of its directors and officers, which agreements will
provide that the Surviving Corporation will indemnify the indemnitee to the
fullest extent permitted by applicable law, provided that the indemnitee acted
in good faith and in the manner he reasonable believed to be in the best
interests of the Surviving Corporation and, with respect to any criminal
action, had reasonable cause to believe his conduct was lawful.

PAYMENT OF DIVIDENDS

Neither the Company nor ETC-Texas has ever declared or paid any cash
dividends on its capital stock. It is anticipated that future earnings of the
Surviving Corporation will be retained to finance the continuing development of
its business. The payment of any future dividends will be at the discretion of
the Board of Directors of the Surviving Corporation and will depend upon, among
other things, future earnings, the success of business activities, regulatory
and capital requirements, the general financial condition of the Surviving
Corporation and general business conditions.

PRIOR OFFERINGS

Both ETC-Texas and the Company have issued securities in transactions
believed by their respective management to have been exempt from the securities
regulation requirements under applicable securities laws. If for any reason
the claimed exemptions were found not to be available for any securities
transactions engaged in by either the Company or ETC-Texas, the Surviving
Corporation could be subject to investor claims resulting in civil liabilities,
the amount of which could be materially adverse to the Surviving Corporation.

THE CONTINUANCE

Generally, the Company is being continued and domesticated into the
State of Delaware in order to facilitate its merger with ETC-Texas in
fulfillment of its business strategy. See "The Merger" and "The Companies --
Business Information Concerning the Company." By taking these steps to
accomplish the Continuance, management is also of the opinion that the
Company's internal procedures will also be simplified in the areas of
accounting, tax, securities and general operations. After the Continuance, the
Company will no longer be obligated to comply with Canadian law that affects
these matters.

Additionally, the Continuance allows for the Company to be positioned
to be listed on a U.S. securities exchange. By achieving a listing on a U.S.
securities exchange, management is of the opinion that a wider and more
significant market will be available to allow for the trading of the Continued
Common Stock than what currently exists for the Company Common Stock. This
type of trading will provide a direct benefit to the Company's shareholders in
their efforts to trade the Company's securities. The Company has not applied
for, and there is no assurance that the Company will, after the Continuance and
the Merger, qualify for listing on a U.S. securities exchange. See "Risk
Factors -- No Public Market; Possible Volatility of Stock Price."

For those shareholders who are opposed to the Continuance, dissenters'
rights are set forth by law to govern the valuation process. For more
information regarding dissenters' rights, see "-- Right of Dissent."

RIGHT OF DISSENT

Shareholders of the Company will be asked to consider and, if thought
fit, pass a special resolution authorizing the Continuance of the Company out
of the Province of Alberta and into the State of Delaware in accordance with
Section 182 of the Alberta Business Corporations Act (the "ABCA"). The
Continuance gives a right to dissent to the Company's shareholders.

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Each of the Company's shareholders is entitled to dissent and be paid
the fair value of such shareholder's shares if the shareholder objects to the
Continuance and the Continuance becomes effective. The shareholder may dissent
only with respect to all of the shares held by the shareholder on behalf of any
one beneficial owner and registered in the shareholder's name. A shareholder
is not entitled to dissent from the resolution with respect to any shares
beneficially owned by one owner if the shareholder votes any shares
beneficially owned by that owner in favor of the resolution that is adopted.
In order to dissent, a shareholder must send to the Company, c/o Beaumont
Church, Barristers and Solicitors, 2200 AGT Tower, 411 -- 1st Street S.E.,
Calgary, Alberta, Canada T2G 5E7, on or before the date of the Meeting, a
written objection (an "Objection Notice") to the Continuance in respect of
which the shareholder proposes to dissent. A vote against the Continuance or
an abstention in respect thereof does not constitute such an Objection Notice,
but a shareholder need not vote his shares against the Continuance in order to
dissent in respect of the Continuance. Similarly, the revocation of a proxy
conferring authority on the proxy holder to vote in favor of the Continuance
does not constitute an Objection Notice in respect of the Continuance, but any
such proxy granted by a shareholder who intends to dissent should be validly
revoked. Within 10 days following the date of the Meeting, the Company will
deliver to each shareholder who has filed an Objection Notice in respect of the
resolution passed at the Meeting, at the address specified for such purpose in
the Objection Notice, a notice stating the special resolution authorizing the
Continuance has been adopted.

After the Continuance has been approved, an application may be made to
the Court of Queen's Bench of Alberta (the "Court") by the Company or by any
dissenting shareholder to fix the fair value of the shares of the Company
Common Stock held by the dissenting shareholder. If an application is made to
the Court, the Company shall, unless the Court otherwise orders, send to each
dissenting shareholder a written offer (the "Offer to Purchase") to pay him an
amount considered by the Board of Directors of the Company to be the fair value
of such shares as of the close of business on the day before the Meeting
accompanied by a statement showing how the fair value was determined. Every
Offer to Purchase shares of Company Common Stock made to a shareholder of the
Company Common Stock who dissents to the Continuance shall be on the same terms
as every other Offer to Purchase made to other dissenting shareholders of the
Company.

A dissenting shareholder may make an agreement with the Company for
the purchase of his shares by the Company in the amount of the Company's Offer
to Purchase or otherwise at any time before the Court fixes the fair value of
the shares. If a settlement cannot be reached, the parties will proceed to the
Court. All dissenting shareholders whose shares have not been purchased by the
Company will be joined as parties to the application and will be bound by the
decision of the Court. The Court order will fix the fair value of the shares
of all dissenting shareholders who are parties to the application, give
judgment in that amount against the Company in favor of each of the dissenting
shareholders and fix the time within which the Company must pay the amount to
the dissenting shareholders.

On the earlier of: (a) the Company being continued into Delaware, (b)
the Company and the dissenting shareholder entering into a settlement
agreement, or (c) the pronouncement of a Court order giving judgment against
the Company for the fair value of the shares of the dissenting shareholder, a
dissenting shareholder ceases to have any rights as a shareholder of the
Company other than the right to be paid the fair value of his shares. The
Company will not make a payment to a dissenting shareholder if there are
reasonable grounds for believing that: (a) the Company is or would after the
payment be unable to pay its liabilities as they become due or (b) the
realizable value of the Company's assets would thereby be less than the
aggregate amount of its liabilities. If either of these tests cannot be met,
the Company shall within 10 days of the Court order or reaching its settlement
with a dissenting shareholder send a notice to each dissenting shareholder that
the Company cannot lawfully make the payment for the shares. Once this notice
is received, a dissenting shareholder may, by written notice delivered to the
Company within 30 days after receiving the Company's notice, withdraw his
Objection Notice, in which case the dissenting shareholder is returned his full
rights as a shareholder. If the dissenting shareholder does not withdraw his
Objection Notice, he retains his status as a claimant against the Company to be
paid as soon as the Company is lawfully able to do so or, in liquidation, to be
ranked subordinate to the rights of the creditors but in priority to its
shareholders.

The foregoing is only a summary of the rights of dissenting
shareholders and is qualified in its entirety by the provisions of Section 184
of the ABCA, a copy of which is attached as Appendix "G". Any shareholder
desiring to exercise a right of dissent should seek legal advice and his
failure to comply strictly with the provisions of that section may prejudice
that right. The right of shareholders to dissent is not exclusive of any other
rights available to shareholders generally, such as rights in respect of a
corporate director's duties of good faith and care under the ABCA, or
otherwise.

DIFFERENCE BETWEEN THE DELAWARE CODE AND ALBERTA BUSINESS CORPORATIONS ACT

After the Continuance, and upon consummation of the Merger,
shareholders of the Company will become shareholders of the Surviving
Corporation and subject to the DGCL. The DGCL is similar in many ways to the
ABCA, to which the Company is now subject, but differs in several material
respects, including the following:

VOTE ON EXTRAORDINARY CORPORATE TRANSACTIONS. Under the ABCA,
continuances, sales of substantially all assets of a corporation, amendments to
the articles of incorporation and other extraordinary corporate actions require
authorizations by a special resolution, meaning a resolution passed by sixty-
six and two-thirds percent (66-2/3%) of the votes cast by the shareholders who
voted in respect of that resolution, or by instrument signed by all
shareholders entitled to vote on that

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resolution. Under the DGCL, mergers or consolidations require the approval of
the holders of a majority of the outstanding stock of the corporation entitled
to vote thereon. A sale, lease or exchange of all or substantially all the
property and assets of a corporation requires the approval of the holders of a
majority of the outstanding stock of the corporation entitled to vote thereon,
and an amendment to the certificate of incorporation of a corporation generally
requires the approval of the holders of a majority of the outstanding stock
entitled to vote thereon.

BYLAW AMENDMENTS. Under the ABCA, either shareholders or directors
may make, amend or repeal bylaws (subject to any restrictions under the
articles, bylaws or any unanimous shareholder agreement), but any such action
of the directors with respect to the bylaws are subject to later confirmation
by resolution passed by a majority of the votes cast by the shareholders
entitled to vote on that resolution. Under the DGCL, after a corporation has
received any payment for any of its stock, the shareholders entitled to vote
thereon, and where authorized by the certificate of incorporation, the
directors may adopt, amend or repeal the bylaws. The Surviving Corporation
Charter authorizes the Board of Directors of the Surviving Corporation to
adopt, amend or repeal the Surviving Corporation Bylaws.

REMOVAL OF DIRECTOR. Directors generally may be removed under the
ABCA by ordinary resolution, meaning a resolution passed by a majority of the
votes cast by the shareholders who voted in respect of that resolution.
Directors generally may be removed, with or without cause, under the DGCL by
holders of a majority of shares then entitled to vote at an election of
directors. Directors of an ABCA corporation may be removed at any time without
cause; directors of a Delaware corporation may be removed without cause unless
the board is classified, in which case directors may be removed for cause only,
unless the certificate of incorporation provides otherwise. The Surviving
Corporation Bylaws will provide that any director may be removed, either with
or without cause, by the affirmative vote of the holders of record of a
majority of the issued and outstanding stock entitled to vote thereon.

QUORUM OF SHAREHOLDERS. A quorum for a shareholder meeting under the
ABCA consists of the holders of a majority of shares entitled to vote present
in person or represented by proxy at the meeting unless the bylaws provide
otherwise. Under the DGCL, a quorum consists of a majority of shares entitled
to vote present in person or represented by proxy unless the certificate of
incorporation or bylaws provide otherwise, but in no event may a quorum consist
of less than one-third of shares entitled to vote at the meeting. The
Surviving Corporation Bylaws will state that in the absence of a quorum, the
holders of a majority of the shares present in person or represented by proxy
and entitled to vote may adjourn the meeting to another date and time.

NOTICE AND CALL OF SHAREHOLDER MEETINGS. Under the ABCA, shareholder
meetings may be called by the board of directors, who must call a meeting when
so requisitioned by holders of not less than 5% of the issued shares that carry
the right to vote, on not less than 21 days and not more than 50 days notice.
Under the DGCL, unless the certificate of incorporation or bylaws authorize
additional persons, only the board of directors may call a special
shareholders' meeting. Under the DGCL, written notice of any meeting of
shareholders shall be given not less than 10 nor more than 60 days before the
date of the meeting to each shareholder entitled to vote at such meeting
(provided that a minimum of 20 days notice is required for a merger). Under
the Surviving Corporation Bylaws, special meetings of the shareholders may be
called by the Chairman of the Board of Directors, the President of the
Surviving Corporation, the Board of Directors or by the holder(s) of at least
10% of the outstanding Continued Common Stock entitled to vote at such meeting,
unless otherwise prescribed by statute.

SHAREHOLDER WRITTEN CONSENT IN LIEU OF MEETING. Under the ABCA,
shareholder actions without a meeting may be taken by resolution in writing
signed by all of the shareholders entitled to vote. Under the DGCL,
shareholders may act by written consent without a meeting if holders of
outstanding stock, having not less than the minimum number of votes that would
be necessary to take such action at a meeting at which all shares entitled to
vote thereon were present and voting, execute a written consent providing for
such action unless otherwise provided in the corporation's certificate of
incorporation.

APPRAISAL RIGHTS. The DGCL does not grant appraisal rights in a
merger or consolidation to holders of stock which is, either (a) listed on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc., (the "NASD") or (b) held of record by more than 2,000
shareholders, provided that such holders receive shares of stock of the
corporation surviving the merger or consolidation which is either listed on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the NASD or held of record by more than
2,000 shareholders. The ABCA does not contain any similar exemption from its
provisions relating to dissenters' rights of appraisal for amalgamation.
Notwithstanding the foregoing, appraisal rights are available under the DGCL
for sales of all or substantially all of the corporation's assets, any merger
or consolidation in which the corporation is a constituent corporation, or for
amendments to its certificate of incorporation if the certificate of
incorporation so provides.

Shareholders are entitled to dissent and appraisal rights under the
ABCA in connection with any sale of substantially all the assets of a
corporation outside the ordinary course of business, for amendments to its
articles of incorporation such as those affecting share issuance,
transferability or ownership of shares of the class held by a dissenting
shareholder, or amendments to its articles of incorporation to add, change or
remove any restriction on the business of the corporation, or relating to
amalgamation, or continuance. Also, the ABCA provides rights of appraisal to
shareholders of a class of shares entitled to vote

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on proposals to amend the articles of incorporation to vary the number of
authorized shares of the class, effect a reclassification or cancellation of
shares of the class, affect restrictions, right or privileges attached to such
shares, create a new class of shares, or constrain the issue or transfer of
ownership of such shares.

SHAREHOLDER REGISTER. A Delaware corporation's stock list showing the
names, addresses and the number of shares registered in the name of each
shareholder may be inspected by shareholders of record for any purpose germane
to a shareholder's meeting. Under the ABCA, shareholders and creditors, where
the corporation is a distributing corporation, may inspect the list of
shareholders.

DIVIDENDS AND DISTRIBUTION. The DGCL and ABCA treat dividends
similarly. The DGCL permits a corporation, unless otherwise restricted by the
certificate of incorporation, to declare and pay dividends out of surplus or,
if there is no surplus, out of the net profits for the fiscal year in which the
dividend is declared and/or the preceding fiscal year (provided that the amount
of capital of the corporation is not less than the aggregate amount of the
capital represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets). In addition, the DGCL generally
provides that a corporation may redeem or repurchase its shares only if such
redemption or repurchase would not impair the capital of the corporation and
the capital of the corporation is not impaired.

Under the ABCA, a corporation may not declare or pay a dividend or
redeem or repurchase its shares if the corporation is, or would after the
payment be, unable to pay its liabilities as they become due, or if the
realizable value of the corporation's assets would thereby be less than the
aggregate of its liabilities and share capital of all classes.

DIRECTOR QUALIFICATIONS AND NUMBER. Under the ABCA, directors
generally must not transact business at a meeting of directors unless a
majority of directors present are resident Canadians. In addition, a majority
of the directors of a corporation must be resident Canadians. The DGCL has no
comparable requirement. The DGCL provides that the number of directors shall be
fixed by, or in the manner provided in, the bylaws unless the certificate of
incorporation fixes the number of directors. The articles of incorporation of
an ABCA corporation must specify the number or a range for number of directors
(minimum and maximum), and reductions in size within that range can only be
effected by the shareholders. The Surviving Corporation Charter will be silent
as to the number of directors. The Surviving Corporation Bylaws provide that
the Board of Directors may fix the number of directors to a number not less
than three.

DIRECTOR LIABILITY. The DGCL permits the certificate of incorporation
of a Delaware corporation (as does the Surviving Corporation Charter) to contain
a provision limiting the personal liability of a director to the shareholders or
the corporation for monetary damages for breach of fiduciary duty, except (i)
for any breach of a directors' duty of loyalty to the corporation or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of laws, (iii) for paying a
dividend or approving a stock repurchase in violation of statutory limitations,
or (iv) for any transaction from which a director derived an improper personal
benefit. Such a provision does not affect a director's liability under U.S.
federal securities laws. The Surviving Corporation Charter will contain such a
provision.

Under the ABCA, directors of a corporation who vote for or consent to a
resolution authorizing the issue of shares for consideration other than money
are jointly and severally liable to the corporation to make good any amount by
which the consideration received is less than the fair equivalent of the money
that the corporation would have received if the shares had been issued for
money. Directors of a corporation who authorize an improper purchase,
redemption or other acquisition of shares, authorize improper payments of
dividends, commissions, financial assistance, indemnities or other improper
payments to a shareholder are jointly and severally liable to restore to the
corporation any amounts so distributed. In addition, directors of a corporation
may be jointly and severally liable to employees for certain wages and salaries
payable to each employee for services performed for the corporation. The ABCA
has no provision limiting directors' liability as does the DGCL.

The liability limitations will be included in the Surviving Corporation
Charter in order to enhance the ability of the corporation to attract and retain
highly qualified people to serve as outside directors, and not in response to
any resignation, threat of resignation or refusal to serve by a director or
potential director of the Surviving Corporation. Furthermore, although the
effect of this provision of the DGCL on the insurance market generally will be
determined in the future based on the insurance industry experience, the Board
of Directors believes that the inclusion of this provision in the Surviving
Corporation Charter should help to make directors' liability insurance available
to the Surviving Corporation in the future. To the extent that such provision
would eliminate litigation for which the Surviving Corporation would otherwise
be obligated to indemnify directors for defense or other costs, the Surviving
Corporation would avoid director indemnification expense.

There has been no recent litigation involving the Board of Directors of
the Company or ETC-Texas or any of its members which might have been effected
had such a limitation of liability provision been in effect. Further, to the
best knowledge of the Company or ETC-Texas, there is no litigation pending or
threatened against any director of either corporation which would be effected by
such provision of the Surviving Corporation Charter.

INDEMNIFICATION OF OFFICERS AND DIRECTORS. Both the DGCL and the ABCA
authorize a corporation to indemnify its directors, officers, employees and
agents against all reasonable expenses (including legal fees) and, provided that
such individual

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(the "indemnitee") acted in good faith and for a purpose which he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, in the case of a criminal proceeding, had reasonable grounds
to believe his or her conduct was lawful. The DGCL authorizes a corporation to
indemnify its directors, officers, employees and agents against all reasonable
expenses (including legal fees) in connection with a lawsuit by or in the right
of the corporation to procure a judgment in its favor if such person acted in
good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be paid
as to any claim, issue or matter as to which such person has been adjudged
liable to the corporation unless it is determined by the court making such
adjudication of liability that, despite such finding, such person is fairly and
reasonably entitled for such expenses deemed proper. The DGCL contemplates
that the determination of whether the indemnitee is entitled to indemnification
is to be made in the specific case by a majority vote of the directors who are
not parties to such action, even though less than a quorum, by independent
legal counsel in a written opinion or by the shareholders, unless otherwise
determined by a court of competent jurisdiction, whereas the ABCA contemplates
a determination exclusively by a court. The Surviving Corporation Bylaws
provide for indemnification of directors, officers, employees or agents of the
Surviving Corporation as described above.

Under the DGCL and the ABCA, there is a right of mandatory
indemnification to the extent that an indemnitee is successful on the merits or
otherwise in defense of any action, suit or proceeding or any claim, issue or
matter therein. The DGCL allows for the advance payment of an indemnitee's
expenses prior to the final disposition of an action (as do the Surviving
Corporation Bylaws), provided that the indemnitee, if an officer or director of
the corporation, undertakes to repay any such amount advanced if it is later
determined that the indemnitee is not entitled to indemnification with regard
to the action for which his or her expenses were advanced, whereas the ABCA
does not expressly contemplate such an advance payment.

The DGCL and the ABCA permit a corporation to maintain insurance on
behalf of an indemnitee against any liability asserted against such indemnitee
by reason of his or her having been a director or officer, whether or not the
corporation would have the power to indemnify him or her against such
liabilities under the applicable provisions of the respective act. The ABCA
limits this in that insurance is not available where the liability relates to a
director's failure to act honestly and in good faith with a view to the best
interests of the corporation. In addition, the DGCL provides that the
indemnification rights provided by the provisions described above are not
exclusive of any rights to indemnification or advancement of expenses to which
such indemnitee may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, but the ABCA does not
contemplate such arrangements. The Surviving Corporation Bylaws will match the
provisions of the DGCL.

OPPRESSION RELIEF AND EQUITABLE REMEDIES. The ABCA creates a cause of
action for "oppression" and "unfairness" with respect to security holders,
creditors, directors and officers, and vests the courts with broad remedial
powers in connection therewith; the DGCL contains no comparable provision, and
the scope of the equitable powers of the DGCL as defined by existing case law
is less certain than the scope of the powers in Canada.

Certain differences between the powers granted to corporations under
the DGCL and the powers granted under the ABCA may make a Delaware corporation
somewhat less vulnerable than a Canadian corporation to hostile takeover
attempts. These differences include the absence of power of shareholders to
call special meetings unless expressly granted as discussed above, the power of
the directors to ascribe attributes to a series of preferred stock authorized
by the certificate of incorporation which give the series a priority over
another series within the class, and the restrictions on business combinations
discussed below. On the other hand, because of such provisions as the power of
shareholders to take action without a meeting by less than unanimous consent,
the DGCL may, under such circumstances, facilitate a hostile takeover attempt.

BUSINESS COMBINATIONS. The DGCL has a business combination statute
which provides that any person who acquires 15% or more of a corporation's
voting stock (thereby becoming an "interested shareholder") may not engage in
certain "business combinations" with the target corporation for a period of
three years following the date the person became an interested shareholder,
unless (1) the board of directors of the corporation has approved, prior to the
date such person acquires 15% or more of the voting stock, either the business
combination or the transaction that resulted in the person becoming an
interested shareholder, (2) upon consummation of the transaction that resulted
in the person becoming an interested shareholder, that person owns at least 85%
of the corporations' voting stock outstanding at the time the transaction is
commenced (excluding shares owned by persons who are both directors and
officers and shares owned by employee stock plans in which participants do not
have the right to determine confidentially whether shares will be tendered in a
tender or exchange offer), or (3) the business combination is approved by the
board of directors and authorized by the affirmative vote (at an annual or
special meeting and not by written consent) of at least sixty-six and two-
thirds percent (66-2/3%) of the outstanding voting stock not owned by the
interested shareholder.

For the purpose of determining whether a person is the "owner" of 15%
or more of a corporation's voting stock for these purposes, ownership is
defined broadly to include the right, directly or indirectly, to acquire the
stock or to control the voting or disposition of the stock. A "business
combination" is also defined broadly to include (1) merger and sales or other
dispositions of 10% or more of the assets of a corporation with or to an
interested shareholder, (2) certain transactions resulting in the issuance or
transfer to the interested shareholder of any stock of the corporation or its
subsidiaries, (3) certain transactions which would result in increasing the
proportionate share of the stock of a corporation or its subsidiaries owned by
the interested

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shareholder, and (4) receipt by the interested shareholder of the benefit
(except proportionately as a shareholder) or any loans, advances, guarantees,
pledges or other financial benefits.

These restrictions placed on interested shareholders do not apply
under certain circumstances, including, but not limited to, the following: (1)
if the corporation's original certificate of incorporation contains a provision
expressly electing not to be governed by the relevant section of the DGCL, or
(2) if the corporation, by action of its shareholders, adopts an amendment to
its bylaws or certificate of incorporation expressly electing not to be
governed by such section, provided that such an amendment is approved by the
affirmative vote of not less than a majority of the outstanding shares entitled
to vote and that such an amendment will not be effective until 12 months after
its adoption and will not apply to any business combination with a person who
became an interested shareholder at or prior to such adoption. Pursuant to the
Surviving Corporation Charter, however, the Surviving Corporation has elected
not to be governed by Section 203 of the DGCL.

APPROVAL OF THE CONTINUANCE UNDER THE ABCA. Under the ABCA, a
proposed continuance is subject to approval by the Company's shareholders and
the Registrar of Corporations (the "Registrar"). The Company expects to be
able to satisfy the requirements of the Registrar regarding
discontinuance/export.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSEQUENCES OF THE CONTINUANCE AND THE
MERGER

An opinion regarding certain of the Canadian federal income tax
consequences of the Continuance and the Merger has been issued by Felesky
Flynn, Barristers & Solicitors, a copy of which is attached hereto as Appendix
"E". Subject to certain assumptions and qualifications, the afore- referenced
opinion provides in part as follows:

(i) The shareholders of the Company will not recognize gain or
loss solely due to the continuation and domestication of the
Company from Alberta, Canada to Delaware, U.S.A.;

(ii) The shareholders of the Company will not recognize gain or
loss as a result of the merger of ETC-Texas into the Company
unless a shareholder otherwise elects to recognize such gain
or loss;

(iii) The Company will be deemed to dispose of all its property at
fair market value immediately before the deemed year end
immediately before the Continuance and may have a liability
for tax under Part XIV of the Income Tax Act (Canada) (the
"ITA"); and

(iv) Dissenting shareholders of the Company who receive cash in
receipt of their shares of the Company will recognize a gain
or loss and, if payment is received before the Continuance,
possibly a deemed dividend.

NATURE OF THE SHARES OF THE COMPANY HELD BY SHAREHOLDERS OF THE
COMPANY. All shareholders should consult their own tax advisors as to whether
they hold their Company Common Stock and will hold their Continued Common Stock
as capital property for purposes of the ITA. In general, however, the shares
of the Company Common Stock and Continued Common

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Stock will normally constitute capital property to a holder thereof, unless the
holder is a trader or dealer in securities or is engaged in an adventure in the
nature of trade with respect to such shares.

Certain recent amendments to the ITA (the "mark-to-market rules")
relating to financial institutions (including certain financial institutions,
registered securities dealers and corporations controlled by one or more of the
foregoing) will deem such financial institutions not to hold their Company
Common Stock or Continued Common Stock as capital property for purposes of the
ITA. Shareholders that are financial institutions should consult their own tax
advisors to determine the tax consequences to them of the application of the
mark-to-market rules.

SHAREHOLDER CONSEQUENCES OF THE CONTINUANCE. The Continuance of the
Company under the laws of the State of Delaware will not constitute a taxable
event under the ITA for the Company's shareholders. The shareholders of the
Company will continue to hold their shares of the Company following the
Continuance at the same adjusted cost base as before the Continuance.

DIVIDENDS PAID ON CONTINUED COMMON STOCK. Dividends, if any, paid by
the Company following the Continuance to shareholders resident in Canada for
purposes of the ITA will be treated differently under the ITA than dividends
paid by the Company to those shareholders prior to the Continuance. Following
the Continuance, a Canadian resident shareholder will be required to include
the gross amount of any dividends received from the Company (before deduction
of any U.S. non-resident withholding tax) in income for the year of such
receipt. Shareholders who are individuals will not be subject to the gross-up
rule normally applicable to dividends received from a corporation resident in
Canada and will not be entitled to claim the federal dividend tax credit in
respect of such dividends.

Under the Treaty, the rate of U.S. non-resident withholding tax which
may be levied on residents of Canada is limited to 15% of the gross amount of
the dividend. If the shareholder is a corporation resident in Canada for
purposes of the Treaty and owns 10% or more of the voting stock of the Company
after the Continuance, the rate of U.S. non-resident withholding tax that can
be levied is restricted under the Treaty to 6% of the gross dividend paid in
1996 and 5% thereafter. (Note that if a Canadian resident shareholder owns 10%
or more of any class of stock of the Company after the Continuance (and some
cases where less than 10% is owned), the Company may be a foreign affiliate
within the meaning of the ITA. Shareholders should consult their own tax
advisors as to the possible application of the foreign affiliate rules and the
attendant Canadian income tax consequences.) United States non-resident
withholding tax on dividends received by residents of Canada will be eligible
for foreign tax credit or deduction treatment where applicable under the ITA.

COMPANY CONSEQUENCES OF THE CONTINUANCE. Once the Continuance is
effected under the DGCL, the Company will be deemed, for the purposes of the
ITA, to thereafter have been incorporated in Delaware. Accordingly, following
the Continuance, the Company will cease to be a resident of Canada for purposes
of the ITA and, therefore, will only be subject to Canadian federal income tax
to the extent of certain Canadian source income, including income from
businesses carried on in Canada through a permanent establishment or gains from
the disposition of taxable Canadian property which is not otherwise exempt from
Canadian federal income tax by virtue of certain relieving provisions in the
Treaty.

The "corporate emigration" rules under the ITA will apply upon the
Continuance of the Company into Delaware. The taxation year of the Company
will be deemed to end immediately prior to the Continuance. In addition, each
property owned by the Company immediately before the deemed year end will be
deemed to have been disposed of by it for proceeds of disposition equal to that
property's fair market value. Any gains or losses realized by the Company from
its deemed disposition of property will be taken into account when determining
the amount of the Company's taxable income for that taxation year. For
purposes of the ITA, all amounts relating to the cost and proceeds of
disposition of property must be stated in Canadian dollars based on any
relevant exchange rate at the time such amounts arise.

The Company will also be required to pay tax under Part XIV of the ITA
equal to 6% (5% if the Continuance occurs after 1996) of the amount by which
the fair market value of the Company's assets (calculated immediately before
the Continuance) exceeds the aggregate of its liabilities (including its
liabilities owing under the ITA except for Part XIV tax) and the paid-up
capital of its issued and outstanding shares at the time of the Continuance.

SHAREHOLDER CONSEQUENCES OF THE MERGER. Unless a shareholder of the
Company otherwise elects, the merger of ETC-Texas into the Company will be a
tax-deferred event to the shareholder for purposes of the ITA. A shareholder
of the Company, unless the holder elects otherwise, will be deemed to dispose
of the Continued Common Stock for proceeds of disposition equal to the adjusted
cost base of the shares and be deemed to reacquire such shares at a cost of an
equal amount.

Immediately after the Continuance, the shares of the Company will not
be taxable Canadian property. Therefore, shareholders of the Company who are
not resident in Canada should not be affected by the Merger.

DISPOSITION OF COMPANY COMMON STOCK OR CONTINUED COMMON STOCK. A
disposition or deemed disposition of a share of the Company Common Stock (other
than to the Company before the Continuance as a result of a dissent) or
Continued Common Stock by a holder will generally result in a capital gain (or
capital loss) equal to the amount by which the proceeds

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of disposition, net of any reasonable costs of disposition, exceed (or are less
than) the adjusted cost base to the holder of the share. Any capital gain (or
loss) realized before the Continuance will be subject to Canadian federal
income tax. Any capital gain (or capital loss) on a disposition or deemed
disposition of a share of the Continued Common Stock after the Continuance by a
holder resident in Canada will be subject to Canadian federal income tax. Non-
resident shareholders will not be subject to Canadian federal income tax on
dispositions or deemed dispositions after the Continuance, provided the shares
are not taxable Canadian property at the time of such disposition.

Any capital loss arising on the disposition or deemed disposition of
Company Common Stock or Continued Common Stock (including upon the exercise of
dissent rights, discussed below) by a corporate shareholder of the Company will
be reduced by the amount of dividends received or deemed to have been received,
including any deemed dividend arising from the exercise of dissent rights
(discussed below), on the subject shares where the period of ownership of such
shares was less than 365 days or where the corporate holder (together with
persons with whom it did not deal at arm's length) held more than 5% of the
issued shares of any class of the Company at the time the dividends were
received or deemed to have been received.

COMPANY SHAREHOLDERS DISSENTING TO THE CONTINUANCE OR MERGER. The
consequences under the ITA to a shareholder of the Company who dissents, in the
manner described herein, to the proposed Continuance or Merger and whose shares
are purchased by the Company are discussed below.

The receipt before the Continuance by a dissenting shareholder of the
Company of a cash payment from the Company equal to the fair value of the
holder's Company Common Stock will generally be treated as a dividend to the
holder of such shares to the extent that such payment exceeds the paid-up
capital of the subject shares. The balance of the fair value paid (i.e., the
amount equal to the paid-up capital of the subject shares) will be treated as
proceeds of disposition of such shares for the purpose of calculating the
shareholder's gain or loss. Consequently, such dissenting shareholder would
realize a capital gain (capital loss) to the extent that the deemed proceeds of
disposition received for the shares exceed (are exceeded by) the shareholder's
adjusted cost base thereof. Notwithstanding the foregoing, if the dissenting
recipient shareholder is a corporation resident in Canada, the full amount of
the purchase proceeds may be treated under the ITA as proceeds of disposition
with the result that no dividend would be deemed to have been paid to the
corporate shareholder and any capital gain (or capital loss) realized by it
upon the disposition will be determined by reference to the full amount of the
purchase proceeds paid by the Company.

The receipt after the Continuance by a dissenting shareholder of the
Company of a cash payment from the Company will be treated under the ITA as
proceeds of disposition as described above under "Disposition of Company Common
Stock or Continued Common Stock." A deemed dividend will not arise if the cash
payment is made after the Continuance.

THE ABOVE IS A SUMMARY AND IS OF A GENERAL NATURE ONLY AND IT IS NOT
INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY
PARTICULAR SHAREHOLDER OF THE COMPANY. THEREFORE, SUCH HOLDERS SHOULD CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR PARTICULAR CIRCUMSTANCES REGARDING
THE PROPOSED CONTINUANCE, THE EXERCISE OF DISSENT RIGHTS AND THE PROPOSED
MERGER. NO ADVANCE INCOME TAX RULING HAS BEEN OBTAINED FROM REVENUE CANADA TO
CONFIRM THE TAX CONSEQUENCES OF ANY OF THE EVENTS DESCRIBED HEREIN.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE CONTINUANCE

Provided that no greater than 1% of the shareholders of the Company
exercise their right to dissent to the Continuance, and as such have their
shares of Company Common Stock redeemed, the Continuance will constitute a
reorganization within the meaning of Section 368(a) of the Code. No gain or
loss will be recognized by the Company due to the Continuance. No gain or loss
will be recognized by reason of the Continuance by the U.S. shareholders of the
Company upon their conversion of Company Common Stock into Continued Common
Stock. See "The Merger -- Certain United States Federal Income Tax
Consequences."

In addition, cash received as a result of the exercise of appraisal
rights by a U.S. shareholder who dissents from the Continuance and who is
subject to federal income tax (the "Dissenting Holder") will be treated as
received in redemption of the Dissenting Holders' Company Common Stock, and
generally will recognize gain or loss, measured by the difference between the
cash received and the Dissenting Holder's basis in his or her Company Common
Stock and gain or loss will be a capital gain or loss if the Dissenting Holder
holds his or her stock as a capital asset.

THE DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. IT
DOES NOT ADDRESS THE STATE, LOCAL OR FOREIGN TAX ASPECTS OF THE CONTINUANCE.
THE DISCUSSION IS BASED ON CURRENTLY EXISTING PROVISIONS OF THE INCOME TAX ACT
(CANADA) AND THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, EXISTING AND
PROPOSED TREASURY REGULATIONS THEREUNDER AND CURRENT ADMINISTRATIVE RULINGS AND
COURT DECISIONS. ALL OF THE FOREGOING IS SUBJECT TO CHANGE AND ANY SUCH CHANGE
COULD AFFECT THE CONTINUING VALIDITY OF THE DISCUSSION. EACH

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COMPANY SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISER AS TO THE
SPECIFIC TAX CONSEQUENCES OF THE CONTINUANCE AND THE MERGER TO HIM OR HER,
INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX
LAWS.

THE MERGER

GENERAL DESCRIPTION OF THE MERGER

The Merger Agreement provides that, at the Effective Time, ETC-Texas
will merge with and into the Company with the Company becoming the Surviving
Corporation, and each outstanding share of ETC-Texas Common Stock will be
converted into 1.25 shares of Continued Common Stock. No fractional shares of
Continued Common Stock shall be issued in the Merger. In lieu thereof, all
fractional shares of Continued Common Stock that a holder of ETC-Texas Common
Stock would otherwise be entitled to receive as a result of the Merger shall be
automatically converted into the right to receive one full share of Continued
Common Stock. The Merger is conditioned upon the approval of the Continuance
by the shareholders of the Company.

Based on the number of shares of ETC-Texas Common Stock outstanding as
of the ETC-Texas Record Date, 8,942,001 shares of Continued Common Stock will
be issuable pursuant to the Merger Agreement representing approximately 82% of
the total Continued Common Stock to be outstanding after such issuance (based
on the number of shares of Company Common Stock outstanding as of the Record
Date).

Expenses to be incurred by the parties as a result of the Continuance
and the Merger are expected to be approximately $200,000, which expenses
include legal, accounting and printing costs associated with these
transactions.

BACKGROUND TO THE MERGER

L. Cade Havard, the Chairman of the Board and Chief Executive Officer
of the Company and the Chairman of the Board, Chief Executive Officer and
President of ETC-Texas, was originally engaged by the Company in 1991 to find a
suitable merger or acquisition candidate for the purpose of bringing value to
the outstanding shares of Company Common Stock. From 1992 to 1994, the Company
attempted on two occasions to effect merger transactions with privately held
corporations; however, the Company was unable to consummate either of the
proposed transactions.

In 1995, Mr. Havard began developing the business currently operated
by ETC-Texas while still engaged by the Company to identify a suitable
acquisition or merger candidate. To facilitate the research and development
efforts of ETC-Texas, it consummated certain private offerings of its common
stock to meet the related capital requirements. Investors in each private
offering were advised prior to acceptance of their subscriptions that ETC-Texas
intended to become a publicly-traded corporation through a merger with a
company possessing an adequate public shareholder base, and that the Company
would be presented with the opportunity to consummate a merger transaction with
ETC-Texas prior to negotiating with other publicly-traded companies. This
segment of ETC-Texas' business strategy was reviewed and approved by the entire
Board of Directors of ETC-Texas.

In late 1995, Mr. Havard approached the Company concerning a possible
merger with ETC-Texas. The Company's Board of Directors and certain principal
shareholders, representing holders of greater than 50% of the outstanding
shares of Company Common Stock at the time, tentatively agreed to the merger
transaction with ETC-Texas pending determination of the Exchange Ratio. For
purposes of establishing the Exchange Ratio, the respective Boards of Directors
reviewed the operating and financial history of the entities, the potential
value of the shares of Continued Common Stock and the dilution, if any, to be
faced by shareholders of the companies. After an assessment of these factors,
the Board of Directors of ETC-Texas requested that the Company undergo a one-
for-six reverse stock split with a resulting one-for-one exchange ratio. The
principal shareholders of the Company initially agreed only to a one-for-five
reverse stock split and a one-for-one exchange ratio. The Board of Directors
of ETC-Texas agreed to accept the one-for-five reverse stock split if the
Company would be willing to agree to an exchange ratio of 1.25 shares of the
Company's Common Stock for each share of ETC-Texas Common Stock exchanged. The
Board of Directors of the Company subsequently ratified both the one-for-five
reverse stock split and the Exchange Ratio given the business prospects of
ETC-Texas in the burgeoning health care industry. The Exchange Ratio was also
ratified by Board of Directors of ETC-Texas as the Company provided an adequate
public shareholder base and because of the absence of liabilities, contingent
or otherwise, related to the Company. The terms of the Merger, including the
Exchange Ratio, were again discussed and unanimously re-affirmed at a meeting
of the Board of Directors of ETC-Texas held on October 17, 1996.

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Although Mr. Havard serves as an officer and director of both the
Company and ETC-Texas, both the Company and ETC-Texas believe that negotiations
to establish the terms and conditions of the Merger were conducted on an arms'-
length basis given that the Company's Board of Directors and principal
shareholders agreed to the initial terms of the Merger and that the Merger was
preliminarily ratified by the shareholders of the Company at a special meeting
called for such purpose on March 21, 1996. During the negotiation process, Mr.
Havard did retain an ownership interest in the Company which constituted less
than 4% of the total outstanding shares of Company Common Stock.

Upon the effectiveness of the Merger, only Mr. Havard, of the officers
and directors of the Company, will continue with the Surviving Corporation.
With regard to the officers and directors of ETC-Texas, the current Board of
Directors of ETC-Texas will serve as the Board of Directors of the Surviving
Corporation and the executive officers of ETC-Texas will continue in such
capacity with the Surviving Corporation. Other than the continuation of their
employment, assumption by the Surviving Corporation of certain existing
contractual obligations, and the conversion of their options to purchase shares
of ETC-Texas common stock into options to purchase shares of Continued Common
Stock, the officers, directors and affiliates of ETC-Texas have no other
interests in the Merger. See "Certain Transactions."

THE COMPANY'S REASONS FOR THE MERGER; RECOMMENDATION OF THE COMPANY'S BOARD OF
DIRECTORS

THE COMPANY'S REASONS FOR THE MERGER. The Company's Board of
Directors believes that the Merger is in the best interests of the Company and
its shareholders as it is consistent with the Company's business strategy of
acquiring or merging with a viable business entity which will bring value to
the Company Common Stock. In reaching its conclusions to enter into the Merger
Agreement, the Company's Board of Directors considered a number of factors,
including, without limitation, the following:

(a) the financial condition, results of operations and
business of the Company, both on an historical basis and on a
prospective basis without giving effect to the Merger;

(b) the financial condition, results of operations and
business of ETC-Texas, both on an historical basis and on a
prospective basis giving effect to the Merger;

(d) the Exchange Ratio; and

(e) the ability of trading the Company's securities on a
U.S. securities exchange.

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For the reasons set forth above, the Company's Board of Directors
believes that the Continuance and the Merger are fair to, and in the best
interests of, the Company and its shareholders and recommend that its
shareholders vote FOR the approval of the Continuance and the Merger.

CERTAIN CONSIDERATIONS. Shareholders of the Company should be aware
of the following in assessing the merits of the Merger: (i) the ownership
interest of the existing Company shareholders will be severely diluted, (ii)
directors and executive officers of ETC-Texas have certain interests in the
Merger as identified above which are in addition to those of the Company's and
ETC-Texas' unaffiliated shareholders, see "-- Interests of Certain Persons in
the Merger," (iii) that no assurances can be given that the Surviving
Corporation can achieve profitability in light of the historical financial
condition and results of operations of both the Company and ETC-Texas, see
"Risk Factors -- Accumulated Deficit and Independent Accountants' Report
Referred to Going Concern Uncertainties; -- Working Capital Deficit; Lack of
Liquidity and Capital Resources; -- Additional Financing Needed; and -- Limited
Operating History; Absence of Profits," and (iv) that no assurance can be given
that a trading market for the Continued Common Stock can be established. If
the Merger is not effected, the Company will be forced to seek a similar
privately- held company to acquire or with which to merge. However, no
assurances can be given that the Company can either identify and, if
identified, consummate an acquisition or merger transaction, and it is doubtful
that the Company has the financial capability to pay the expenses related to a
subsequent transaction.

ETC-TEXAS' REASONS FOR THE MERGER; RECOMMENDATION OF ETC-TEXAS' BOARD OF
DIRECTORS

ETC-TEXAS' REASONS FOR THE MERGER. ETC-Texas' Board of Directors
believes that the Merger is in the best interests of ETC-Texas and its
shareholders as it achieves ETC-Texas' goal of becoming a publicly traded
entity so as to enhance its reputation in the marketplace and allow it to
achieve its overall growth strategy. Furthermore, management of ETC-Texas
believes that the terms of the Merger are fair given the Company provides
ETC-Texas with a suitable public shareholder base, an absence of liabilities
and has provided ETC-Texas with approximately $779,575 dollars in order to
primarily facilitate ETC-Texas' marketing and product development efforts. In
reaching its conclusions to enter into the Merger Agreement, ETC-Texas' Board
of Directors considered a number of factors, including, without limitation, the
following:

(a) the financial condition, results of operations and
business of ETC-Texas, both on an historical basis and on a
prospective basis with and without giving effect to the Merger;

(b) a review of possible alternatives available to
ETC-Texas if the Merger is not consummated;

(d) the benefits of being a publicly-traded entity,
including access to capital markets.

The ETC-Texas Board of Directors also considered the relative
prospects for growth and growth in shareholder values, in ETC-Texas' present
form and as a publicly-traded entity, the credibility afforded public entities,
the ability to obtain debt or equity capital on a more favorable basis and the
tax consequences of the transaction upon ETC-Texas shareholders.

For the reasons set forth above, ETC-Texas' Board of Directors
believes that the Merger is fair to, and is in the best interests of,
ETC-Texas and its shareholders and recommends that its shareholders vote FOR the
approval of the Merger.

CERTAIN CONSIDERATIONS. Shareholders of ETC-Texas should be aware of
the following in assessing the merits of the Merger: (i) ETC-Texas' directors
and executive officers as identified above have certain interests in the Merger
which are in addition to those of ETC-Texas' unaffiliated shareholders, see "--
Interests of Certain Persons in the Merger," (ii) that no assurances can be
given that the Surviving Corporation can achieve profitability in light of the
historical financial condition and results of operations of both ETC-Texas and
the Company, see "Risk Factors -- Accumulated Deficit and

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Independent Accountants' Report Referred to Going Concern Uncertainties; --
Working Capital Deficit; Lack of Liquidity and Capital Resources; -- Additional
Financing Needed; and -- Limited Operating History; Absence of Profits," and
(iii) no assurance can be given that a trading market for the Continued Common
Stock can be established. If the Merger is not approved, ETC-Texas will
attempt to identify another viable public company with which to merge.
However, no assurance can be given that such a company can be identified or, if
identified, the terms of the transaction will be acceptable to ETC-Texas.
Also, given ETC-Texas' financial condition, expenses related to attempts to
identify a suitable merger candidate may have an adverse effect upon ETC-Texas.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the recommendations of the Company's and ETC-Texas'
Boards of Directors, respectively, with respect to the Merger, both the Company
and ETC-Texas shareholders are advised that Mr. L. Cade Havard, the Chairman
and Chief Executive Officer of the Company and the Chairman, President and
Chief Executive Officer of ETC-Texas, beneficially owns or controls 2,845,368
shares of ETC-Texas Common Stock at November 8, 1996. To the knowledge of both
the Company and ETC-Texas, no other executive officer or director of the
Company owns any shares of ETC-Texas Common Stock and no other executive
officer or director of ETC-Texas owns any shares of Company Common Stock. If
the Merger is effected, certain of the officers and directors of the Company
and ETC-Texas, respectively, will derive certain benefits which are in addition
to their interests as shareholders of the Surviving Corporation. Specifically,
the Employment Agreement of L. Cade Havard with ETC-Texas will be assigned to
and assumed by the Surviving Corporation. Furthermore, Mr. Havard's options to
purchase 300,000 shares of ETC-Texas Common Stock at an exercise price of
$0.001 per share, when vested, will be converted into options to purchase the
identical number of shares of Continued Common Stock. Edward Bollinger and
Katherine L. MacDonald, both directors of the Company, hold options to purchase
an aggregate of 20,000 shares of Company Common Stock on or before June 15,
1997 at a purchase price of $1.50 per share. Upon completion of the Merger,
Mr. Bollinger and Ms. MacDonald shall have the right to acquire the identical
number of shares of Continued Common Stock upon payment of the $1.50 exercise
price on or before June 15, 1997. The executive officers of ETC-Texas,
including Elaine Boze, Ann C. Dearmon, Louann C. Smith and Timothy P. Powell,
will have their employment contracts assigned to and assumed by the Surviving
Corporation, and all options to purchase shares of ETC-Texas Common Stock
granted to employees or affiliates of ETC-Texas will be converted into options
to purchase the identical number of shares of Continued Common Stock at the
identical exercise price. Also, Michael Eckstein, a director of ETC-Texas
shall have the right to receive options to purchase 100,000 shares of Continued
Common Stock at an exercise price of $0.001 per share upon completion of the
Merger. In addition to the interests outlined above, ETC-Texas has entered
into (i) a marketing agreement with MS3, of which Rick Snyder, a director of
ETC-Texas, is the principal owner, and (ii) a consulting agreement with Michael
Eckstein, a director of ETC-Texas. ETC-Texas has no other agreements with any
other members of its Board of Directors or affiliates of the members of its
Board of Directors. See "Certain Transactions."

EMPLOYMENT ARRANGEMENTS

At the Effective Time, the Employment Agreements between ETC-Texas and
L. Cade Havard, Elaine Boze, Ann C. McDearmon, Louann C. Smith and Timothy P.
Powell, respectively, will be assigned to and assumed by the Surviving
Corporation. See "Election of Surviving Corporation Board of Directors --
Employment Agreements."

CERTAIN CANADIAN FEDERAL INCOME TAX CONSEQUENCES

For a discussion of the Canadian federal income tax consequences of
the Merger, see "The Continuance -- Certain Canadian Federal Income Tax
Consequences of the Continuance and the Merger."

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

An opinion regarding the federal income tax consequences of the Merger
upon the shareholders of ETC-Texas has been issued by Looper, Reed, Mark &
McGraw

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<PAGE> 41

Incorporated, a copy of which is attached hereto as Appendix "F". The afore-
referenced opinion provides that assuming the Merger qualifies as a
reorganization under Section 368(a) of the Code, the following federal income
tax consequences will occur:

(a) no gain or loss will be recognized by the Company or
ETC-Texas in connection with the Merger;

(b) except for cash consideration received in lieu of
fractional shares, no gain or loss will be recognized by a holder of
ETC-Texas Common Stock upon the exchange of all of such holders shares
of ETC-Texas Common Stock solely for Continued Common Stock in the
Merger;

(c) the aggregate basis of the Continued Common Stock
received by a ETC-Texas shareholder in the Merger (including any
fractional share deemed received) will be the same as the aggregate
basis of the shares of ETC-Texas Common Stock surrendered in exchange
therefor;

(d) the holding period of the Continued Common Stock
received by an ETC-Texas shareholder in the Merger will include the
holding period of the shares of ETC-Texas Common Stock surrendered in
exchange therefor, provided that such shares of ETC-Texas Common Stock
are held as capital assets at the Effective Time; and

(e) if applicable, a shareholder of ETC-Texas who
receives cash in lieu of a fractional share will recognize gain or
loss equal to the difference, if any, between such shareholder's basis
in the fractional share (as described in paragraph (c) above) and the
amount of cash received. Such gain or loss may be classified as
either a capital gain or loss if the ETC-Texas Common Stock is held by
such shareholder as a capital asset at the Effective Time or as a
dividend, depending upon the shareholder's particular circumstance.

HOLDERS OF ETC-TEXAS COMMON STOCK ARE ADVISED AND EXPECTED TO CONSULT
THEIR OWN TAX ADVISERS REGARDING THE FEDERAL INCOME TAX CONSEQUENCES OF THE
MERGER IN LIGHT OF THEIR PERSONAL CIRCUMSTANCES AND THE CONSEQUENCES UNDER
STATE, LOCAL AND FOREIGN TAX LAWS.

No ruling from the Internal Revenue Service ("IRS") has been or will
be requested in connection with the Merger. The Merger will be treated for
federal income tax purposes as a reorganization with the meaning of Section
368(a) of the Code. The Company and ETC-Texas will each be a party to the
reorganization within the meaning of Section 368(b) of the Code, and the
Company and ETC-Texas will not recognize any gain or loss as a result of the
Merger.

ACCOUNTING TREATMENT

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RIGHTS OF DISSENTING SHAREHOLDERS

THE COMPANY SHAREHOLDERS. Each of the Company's shareholders is
entitled to dissent and be paid the fair value of such shareholder's shares if
the shareholder objects to the Merger and the Merger becomes effective. The
shareholder may dissent only with respect to all of the shares held by the
shareholder on behalf of any one beneficial owner and registered in the
shareholder's name. A shareholder is not entitled to dissent from the
resolution with respect to any shares beneficially owned by one owner if the
shareholder votes any shares beneficially owned by that owner in favor of the
resolution that is adopted. In order to dissent, a shareholder must send to
the Company, c/o Beaumont Church, Barristers and Solicitors, 2200 AGT Tower,
411 -- 1st Street S.E., Calgary, Alberta, Canada T2G 5E7, on or before the date
of the Meeting, a written objection (an "Objection Notice") to the Merger in
respect of which the shareholder proposes to dissent. A vote against the
Merger or an abstention in respect thereof does not constitute an Objection
Notice, but a shareholder need not vote his shares against the Merger in order
to dissent in respect of the Merger. Similarly, the revocation of a proxy
conferring authority on the proxy holder to vote in favor of the Merger does
not constitute an Objection Notice in respect of the Merger, but any such proxy
granted by a shareholder who intends to dissent should be validly revoked.
Within 10 days following the date of the Meeting, the Company will deliver to
each shareholder who has filed an Objection Notice in respect of the resolution
passed at the Meeting, at the address specified for such purpose in the
Objection Notice, a notice stating the Merger has been adopted.

After the Merger has been approved, an application may be made to the
Court by the Company or by any dissenting shareholder to fix the fair value of
the shares of the capital stock of the Company held by the dissenting
shareholder. If an application is made to the Court, the Company shall, unless
the Court otherwise orders, send to each dissenting shareholder the Offer to
Purchase to pay him an amount considered by the Board of Directors of the
Company to be the fair value of such shares as of the close of business on the
day before the Meeting accompanied by a statement showing how the fair value
was determined. Every offer to purchase shall be on the same terms.

A dissenting shareholder may make an agreement with the Company for
the purchase of his shares by the Company in the amount of the Company's Offer
to Purchase or otherwise at any time before the Court fixes the fair value of
the shares. If a settlement cannot be reached, the parties will proceed to
Court. All dissenting shareholders whose shares have not been purchased by the
Company will be joined as parties to the application and will be bound by the
decision of the Court. The Court order will fix the fair value of the shares
of all dissenting shareholders who are parties to the application, give
judgment in that amount against the Company in favor of each of the dissenting
shareholders and fix the time within which the Company must pay the amount to
the dissenting shareholders.

On the earlier of: (a) the Company being continued into Delaware, (b)
the Company and the dissenting shareholder entering into a settlement
agreement, or (c) the pronouncement of a Court order giving judgment against
the Company for the fair value of the shares of the dissenting shareholder, a
dissenting shareholder ceases to have any rights as a shareholder other than
the right to be paid the fair value of his shares. The Company will not make a
payment to a dissenting shareholder if there are reasonable grounds for
believing that: (a) the Company is or would after the payment be unable to pay
its liabilities as they become due or (b) the realizable value of the Company's
assets would thereby be less than the aggregate of its liabilities. If either
of these tests cannot be met, the Company shall within 10 days of the Court
order or reaching its settlement with a dissenting shareholder send a notice to
each dissenting shareholder that the Company cannot lawfully make the payment
for the shares. Once this notice is received, a dissenting shareholder may, by
written notice, delivered to the Company within 30 days after receiving the
Company's notice, withdraw his Objection Notice, in which case the dissenting
shareholder is returned his full rights as a shareholder. If the dissenting
shareholder does not withdraw his Objection Notice, he retains his status as a
claimant against the Company to be paid as soon as the Company is lawfully able
to do so or, in liquidation, to be ranked subordinate to the rights of the
creditors but in priority to its shareholders.

The foregoing is only a summary of the rights of dissenting
shareholders and is qualified in its entirety by the provisions of Section 184
of the ABCA, a copy of which is attached as Appendix "G". Any shareholder
desiring to exercise a right of dissent should seek legal advice and his
failure to comply strictly with the provisions of that section may prejudice
that right. The right of shareholders to dissent is not exclusive of any other
rights available to shareholders generally, such as rights in respect of a
corporate directors' duties of good faith and care under the ABCA, or
otherwise.

ETC-TEXAS SHAREHOLDERS. Any shareholder of record of ETC-Texas may
exercise dissenters' rights in connection with the Merger by properly complying
with the requirements of Articles 5.11, 5.12 and 5.13 of the TBCA. By
exercising dissenters' rights, any such shareholder would have the "fair value"
of his ETC-Texas Common Stock determined by a court and paid to him in cash.

The following is a summary of the statutory procedures that a
shareholder of a Texas corporation must follow in order to exercise his
dissenters' rights under Texas law. This summary is not complete and is
qualified in its entirety by reference to Articles 5.11, 5.12 and 5.13 of the
TBCA, the text of which is set forth in full in Appendix "H" to this Proxy
Statement/Prospectus.

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The TBCA provides that each shareholder of a Texas corporation has the
right to dissent from certain transactions, including the merger of a
corporation requiring the special authorization of the shareholders. Any
shareholder of a Texas corporation who objects to a merger of the corporation
may exercise the rights and remedies of a dissenting shareholder under Articles
5.11, 5.12 and 5.13 of the TBCA. Any shareholder desiring to exercise his
right of dissent must file a written objection to the merger with the
corporation prior to the date of the meeting of shareholders called to consider
the merger. The written objection must state that the shareholder's right to
dissent will be exercised if the merger becomes effective and give the address
to which notice of the effectiveness of the merger should be delivered or
mailed. Neither a proxy nor a vote against the Merger are sufficient to
constitute a written objection as required under the statute.

Any written objection or notice required of any dissenting shareholder
under Articles 5.11 through 5.13 of the TBCA should be sent to Electronic
Transmission Corporation, Attention: Secretary, 5025 Arapaho Road, Suite 515,
Dallas, Texas 75248.

The corporation must deliver or mail notice of the effectiveness of
the merger to each dissenting shareholder that has not voted in favor of the
merger within 10 days of the effectiveness of the merger. Any dissenting
shareholder that has not voted in favor of the merger may then make a written
demand on the surviving corporation (which in such case would be ETC
Transaction Corporation) for the payment of the fair value of his shares within
10 days of the delivery or mailing of the notice by the corporation. Such
demand must state the number and class of the shares of stock owned by the
dissenting shareholder and the dissenting shareholder's estimate of the fair
value of his shares as of the day immediately prior to the meeting, excluding
any increase or decrease in value of the shares in anticipation of the proposed
Merger. Any shareholder failing to make such a demand within the 10-day period
will lose the right to dissent and will be bound by the terms of the merger.
In order to preserve his dissenters' rights, a dissenting shareholder must also
submit his stock certificates to the surviving corporation for the appropriate
notation within 20 days of making a demand for payment.

Any shareholder who has properly demanded payment for his shares of
stock will not have any rights as a shareholder, except the right to receive
payment for his shares and the right to claim that the merger and the related
transactions were fraudulent.

Within 20 days of receipt of the demand for payment, the surviving
corporation must deliver or mail to the dissenting shareholder written notice
that either (i) the corporation agrees to pay the amount of the shareholder's
demand within 90 days after the effectiveness of the merger upon receipt of the
dissenting shareholder's duly endorsed share certificates or (ii) the
corporation offers to pay its own estimate of the fair value of the shares
within 90 days after the effectiveness of the merger upon receipt of the
dissenting shareholder's duly endorsed share certificates and upon receipt of
notice within 60 days after such date that the dissenting shareholder agrees to
accept the surviving corporation's estimate. If the dissenting shareholder and
the surviving corporation agree upon the value of the dissenting shareholder's
shares within 60 days after effectiveness of the merger, the corporation shall
pay the amount of the agreed value to the dissenting shareholder upon receipt
of the dissenting shareholder's duly endorsed share certificates within 90 days
of the effectiveness of the merger. Upon payment of the agreed value, the
dissenting shareholder will cease to have any interest in such shares.

If the dissenting shareholder and the corporation do not agree upon
the value of the dissenting shareholder's shares within 60 days after the
effectiveness of the merger, then either the dissenting shareholder or the
surviving corporation may, within 60 days after the expiration of such 60-day
period, file a claim in a court of competent jurisdiction in the county in
Texas in which the principal office of the corporation is located (in such
case, Dallas County), seeking a determination of the fair value of the shares.
The corporation shall file with the court a list of all shareholders who have
demanded payment for their shares with whom an agreement as to value has not
been reached upon receipt of such a claim filed by a dissenting shareholder or
upon the filing of such a claim by the corporation. The clerk of the court
will give notice of the hearing of any such claim to the corporation and to all
of the dissenting shareholders on the list provided by the corporation. All
dissenting shareholders notified in this manner will be bound by the final
judgment of the court as to the value of their shares.

In considering such a claim, the court will determine which of the
dissenting shareholders have complied with the provisions of the TBCA and are
entitled to the payment of the fair value of their shares and will appoint one
or more qualified appraisers to assist in the determination of the fair value
of the shares upon such investigation as the appraisers consider proper. Any
valuation techniques or methods may be employed which are generally acceptable
to the financial community. The appraisers will also allow the dissenting
shareholders and the corporation to submit to them evidence as to the fair
value of the shares.

Upon receipt of the appraisers' report, the court will determine the
fair value of the shares of the dissenting shareholders and will direct the
payment to the dissenting shareholders of the amount of the fair value of their
shares, with interest to the date of the judgment, by the corporation, upon
receipt of the dissenting shareholder's share certificates. Upon payment of
the judgment, the dissenting shareholders will cease to have any interest in
the corporation. The court will allow the appraisers a reasonable fee as court
costs, and all court costs will be allocated between the parties in such manner
as the court determines to be fair and equitable.

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Under Texas law, "fair value" of shares for purposes of the exercise
of dissenters' rights is defined as the value of the shares as of the day
before the vote is taken authorizing the merger, excluding any increase or
decrease in value of the shares in anticipation of the proposed Merger. Such
"fair value" is determined in the first instance by appraisers appointed by the
court, who are directed to make such determination "upon such investigation as
to them may seem proper." Any valuation techniques or methods may be employed
which are generally acceptable to the financial community.

Any dissenting shareholder may withdraw his demand at any time before
receiving payment for his shares or before a claim has been filed seeking
determination of the fair value of his shares. No such dissenting shareholder
may withdraw his demand after payment has been made or, unless the surviving
corporation consents to the withdrawal, where a claim has been filed.

Shareholders of ETC-Texas considering appraisal rights should consider
that the payment which they eventually receive in exchange for their shares in
a dissenters' rights proceeding under Texas law could be less than, equal to,
or greater than the eventual market value of the consideration they would
receive as a result of the consummation of the Merger.

An ETC-Texas shareholder who exercises his appraisal rights and
receives cash from ETC-Texas, or the Surviving Corporation, in exchange for his
shares of ETC-Texas Common Stock will recognize taxable gain or loss in an
amount equal to the difference between (a) the sum of cash received from
ETC-Texas and (b) the basis of the common stock so exchanged. Any such gain or
loss recognized would be long-term capital gain or loss if the shares of
ETC-Texas Common Stock constitute capital assets in the hands of the dissenting
ETC-Texas shareholder and have been held by such shareholder for more than one
year at the Closing Date, as defined in the Merger Agreement.

ETC-TEXAS SHAREHOLDERS WHO ARE CONSIDERING DISSENTING FROM THE MERGER
WITH THE COMPANY ARE URGED TO CONSULT THEIR OWN LEGAL COUNSEL.

STOCK EXCHANGE LISTING

Following the Continuance and the Merger, if approved, the Surviving
Corporation may make application to have the Continued Common Stock listed on
the Nasdaq SmallCap Market. No assurance can be given that the application for
listing on the Nasdaq SmallCap Market or any other national or regional
exchange, if made, will be accepted. See "Risk Factors -- No Public Market;
Possible Volatility of Stock Price -- Risks of Low-Priced Stock."

U.S. FEDERAL SECURITIES LAW CONSEQUENCES

All Continued Common Stock received by ETC-Texas shareholders in the
Merger will be freely transferable, except that shares of Continued Common
Stock received by persons who are deemed to be "affiliates" (as such term is
defined under the Securities Act) of the Company or ETC-Texas prior to the
Merger may be resold by them only in transactions permitted by the resale
provisions of Rule 145 promulgated under the Securities Act (or Rule 144 or
144A in the case of such persons who become affiliates of ETC-Texas) or as
otherwise permitted under the Securities Act. Persons who may be deemed to be
affiliates of the Company or ETC-Texas generally include individuals or
entities that control, are controlled by, or are under common control with,
such party and may include certain officers and directors of such party as well
as principal shareholders of such party or persons who hold restricted shares.

CANADIAN SECURITIES LAW CONSEQUENCES

Shares of Continued Common Stock held by Canadian residents are
subject to any applicable resale restrictions imposed by the securities laws of
the province in which the shareholder is a resident. The Company is not aware
of any present provincial resale restrictions on the issued shares of the
Company other than the Cease Trade Order of the ASC which will be revoked upon
the declaration by the Commission of the effectiveness of the Registration
Statement, of which this Proxy Statement/Prospectus is a part. See "The
Companies -- Business Information Concerning the Company." Alberta securities
law provides that shares issued upon conclusion of a merger such as the Merger
being contemplated will be issued to Alberta residents free of any additional
resale restrictions, unless such issuance is to a "control person," as defined
in The Alberta Securities Act. The Company believes that the securities laws
of the other provinces of Canada are substantially similar to those of Alberta.

CERTAIN TERMS OF THE MERGER AGREEMENT

A summary of the material terms of the Merger Agreement is set forth
below. However, the following description does not purport to be complete and
is qualified in its entirety by reference to the Merger Agreement, a copy of
which is attached as Appendix "A" to this Proxy Statement/Prospectus and is
incorporated herein by reference.

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EFFECTIVE TIME OF THE MERGER

The Merger Agreement provides that, as promptly as practicable after
the satisfaction or waiver of the conditions to effecting the Merger, the
parties shall cause the Merger to be consummated by filing a Certificate of
Merger with the Secretary of State of the State of Delaware, in such form as
required by, and executed in accordance with, the relevant provisions of the
DGCL, and Articles of Merger with the Secretary of State of the State of Texas,
in such form as required by, and executed in accordance with, the relevant
provisions of the TBCA. It is anticipated that, if the Merger Agreement is
approved and adopted at each of the meetings and all other conditions to the
Merger have been satisfied or waived, the Effective Time will occur on the date
of the meetings or as soon thereafter as practicable.

MANNER AND BASIS OF CONVERTING SHARES

At the Effective Time, each outstanding share of ETC-Texas Common
Stock will be converted into 1.25 shares of Continued Common Stock.

As soon as practicable following the Effective Time, the Surviving
Corporation will mail to each record holder of ETC-Texas Common Stock
immediately prior to the Effective Time, a letter of transmittal and other
information advising such holder of the consummation of the Merger and for use
in exchanging ETC-Texas Common Stock certificates for certificates representing
Continued Common Stock. Letters of transmittal will also be available
following the Effective Time at the offices of the Surviving Corporation in
Dallas, Texas. After the Effective Time, there will be no further registration
of transfers on the stock transfer books of ETC-Texas of shares of ETC-Texas
Common Stock that were outstanding immediately prior to the Effective Time.
Share certificates should not be surrendered for exchange by shareholders of
ETC-Texas prior to the Effective Time and the receipt of a letter of
transmittal.

No fractional shares of Continued Common Stock shall be issued in the
Merger. In lieu thereof, all fractional shares of Continued Common Stock that
a holder of ETC-Texas Common Stock would otherwise be entitled to receive as a
result of the Merger shall be automatically converted into one full share of
Continued Common Stock.

Until surrendered and exchanged, each certificate previously
evidencing ETC-Texas Common Stock shall represent solely the right to receive
Continued Common Stock. Unless and until any such certificates shall be so
surrendered and exchange, no dividends or other distributions payable to the
holders of record of Continued Common Stock as of any time after the Effective
Time shall be paid to the holders of such certificates previously evidencing
ETC-Texas Common Stock; provided, however, that upon any such surrender and
exchange of such certificates, there shall be paid to the record holders of the
certificates issued and exchange therefor (i) the amount, without interest
thereon, of dividends and other distributions, if any, with a record date after
the Effective Time theretofore paid with respect to such whole shares of
Continued Common Stock, and (ii) at the appropriate payment date, the amount of
dividends or other distributions, if any, with a record date after the
Effective Time but prior to surrender and a payment date occurring after
surrender, payable with respect to such whole shares of Continued Common Stock.

CONDITIONS TO THE MERGER

The respective obligations of the Company and ETC-Texas to consummate
the Merger are subject to the satisfaction of the following conditions, any or
all of which may be waived in writing by ETC-Texas and the Company, in whole or
in part, to the extent permitted by applicable law: (a) the Registration
Statement registering the Continued Common Stock to be issued pursuant to the
Merger Agreement shall have been declared effective by the Commission under the
Securities Act, no stop order suspending the effectiveness of the Registration
Statement shall have been issued by the Commission and no proceedings for that
purpose shall have been initiated by the Commission; (b) the Merger Agreement
and the Merger shall have been approved and adopted by the requisite vote of
the shareholders of the Company and ETC-Texas, and the issuance of the
Continued Common Stock in the Merger shall have been approved by the requisite
vote of the shareholders of the Company; (c) the Continuance shall have been
approved by the requisite vote of the shareholders of the Company; (d) no
governmental entity or federal or state court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and which has the
effect of making the Merger illegal or otherwise prohibiting consummation of
the Merger; and (e) there shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger by any governmental entity in connection with the grant of a regulatory
approval necessary to the continuing operation of the business or future
prospects of ETC-Texas, that imposes any condition or restriction upon the
Company or the business or operations of ETC-Texas that, individually or when
taken together with all such conditions or restrictions would be materially
adverse to the financial condition, results of operations, business or
prospects of ETC-Texas or the Company.

The obligation of the Company to effect the Merger is also subject to
the satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived in writing by the Company, in whole or in
part: (a) each of the representations and warranties of ETC-Texas contained in
the Merger Agreement shall be true and correct in all material respects as of
the Effective Time as though made as of the Effective Time; and (b) ETC-Texas
shall have performed or complied in all

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material respects with all agreements and covenants required by the Merger
Agreement to be performed or complied with by it on or prior to the Effective
Time.

The obligation of ETC-Texas to effect the Merger is also subject to
the satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived in writing by ETC-Texas, in whole or in part:
(a) each of the representations and warranties of the Company contained in the
Merger Agreement shall be true and correct in all material respects as of the
Effective Time as though made as of the Effective Time; and (b) the Company
shall have performed or complied in all material respects with all agreements
and covenants required by the Merger Agreement to be performed or complied with
by then on or prior to the Effective Time.

There can be no assurance that all of the conditions to the Merger
will be satisfied.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains various representations and warranties
of the Company and ETC-Texas relating to, among other things, (i) the
organization and similar corporate matters of each, (ii) the capitalization of
each, (iii) the authorization, execution, delivery, performance and
enforceability of the Merger Agreement and related matters, and the absence of
conflicts, violations and defaults under their respective charters and bylaws
and certain other agreements and documents, (iv) compliance with applicable
laws, (v) the documents and reports filed by them with the Commission and the
accuracy of the information contained therein, (vi) the absence of certain
changes and events, (vii) litigation, (viii) employee benefit and labor
matters, (ix) taxes and matters relating to a tax-free reorganization, (x)
certain matters relating to "pooling of interests" accounting, (xii) certain
business practices, (xiii) the vote required to approve the Merger Agreement,
(xiv) brokers, and (xv) the accuracy of certain information provided.

CERTAIN COVENANTS; CONDUCT OF BUSINESS PRIOR TO THE MERGER

Each of the Company and ETC-Texas has agreed that, prior to the
Effective Time, unless expressly contemplated by the Merger Agreement or
otherwise consented to in writing by the other, it will (a) operate its
business in the usual and ordinary course consistent with past practices; (b)
use all reasonable efforts to preserve substantially intact its business
organization, maintain its material rights and franchises, retain the services
of its respective officers and key employees and maintain its relationships
with its material customers and suppliers; (c) maintain and keep its properties
and assets in as good repair and condition as at present, ordinary wear and
tear excepted, and maintain supplies and inventories in quantities consistent
with its customary business practice; and (d) use all reasonable efforts to
keep in full force and effect insurance and bonds comparable in amount and
scope of coverage to that currently maintained.

Each of the Company and ETC-Texas has agreed that, prior to the
Effective Time, unless expressly contemplated by the Merger Agreement or
otherwise consented to in writing by the other, it will not do, and will not
permit any of its subsidiaries to do, any of the following: (a)(i) increase the
compensation payable to or to become payable to any director or executive
officer, subject to certain exceptions; (ii) grant any severance or termination
pay to, or enter into or amend any employment or severance agreement with, any
director, officer or employee, subject to certain exceptions; (iii) establish,
adopt or enter into any employee benefit plan or arrangement; or (iv) amend, or
take any other actions with respect to, any benefit plans, subject to certain
exceptions; (b) declare or pay any dividend on, or make any other distribution
in respect of, outstanding shares of capital stock, with certain exceptions;
(c)(i) except for certain matters and subject to certain exceptions, redeem,
purchase or otherwise acquire any shares of its or any of its subsidiaries'
capital stock or any securities or obligations convertible into or exchangeable
for any shares of its or its subsidiaries' capital stock, or any options,
warrants or conversion or other rights to acquire any shares of its or its
subsidiaries' capital stock or any such securities or obligations; or (ii)
effect any reorganization or recapitalization, subject to certain exceptions;
(d)(i) issue, sell, grant, award, deliver or limit the voting rights of any
class of its or its subsidiaries' capital stock, any securities convertible
into or exercisable or exchangeable for any such shares, or any rights,
warrants or options to acquire any such shares; (ii) amend or otherwise modify
the terms of any such rights, warrants or options the effect of which shall be
to make such terms more favorable to the holders thereof; (iii) take any action
to accelerate the vesting of options; (e) acquire or agree to acquire any
business or other entity, or otherwise acquire or agree to acquire any assets
of any other person; (f) sell or otherwise dispose of any of its material
assets or any material assets of any of its subsidiaries, with certain
exceptions; (g) propose to adopt certain amendments to its charter or bylaws;
(h) change any of its significant accounting policies or take certain actions
with respect to taxes; (i) incur any obligation for borrowed money or purchase
money indebtedness, with certain exceptions; or (j) agree in writing or
otherwise to do any of the foregoing.

CERTAIN POST-MERGER MATTERS

Once the Merger is consummated, ETC-Texas will cease to exist as a
corporation, and the Surviving Corporation will succeed to all of the assets,
rights and obligations of ETC-Texas. Pursuant to the Merger Agreement, the
Surviving Corporation Charter and the Surviving Corporation Bylaws will be the
certificate of incorporation and bylaws of the Surviving Corporation until
amended as provided therein and pursuant to the DGCL and the name of the
Surviving Corporation will be changed to Electronic Transmission Corporation.

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The obligation of ETC-Texas under the Note will be forgiven upon the
consummation of the Merger. See "The Companies -- Business Information
Concerning the Company" and "Certain Transactions."

TERMINATION OR AMENDMENT OF THE MERGER AGREEMENT

The Merger Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the Merger Agreement and
the Merger by the shareholders of the Company and ETC-Texas: (a) by mutual
consent of the Company and ETC-Texas; (b) by the Company, upon a breach of any
material representation, warranty, covenant or agreement on the part of
ETC-Texas set forth in the Merger Agreement, or if any representation or
warranty of ETC-Texas shall have become untrue, in either case such that the
Company's conditions to effecting the Merger would not be satisfied, subject to
a cure period under certain circumstances (a "Terminating ETC-Texas Breach");
(c) by ETC-Texas, upon a breach of any material representation, warranty,
covenant or agreement on the part of the Company set forth in the Merger
Agreement, or if any representation or warranty of the Company shall have
become untrue, in either case such that ETC-Texas' conditions to effecting the
Merger would not be satisfied, subject to a cure period under certain
circumstances (a "Terminating Company Breach"); (d) by either the Company or
ETC-Texas, if there shall be any order, ruling or decree which is final and
nonappealable preventing the consummation of the Merger, subject to a limited
exception; or (e) by either the Company or ETC-Texas, if the Merger Agreement
and the Merger shall fail to receive the requisite vote for approval and
adoption by the shareholders of ETC-Texas at the ETC-Texas Meeting and by the
shareholders of the Company at the Meeting.

In the event of the termination of the Merger Agreement, the Merger
Agreement shall become void, there shall be no liability on the part of the
Company or ETC-Texas to any other party and all rights and obligations of the
parties thereto shall cease, except that no party will be relieved from its
obligations with respect to any breach of the Merger Agreement.

The Merger Agreement may be amended by the parties thereto by action
taken by or on behalf of their respective Boards of Directors at any time prior
to the Effective Time; provided, however, that after approval of the Merger by
the shareholders of ETC-Texas, no amendment may be made that would reduce the
amount or change the type of consideration into which each share of ETC-Texas
Common Stock shall be converted pursuant to the Merger Agreement upon
consummation of the Merger. At any time prior to the Effective Time, any party
to the Merger Agreement may (a) extend the time for the performance of any of
the obligations or other acts of the other party thereto, (b) waive any
inaccuracies in the representations and warranties of the other party contained
therein or in any document delivered pursuant thereto, and (c) waive compliance
by the other party with any of the agreements or conditions contained therein.

COMPARISON OF SHAREHOLDERS RIGHTS

PREEMPTIVE RIGHTS; CUMULATIVE VOTING

Neither Delaware nor Texas corporation law require shareholders to
have preemptive rights or the right of cumulative voting. Shareholders of
ETC-Texas do not now have preemptive rights or the right of cumulative voting.
Since the Surviving Corporation Charter denies such rights, the ETC-Texas
shareholders will not have such rights as shareholders of the Surviving
Corporation.

VOTING RIGHTS

Under Texas law, shareholders have the right to vote on all mergers to
which the corporation is a party (except for the merger into the surviving
corporation if subsidiaries are owned 90% or more by the surviving corporation
for which a shareholder vote is not required under Texas law). In certain
circumstances, different classes of securities may be entitled to vote
separately as classes with respect to such transactions. Unless the articles
of incorporation provide otherwise, approval of the holders of at least sixty-
six and two-thirds percent (66-2/3%) of all outstanding shares entitled to vote
is required by Texas law to approve a merger, while under Delaware law approval
by the holders of a majority of all outstanding shares is required to approve a
merger, unless the certificate of incorporation provides otherwise. The
Surviving Corporation Charter does not provide otherwise. Unless the articles
of incorporation provide otherwise, the approval of the shareholders of the
surviving corporation of the merger is not required under Texas law if (1) the
corporation is a sole surviving corporation in the merger; (2) there is no
amendment to the corporation's articles of corporation; (3) each shareholder
holds the same number shares after the merger as before, with identical
designation, preferences, limitations and relative rights; (4) the voting power
of the shares outstanding after the merger plus the voting power of the shares
issuable as a result of the merger (taking into account convertible securities
and warrants, options or other rights to purchase securities issued pursuant to
the merger) does not exceed the voting power of the shares outstanding prior to
the merger by more than 20%; (5) the number of participating shares (that is,
shares whose holders are entitled to participate without limitation in
dividends or other distributions) outstanding after the merger plus the
participating shares issuable as a result of the merger (taking into account
convertible securities and warrants, option or other rights to purchase
securities issued pursuant to the merger) does not exceed the number of
participating shares outstanding prior to the merger by more than 20%; and (6)
the board of directors of the surviving corporation adopts a resolution
approving the plan of merger.

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<PAGE> 48
Under Delaware law, unless a certificate of incorporation provides
otherwise, shareholders of the surviving corporation in the merger have no
right to vote, except under limited circumstances, on the acquisition by merger
directly into the surviving corporation in cases where (1) the agreement of
merger does not amend in any respect the certificate of incorporation of such
corporation, (2) each share of stock of such corporation outstanding
immediately prior to the effective date is to be an identical outstanding or
treasury share of the corporation after the effective date of the merger, and
(3) the authorized unissued shares of the treasury shares of common stock of
the surviving corporation to be issued or delivered under the plan of merger
plus those initially issuable upon conversion of any other shares, securities
or obligations to be issued or delivered under such plan do not exceed 20% of
the shares of common stock of such corporation outstanding immediately prior to
the effective date of the merger. The Surviving Corporation Charter does not
alter the statutory rules described above.

SALE, LEASE OR DISPOSITION OF PROPERTY

The sale, lease, exchange or other disposition (not including any
pledge, mortgage, deeds of trust or trust indenture, unless otherwise provided
in the articles of incorporation) of all, or substantially all, the property
and assets of a Texas corporation if not made in the usual and regular course
of its business, requires the approval of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the outstanding shares of the corporation. A
Delaware corporation may sell, lease or exchange all or substantially all of
its property and assets when and as authorized by a majority of the outstanding
stock of the corporation entitled to vote thereon, unless the certificate of
incorporation provides to the contrary. The Surviving Corporation Charter does
not so provide.

APPRAISAL RIGHTS

Shareholders of Texas corporations have appraisal rights in the event
of a merger (except for the limited classes of mergers for which no shareholder
vote is required under Texas law and as set forth hereunder), consolidation or
sale, lease, exchange or other disposition of all, or substantially all, of the
property and assets of the corporation. Notwithstanding the foregoing, a
shareholder of a Texas corporation has no appraisal rights with respect to any
plan of merger in which there is a single surviving or new domestic or foreign
corporation, or from any plan of exchange, if (1) the shares held by the
shareholder are part of a class of shares of which are listed on a national
securities exchange, or held of record by not less than 2,000 holders, on the
record date for the plan of merger or the plan of exchange, and (2) the
shareholder is not required by the terms of the plan of merger or exchange to
accept for his shares any consideration other than (a) shares of a corporation
that, immediately after the merger or exchange, will be part of a class or
series of shares which are (i) listed, or authorized for listing upon official
notice of issuance, on a national securities exchange, or (ii) held of record
by not less than 2,000 holders, and (b) cash in lieu of fractional shares
otherwise entitled to be received. The appraisal rights of a shareholder of a
Texas corporation are summarized herein under "The Merger -- Rights of
Dissenting Shareholders."

Shareholders of a Delaware corporation have no appraisal rights in the
event of a merger or consolidation of the corporation if the stock of the
Delaware corporation is listed on a national securities exchange or such stock
is held of record by more than 2,000 shareholders, or in the case of a merger
in which the Delaware corporation is the surviving corporation, if: (1) the
agreement of merger does not amend the certificate of incorporation of the
surviving corporation, (2) each share or stock of the surviving corporation
outstanding immediately prior to the effective date of the merger is to an
identical outstanding share of the surviving corporation after the effective
date of the merger, and (3) the increase in the outstanding shares is a result
of the merger does not exceed 20% of the shares of the surviving corporation
outstanding immediately prior to the merger. Even if appraisal rights would
not otherwise be available under Delaware law in the cases described in the
preceding sentence, shareholders would have appraisal rights nevertheless if
they were required by the terms of the agreement of merger or consolidation to
accept for their stock anything other than the shares of stock of either the
surviving corporation or of any other corporation whose shares will be either
listed on a national securities exchange or held of record by more than 2,000
shareholders, or cash in lieu of fractional shares, or a combination of said
shares in cash. Otherwise, shareholders of a Delaware corporation have
appraisal rights in consolidations and mergers. Under Delaware law, any
corporation may provide to its certificate of incorporation that appraisal
rights will also be available as a result of an amendment to its certificate or
incorporation or the sale of all or substantially all of the assets of the
corporation. No such provisions are in the Surviving Corporation Charter.

SHAREHOLDER ACTION; ELECTION OF DIRECTORS; VOTING

Under Texas law, any action to be taken by shareholders may be taken
without a meeting, without prior notice and without a vote if all shareholders
entitled to vote on the matter consent to the action in writing. If a
corporation's articles of incorporation so provide, shareholder action may be
taken under Texas law by a consent signed by the holders of outstanding stock
having not less than the minimum number of votes would be necessary to
authorize or take such action at a meeting. Under Delaware law, unless a
certificate of incorporation provides otherwise, any action to be taken by
shareholders may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the actions that are taken, is
signed by the holders of outstanding stock having not less than the minimum
number of votes would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
The Surviving Corporation Charter does alter the statutory rule as to action
which may taken by written consent of the shareholders by prohibiting same.

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<PAGE> 49
Under Texas law, any vacancy occurring in the board of directors may
be filled by the shareholders or by the affirmative vote of a majority of the
remaining directors. A directorship to be filled by reason of an increase in
the number of directors may be filled by the shareholders or by the board of
directors for a term of office continuing only until the next election of one
or more directors by the shareholders, provided that the board of directors may
not fill more than two such directorships during the period between any two
successive annual meetings of shareholders. Under Delaware law, unless a
certificate of incorporation or bylaws provide otherwise, vacancy and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office. The
Surviving Corporation Charter does not provide otherwise.

Under Texas law, holders of not less than 10% of all the shares
entitled to vote have the right to call a special shareholders' meeting, unless
the articles of incorporation provide for a number of shares greater than or
less than 10%, in which event, special meetings of the shareholders may be
called by holders of at least the percentage of shares so specified in the
articles of incorporation, but in no event may the articles of incorporation
provide for a number of shares greater than 50% is required to call a special
shareholders' meeting. Delaware law provides that special meetings of
shareholders may be called by the board of directors or such other persons as
are authorized in the certificate of incorporation of bylaws. The Surviving
Corporation Bylaws provide for the call of a special shareholders' meeting by
the Board of Directors, the Chairman of the Board of Directors, the President
of the Company, or by the holders of at least 10% of the outstanding Continued
Common Stock entitled to vote at such meeting.

BUSINESS COMBINATION; TAKEOVERS

Under Section 203 of the DGCL, unless a corporation expressly elects
to have such provision not apply, no person who has acquired 15% of a Delaware
corporation's voting stock (with certain exceptions) may enter into a business
combination with the corporation for three years after acquiring 15% ownership,
unless the board of directors has approved the transaction or exempted the
person before he reached the 15% threshold or unless one of two exemptions is
satisfied: (i) upon consummation of the transaction resulting in such person
reaching the 15% threshold he owned at least 85% of the corporation's
outstanding voting stock (excluding shares owned by certain corporate insiders
in employee stock plans), or (ii) the business combination is approved by the
corporation's board of directors and authorized the holders of at least tho-
thirds of the outstanding voting stock (excluding that owned by the acquiring
person). The Surviving Corporation expressly elected to opt out of the
provisions of Section 203 of the DGCL. No similar statute currently exists
under Texas law.

THE MEETINGS

DATE, TIME AND PLACE

ETC-TEXAS. The ETC-Texas Meeting will be held on
____________________, 1996, at 5025 Arapaho Road, Suite 515, Dallas, Texas
75248, commencing at 2:00 p.m. local time.

PURPOSES OF THE MEETINGS

THE COMPANY. The purpose of the Meeting is to consider and vote upon
(i) the election of directors nominated by management; (ii) the appointment of
auditors to serve until the next annual meeting of the Company (or the
Surviving Corporation); (iii) a proposal to approve the Continuance; (iv) a
proposal to approve and adopt the Merger Agreement, the terms of which require
the issuance and reservation for issuance of up to 10,949,146 shares of
Continued Common Stock, (v) a proposal to change the name of the Company to
Electronic Transmission Corporation, and (vi) such other matters as may
properly be brought before the Meeting.

ETC-TEXAS. The purpose of the ETC-Texas Meeting is to consider and
vote upon (i) a proposal to approve and adopt the Merger Agreement, (ii) the
election of directors to serve on the Board of Directors of the Surviving
Corporation, and (iii) such other matters as may properly be brought before the
ETC-Texas Meeting.

RECORD DATE AND OUTSTANDING SHARES

Only holders of record of Company Common Stock at the close of
business on the Record Date are entitled to notice of, and to vote at, the
Meeting. Only holders of record of ETC-Texas Common Stock at the close of
business on the ETC-Texas Record Date are entitled to notice of, and to vote
at, the ETC-Texas Meeting.

On the Record Date, there were approximately 147 holders of record of
the 2,007,145 shares of Company Common Stock then issued and outstanding. Each
share of Company Common Stock entitles the holder thereof to one vote on each
matter

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<PAGE> 50
submitted for shareholder approval. See "Beneficial Ownership of Securities"
for information regarding persons known to the management of the Company to be
the beneficial owners of more than 5% of the outstanding Company Common Stock.
A complete list of registered shareholders entitled to notice of, and to vote
at, the Meeting will be available for examination at the offices of Beaumont
Church, Barristers and Solicitors, 2200 AGT Tower, 411 -- 1st Street S.E.,
Calgary, Alberta, Canada T2G 5E7, during normal business hours by any
shareholder, for any purpose germane to the Meeting for a period of 10 days
prior thereto.

On the ETC-Texas Record Date, there were approximately 155 holders of
record of the 7,153,601 shares of ETC-Texas Common Stock then issued and
outstanding. Each share of ETC-Texas Common Stock entitles the holder thereof
to one vote on each matter submitted for shareholder approval. See "Beneficial
Ownership of Securities" for information regarding persons known to the
management of ETC-Texas to be the beneficial owners of more than 5% of the
outstanding ETC-Texas Common Stock. A complete list of shareholders entitled
to notice of, and to vote at, the ETC-Texas Meeting will be available for
examination at the offices of ETC-Texas in Dallas, Texas during normal business
hours by any ETC-Texas shareholder, for any purpose germane to the ETC-Texas
Meeting for a period of 10 days prior thereto.

VOTING AND REVOCATION OF PROXIES

All properly executed proxies that are not revoked will be voted at
the Meeting and the ETC-Texas Meeting, as applicable, in accordance with the
instructions contained therein. If a holder of Company Common Stock executes
and returns a proxy and does not specify otherwise, the shares represented by
such proxy will be voted "for" approval of the appointment of the designated
auditors, approval of the Continuance, approval and adoption of the Merger
Agreement, approval of the changing of the Company's name to Electronic
Transmission Corporation, and election of a new Board of Directors in
accordance with the recommendation of the Board of Directors of the Company.
If a holder of ETC-Texas Common Stock executes and returns a proxy and does not
specify otherwise, the shares represented by such proxy will be voted "for"
approval and adoption of the Merger Agreement and the election of those
individuals nominated to serve as directors of the Surviving Corporation in
accordance with the recommendation of the Board of Directors of ETC-Texas. A
shareholder of the Company or a shareholder of ETC-Texas who has executed and
returned a proxy may revoke it at any time before it is voted at the
appropriate meeting by (i) executing and returning a proxy bearing a later
date, (ii) filing written notice of such revocation with the Secretary of the
Company or ETC-Texas, as appropriate, stating that the proxy is revoked, or
(iii) attending the appropriate meeting and voting in person.

VOTE REQUIRED

THE COMPANY. The Company's current Bylaws provide that the presence
at the Meeting, in person or by proxy, of the holders of 5% of the outstanding
shares of Company Common Stock entitled to vote thereat will constitute a
quorum for the transaction of business. On the Record Date, there were
2,007,145 shares of Company Common Stock outstanding and entitled to vote at
the Meeting. Approval of the Continuance, the Merger and the name change
requires the affirmative vote of at least sixty-six and two-thirds percent (66-
2/3%) of the votes cast on each proposal.

ETC-TEXAS. The presence at the ETC-Texas Meeting, in person or by
proxy, of the holders of a majority of the outstanding shares of ETC-Texas
Common Stock entitled to vote thereat will constitute a quorum for the
transaction of business, and approval and adoption of the Merger Agreement
requires the affirmative vote of sixty-six and two-thirds percent (66-2/3%) of
the issued and outstanding ETC-Texas Common Stock entitled to vote thereon. On
the ETC-Texas Record Date, there were 7,153,601 shares of ETC-Texas Common
Stock outstanding and entitled to vote at the ETC-Texas Meeting. In
determining whether the Merger Agreement has received the requisite number of
affirmative votes, abstentions will have the same effect as a vote against the
Merger Agreement.

SOLICITATION OF PROXIES

In addition to solicitation by mail, the directors, officers,
employees and agents of each of the Company and ETC-Texas may solicit proxies
from their respective shareholders by personal interview, telephone, telegram
or otherwise. The Company and ETC-Texas will each bear the costs of the
solicitation of proxies from their respective shareholders. Arrangements will
also be made with brokerage firms and other custodians, nominees and
fiduciaries who hold of record voting securities of the Company and ETC-Texas
for the forwarding of solicitation materials to the beneficial owners thereof.
The Company and ETC-Texas will reimburse such brokers, custodians, nominees and
fiduciaries for the reasonable out-of-pocket expenses incurred by them in
connection therewith.

OTHER MATTERS

At the date of this Proxy Statement/Prospectus, the Boards of
Directors of the Company and ETC-Texas do not know of any business to be
presented at their respective meetings other than as set forth in the notices
accompanying this Proxy Statement/Prospectus. If any other matters should
properly come before the respective meetings, it is intended that the shares

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<PAGE> 51
represented by proxies will be voted with respect to such matters in accordance
with the judgment of the persons voting such proxies.

ELECTION OF COMPANY DIRECTORS

GENERAL INFORMATION

The Articles of Incorporation, as amended, of the Company provide that
the Board of Directors shall consist of a minimum of three and a maximum of
seven directors with the actual number of directors to be determined from time
to time by the Board of Directors. All the Directors are to be elected
annually and each shall hold office until the close of the next annual meeting
of the shareholders or until he or she ceases to be a Director by operation of
law or until his or her resignation becomes effective. At the Meeting, it is
proposed that a Board of Directors comprised of three members be elected. All
three nominees are currently members of the Board of Directors of the Company,
and include L. Cade Havard, Edward Bollinger and Katherine L. MacDonald. Mr.
Bollinger and Ms. MacDonald intend to resign upon the completion of the Merger.
See "Election of Surviving Corporation Directors" and "Beneficial Ownership of
Securities."

The persons named in the accompanying proxy may act with discretionary
authority to vote for a new management nominee should any nominee named in this
Proxy Statement become unavailable for election, although the Company is
unaware of circumstances likely to render any nominee unavailable for election.
Unless the shareholder has specified otherwise, the persons named in the
accompanying proxy will vote such shareholder's shares of Company Common Stock
in favor of the nominees listed below.

NOMINEES FOR COMPANY DIRECTORS

L. CADE HAVARD has served as Chairman of the Board and Chief Executive
Officer of the Company since 1992. Mr. Havard has also served as Chairman of
the Board and Chief Executive Officer of ETC-Texas since December 1994 and has
served as President of ETC-Texas since April 1996. Mr. Havard also is the sole
officer, director and shareholder of Sterling National Corporation
("Sterling"), a factoring company. From 1990 through 1992, Mr. Havard served
as an independent venture capitalist providing financing for various companies,
while also serving as Chairman of the Board of the Regional Missouri Bank,
Marceline, Missouri. Mr. Havard does not serve on the board of directors of
any other reporting company. See "Certain Transactions."

EDWARD BOLLINGER has served as a Director of the Company since
November 1994. Mr. Bollinger has been an independent consultant since 1986.
Mr. Bollinger does serve on the board of directors of Frost Resources, Inc., a
dormant reporting company in Alberta, Canada.

KATHERINE L. MACDONALD has served as a Director of the Company since
March 1996. Ms. MacDonald has served as President and Managing Director of
Dimark Capital Corp., a finance and investment company. Ms. MacDonald serves
on the board of directors of Valley High Ventures Ltd. and Sovereign Chief
Ventures Ltd., both of which are traded on the Vancouver Stock Exchange.

None of the Directors of the Company are a party to any material
pending legal proceedings nor have there been any legal proceedings during the
last five years that are material to an evaluation of the ability or integrity
of any of the Directors or anyone nominated to become a director of the
Company.

BOARD RECOMMENDATION

The Board of Directors believes that the election of the persons above
as Directors of the Company is in the best interest of the Company and its
shareholders. The Board therefore recommends a FOR vote for the nominees and
it is intended that the proxies not marked to the contrary will be so voted.

The Articles of Incorporation of the Company, as amended, do not
permit cumulative voting. A majority of the votes of the holders of the
outstanding shares of Common Stock of the Company represented at a meeting at
which a quorum is present may elect each director.

-39-
<PAGE> 52
DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names and ages of the Company's
directors and executive officers (including positions), of whom only L. Cade
Havard shall serve in a similar capacity with the Surviving Corporation.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
L. Cade Havard . . . . . 44 Director and Chairman, President and Chief
Executive Officer
Edward Bollinger . . . . 68 Director
Katherine L. MacDonald . 36 Director
</TABLE>

INFORMATION REGARDING THE BOARD OF DIRECTORS OF THE COMPANY

The Company does not have a formal plan for compensating its Directors
for their service in their capacity as Directors. Directors are currently
entitled to reimbursement for reasonable travel and other out-of-pocket
expenses incurred in connection with attendance at meetings of the Board of
Directors. There are no other arrangements entered into in consideration of the
Directors' services on the Board nor are any of the Directors subject to an
employment contract.

During fiscal 1995, no funds were set aside or accrued by the Company
to provide pension, retirement or similar benefits for Directors or executive
officers.

During 1995 and through September 30, 1996, the Board of Directors of
the Company held six meetings, each of which was attended either in person or
by telephonic transmission by each member of the Board of Directors. The Board
of Directors also acted by unanimous consent on five occasions during the
referenced period. There are no established committees of the Board of
Directors of the Company.

EXECUTIVE COMPENSATION

The following Summary Compensation Table sets forth, for the years
indicated, all cash compensation paid, distributed or accrued for services,
including salary and bonus amounts, rendered in all capacities for the Company
to its Chief Executive Officer. No other executive officer of the Company
received any remuneration during the referenced periods. All other
compensation related tables required to be reported have been omitted as there
has been no applicable compensation awarded to, earned by or paid to any of the
Company's executive officers in any fiscal year to be covered by such tables.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------- -----------------------------
Awards
-----------------------------
Securities
Other Annual Restricted Underlying
Name/Title Year Salary/Bonus Compensation Stock Awards Options/SARs
---------- ---- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
L. Cade Havard, Chairman of the 1995 $ -0- $ -0- -0- -0-
Board and Chief Executive Officer 1994 -0- -0- -0- -0-
1993 -0- -0- -0- -0-
</TABLE>

STOCK OPTIONS

On June 1, 1996, the Company issued options (the "Company Options") to
purchase an aggregate of 220,000 shares of Company Common Stock at an exercise
price of $1.50 per share on or before June 15, 1997 to two affiliated and three
unaffiliated parties in consideration for services provided to the Company.
Upon completion of the Continuance and the Merger, the holders of the Company
Options will continue to have the right to acquire the identical number of
shares of Continued Common Stock upon payment of the $1.50 per share exercise
price. Edward Bollinger and Katherine L. MacDonald, both Directors of the
Company, each received 10,000 Company Options.

-40-
<PAGE> 53
ELECTION OF SURVIVING CORPORATION DIRECTORS

GENERAL INFORMATION

Under the terms of the Merger Agreement, the existing Board of
Directors of ETC-Texas would become the Board of Directors of the Surviving
Corporation. Accordingly, it is proposed that a Board of Directors comprised
of six members be elected at the Meeting to take office upon completion of the
Merger, which nominees include L. Cade Havard, Elaine Boze, Timothy P. Powell,
Michael Eckstein, David O. Hannah and Rick L. Snyder.

NOMINEES FOR COMPANY DIRECTORS

L. CADE HAVARD has served as Chairman of the Board and Chief Executive
Officer of the Company since 1992. Mr. Havard has also served as Chairman of
the Board and Chief Executive Officer of ETC-Texas since December 1994 and has
served as President of ETC-Texas since April 1996. Mr. Havard also is the sole
officer, director and shareholder of Sterling, a factoring company. From 1990
through 1992, Mr. Havard served as an independent venture capitalist providing
financing for various companies, while also serving as Chairman of the Board of
the Regional Missouri Bank, Marceline, Missouri. See "Certain Transactions."

ELAINE BOZE has served as General Counsel and a Director of ETC-Texas
since July 1995. For the nine years prior to her affiliation with ETC-Texas,
Ms. Boze was involved in the private practice of law in Dallas, Texas. From
1977 to 1986, Ms. Boze was employed in the General Counsel's office of Sun
Exploration and Production Company in Dallas, Texas. Ms. Boze received her
Doctor of Jurisprudence degree from Texas Tech School of Law in 1973. Ms. Boze
is Board Certified -- Oil, Gas and Mineral Law, Texas Board of Legal
Specialization.

TIMOTHY P. POWELL has served as Executive Vice President -- Data
Services and as a Director of ETC-Texas since February 1995. From 1981 to
February 1995, Mr. Powell served as a self-employed computer consultant for
individuals and corporations in the State of California. Mr. Powell contracted
consulting projects with independent, governmental organizations and Fortune
1000 companies. He provided services in system design, implementation,
applications development and procurement specifications.

MICHAEL ECKSTEIN has served as a Director of ETC-Texas since January
1996. Mr. Eckstein is the President of EDI For Healthcare, a
Pennsylvania-based technology company specializing in systems, networking and
EDI applications for health care and insurance industries. Mr. Eckstein's
personal experience includes over 20 years of designing and implementing data
processing and information management solutions for health care providers and
payors. He is an active member of the ANSI Standards Committee for EDI
Insurance and Healthcare Applications, and participates in numerous EDI
initiatives including the National Information Infrastructure task force for
health care and medical applications.

DAVID O. HANNAH has served as a Director of ETC-Texas since February
1995. For the proceeding five years, Mr. Hannah has managed his personal
investments. Mr. Hannah has spent most of his professional career in real
estate development. His area of expertise is in the purchasing and development
of real estate for the sole purpose of leasing to commercial entities.

RICK L. SNYDER has served as a Director of ETC-Texas since January
1996. Mr. Snyder is the principal owner of MS3 located in Fairfax, Virginia.
MS3 is an independent provider of Section 125, COBRA, Quality Retirement Plan,
and Automated Payroll Processing administrative services. From 1985 to October
1996 Mr. Snyder served as President of The L.P. BAIER Company located in
Fairfax, Virginia. The L.P. BAIER Company is an independent provider of Section
125, COBRA, Qualified Retirement Plan, and Automated Payroll Processing
administrative services. Mr. Snyder also serves as the firm's Senior Consultant
for the Section 125 and COBRA administration practice. Mr. Snyder also lectures
on issues related to Section 125 and COBRA compliance. His courses are approved
by various State Insurance and Certified Public Accounting Departments for
continuing education credits.

Each director of the Surviving Corporation will hold office until the
next annual meeting of shareholders and until a successor has been elected and
qualified or until his earlier resignation or removal.

None of the Directors of ETC-Texas is a party to any material pending
legal proceedings nor have there been any legal proceedings during the last
five years that are material to an evaluation of the ability or integrity of
any of the Directors or anyone nominated to become a director of the Company.

BOARD RECOMMENDATION

The Board of Directors of the Company believes that the election of
the persons above as directors of the Surviving Corporation is in the best
interest of the Surviving Corporation and its shareholders. The Board
therefore recommends a FOR vote for the nominees and it is intended that the
proxies not marked to the contrary will be so voted.

-41-
<PAGE> 54
The Articles of Incorporation, as amended, of the Company does not
permit cumulative voting. A majority of the votes of the holders of the
outstanding shares of Common Stock of the Company represented at a meeting at
which a quorum is present may elect each director.

DIRECTORS AND EXECUTIVE OFFICERS OF ETC-TEXAS AND THE SURVIVING CORPORATION

The following table sets forth the names and ages of the directors
(including committee members) and executive officers (including positions) of
ETC-Texas who will also serve in similar capacities with the Surviving
Corporation.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
L. Cade Havard(1)(2)(3) . 44 Chairman, President and Chief Executive
Officer and Director
Elaine Boze(2)(3) . . . . 47 General Counsel and Director
Louann C. Smith . . . . . 37 Controller, Treasurer, Corporate Secretary
Ann C. McDearmon . . . . 46 Executive Vice President -- Director of
Marketing
Timothy P. Powell(3) . . 37 Executive Vice President -- Data Services and
Director

Michael Eckstein(1)(3) . 48 Director
David O. Hannah(1)(3) . . 71 Director
Rick L. Snyder(2)(3) . . 44 Director

- ------------------------------
</TABLE>
(1) Member of Compensation Committee of ETC-Texas.
(2) Member of Audit Committee of ETC-Texas.
(3) Nominees for election as directors of the Surviving Corporation by the
shareholders of the Company after the Continuance and the Merger.

LOUANN C. SMITH has served as Controller, Treasurer and Corporate
Secretary of ETC-Texas since its inception in 1994. From March 1994 to the
present, Ms. Smith has served as Controller, Treasurer and Corporate Secretary
of Sterling. Prior to 1994, Ms. Smith worked as an accountant for Jonmar
Services, attended the University of Texas at Dallas, served as Assistant
Controller for Remington Companies and Senior Accounting Manager for Southmark
Public Syndications. At Southmark, Ms. Smith was responsible for SEC reporting
for 10 public partnerships.

ANN C. MCDEARMON has served as Executive Vice President and Director
of Marketing of ETC-Texas since June 1995. From November 1989 to May 1995, Ms.
McDearmon worked for Tucker and Clark, a third party administrator, as the
claims manager. Her responsibilities included claims processing, employee
management and subrogation. While serving as claims manager, Ms. McDearmon
wrote the claims logic for automated claims, created a budget and new filing
system, and wrote plan benefit designs to comply with ERISA and the ADA. Ms.
McDearmon has successfully completed the Health Insurance Association of
America courses as well as the International Claims Administration course on
Medical and Dental claims and LOMA I. Ms. McDearmon obtained a Bachelor of
Arts degree from Arkansas State in 1973.

INFORMATION REGARDING THE BOARD OF DIRECTORS OF ETC-TEXAS AND THE SURVIVING
CORPORATION

ETC-Texas does not have a formal plan for compensating its Directors
for their service in their capacity as Directors. Directors of the Surviving
Corporation will be entitled to reimbursement for reasonable travel and other
out-of-pocket expenses incurred in connection with attendance at meetings of
the Board of Directors. The Board of Directors of the Surviving Corporation
may award special remuneration to any Director undertaking any special services
on behalf of the Surviving Corporation other than services ordinarily required
of a Director.

During fiscal 1995, no funds were set aside or accrued by ETC-Texas to
provide pension, retirement or similar benefits for Directors or executive
officers.

The Board of Directors of ETC-Texas has created an Audit Committee and
a Compensation Committee. The Audit Committee is composed of three members,
one of which is an independent Director, and is charged with reviewing
ETC-Texas' annual audit and meeting with ETC-Texas' independent accountants to
review internal controls and financial management practices. The Compensation
Committee is composed of three members, the majority of which are independent
Directors. The Compensation Committee recommends to the Board of Directors of
ETC-Texas compensation for key employees. Following the Merger, identical
committees will be established by the Surviving Corporation, and its members
will be those currently serving in such capacity(ies) for ETC-Texas.

During 1995 and through September 30, 1996, the Board of Directors of
ETC-Texas held three meetings, each of which was attended either in person or
by telephonic transmission by each member of the Board of Directors. The Board
of Directors also acted by unanimous consent on 14 occasions during the
referenced period.

-42-
<PAGE> 55
EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------ -------------------------------
Awards
-------------------------------
Securities
Other Annual Restricted Underlying
Name/Title Year Salary/Bonus Compensation Stock Awards Options/SARs
---------- ---- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
L. Cade Havard, Chairman of the Board, 1995 $ 96,736 $ -0- -0- 400,000
President and Chief Executive Officer
</TABLE>

STOCK OPTIONS

Mr. Havard owns options to purchase 300,000 shares of ETC-Texas Common
Stock at a purchase price of $0.001 per share, which options vest as follows:
100,000 shares upon the consummation of the Merger, 100,000 shares on January
1, 1997 and 100,000 on January 1, 1998. Mr. Havard exercised options to
purchase 100,000 shares of ETC-Texas Common Stock on April 30, 1996. The
options expire upon the termination of Mr. Havard's employment with either
ETC-Texas or a surviving entity. Upon consummation of the Merger, Mr. Havard's
ETC-Texas options will entitle him to purchase the identical number of shares
of Continued Common Stock under terms and conditions similar to those currently
governing these options.

In addition to Mr. Havard's stock options, ETC-Texas has granted
options to purchase an aggregate of 366,667 shares of ETC-Texas Common Stock,
at an exercise price of $0.001 per share, to certain other employees of
ETC-Texas. The options vest over the period commencing October 1996 and ending
August 1999 and expire upon the termination of the holder's employment with
ETC-Texas or a surviving entity. Upon the effectiveness of the Merger, the
holders of these options will have the right to acquire the identical number of
shares of Continued Common Stock under terms and conditions similar to those
currently governing the options granted by ETC-Texas.

OPTION/SAR GRANTS IN LAST FISCAL YEAR BY ETC-TEXAS

<TABLE>
<CAPTION>
Percent of Total
Number of Securities Options/SARs Granted Exercise or
Underlying Options/ to Employees in Base Price
SARs Granted (#) Fiscal 1995 ($/Sh) Expiration Date
-------------------- ------------------------ ------------- ---------------
Name
----
<S> <C> <C> <C> <C>
L. Cade Havard, Chairman of 400,000 87% $0.001 See footnote (1)
the Board, President and
Chief Executive Officer

- ------------------------------
</TABLE>
(1) The options to purchase 400,000 shares of ETC-Texas Common Stock granted to
Mr. Havard expire upon the termination of Mr. Havard's employment with
ETC-Texas.

-43-
<PAGE> 56
AGGREGATED FISCAL YEAR-END OPTION VALUES
(OPTIONS GRANTED BY ETC-TEXAS)

<TABLE>
<CAPTION>
Number of Securities Underlying
Name/Title Exercisable Unexercisable Exercisable Unexercisable
---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
L. Cade Havard, Chairman of the Board, -0- 300,000 -0- $12,348
President and Chief Executive
Officer
</TABLE>

Following the Continuance and the Merger, the Surviving Corporation
intends to implement a new outside director and employee stock option plan. It
is anticipated that a Form S-8 will be filed with the Commission to register
the common stock into which the stock options are exercised.

EMPLOYMENT AGREEMENTS

The employment agreements of ETC-Texas will be assumed and continued
by the Surviving Corporation after the Continuance and the Merger.

ETC-Texas has an entered into an employment agreement with L. Cade
Havard, Chairman of the Board, President and Chief Executive Officer. Under
the terms of this agreement, Mr. Havard is entitled to receive a base salary of
$180,000 per year and is eligible to receive annual bonuses and raises
consistent with performance. Mr. Havard also has been given the right to
receive options to purchase the number of shares of ETC-Texas Common Stock
representing 20% of all stock options granted at any time by ETC-Texas under
the terms of any non-qualified or qualified stock option plan established and
properly approved by the shareholders of ETC-Texas. The agreement further
provides that if Mr. Havard becomes permanently disabled, ETC-Texas will pay
Mr. Havard one-year's salary, provide him health insurance for life and offer
to purchase his shares of ETC-Texas Common Stock at the highest price that has
ever been paid for such stock sold in an "arms length" transaction. Also, if
Mr. Havard dies during the term of the agreement, ETC-Texas must offer to
purchase all ETC-Texas Common Stock owned by Mr. Havard from his estate at the
highest price that has ever been paid for such stock sold in an "arms length"
transaction. If Mr. Havard is terminated other than "for cause," he is
entitled to all sums due him for the remainder of the term of the agreement.
Mr. Havard agrees for a period of two years after termination of the agreement
not to solicit, on his own behalf or on behalf of any future employer or other
entity, any business from any entity with which ETC-Texas did business during
the term of the agreement. The agreement is to expire on December 31, 2010.

ETC-Texas has entered into an employment agreement with Elaine Boze,
its General Counsel. The agreement provides that Ms. Boze shall devote 30
hours per week of her business time and efforts to ETC-Texas. In exchange, Ms.
Boze is entitled to receive a base salary of $60,000 per year and is eligible
to receive annual raises and bonuses. Ms. Boze shall have the continuing
right to receive options to purchase the number of shares of ETC-Texas Common
Stock equal to the product of the number of shares reserved for issuance under
a stock option plan to be developed and duly approved and ratified by the
shareholders of ETC-Texas multiplied by the percentage her total salary is to
the total salaries paid to other employees of ETC-Texas, excluding the base
salary paid to Mr. Havard. The agreement further provides that if Ms. Boze
becomes permanently disabled, ETC-Texas will pay Ms. Boze one-year's salary,
provide her with health insurance for life, and allow her to participate in any
existing retirement program in place at the time of her disability. If Ms.
Boze is terminated by ETC-Texas other than "for cause," she is entitled to an
amount equal to 25% of her salary due for the remainder of the term of the
agreement. Furthermore, should there be a change in control in ETC-Texas's
management or she is removed as General Counsel or her duties significantly
changed, Ms. Boze shall receive an amount each year, through the term of the
agreement, equal to her then annual salary, including raises and bonuses that
she would have received had she remained employed as General Counsel by
ETC-Texas, be provided with free medical insurance coverage, and be given the
option to participate in pension and profit sharing programs. Ms. Boze agrees
for a period of two years after termination of the agreement not to solicit, on
her own behalf or on behalf of any future employer or other entity, any
business from any entity with which ETC-Texas did business during the term of
the agreement. The agreement is to expire on December 31, 1998.

ETC-Texas has entered into an employment agreement with Louann C.
Smith, Corporate Secretary, Treasurer and Controller. As compensation for her
services, ETC-Texas agrees to pay to Ms. Smith a base salary of $50,000 per
year and she is eligible to receive annual raises and bonuses. The agreement
expires on December 31, 1998. The agreement is terminable upon Ms. Smith's
death or permanent disability, as determined by the Board of Directors of
ETC-Texas. If the agreement is terminated as a result of Ms. Smith's permanent
disability, Ms. Smith shall be entitled to receive compensation equal to her
current annual base salary, health insurance for life, and to participate in
any existing retirement program in place at the time of her termination. The
agreement may be terminated by ETC-Texas for cause at any time the ETC-Texas
Board

-44-
<PAGE> 57
of Directors determines, in the exercise of its good faith judgment, that
Ms. Smith has engaged in gross malfeasance or willful misconduct in performing
her duties thereunder. Ms. Smith may terminate this agreement at any time. If
ETC-Texas terminates Ms. Smith's employment prior to the expiration of the term
of the agreement, other than "for cause," then ETC-Texas will be responsible to
pay to Ms. Smith an amount equal to 25% of all salary due for the remainder of
the term of the agreement, such amount payable at Ms. Smith's salary at the
time of termination. Should there be a change of control of ETC-Texas'
management, Ms. Smith shall receive an amount each year until the end of the
contract term equal to what her yearly salary, raises and bonuses would have
been had she remained employed by ETC-Texas. If ETC-Texas removes Ms. Smith
from her current positions or significantly changes her duties as set forth
therein, without her consent, then Ms. Smith at her option may treat such
actions as an unauthorized termination. Furthermore, Ms. Smith will be treated
as an early retiree and ETC-Texas will provide free medical insurance coverage
to Ms. Smith for the rest of her life, and Ms. Smith shall have the option to
participate in all pension and profit sharing programs as other ETC directors
and employees. Ms. Smith agrees for a period of two years after the
termination of the agreement not to solicit, on her own behalf or on behalf of
any future employer or other entity, any business from any entity with which
ETC-Texas did business during the term of the agreement.

ETC-Texas has entered into an employment agreement, dated May 1, 1996,
with Ann C. McDearmon, Executive Vice President -- Director of Marketing. As
compensation for her services, ETC-Texas agrees to pay to Ms. McDearmon a base
salary of $48,000 per year and a commission of 9% of all gross income generated
from services provided to companies referred to ETC-Texas by Ms. McDearmon.
Ms. McDearmon is also entitled to receive a commission of 2% of all gross
income generated from services provided to companies referred to ETC-Texas by
another employee of ETC-Texas under Ms. McDearmon's supervision. Gross
income, for the purpose of this agreement, is to be calculated for each
calendar month during the term thereof by (i) determining the gross income
received by ETC-Texas and the immediately available funds during such calendar
month from commissions, administrative and other fees, fees for editing and
transmitting claims and other direct sources, from accounts credited to Ms.
McDearmon, and (ii) subtracting any third-party subcontractor or consultant or
other third-party expenses incurred by ETC-Texas with respect to such accounts
during such calendar month. Commissions are payable for the life of applicable
accounts as long as the employment agreement or any extension thereof is in
effect. If the agreement is terminated or not renewed, commissions shall be
paid on said accounts for one year after termination or non-renewal. Should
the agreement be terminated without cause by ETC-Texas, liquidated damages of
such termination shall be payment of commissions to Ms. McDearmon for the
remainder of the term of the agreement and for one year thereafter. The
agreement expires on December 31, 1998. The agreement is terminable upon Ms.
McDearmon's death or permanent disability, as determined by the Board of
Directors of ETC-Texas. The agreement may be terminated by ETC-Texas for cause
at any time the ETC-Texas Board of Directors determines, in the exercise of its
good faith judgment, that Ms. McDearmon has engaged in gross malfeasance or
willful misconduct in performing her duties thereunder. Ms. McDearmon may
terminate this agreement at any time. Ms. McDearmon agrees for a period of six
months after the termination of the agreement not to solicit, on her own behalf
or on behalf of any future employer or other entity, any business from any
entity with which ETC-Texas did business during the term of the agreement.

ETC-Texas has entered into an employment agreement with Timothy P.
Powell, Executive Vice President -- Data Services. Under the terms of this
agreement, Mr. Powell is entitled to receive a base salary of $72,000 per year
and is eligible to receive annual raises and bonuses. Mr. Powell shall have
the continuing right to receive options to purchase the number of shares of
ETC-Texas Common Stock equal to the product of the number of shares reserved
for issuance under a stock option plan to be developed and duly approved and
ratified by the shareholders of ETC-Texas multiplied by the percentage his
total salary is to the total salaries paid to other employees of ETC-Texas,
excluding the base salary paid to Mr. Havard. The agreement further provides
that if Mr.Powell becomes permanently disabled, ETC-Texas will pay Mr. Powell
one-year's salary, provide him with health insurance for life, and allow him to
participate in any existing retirement program in place at the time of his
disability. If Mr. Powell is terminated by ETC-Texas other than "for cause,"
he is entitled to an amount equal to 25% of his salary due for the remainder of
the term of the agreement. Furthermore, should there be a change in control in
ETC-Texas's management or he is removed from office or his duties are
significantly changed, Mr. Powell shall receive an amount each year, through
the term of the agreement, equal to his then annual salary plus raises and
bonuses that he would have received had he remained employed by ETC-Texas, be
provided with free medical insurance coverage, and be given the option to
participate in pension and profit sharing programs. Mr. Powell agrees for a
period of two years after termination of the agreement not to solicit, on his
own behalf or on behalf of any future employer or other entity, any business
from any entity with which ETC-Texas did business during the term of the
agreement. The agreement is to expire on December 31, 1998.

NONDISCLOSURE AND NONCOMPETITION AGREEMENTS

ETC-Texas has entered into noncompetition agreements with each of its
executive officers. These agreements provide that during the term of their
employment and for one year thereafter, the officers, without the prior consent
of ETC-Texas, will refrain from competing with ETC-Texas within the State of
Texas, or employ, or solicit the employment of, any employee of ETC-Texas.
These agreements will be assigned to and assumed by the Surviving Corporation
following the Merger.

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<PAGE> 58
BENEFICIAL OWNERSHIP OF SECURITIES

The following table provides certain information based on the
outstanding securities of the Company and ETC-Texas as of November 8, 1996, and
gives effect to the Merger with respect to each director, each beneficial owner
of more than 5% of the Company Common Stock and ETC-Texas Common Stock and all
corporate officers and directors of the Company and ETC-Texas as a group.

<TABLE>
<CAPTION>
Amount of Percent of
Amount of Percent of Amount of Percent of Beneficial Outstanding
Beneficial Outstanding Beneficial Outstanding Ownership in the Common Stock of
Name and Address Ownership in the Common Stock of Ownership in Common Stock of Surviving the Surviving
of Beneficial Owner(1)(2) Company the Company ETC-Texas ETC-Texas Corporation Corporation
- --------------------------- ------------------ ----------------- -------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
L. Cade Havard(3)(4)(5)(6) -0- -0- 2,945,368(6)(7) 41.17 3,656,710(6)(7) 33.40
Sterling National -0- -0- 745,368 10.42 931,710 8.51
Corporation(7)
Anneal Osbon Havard(8) -0- -0- 400,000 5.59 500,000 4.57
Elaine Boze(4)(5)(9) -0- -0- 66,666 * 83,333 *
Louann C. Smith(10) -0- -0- 13,333 * 16,666 *

Ann C. McDearmon(11) -0- -0- 13,333 * 16,666 *
Timothy P. -0- -0- 200,000 2.80 250,000 2.28
Powell(4)(5)(12)
David O. Hannah(4)(5) -0- -0- 728,542 10.18 910,678 8.32
Michael Eckstein(4)(5) -0- -0- -0- -0- -0- -0-
Rick L. Snyder(4)(5) -0- -0- -0- -0- -0- -0-
Edward Bollinger(3)(13) 13,000 * -0- -0- 13,000 *
Katherine L. 10,000 * -0- -0- 10,000 *
MacDonald(3)(14)
All executive officers and 23,000 1.15 3,967,242 55.46 4,957,053 45.27
directors as a group
(three persons as to the
Company and 10 persons as
to the Surviving
Corporation)(15)

- ------------------------------
</TABLE>

* Indicates less than 1%.
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days following the date of this Proxy
Statement/Prospectus upon the exercise of options or warrants. Each
beneficial owner's percentage ownership is determined by assuming that
options or warrants that are held by such person (but not those held by any
other person) and which are exercisable within 60 days from the date of
this Proxy Statement/Prospectus have been exercised. Unless otherwise
noted, the Company and ETC-Texas believe that all persons named in the
table have sole voting and investment power with respect to all common
shares beneficially owned by them.
(2) Unless otherwise indicated, the address of each beneficial owner identified
is: c/o Electronic Transmission Corporation, 5025 Arapaho Road, Suite 515,
Dallas, Texas 75248.
(3) Director of the Company.
(4) Director of ETC-Texas.
(5) Proposed Director of the Surviving Corporation.

(6) Includes (i) options to purchase 100,000 shares of Continued Common Stock
at an exercise price of $0.001 per share upon the effectiveness of the
Merger; (ii) 400,000 shares of ETC-Texas Common Stock issued in the name of
Mr. Havard's minor children over which Mr. Havard exercises sole voting and
investment power; and (iii) 745,368 shares of ETC-Texas Common Stock issued
in the name of Sterling, of which Mr. Havard is the sole shareholder. See
"Management -- Stock Options" and "Certain Transactions."

(7) Includes 594,368 shares of ETC-Texas Common Stock issued in the name of
Sterling, but which are held for the benefit of certain former employees of
Sterling who are presently employed by ETC-Texas pursuant to options (the
"Sterling Options") to purchase such shares at an exercise price of $0.001
per share over various vesting periods. The Sterling Options have no
expiration date, but are cancelable upon the termination of the holder as
an employee of ETC-Texas. Mr. Havard has been designated trustee of the
shares underlying the Sterling Options pursuant to a Voting Trust
Agreement, dated January 26, 1995, between Sterling and the holders of the
Sterling Options and, therefore, has sole voting and investment control
over said shares until such time as the Sterling Options are exercised. It
is anticipated that within 90 days of the date of this Proxy
Statement/Prospectus, Mr. Havard will resign as trustee of the Sterling
Options and that an unaffiliated person or entity will be retained as
trustee under the terms of the Voting Trust Agreement. Upon effectiveness
of the Merger, the holders of the Sterling Options will be entitled to
purchase an aggregate of 742,960 shares of Continued Common Stock at the
current exercise price. Any shares subject to the Sterling Options which
are not exercised will revert to Sterling. See "Certain Transactions."
(8) Ms. Havard is the wife of L. Cade Havard. Ms. Havard exercises sole voting
and investment control over the 400,000 shares of ETC-Texas Common Stock of
which she is the record holder.
(9) Does not include options to purchase an aggregate of 133,332 shares of
ETC-Texas Common Stock under Sterling Options granted to Ms. Boze which
vest 66,666 shares on March 1, 1997 and 66,666 shares on March 1, 1998.
(10) Does not include options to purchase an aggregate of 26,666 shares of
ETC-Texas Common Stock under Sterling Options granted to Ms. Smith
which vest 13,333 shares on March 1, 1997 and 13,333 shares on March
1, 1998.
(11) Does not include options to purchase an aggregate of 26,666 shares of
ETC-Texas Common Stock under Sterling Options granted to Ms. McDearmon
which vest 13,333 shares on March 1, 1997 and 13,333 shares on March
1, 1998.

(12) Includes Sterling Options to purchase 133,333 shares of ETC-Texas
Common Stock at $0.001 per share which became exercisable on May 10,
1996 and which expire upon Mr. Powell's termination as an employee of
the Company. Does not include Sterling Options to purchase an
aggregate of 200,000 shares of ETC-Texas Common Stock which vest
133,333 on March 1, 1997 and 100,000 on March 1, 1998.

-46-
<PAGE> 59
(13) Includes options to purchase 10,000 shares of Company Common Stock at
an exercise price of $1.50 per share, which options expire on June 15,
1997.
(14) Includes options to purchase 10,000 shares of Company Common Stock at
an exercise price of $1.50 per share, which options expire on June 15,
1997.
(15) Mr. Bollinger and Ms. MacDonald will resign as directors of the
Company upon the consummation of the Merger, and will not serve the
Surviving Corporation as either a director or officer.

CERTAIN TRANSACTIONS

THE COMPANY

On April 1, 1996, the Company issued 201,112 shares of Company Common
Stock to L. Cade Havard, the Chairman of the Board and Chief Executive Officer
of the Company, in satisfaction of $201,112 of debt owed by the Company to Mr.
Havard. Mr. Havard transferred 121,612 of such shares in satisfaction of debt
obligations owed by Mr. Havard to unaffiliated third parties.

On June 1, 1996, ETC-Texas executed an unsecured promissory note (the
"Note") in the principal amount of $779,575 in favor of the Company. The Note
accrues interest at the rate of 6% per annum and is due and payable on July 1,
1997. The obligation of ETC-Texas under the Note will be forgiven upon the
consummation of the Merger.

ETC-TEXAS

In early 1995, ETC-Texas purchased certain of the assets of Sterling,
including the claims processing business currently operated by ETC-Texas, in
exchange for a cash payment of $210,000 and the issuance of 3,965,100 shares of
ETC-Texas Common Stock. Sterling is currently in the business of factoring
accounts receivable. L. Cade Havard, the Chairman of the Board, President and
Chief Executive Officer of ETC-Texas and the Chairman of the Board and Chief
Executive Officer of the Company, is the sole shareholder of Sterling.
Sterling is currently the record owner of 745,368 shares of ETC-Texas Common
Stock, of which 594,368 shares are subject to the Sterling Options,
representing approximately 14% of all issued and outstanding shares of
ETC-Texas Common Stock. Sterling and ETC-Texas periodically advance and repay
funds to one another. Net borrowings of Sterling as of September 30, 1996 were
$25,972, which amount is due on demand and without interest. It is not
anticipated that the Surviving Corporation will enter into any further
agreements with Sterling for the purpose of borrowing or lending funds.
Sterling may provide certain computer hardware equipment to the Surviving
Corporation at below market prices as the result of contractual arrangements
Sterling has with third party suppliers. Should such transactions be
undertaken, they will be effected on terms and conditions similar to those
available to the Surviving Corporation as if dealing with an independent third
party.

On December 12, 1995, ETC-Texas entered into a marketing agreement
(the "Marketing Agreement") with L.P. BAIER ("Baier"). Rick Snyder, the
President of Baier, is also a director of ETC-Texas. Under the terms of the
Marketing Agreement, Baier will assist ETC-Texas in identifying and bringing
under contract clients requiring ETC-Texas' claims processing services. As
compensation of his marketing services, Baier shall receive an amount equal to
15% of the "gross income from revenue," as defined in the Agreement, realized
by ETC-Texas from accounts credited to Baier. Also under the terms of the
Marketing Agreement, ETC-Texas has agreed to assist Baier in marketing its
flexible benefits and COBRA administrative services. In consideration for this
marketing assistance, Baier has agreed to pay ETC-Texas, on a monthly basis, an
amount equal to 10% of the gross income of revenue realized by Baier from the
services provided to clients introduced to Baier by ETC-Texas which are brought
under contract. The Marketing Agreement is for a term ending on November 30,
1997 and shall be extended automatically for additional two-year rollover
periods unless either party desires to terminate its rights under same with at
least 60-days notice to the non-terminating party prior to the scheduled
expiration date.

On January 18, 1996, ETC-Texas entered into a consulting agreement
with Michael Eckstein, a director of ETC-Texas, pursuant to which Mr. Eckstein
agreed to assist ETC-Texas in identifying and placing under contract third
party administrators ("TPAs"), preferred provider organizations ("PPOs") and
other managed care companies which may be able to utilize ETC-Texas's claims
processing services. Under the terms of this agreement, Mr. Eckstein is
entitled to receive compensation on a monthly basis equal to $3,500 and
commissions equal to 8% of the "gross income from revenue," as defined in the
agreement, realized by ETC-Texas from clients generated by Mr. Eckstein. The
consulting agreement expires on January 20, 1998, and will automatically renew
for additional one-year periods unless canceled by either ETC-Texas or Mr.
Eckstein on 30-days notice prior to the applicable expiration date.

ETC-Texas is a party to an equipment lease and stock option agreement,
dated April 23, 1996 (the "Lease Agreement") with Ironwood Leasing Ltd., a
Texas corporation ("Ironwood"). Principals of Ironwood are also shareholders
of ETC-Texas. Under the terms of the Lease Agreement, ETC-Texas leases the
scanning equipment necessary to scan paper claims and convert them into
electronically transmittable claims data information. The Lease Agreement is
for a term of five years and automatically renews for consecutive one-year
periods unless a party thereto notifies the other of its intent to terminate
the Lease Agreement 90 days prior to the end of the renewal term.

-47-
<PAGE> 60
Also under the Lease Agreement, ETC-Texas has granted to Ironwood the
option to either (i) sell to ETC-Texas all the equipment referenced in the
Lease Agreement in exchange for the number of shares of ETC-Texas Common Stock,
or an equivalent number of shares of an entity with which ETC-Texas may merge,
equal to the purchase price for said equipment divided by 1.25 per share or
(ii) purchase, at a per share price of $1.25, the number of shares of ETC-Texas
Common Stock equal to the purchase price of the equipment divided by 1.25
whereby ETC-Texas may in turn purchase the equipment referenced in the Lease
Agreement at the expiration of the lease term for $1.00.

On June 20, 1996, Ironwood and ETC-Texas entered into a letter
agreement whereby Ironwood waived the escrow requirements imposed upon
ETC-Texas pursuant to the Lease Agreement for the period ending June 30, 1996.
Ironwood further agreed that ETC-Texas would not have to comply with the escrow
provisions of the Lease Agreement until ETC-Texas had received 30-days written
notice from Ironwood. Furthermore, Ironwood acknowledged that any option to
purchase shares of the common capital stock of ETC-Texas pursuant to the Lease
Agreement would have an exercise price of $1.25 per share.

Effective May 1, 1996, Roy W. Mers ("Mers") resigned from his position
as President and Director of ETC-Texas. As a consequence to his resignation,
ETC-Texas and Mers entered into a Settlement and Employment Agreement.
Pursuant to that agreement, ETC-Texas has agreed to pay to Mers, as
compensation for his efforts in assisting ETC-Texas to obtain financing for
ETC-Texas' business ventures, a commission of: (a) 10% of all capital invested
by private investors for which no commission is due to any other funding
source, (b) the following percentages based upon a "Lehman Formula" for
additional capital provided by an investment banking or brokerage group to
which a commission is due, 5% on the first $1,000,000, 4% on the second
$1,000,000, 3% on the third $1,000,000, 2% on the fourth $1,000,000 and 1% on
the capital raised in excess of $5,000,000; (c) 2% of the loan amount or
maximum amount used on any credit line for any loans generated or credit lines
established by Mers on behalf of ETC-Texas. Mers is also entitled to receive
ETC-Texas stock at the rate of 100,000 shares for the first $1,000,000 of
capital raised, 75,000 shares for the second $1,000,000 of capital raised,
50,000 shares for the third $1,000,000 of capital raised and 25,000 shares for
the fourth $1,000,000 and each additional $1,000,000 in capital raised. The
stock may be earned pro rata beginning at $500,000. If less than $500,000 in
capital is provided, then no shares will be earned. Furthermore, ETC-Texas
shall continue to provide medical insurance to Mers for the term of the
agreement. The agreement terminated on July 31, 1996. However, ETC-Texas has
agreed to pay Mers' compensation and stock bonuses should any financial
institution that Mers introduces to ETC-Texas subsequently provide financing to
ETC-Texas or the Surviving Corporation prior to August 1, 1997.

APPOINTMENT OF AUDITORS

At the Meeting, the shareholders of the Company will be called upon to
appoint auditors to serve until the close of the next annual meeting of the
Company and to authorize the directors to fix the remuneration of the auditors
so appointed. Hans P. Cremers, Chartered Accountant, of Calgary, Alberta (the
"Former Auditor"), served as auditor for the fiscal years ended December 31,
1991 to and including December 31, 1995 and has assisted the Company's
accountants in preparing the financial disclosure contained in this Proxy
Statement/Prospectus.

Simonton, Kutac & Barnidge, L.L.P. (the "Successor Auditor") has been
authorized by the Board of Directors of the Company to audit the books and
records of the Company for the fiscal years ended December 31, 1994 and 1995
and to prepare financial statements for these periods in accordance with
generally accepted accounting principles recognized by the Commission for the
purpose of including such financial statements in the Registration Statement of
which this Proxy Statement/Prospectus is a part. Because the Company will
become domiciled in the United States upon completion of the Continuance and
the Merger, and because the financial disclosure contained in this Proxy
Statement/Prospectus had to be prepared in accordance with United States,
rather than Canadian, generally accepted accounting principles, management
recommends that the shareholders vote for the appointment of the Successor
Auditor to serve as auditors until the close of the next annual meeting of the
shareholders of the Company. The recommendation of the Company's Board of
Directors is not the result of any disagreement with the Former Auditor on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedures. Furthermore, the Former Auditor's Report on
the financial statements of the Company for the preceding two fiscal years did
not contain any adverse opinion, nor was it modified for uncertainty, audit
scope or accounting principles.

In accordance with National Policy Number 31 under Canadian law, the
Company will deliver a Notice of Change of Auditor to the ASC, the Former
Auditor and the Successor Auditor. Letters of response have been received by
the Company from both the Former and the Successor Auditors.

COMPANY NAME CHANGE

If the shareholders of the Company and the shareholders of ETC-Texas
approve the Merger, then it is proposed that the Company will change its name
from ETC Transaction Corporation to Electronic Transmission Corporation. At
the Meeting, the shareholders will be asked to consider and, if thought fit,
pass a special resolution approving this name change which will become
effective concurrent with the completion of the Continuance and the Merger.

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THE COMPANIES

BUSINESS INFORMATION CONCERNING THE COMPANY

The Company was incorporated as Solo Petroleums Ltd. on September 5,
1986 for the purpose of undertaking oil and gas exploration efforts. In 1987,
the Company completed a public offering of the Company Common Stock as a Junior
Capital Pool Company under the policies of The Alberta Stock Exchange (the
"ASE") and the Alberta Securities Commission (the "ASC"). The Company Common
Stock was subsequently listed for trading on the ASE under the trading symbol
"SOP". By 1990, revenues from oil and gas exploration efforts had
substantially declined and the Company began experiencing financial
difficulties. As a result, the Company liquidated substantially all of its
assets and underwent a significant change in management during 1990.
Management of the Company is currently seeking to consummate an acquisition or
merger transaction with a privately-held business which the Company believes
has significant growth potential, thereby allowing the shareholders of both
corporations to benefit by owning an interest in a viable business enterprise.
Since the Company has no significant assets or operations, its principal
potential for profits comes solely from operations it may receive in an
acquisition or merger transaction. Management of the Company has identified
ETC-Texas as a suitable merger candidate because of its position in the
emerging electronic medical claims processing industry and the related
potential for significant growth. On March 21, 1996, the Company changed its
name to ETC Transaction Corporation and effected a one-for-five consolidation
of capital of the outstanding shares of Company Common Stock to facilitate the
effectiveness of the Merger.

The Company, in 1991 and 1992, issued $605,000 in convertible
debentures. The proceeds of these offerings were used to fund costs and
expenses incurred in identifying and negotiating acquisition or merger
transactions with privately-held entities and for working capital. The Company
did identify and conduct preliminary negotiations with two entities during 1993
and 1994. As a result of the Company's inability to consummate an acquisition
or merger transaction, the debentures went into default. In April 1996, the
Company issued 552,500 shares of Company Common Stock to the debenture holders
in satisfaction of $552,500 of debt. Also in April 1996, the Company issued
284,928 shares of Company Common Stock in satisfaction of loans to the Company
primarily from L. Cade Havard and other non-affiliated third parties. Mr.
Havard, the Chairman of the Board and Chief Executive Officer of the Company
and the Chairman of the Board, President and Chief Executive Officer of
ETC-Texas, received 201,112 shares of Company Common Stock as a result of this
debt to equity conversion. See "The Merger -- Interests of Certain Persons in
the Merger" and "Certain Transactions."

On July 29, 1992, the Company received a Cease Trade Order from the
ASC for failure to file annual audited financial statements for the year ended
December 31, 1991 and first quarter interim unaudited financial statements for
the period ended March 31, 1992, and for failure to forward such financial
statements to the Company's shareholders. On January 12, 1993, the shares of
Company Common Stock were automatically removed from the ASE. On March 21,
1996, the ASC varied its Cease Trade Order for the purpose of allowing the
Company to issue securities in satisfaction of the debt obligations referenced
above and to consummate the Continuance and the Merger and ordered that the
Cease Trade Order would be revoked 48 hours after delivery to the ASC of
verification that the Registration Statement, of which this Proxy
Statement/Prospectus is a part, has been declared effective by the Commission
and upon confirmation to the ASC that the Company has issued a press release
setting out the material terms of the Continuance and the Merger.

On June 5, 1996, the Company consummated a private offering of Company
Common Stock pursuant to which the Company issued 519,717 shares of Company
Common Stock at a per share price of $1.50 for aggregate proceeds of $779,575.
The proceeds of this offering have been loaned to ETC-Texas to fund (i) its
business operations, (ii) costs associated with the Merger, including legal,
accounting and related proxy statement printing costs, and (iii) for general
working capital. See "Certain Terms of the Merger Agreement -- Certain
Post-Merger Matters" and "Certain Transactions."

The Company has never generated significant revenues or assets, owns
no real or personal property, has no full- time personnel and is not involved
in any material litigation. The Company has approximately 250 holders of its
Company Common Stock.

BUSINESS INFORMATION CONCERNING ETC-TEXAS

GENERALLY. ETC-Texas was organized in December 1994 under the laws of
the State of Texas. In early 1995, ETC-Texas paid to Sterling $210,000 and
issued 3,965,100 shares of ETC-Texas Common Stock in exchange for certain
assets related to Sterling's electronic medical claims processing business
which was developed by Sterling as a segment of its overall business
operations. L. Cade Havard, the Chairman, President and Chief Executive
Officer of ETC-Texas and the Chairman of the Board and Chief Executive Officer
of the Company, is the sole shareholder of Sterling. See "The Merger --
Interests of Certain Persons in the Merger" and "Certain Transactions."
ETC-Texas has enhanced the electronic medical claims flow methodology
established by Sterling and currently markets an electronic medical claims flow
process whereby paper medical claims are electronically scanned and transposed
into images formatted for the claims payor for adjudication and payment.

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CLAIMS AUTOMATION. The primary business of ETC-Texas is that of
providing automated processing services of health care claims for (i)
self-insured companies that administer their own health care plans and pay
their own medical claims, (ii) TPAs that administer health care plans and pay
medical claims for self-insured companies, (iii) PPOs, and (iv) other managed
care organizations that offer discounts on medical claims and who reprice those
claims to reflect discounts offered by providers to payors.

ETC-Texas processes more than 90,000 claims per month for four
clients, the majority of which are generated by a self-insured employer.
Utilizing its existing work flow process and imaging technology, ETC-Texas
processes standardized claim and plan enrollment forms by scanning these forms
at the client's facilities, with the scanned data being transmitted to
ETC-Texas' imaging center. Once received at ETC-Texas' imaging center, the
data is processed using an optical character recognition process. ETC-Texas
then extracts all available data from the scanned claim form, manually reviews
each claim, and transmits the claim to the respective payor for adjudication
and payment. See "Risk Factors -- Dependence on Major Client."

CONTRACTING FOR DISCOUNTS. Health care providers may contract with
various managed care organizations, and those contracts may limit the amount
that providers may charge for a particular service. ETC-Texas utilizes
provider information directly from the medical claim in order to contact either
the managed care organization or a provider directly to secure a discount for
medical services for the benefit of self-insured clients.

REPRICING. Many PPOs cannot receive or send medical claims
electronically despite the fact that electronic transmission is required by an
increasing number of payors. ETC-Texas provides electronic processing and
repricing to these organizations on a contract basis. This service is
currently provided to and paid for entirely by the PPO networks.

GROWTH STRATEGY. ETC-Texas intends to grow by consolidating its
position in its existing market by expanding its base of self-insured, TPA and
PPO clients. The objective of ETC-Texas is to become the dominant provider of
electronic medical claims processing services. ETC-Texas intends to implement
its strategy in the following manner:

o Internal Market Development. The majority of ETC-Texas'
growth is driven from its claims automation processing
activities. ETC-Texas' internal growth initiatives consist of
marketing its existing claims automation, contracting for
discounts and repricing services to self-insured, TPA and PPO
clients. ETC-Texas' relationships with existing clients in
various geographic regions allow it to engage additional
clients through referrals generated from its client base.
ETC-Texas hopes to utilize the interrelationships between
various self-insured companies, TPAs and PPOs for the purpose
of enhancing its reputation in the marketplace and in turn
increasing its client base through referrals within medical
claims payor networks.

o Long-Term Customer Contracts. ETC-Texas typically enters into
90-day service provider agreements which are cancelable by
either the client or ETC-Texas at any time. During this
90-day period, ETC-Texas evaluates the needs of the client,
develops a tailored claims processing system and initiates
claims processing procedures for the client's analysis. Upon
expiration of the 90-day period, ETC-Texas will enter into a
long-term agreement, generally for a term of two years, under
the terms of which ETC-Texas will provide claims automation
processing services to the client on a per-claim processed fee
basis. ETC-Texas intends to utilize the 90-day review
process, which is risk free to the client, as a proving ground
for its services thereby allowing it to enter into more
lucrative long-term provider contracts. ETC-Texas believes
that long-term contracts provide benefits to both itself and
its clients. Clients are able to realize the cost savings
associated with the processing of medical claims through an
electronic medium, while long-term contracts add stability to
ETC-Texas' revenue base and may deter potential competition.
After the expiration of the initial term of a long-term
contract, the term of the contract continues in effect until
either ETC-Texas or the client notifies the other of its
desire to terminate. To date, ETC-Texas has only entered into
a long-term contract with Wal-Mart. See "-- Clients and
Marketing."

o Superior Customer Service. ETC-Texas seeks to differentiate
itself through its attention to client service. Clients
receive the necessary training in implementing the automated
claims processing system and have the ability to consult with
an ETC-Texas representative via a help line which is
operational during normal business hours. ETC-Texas responds
to service calls on a timely basis and the experience level of
its personnel aids in the resolution of clients' concerns.
Recognizing the public visibility of its clients, ETC-Texas
carefully maintains the professional image of its employees.

o Rapid Installation and Enhanced Processing Capability.
ETC-Texas installs claims processing equipment, including
computer, telecommunications and scanning equipment, for use
at the client's facility. Once the contractual relationship
is entered into, it is ETC-Texas' intention to initiate claims
processing services within 20 days of the date that an
agreement is reached. ETC-Texas believes its ability to
rapidly install a processing system at a client's location
with minimal disruption gives it a significant advantage in
the marketplace. ETC-Texas intends to enhance its claims
processing capabilities by increasing its number of

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scanners and retaining the services of additional claims
processors, both of which will afford ETC-Texas the capability
of increasing the volume of claims processed while reducing
the time involved in doing so.

o Expanded Automated Enrollment. One of the most time-consuming
parts of initiating claims automation services for a new
client is that of acquiring "Eligibility Data," which consists
of all of the enrollment data gathered at the time the insured
person makes application for medical coverage. ETC-Texas has
developed an enrollment form which when filled out can be
scanned and processed in much the same way medical claim forms
are processed for the insurer. The result is that enrollment
forms can be processed daily as they are received, with the
data extracted from the forms being used by ETC-Texas in
claims processing. ETC-Texas intends to utilize the
availability of this form of enrollment to market its services
to potential clients.

o Expanded Repricing or Discounting of Medical Claims for PPOs.
ETC-Texas developed its own electronic medical claim repricing
system which is now used to do the work of repricing for PPO
networks that do not have Electronic Data Interchange ("EDI")
capabilities. With the agreement of the PPO networks the data
used to reprice or discount the medical claims is provided to
ETC and the repricing or discounting procedures are completed
as a part of the existing claims automation services offered
by ETC-Texas. While PPOs are the main focus of this service,
the new entities that are forming in the medical community
such as independent professional associations ("IPAs"),
physician hospital organizations ("PHOs") and even some health
maintenance organizations ("HMOs") are offering products that
resemble those offered by PPOs and they have the same need to
automate the repricing or discounting procedures and are
potential clients for this service.

o Providing Repricing or Discounting of Medical Claims for
Payors. ETC-Texas has developed a value added service to the
claims automation service which will allow ETC-Texas to become
actively involved with acquiring discounts on medical claims
for its existing clients as well as for all new clients. This
new service offers discounts on many medical claims which have
heretofore not been covered by traditional PPO arrangements.
Traditionally, PPOs have offered significant discounts on
services from their provider members, but fail to provide
discounts on other claims because patients tend to see their
physician of choice regardless of whether they are members of
the particular PPO utilized by the primary insurer. With the
information on medical providers which PPO networks are
affiliated with, ETC-Texas has been able to direct its payor
clients where to go for the best source of discounts from
medical providers being used by the insured individuals.
ETC-Texas has now contracted with several networks to lease
access to the provider members for a fee and this service is
resold to the payor clients of ETC-Texas. ETC-Texas is paid a
percentage of the total discounts delivered to the insurer
which the insurer would otherwise not have been able to
access.

o Workers' Compensation Automation Service. During the
development of the work flow process by ETC-Texas, a common
request by potential clients was the automation of the process
for handling workers' compensation claims. The process in
almost all cases has heretofore been done manually. The
terminology of this business segment is completely different
from healthcare as are the procedures for seeking treatment.
However, most of the claims (called bills for workers'
compensation) are the same claim forms used by medical
providers for healthcare. As with healthcare claims, the
problems with workers' compensation is the use of manual data
entry to process the forms. As ETC-Texas had already
developed a system for automated data entry, ETC-Texas may
link the automation work flow process to an existing system
for processing workers' compensation claims.

ETC-Texas believes it has sufficient operating capital for the
remainder of fiscal 1996 to operate the business without constraint. However,
the capital on hand does not allow for expenditures deemed necessary for
ETC-Texas to keep pace with its expansion plans. The plans for expansion
include adding an additional five clients by the end of the year and expanding
the office facilities to accommodate the growth which will be encountered with
the addition of the new clients. Other plans are to expand the scope of
services offered and the market segments to which the existing services are
offered. ETC-Texas will expand its service for acquiring discounts on medical
claims by entering into joint venture or revenue sharing agreements with
existing PPO networks. Also, ETC-Texas intends to expand its services for
medical claims to the workers' compensation segment of the market. This will
be facilitated by first automating its Workers Compensation Bill Audit Review
service and then offering these automated services to ETC-Texas' existing
client base which have already expressed an interest in utilizing the new
services. In order to fund expenditures deemed necessary for proper growth and
expansion, it will be necessary to acquire additional operating capital by
increasing equity capital and possibly the use of debt financing.

ETC-Texas may seek to expand its business through acquisition. The
goal of management in such cases will be to make prudent decisions before
embarking on any acquisition and to negotiate agreements which will insure that
any acquisition candidate will be financially self-sufficient in minimal time
so as to not be a drain on the assets of ETC-Texas. Management will also
evaluate in any such cases the ability to develop a product, service or block
of business before attempting an acquisition. ETC-Texas has no commitment,
understanding or agreement with any other party relating to a proposed
acquisition.

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As ETC-Texas grows in the number of claims it processes the number of employees
will also increase but not significantly. Personnel that is added to handle
the increase in volume will typically be added in the data perfection and
quality assurance departments. These are hourly employees and are readily
available in the marketplace.

CLIENTS AND MARKETING. ETC-Texas markets its processing services
primarily to self-insured health plans, TPAs and PPOs. ETC-Texas currently
provides services to two self-insured health plan clients, one TPA client and
two PPO clients. ETC-Texas generally enters into 90-day service provider
agreements, which are cancelable either by the client or ETC-Texas at any time.
During the 90-day period, ETC-Texas evaluates the needs of the client, develops
a tailored claims processing system and initiates claims processing procedures
for the client's analysis. Following the 90-day period, long-term service
contracts are entered into. The long-term agreements are generally for a
period of two years and detail the services to be provided for the benefit of
the client.

On March 5, 1996, ETC-Texas and Wal-Mart entered into an Agreement for
Processing Medical Claims on a Temporary Basis (the "Wal-Mart Agreement")
pursuant to which ETC-Texas was retained to evaluate the manner in which
Wal-Mart processed its medical claims and to implement an electronic claims
processing system for claims generated from medical services provided to
Wal-Mart employees. Under the terms of the Wal-Mart Agreement, ETC-Texas
installed all necessary equipment on-site to scan all machine-printed medical
claim forms submitted by health care providers who rendered services for the
benefit of Wal-Mart employees. ETC-Texas has trained Wal-Mart employees in
scanning the machine-printed medical claims for the purpose of transmitting an
effective image to ETC-Texas for processing. As of September 30, 1996,
ETC-Texas electronically processed approximately 370,000 medical claims for the
benefit of Wal-Mart, resulting in revenues to ETC-Texas of approximately
$367,755. Revenues generated from the Wal-Mart Agreement represent
approximately 65% of ETC-Texas' revenues as of September 30, 1996. ETC-Texas
has entered into an Agreement for Processing and Repricing Medical Claims with
Wal-Mart (the "Long-Term Wal-Mart Agreement"), effective September 1, 1996.
Under the terms of the Long-Term Wal-Mart Agreement, ETC-Texas has agreed to
provide electronic medical claims processing and repricing services for
Wal-Mart under the terms and conditions set forth therein for a term of two
years from the effective date. ETC-Texas will receive $1.00 per claim
processed for the first 50,000 claims processed in a given month, which amount
will be reduced by $.10 for every additional 50,000 claims processed in that
month. Once 150,000 claims have been processed in a given month, ETC-Texas
will receive $.75 per additional claim processed during said month. See "Risk
Factors -- Dependence on Major Client."

ETC-Texas utilizes direct marketing efforts to solicit new clients and
retain the business of existing clients. ETC-Texas' marketing department
consists of two employees who focus on identifying and preparing presentations
for the benefit of self-insured companies, TPAs and PPOs. The efforts of
ETC-Texas' marketing staff are supplemented by ETC-Texas' executive officers.
Also, ETC-Texas relies upon referrals within the network of medical claims
payors to expand its client base. ETC-Texas does not anticipate that it will
be required to expand its marketing efforts beyond the strategies currently in
place in order to achieve a client base necessary to attain profitability.

REGULATORY MATTERS. ETC-Texas is not subject to any direct federal or
state government regulation because of the nature of its business. There can
be no assurance that federal or state authorities will not in the future impose
restrictions on its activities that might adversely effect the Surviving
Corporation's business. The failure by the Surviving Corporation to obtain or
retain any applicable licenses, certifications or operational approvals could
adversely effect its existing operations and professional performance. There
can be no assurance that in the future the Surviving Corporation will be able
to acquire all the necessary licenses, permits or approvals, if any, necessary
to conduct its business or that the costs associated with complying with laws
and regulations affecting its business will not have a materially adverse
effect on the Surviving Corporation.

COMPETITION. The medical claims processing industry is intensely
competitive and is characterized by providers of electronic claims automation
and paper claims processing services. There are also participants in the
industry which provide contracting for discount and repricing services for the
benefit of participants in the market currently served by ETC-Texas.
ETC-Texas' competition in the market for electronic claims processing,
contracting for discount and repricing services is primarily derived from
certain insurance companies or other TPAs and management services organizations
which are substantially larger than ETC-Texas with much greater financial and
technical resources and longer operating histories than ETC-Texas. ETC-Texas
also believes that its processing methodology is easily duplicated. However,
management of ETC-Texas believes that ETC-Texas' competitors, while each
provides only segments of the services offered by ETC-Texas, do not offer the
interconnected array of services provided by ETC-Texas. ETC-Texas believes
that it possesses a competitive advantage by offering its claims automation,
contracting for discounts and repricing services in a format that connects
payors, payees and service providers. The service methodology of ETC-Texas
will allow it to compete against more established companies with much greater
financial and technical resources. However, there is no barrier which would
prohibit ETC-Texas' competitors from modifying their current services to
emulate those offered by ETC-Texas. In addition, ETC-Texas may face
substantial competition from new entrants into the electronic claims processing
industry. ETC-Texas' ability to compete successfully with current and
potential competitors will depend to a significant extent on its ability to
continue developing processing methodologies which are superior to its
competitors and to adapt to changes in the marketplace. ETC-Texas believes it
will be able to do so by developing its current clients and using their
recommendations to engage additional clients in order to compete effectively
despite ETC-Texas's current financial condition.

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LEASED EMPLOYEES. Since January 1, 1996, ETC-Texas has been a party
to a Staff Leasing Services Agreement with Network Employers Group, Inc.
("Network"). The Staff Leasing Services Agreement, with the consent of
Network, which is not expected to be denied, will be assigned to and assumed by
the Surviving Corporation upon completion of the Merger. Under such agreement,
all personnel working for ETC-Texas, including its executive officers
(totalling 55 persons as of November 1, 1996), are actually employed by Network
and "leased" to ETC-Texas. Under such contract, the "leased" employees perform
services for ETC-Texas in a manner substantially identical to being directly
employed by ETC-Texas; however, Network is their actual employer and provides
such employees with their medical, unemployment, worker's compensation and
liability insurance through group insurance plans maintained by Network for
ETC-Texas and other clients of Network. More specifically, ETC-Texas pays
Network's service fees, for each payroll period, based upon gross payroll and a
fee rate percentage. Pursuant to the terms of the contract, the cost of the
aforesaid insurance as well as the payroll obligations for the leased employees
is funded by ETC-Texas to Network, and Network is required to then apply such
proceeds to cover the payroll and administrative costs of the employees.
Although Network is required to provide the insurance coverage outlined above,
ETC-Texas must keep in force comprehensive general liability insurance
(including products/completed operations coverage) and comprehensive automobile
liability insurance.

Network and ETC-Texas share certain employment responsibilities,
including the employment responsibilities relating to safety; however, Network
is responsible for the following exclusive duties: (i) the responsibility for
adherence to Wage and Hour Administration regulations, compliance with
applicable benefits regulations, COBRA compliance when applicable, minimum
two-year maintenance of employment and payroll records, and handling of all
Texas and federal unemployment claims, protests, and appeal hearings, (ii) the
responsibility to pay wages to the leased employees without regard to payments
made by ETC-Texas to Network, (iii) the responsibility to make (and account for
same to ETC-Texas) all payments, including payments for income tax, social
security tax, and other payroll taxes as required under state or federal laws
from compensation paid to the leased employees by Network, (iv) the
responsibility to make (and account for same to ETC-Texas) all payments,
including payments for income tax, social security tax, unemployment, and
disability insurance, to the proper governmental agency or authority required
under state or federal laws to be made by Network as employer of the leased
employees and to comply with all federal, state, and local tax regulations, (v)
the responsibility to prepare and file with the proper governmental agency or
authority all returns and reports and comply with applicable reporting and
record keeping rules required as employer, in connection with the Staff Leasing
Services Agreement, (vi) the right to retain direction and control over the
adoption of employment and safety policies and the management of any
occupational injury or workers' compensation claims, claims filing, or any
related procedures, and (vii) the responsibility to manage, maintain, collect,
and make timely payments for insurance premiums, welfare benefits plans, and
other employee withholding. Network has agreed to reimburse ETC-Texas for
direct expenses, including any penalties, damages and/or attorney's fees
actually paid by ETC-Texas, resulting from Network's failure to withhold taxes
or failure to provide benefits for the leased employees as required by the
Staff Leasing Services Agreement. As part of the shared responsibilities,
ETC-Texas is required to comply with all applicable health and safety laws,
regulations, ordinances, directives, and rules and any written safety or health
recommendation from Network. If ETC-Texas fails to comply with such laws or
recommendations, Network may terminate the Staff Leasing Services Agreement by
written notice effective the later of (i) five working days after delivery of
notice, or (ii) the end of Network's next regular pay period.

Under the Staff Leasing Services Agreement, both Network and ETC-Texas
have waived any claim against the other by way of subrogation for all loss or
damage to any property covered by an insurance policy, but only to the extent
such property loss or damage is recovered under an insurance policy.
Furthermore, upon a showing by ETC-Texas that ETC-Texas has complied with all
written Network and governmental safety recommendations or directives, Network
is to indemnify, defend and hold harmless ETC-Texas from all suits, actions,
demands, damages, losses, or claims brought or made for or on account of a
physically identifiable on-the-job injury suffered by, or death of, a leased
employee while in the course and scope of employment with, arising out of, or
occasioned by, the leased employee's employment by Network. Network has also
agreed to indemnify, hold harmless, protect and defend ETC-Texas, its
directors, officers and shareholders from any claims, expense and liabilities
(including but not limited to reasonable attorney's fees and other costs of
litigation) incident to the failure of Network to pay withholding or employment
taxes with respect to the leased employees, or to maintain a policy of
statutory workers' compensation insurance covering the leased employees. On
the other hand, ETC-Texas has agreed to indemnify, defend and hold harmless
Network, its agents, employees and representatives, from and against any and
all liability, expense (including attorney's fees) and claims for damages of
any nature whatsoever, whether known or unknown, which Network, in whole or in
part, as a result of the acts, errors or omissions of third parties, ETC-Texas,
or the leased employees, except for on-the-job injuries or deaths, or by any
party arising out of any defect in personal or real property owned or provided
by ETC-Texas.

The agreement may be terminated by either party by giving 30 days
prior written notice to the non-terminating party. As of November 1, 1996,
ETC-Texas had 46 full-time employees, of whom 14 were involved in an executive,
marketing or administrative capacity, 16 of whom were in technical development
and support and 16 of whom were data

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entry personnel. See "Risk Factors -- Employee Leasing Agreement."

PROPERTIES. ETC-Texas owns no real property. ETC-Texas' principal
executive office is located in a 12,176 square foot office space facility in
Dallas, Texas. The lease (the "Lease") for the ETC-Texas' offices expires
September 30, 2001 and provides for monthly rental payments of $15,662. The
Lease, as amended, will be assumed by the Surviving Corporation.

LEGAL PROCEEDINGS. ETC-Texas is not currently a party to any
litigation. Should ETC-Texas become a party to any litigation pursuant to
which ETC-Texas would be required to pay damages, the payment of such damage
award may have a material adverse effect upon ETC-Texas's financial condition
and results of operations.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S AND ETC-TEXAS'
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE COMPANY

The Company is, and has been for several years, an inactive Canadian
based public company previously listed on the ASE. The Company received a
Going Concern audit opinion for the year ended December 31, 1995 and 1994. The
Company's plan to overcome its financial difficulties is to identify and merge
with a suitable candidate and re- establish and maintain operations after the
Merger. In June 1996, the Company raised $779,575 through a private offering
of its Common Stock. Proceeds of the offering were loaned to ETC-Texas. The
Company is inactive and has minimal cash needs, which will be met as needed
during 1996 through proceeds from the repayment of the note by ETC-Texas until
completion of the Merger. The major focus of the Company during the last two
years has been to merge with a commercially viable private company in exchange
for the additional liquidity and financing opportunities that are available in
the public markets. The Company has no assets, other than its rights under an
unsecured promissory note in the principal amount of $779,575 executed in favor
of the Company by ETC-Texas, and had no continuing operations during fiscal
1995. Substantially all of management's efforts during fiscal 1995 and during
the first quarter of fiscal 1996 were directed toward identifying a suitable
merger candidate, preparing for such merger and obtaining capital through the
issuance of equity securities to pay the legal, accounting and other expenses
associated with such merger. Concurrent with the contemplated Merger with
ETC-Texas, the Company plans to continue out of Canada and domesticate into the
State of Delaware, and begin trading on The OTC-Bulletin Board as the Surviving
Corporation. Eventually, the Surviving Corporation may seek listing on either
the NASDAQ SmallCap Market or another national stock exchange.

The Company, in 1991 and 1992, issued $605,000 in convertible
debentures. The proceeds of these offerings were used to fund costs and
expenses incurred in identifying and negotiating acquisition or merger
transactions with privately-held entities and for working capital. The Company
did identify and conduct preliminary negotiations with two entities during 1993
and 1994. As a result of the Company's inability to consummate an acquisition
or merger transaction, the debentures went into default. In April 1996, the
Company issued 552,500 shares of Company Common Stock to the debenture holders
in satisfaction of $552,500 of debt. Also in April 1996, the Company issued
284,928 shares of Company Common Stock in satisfaction of loans to the Company
primarily from L. Cade Havard and certain non-affiliated parties. Mr. Havard,
the Chairman of the Board and Chief Executive Officer of the Company and the
Chairman of the Board, President and Chief Executive Officer of ETC-Texas,
received 201,112 shares of Company Common Stock as a result of this debt to
equity conversion. See "Certain Transactions" and "The Merger -- Interests of
Certain Persons in the Merger."

On June 5, 1996, the Company consummated a private offering of Company
Common Stock pursuant to which the Company issued 519,717 shares of Company
Common Stock at a per share price of $1.50 for aggregate proceeds of $779,575.
The proceeds of this offering have been loaned to ETC-Texas to fund (i) its
business operations, (ii) costs associated with the Merger, including legal,
accounting and related proxy statement preparation costs, and (iii) for general
working capital. See "Certain Transactions" and "Certain Terms of the Merger
Agreement -- Certain Post-Merger Matters."

Since the Company has no significant assets and has been relatively
inactive during the past two years, management of the Company does not believe
that a discussion of the Company's financial condition and results of
operations would be relevant or meaningful to either the Company's or
ETC-Texas' shareholders. See "The Companies -- Business Information Concerning
the Company."

In connection with the proposed Merger, the Company, on March 21,
1996, changed its name from Solo Petroleums Ltd. to ETC Transaction
Corporation, and will be the Surviving Corporation of the Merger. Also, on
March 21, 1996, the shareholders of the Company approved a one-for-five
consolidation of capital of the outstanding shares of the Company Common Stock.

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DEVELOPMENT STAGE ACTIVITIES OF ETC-TEXAS

ETC-Texas, founded December 22, 1994, is engaged in the business of
electronic collection, manipulation and transmission of health care claims
information. ETC-Texas' primary customers are self-insured companies that
administer and pay their own claims, TPAs that assist self-insured companies,
PPOs and certain managed care organizations. ETC-Texas has not generated
sufficient revenues during its limited operating history to repay its
outstanding indebtedness, pay its existing trade accounts or fund its ongoing
operating expenses or service development activities. ETC-Texas received a
Going Concern audit opinion for the fiscal years ended December 31, 1995 and
1994. ETC-Texas plans to alleviate its current financial problems through
private offerings of debt or equity securities, borrowings and increased
revenues from operations. ETC-Texas has historically been able to raise
capital through the private sales of its common stock. Further, on June 5,
1996, ETC-Texas borrowed $779,575 from the Company. The proceeds of the loan
were used to fund (i) product development, (ii) marketing efforts, (iii) the
costs associated with the Merger, including legal, accounting and related proxy
statement preparation costs, and (iv) for general working capital. The loan
bears interest at 6% and is due and payable on or before July 1, 1997. At
September 30, 1996, ETC-Texas had cash and cash equivalents of approximately
$159,178, and a working capital deficit of approximately $57,000. Management
believes that cash, working capital and available credit facilities are
sufficient to fund operations through the close of its fiscal year ending
December 31, 1996. During the first quarter of fiscal 1996, ETC-Texas completed
development of its operating systems. Significant additional research and
development expenditures are not anticipated at this time. ETC-Texas currently
provides three specific types of services to its clients:

o Automation services for health care claims for self-insured
companies. Self-insured companies typically employ an
in-house staff or TPA that manually processes medical claim
forms. ETC-Texas assists companies in automating this
process. Through ETC-Texas' systems and processes, claim
forms are scanned at the client's location, then
electronically captured, sent to any applicable managed care
organization for repricing, and returned to the payor in an
acceptable format for evaluation and payment. As a result,
claims are paid faster, a greater degree of control over data
integrity is maintained, and the customers' in-house claims
processing costs are dramatically reduced.

o Locating and contracting for discounts from medical providers.
Health care providers may contract with various managed care
organizations, and those contracts may limit the amount that
providers may charge for a particular service. ETC-Texas
utilizes provider information directly from the medical claim
in order to contact either the managed care organization or a
provider directly to secure a discount for medical services.
The cost savings realized further reduces costs to ETC-Texas
self-insured customers.

o Processing medical claims on behalf of PPOs that are not
automated. Many PPOs cannot receive or send medical claims
electronically despite the fact that electronic transmission
is required by an increasing number of payors. ETC-Texas
provides electronic processing to these organizations on a
contract basis. This service is currently provided to and
paid for entirely by the PPO networks.

At September 30, 1996, ETC-Texas had five clients. However, ETC-Texas
believes there is a need for its services in the medical claims processing
market. The market includes self-insured companies, their TPAs and the managed
care organizations that serve them. ETC-Texas has expended considerable effort
and resources, including operating briefly as a TPA and hiring personnel with
extensive experience in paying medical claims, to develop its current work flow
process. Additional resources were devoted to (i) defining the exact services
that were needed by the market segment and (ii) developing, testing and
ultimately implementing these services. While expensive and time consuming,
these activities serve as the basis on which the future business of the
Surviving Corporation will be built. As ETC-Texas expands its customer base,
additional computer equipment and personnel will be required. Additional
personnel and equipment will be added as needed to service new customers, which
may contribute to increased revenues. Such expansion will be funded by (i) the
revenues derived from operations, and (ii) ETC-Texas' $500,000 line of credit
from Ironwood. ETC-Texas also has an agreement with Ironwood, under which
Ironwood will fund capital equipment expenditures. See "-- Liquidity and
Capital Resources."

ETC-Texas believes that the proposed Merger with the Company will have
a positive effect on its liquidity and capital resources. ETC-Texas' liquidity
will be enhanced because the loan from the Company would become an intercompany
borrowing that will not have to be repaid in 1997. The proposed Merger will
provide ETC-Texas with greater capital resources and liquidity through the
availability of public markets and financing opportunities; however, its
results of operations will be only marginally improved as the Company has no
significant operations.

RESULTS OF OPERATIONS OF ETC-TEXAS

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995. For the twelve months
ended December 31, 1995, the results of the operations were significant in that
ETC-Texas determined the types of clients to pursue and the nature of
processing services to be provided. The development of the work flow process
was virtually completed and tested to determine its ultimate feasibility. A
comprehensive marketing effort was begun in the last quarter of fiscal 1995
with encouraging results.

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Management secured its first substantial clients and began the process of
implementing its system for commercial use. Although no revenues were
generated from the electronic transmission of data, the process of handling
claims information was established.

REVENUES AND COST OF REVENUES -- 1995. Revenues earned during the
year ended December 31, 1995 were $66,612, resulting primarily from the sale of
ETC-Texas' Automated Medical Practice Solution ("AMPS") system and from
electronic claims processing for military clients. ETC-Texas ceased sales of
its AMPS system on December 31, 1995 due to the fact that a viable market never
developed for the product. During fiscal 1995, management activity was focused
on programming, research and development, and staffing.

The work flow process methodology was completed in the first quarter
of fiscal 1996, and the first clients to use this service on a commercial basis
were engaged. The first commercial operation utilizing the developed system
began operation in April 1996. Despite the extended development period,
ETC-Texas believed it was important to bring to market a service that was fully
functional. Also, management recognized that much of ETC-Texas' potential
market consists of larger, more established companies, and that success and
credibility would be largely determined by the reliability of ETC-Texas'
systems and processes. ETC-Texas has not encountered significant technical or
procedural problems in any area of its claims processing operation since
implementation of its work flow process during the first quarter of fiscal
1996.

Direct expenses incurred for services provided during the development
stage in fiscal 1995 were $40,764 or 61% of total revenues for the period. In
the opinion of management, given that ETC-Texas posted insignificant revenues
in fiscal 1995, such performance should not be used as a significant measure of
future projections. In addition to minimal revenues, ETC-Texas' lack of
operating history resulted in a reluctance by vendors to extend any credit to
ETC-Texas and any credit that was offered was on unfavorable terms. With the
lack of adequate trade credit to build its business, ETC-Texas relied on its
ability to generate additional capital through the issuance of debt and/or
equity securities to fund the operating expenses of the business.

NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1995

During the nine months ended September 30, 1995, ETC-Texas was still a
development stage enterprise. Revenues were $103,005 and net loss was
$570,544. As ETC-Texas had not begun its ongoing operations, a detailed
discussion of comparative results of operations is not meaningful.

Revenues for the nine months ended September 30, 1996 were $570,025
and net loss was $1,517,872. Principal expenses were personnel costs of
approximately $913,933, and legal and professional expenses of approximately
$496,534. Legal and professional expenses are primarily related to expenses
incurred in seeking and identifying suitable merger candidates, general
corporate matters, preparation of the Merger Agreement and related documents,
the audit, accounting and legal fees for the preparation of this Proxy
Statement/Prospectus.

ETC-Texas anticipates gross profit margins on its services will
increase during 1996. Management believes that gross profit percentages will
be approximately 60%-68% for fiscal 1996. Also, ETC-Texas' current fixed costs
of approximately $90,000 per month are not expected to change significantly in
the near future. There can be no assurance that profitable operations will be
achieved or sustained. ETC-Texas projects that annual revenues of $1.3 million
to $1.6 million will be required for ETC-Texas to reach break even.

During March 1996, ETC-Texas entered into an agreement to provide
medical claims processing for Wal-Mart. For the nine months ended September
30, 1996, revenues produced by the agreement were approximately $367,755 or
approximately 65% of revenues. ETC-Texas has entered into the Long-Term
Wal-Mart Agreement, effective September 1, 1996. Under the terms of the
Long-Term Wal-Mart Agreement, ETC-Texas has agreed to provide electronic
medical claims processing and repricing services for Wal-Mart under the terms
and conditions set forth therein for a term of two years from the effective
date. ETC-Texas will receive $1.00 per claim processed for the first 50,000
claims processed in a given month, which amount will be reduced by $.10 for
every additional 50,000 claims processed in that month. Once 150,000 claims
have been processed in a given month, ETC-Texas will receive $.75 per
additional claim processed during said month. Loss of the Long-Term Wal-Mart
Agreement would have a materially adverse effect on ETC-Texas' results of
operations, and may require ETC-Texas to temporarily reduce staff, curtail
operations and delay expansion plans ETC-Texas is currently negotiating with
other potential clients from which revenues may be generated to offset the loss
of the Wal-Mart contract.

OPERATING EXPENSES

Start-up costs in fiscal 1995 consisted of $424,301 in employee costs
and benefits, $245,526 in general and administrative expenses, and $37,613,
$39,000 and $144,717 in legal, marketing and general consulting fees,
respectively. Travel and entertainment costs were $71,469 and costs incurred
in financing the reorganization and restructuring of the Company were $23,281.
Research and development expenses in fiscal 1995 primarily consisted of $97,171
in programming personnel and benefits, $47,525 in professional computer fees
and $35,135 from an investment in a TPA. Management believes that it

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has been able to manage the relationship between cost and revenues during
fiscal 1996 with income increasing at a much faster rate than expenses given
the implementation of claims processing services.

NET LOSS

ETC-Texas incurred a net loss of $1,093,329 for the fiscal year ended
December 31, 1995. ETC-Texas expects to incur losses in future periods until
it generates sufficient revenues from an expanded client base to offset ongoing
operating costs and expansion expenses.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1996, ETC-Texas had cash and cash equivalents of
approximately $159,178, and a working capital deficit of approximately $57,000.
Additionally, ETC-Texas has a $500,000 line of credit available from Ironwood
under which no borrowings were outstanding at September 30, 1996. Under the
terms of the line of credit arrangement, ETC-Texas may draw from the line up to
80% of its accounts receivable that are under 65 days due. As security for
borrowings against the line of credit, ETC-Texas is required to pledge shares
of ETC-Texas Common Stock based upon a ratio whereby for every dollar borrowed
ETC-Texas will pledge that number of shares of ETC-Texas Common Stock having
two dollars worth of value. If the Merger is consummated, the Surviving
Corporation will be required to pay a loan origination fee in an amount equal
to 10% of Ironwood's exposure under the line of credit. Management believes
that cash, working capital and available credit facilities are sufficient to
fund operations through the close of its fiscal year ending December 31, 1996.
ETC-Texas has funded its initial capital needs and operations largely with
funds provided by private debt and equity financing. For the fiscal year ended
December 31, 1995, ETC-Texas issued an aggregate of $120,000 principal amount
of debentures bearing interest at 12%. At various times throughout fiscal
1995, holders of $120,000 of debentures accepted ETC-Texas' offer to convert
such debentures into shares of ETC-Texas Common Stock at a conversion rate of
one share of common stock for each $1.25 of principal. All debentures were
converted into a total of 96,000 shares of ETC-Texas Common Stock. This
conversion allowed management to operate ETC-Texas without debt, which
management believes was essential to the success of the venture. Management's
decision to eliminate debt and to operate by increasing capital was necessary
due to the sporadic nature and overall lack of revenue generated by ETC-Texas.

During fiscal 1995, ETC-Texas acquired the segment of the business
operations of Sterling related to electronic medical claims processing software
for $210,000 and the issuance of 3,965,100 shares of ETC-Texas Common Stock.
Also during fiscal 1995, ETC-Texas raised $1,335,098 by issuing 2,077,110
shares of ETC-Texas Common Stock to private investors. All of the offering
proceeds were used to fund capital expenditures, research and development and
general start-up costs. Also during this period, ETC-Texas issued an aggregate
of 20,000 shares of ETC-Texas Common Stock for a sum total of $37,925
representing payment for services to a former employee of ETC-Texas valued at
$4,000 and furniture and office equipment valued at $33,925.

ETC-Texas has incurred losses from operations since its inception. At
present, ETC-Texas is able to meet its funding needs the remainder of the
current fiscal year ending December 31, 1996 as a result of borrowings
available under the line of credit and from revenues generated from current
operations. The ability of ETC-Texas to fund future costs associated with its
operations is dependent upon its ability to increase revenues from operations
and to raise additional capital through private offerings of ETC-Texas
securities. ETC-Texas may require capital principally for the enhancement of
its existing services and to fund its marketing efforts to existing and
prospective clients.

The availability of future sources of external capital are not known.
Internal sources of capital are limited to the line of credit, successfully
achieving profitable operations in future periods, or raising additional
contributions of capital from shareholders and private investors.

ETC-Texas believes it has sufficient operating capital for the
remainder of fiscal 1996 to operate the business without constraint. However,
the capital on hand does not allow for expenditures deemed necessary for
ETC-Texas to keep pace with its expansion plans. The plans for expansion
include adding an additional five clients by the end of the year and expanding
the office facilities to accommodate the growth which will be encountered with
the addition of the new clients. Other plans are to expand the scope of
services offered and the market segments to which the existing services are
offered. ETC-Texas will expand its service for acquiring discounts on medical
claims by entering into joint venture or revenue sharing agreements with
existing PPO networks. Also, ETC-Texas intends to expand its services for
medical claims to the workers' compensation segment of the market. This will
be facilitated by first automating its Workers Compensation Bill Audit Review
service and then offering these automated services to ETC-Texas' existing
client base which have already expressed an interest in utilizing the new
services. ETC-Texas may also seek to expand its business through acquisitions.
The goal of management in such cases will be to make prudent decisions before
embarking on any acquisition and to negotiate agreements which will insure that
any acquisition candidate will be financially self- sufficient in minimal time
so as to not be a drain on the assets of ETC-Texas. Management will also
evaluate in any such cases the ability to develop a product, service or block
of business before attempting an acquisition. ETC-Texas has no commitment,
understanding or agreement with any other party relating to a proposed

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acquisition. In order to fund expenditures deemed necessary for proper growth
and expansion, it will be necessary to acquire additional operating capital by
increasing equity capital and possibly the use of debt financing, which
ETC-Texas believes is available.

ETC-Texas has focused its efforts thus far on developing, refining and
perfecting its medical claim work flow process for its existing clients. While
the development of these services is now complete and working properly, the
information generated while performing these services has given rise for
additional service areas which ETC-Texas intends to develop in order to bolster
its financial condition and results of operations, including automated
enrollment procedures, repricing or discounting of medical claims for PPOs,
repricing or discounting of medical claims for payors and workers' compensation
automation services. See "The Companies -- Business Information Concerning
ETC-Texas; Growth Strategy."

As ETC-Texas grows in the number of claims it processes the number of
employees will also increase but not significantly. Personnel that is added to
handle the increase in volume will typically be added in the data perfection
and quality assurance departments. These are hourly employees and are readily
available in the marketplace.

DESCRIPTION OF COMPANY CAPITAL STOCK

GENERAL

The Company's authorized capital consists of two classes of shares,
one consisting of an unlimited number of Class A Common Stock, no par value
(the "Company Common Stock"), and an unlimited number of Class B Redeemable
Preferred Stock, no par value (the "Preferred Stock"). As of November 8, 1996,
there were 2,007,145 shares of Company Common Stock outstanding and no shares
of Preferred Stock outstanding. As of such date, there were approximately 147
holders of record of the Company Common Stock, plus a larger number of
unregistered shareholders whose shares were held in brokerage accounts.

COMPANY COMMON STOCK

The holders of Company Common Stock are entitled to one vote for each
share in all matters submitted to a vote of shareholders. The holders of
Company Common Stock do not have cumulative voting rights for the election of
directors. The holders of Company Common Stock are entitled to receive ratably
such dividends, if any, as may be declared by the Company's Board of Directors
out of legally available funds. In the event of liquidation, dissolution or
winding up of the Company, the holders of the Company Common stock are entitled
to share ratably in all assets of the Company remaining after provision for
payment of liabilities in satisfaction of the liquidation preference of any
shares of Preferred Stock that may be outstanding. The holders of Company
Common Stock have no preemptive, subscription, redemptive or conversion rights.
The outstanding shares are fully paid and non-assessable. The rights,
preferences and privileges of the holders of Company Common Stock may be
subject to those of holders of Preferred Stock, if such securities should ever
be issued. See "-- Preferred Stock"."

PREFERRED STOCK

The Board of Directors of the Company is authorized, without further
shareholder action, to issue any of the undesignated shares of Preferred Stock
in one or more series and to fix the voting rights, liquidation preferences,
dividend rights, repurchase rights, conversion rights, redemption rights and
terms, including sinking fund provisions, and certain other rights and
preferences of such shares of the Preferred Stock.

DESCRIPTION OF ETC-TEXAS CAPITAL STOCK

GENERAL

ETC-Texas' authorized capital consists of 8,000,000 shares of common
stock, no par value (the "ETC-Texas Common Stock"), and 2,000,000 shares of
preferred stock, no par value (the "ETC-Texas Preferred Stock"). As of
November 8, 1996, there were 7,153,601 shares of ETC-Texas Common Stock
outstanding and no shares of ETC-Texas Preferred Stock outstanding. As of such
date, there were approximately 155 holders of record of ETC-Texas Common Stock.

ETC-TEXAS COMMON STOCK

The holders of ETC-Texas Common Stock are entitled to one vote for
each share in all matters submitted to a vote of shareholders. The holders of
ETC-Texas Common Stock do not have cumulative voting rights for the election of
directors. The holders of ETC-Texas Common Stock are entitled to receive
ratably such dividends, if any, as may be declared by ETC-Texas' Board of
Directors out of legally available funds. In the event of liquidation,
dissolution or winding up of ETC-Texas, the holders of ETC-Texas Common stock
are entitled to share ratably in all assets of ETC-Texas remaining after
provision for payment of liabilities in satisfaction of the liquidation
preference of any shares of ETC-Texas Preferred Stock (as

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defined below) that may be outstanding. The holders of ETC-Texas Common Stock
have no preemptive, subscription, redemptive or conversion rights. The
outstanding shares are fully paid and non-assessable. The rights, preferences
and privileges of the holders of ETC-Texas Common Stock may be subject to those
of holders of ETC-Texas Preferred Stock, if such securities should ever be
issued. See "ETC-Texas Preferred Stock."

ETC-TEXAS PREFERRED STOCK

The Board of Directors of ETC-Texas is authorized, without further
shareholder action, to issue any of the undesignated shares of ETC-Texas
Preferred Stock in one or more series and to fix the voting rights, liquidation
preferences, dividend rights, repurchase rights, conversion rights, redemption
rights and terms, including sinking fund provisions, and certain other rights
and preferences of such shares of ETC-Texas Preferred Stock.

DESCRIPTION OF SURVIVING CORPORATION CAPITAL STOCK

GENERAL

The Surviving Corporation's authorized capital will consist of
15,000,000 shares of common stock, $0.001 par value (the "Continued Common
Stock"), and 2,000,000 shares of preferred stock, $1.00 par value (the
"Surviving Corporation Preferred Stock").

CONTINUED COMMON STOCK

The holders of Continued Common Stock will be entitled to one vote for
each share in all matters submitted to a vote of shareholders. The holders of
Continued Common Stock will not have cumulative voting rights for the election
directors. The holders of Continued Common Stock are entitled to receive
ratably such dividends, if any, as may be declared by the Surviving
Corporation's Board of Directors out of legally available funds. In the event
of liquidation, dissolution or winding up of the Surviving Corporation, the
holders of Continued Common Stock are entitled to share ratably in all assets
of the Surviving Corporation remaining after provision for payment of
liabilities in satisfaction of the liquidation preference of any shares of
Surviving Corporation Preferred Stock that may be issued and outstanding. The
holders of Continued Common Stock shall have no preemptive, subscription,
redemptive or conversion rights. The rights, preferences and privileges of the
holders of Continued Common Stock may be subject to those of holders of
Surviving Corporation Preferred Stock, if such securities should ever be
issued. See "Surviving Corporation Preferred Stock."

SURVIVING CORPORATION PREFERRED STOCK

The Board of Directors of the Surviving Corporation shall be
authorized, without further shareholder action, to issue any of the
undesignated shares of Surviving Corporation Preferred Stock in one or more
series and to fix the voting rights, liquidation preferences, dividend rights,
repurchase rights, conversion rights, redemption rights and terms, including
sinking fund provisions, and certain other rights and preferences of such
shares of the preferred stock.

CERTAIN PROVISIONS OF THE SURVIVING CORPORATION CHARTER

Section 102 of the DGCL authorizes a Delaware corporation to include a
provision in its certificate of incorporation limiting or eliminating the
personal liability of its directors to the corporation and its shareholders for
monetary damages for breach of a director's fiduciary duty of care. The duty
of care requires that, when acting on behalf of the corporation, directors
exercise an informed business judgment based on material information reasonably
available to them. Absent the limitations authorized by such provisions,
directors are accountable to corporations and their shareholders for monetary
damages for conduct constituting gross negligence in the exercise of their duty
of care. Although Section 102 of the DGCL does not change a director's duty of
care, it enables corporations to limit available relief to equitable remedies
such as injunction or rescission. Pursuant to such provisions, the Surviving
Corporation Charter limits the personal liability of the Surviving
Corporation's directors, in their capacity as directors (but not in their
capacity as officers) to the Surviving Corporation or its shareholders to the
fullest extent permitted by the DGCL. Specifically, a Surviving Corporation
director will not be personally liable to the Surviving Corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except for (i) any breach of the director's duty of loyalty to the Surviving
Corporation or its shareholders, (i) acts or omissions not in good faith or
which involve intentional misconduct and knowing violation of law, (iii)
unlawful payments of dividends or unlawful stock repurchases, redemptions or
other distributions, and (iv) any transaction from which the director derived
an improper personal benefit.

The inclusion of this provision may have the effect of reducing the
likelihood of derivative litigation against directors and discourage or deter
shareholders or management from bringing a lawsuit against directors for breach
of their duty of care, even though such an action, if successful, might
otherwise have benefitted the Surviving Corporation and its shareholders.
However, the inclusion of this provision together with the provision which
requires the Surviving Corporation to indemnify its

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officers and directors against certain liabilities, is intended to enable the
Surviving Corporation to attract qualified persons to serve as directors who
might otherwise be reluctant to do so.

TRANSFER AGENT

The Transfer Agent for the Continued Common Stock shall be Securities
Transfer Corporation, 16910 Dallas Parkway, Suite 100, Dallas, Texas 75248,
(214) 248-1922.

EXPERTS

The financial statements and financial statement schedules for fiscal
years ended December 31, 1995 and 1994 for the Company and for the fiscal years
ended December 31, 1995 and 1994 for ETC-Texas, to the extent of and for the
periods indicated in the reports, have been audited by Simonton, Kutac &
Barnidge, L.L.P., independent public accountants, and are included in the
Registration Statement in reliance upon the authority of said firm as experts
in accounting and auditing in giving said reports.

LEGAL MATTERS

The validity of the shares of Company Common Stock to be issued as a
result of the Continuance and the Merger has been passed upon for the Company
by Beaumont Church, Barristers and Solicitors, Calgary, Alberta, Canada. The
validity of the shares of Continued Common Stock to be issued as a result of
the Continuance and upon consummation of the Merger has also been passed upon
for the Company by Looper, Reed, Mark & McGraw Incorporated, Dallas, Texas.
Looper, Reed, Mark & McGraw Incorporated has also issued an opinion regarding
certain tax matters related to the Merger. Felesky Flynn, Barristers &
Solicitors, Calgary, Alberta, Canada, has issued an opinion regarding certain
tax matters related to the Continuance and the Merger on behalf of the Company.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission, 450
Fifth Street, N.W., Washington, D.C., a Registration Statement on Form S-4
under the Securities Act of 1933, as amended, with respect to the Common Stock
of the Company which may be distributed to Company shareholders in connection
with this Proxy Statement/Prospectus. This Proxy Statement/Prospectus, filed
as part of the Registration Statement, does not contain all the information set
forth in the Registration Statement, as permitted by the Rules and Regulations
of the Securities and Exchange Commission. For further information with
respect to the Company and the Registration Statement and to the Exhibits filed
as a part thereof (Registration Statement No. 333-07069), which may be
inspected at the office of the Securities and Exchange Commission without
charge, or copies thereof may be obtained therefrom upon payment of a fee
prescribed by the Securities and Exchange Commission.

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INDEX TO FINANCIAL STATEMENTS

The Company
- -----------

Independent Auditors' Report........................................F-2

Balance Sheets as of December 31, 1994 and 1995.....................F-3

Statements of Operations and Accumulated Deficit for
the years ended December 31, 1994 and 1995.....................F-4

Statements of Cash Flows for the years ended
December 31, 1994 and 1995.....................................F-5

Notes to the Financial Statements...................................F-6

ETC - Texas
- -----------

Independent Auditors' Report........................................F-11

Balance Sheets as of December 31, 1994 and 1995.....................F-12

Statements of Operations for the years ended
December 31, 1994 and 1995.....................................F-13

Statements of Stockholders' Equity for the years ended
December 31, 1994 and 1995.....................................F-14

Statements of Cash Flows for the years ended
December 31, 1994 and 1995.....................................F-16

Notes to the Financial Statements...................................F-17

F-1

<PAGE> 74

INDEPENDENT AUDITORS' REPORT

April 3, 1996

To the Board of Directors and Shareholders of
Solo Petroleums Ltd.

We have audited the balance sheets of Solo Petroleums Ltd. as of December 31,
1994 and 1995 and the statements of operations and accumulated deficit and
statement of cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Solo Petroleums Ltd. as of
December 31, 1994 and 1995 and the results of its operations and cash flows for
the years then ended in accordance with generally accepted accounting
principles.

As described in Note 2, the accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. The
Company has been inactive since 1992 and has accumulated a deficit of
$1,068,497 as well as a working capital deficiency of $980,930. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. Unless the Company obtains additional financing, it will not be
able to meet its obligations as they come due and it will be unable to execute
its long-term business plan. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ SIMONTON, KUTAC & BARNIDGE, L.L.P.

Simonton, Kutac & Barnidge, L.L.P.
HOUSTON, TEXAS

F-2
<PAGE> 75

SOLO PETROLEUMS LTD.

BALANCE SHEETS

(STATED IN U.S. DOLLARS)

ASSETS

<TABLE>
<CAPTION>
September 30,
--------------------------
Unaudited December 31,
-------------------------- --------------------------
1995 1996 1994 1995
----------- ----------- ----------- -----------

<S> <C> <C> <C> <C>
Current assets:
Cash $ 142 $ 140 $ 140 $ 143
----------- ----------- ----------- -----------

Total current assets 142 140 $ 140 $ 143
----------- ----------- =========== ===========

Note Receivable -- 779,575
----------- -----------

$ 142 $ 779,715
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 110,734 $ 26,919 $ 110,481 $ 110,845
Due to shareholder 201,111 -- 201,111 201,111
Loan payable 23,510 23,182 23,201 23,647
Accrued debenture interest payable 430,418 48,345 339,668 40,470
Short term debentures 605,000 52,500 605,000 605,000
----------- ----------- ----------- -----------
Total current liabilities 1,370,773 150,946 1,279,461 981,073
----------- ----------- ----------- -----------
Stockholders' equity:
Preferred stock, no par value, unlimited
shares authorized; no shares issued
and outstanding -- -- -- --
Common stock, no par value, unlimited
shares authorized; 3,250,000 shares
issued and outstanding 87,567 1,704,569 87,567 87,567

Accumulated deficit (1,458,198) (1,075,800) (1,366,888) (1,068,497)
----------- ----------- ----------- -----------

(1,370,631) 628,769 (1,279,321) (980,930)
----------- ----------- ----------- -----------

$ 142 $ 779,715 $ 140 $ 143
=========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-3
<PAGE> 76

SOLO PETROLEUMS LTD.

STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

(STATED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
September 30,
-------------------------- For the Years Ended
Unaudited December 31,
-------------------------- --------------------------
1995 1996 1994 1995
----------- ----------- ----------- -----------

<S> <C> <C> <C> <C>
Expenses:
Interest on debentures $ 90,750 $ 7,875 $ 121,000 $ 93,375
Other expense (income) 560 (572) (1,189) 807
----------- ----------- ----------- -----------
Total expenses 91,310 7,303 119,811 94,182
----------- ----------- ----------- -----------
Loss before extraordinary items (91,310) (7,303) (119,811) (94,182)

Extraordinary item:
Gain on forgiveness of interest -- -- -- 392,573
----------- ----------- ----------- -----------

Net income (loss) (91,310) (7,303) (119,811) 298,391

Accumulated deficit, beginning of year (1,366,888) (1,068,497) (1,247,077) (1,366,888)
----------- ----------- ----------- -----------

Accumulated deficit, end of year $(1,458,198) $(1,075,800) $(1,366,888) $(1,068,497)
=========== =========== =========== ===========

Earnings (loss) per share:
Primary $ 0.00 $ 0.00 $ (0.04) $ 0.09
=========== =========== =========== ===========
Fully diluted $ 0.00 $ 0.00 $ (0.04) $ 0.06
=========== =========== =========== ===========

Weighted average number of shares outstanding:
Primary $ 3,250,000 $ 1,940,571 $ 3,250,000 $ 3,250,000
=========== =========== =========== ===========
Fully diluted $ 3,250,000 $ 1,958,071 $ 3,250,000 $ 4,821,784
=========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE> 77
SOLO PETROLEUMS LTD.

STATEMENTS OF CASH FLOWS

(STATED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
For the Six Months
Ended June 30, For the Years Ended
Unaudited December 31,
--------------------- ----------------------
1995 1996 1994 1995
-------- --------- --------- ---------

<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net loss $(91,310) $ (7,303) $(119,811) $ 298,391
Adjustments to reconcile net loss to
net cash used in operating activities:
Increase in accrued interest 90,750 7,875 -- --
Decrease in accounts payable 562 (575) -- --
Non-cash change in working capital -- -- 119,807 (298,388)
-------- --------- --------- ---------
Net cash provided (used) by
operating activities 2 (3) (4) 3
-------- --------- --------- ---------

Cash Flows by Investing Activities:
Investment in note receivable -- (779,575) -- --
-------- --------- --------- ---------

Net cash provided by investment
activities -- (779,575) -- --
-------- --------- --------- ---------

Cash Flows by Financing Activities:
Issuance of common stock for cash -- 779,575 -- --
-------- --------- --------- ---------

Net cash provided by financing
activities -- 779,575 -- --
-------- --------- --------- ---------

Increase (decrease) in cash 2 (3) -- --

Cash, beginning of year 140 143 144 140
-------- --------- --------- ---------

Cash, end of year $ 142 $ 140 $ 140 $ 143
======== ========= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE> 78

SOLO PETROLEUMS LTD.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

(STATED IN U.S. DOLLARS)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND BACKGROUND

History -- The Company has been inactive since 1992 and is currently in the
process of re-organizing its affairs. The Company is subject to a "Cease Trade
Order" issued by the Alberta Securities Commission for failing to file annual
audited financial statements for the year ended December 31, 1991 and the first
quarter interim unaudited statements for the period ended March 31, 1992 and
further that Solo failed to concurrently send the foregoing financial
statements to each holder of its securities.

The Company's common shares were automatically removed from the Alberta Stock
Exchange (the "ASE") on January 12, 1993, due to trading in its securities
being suspended for six months. The Company has no intention to apply to relist
on the ASE.

The following is a summary of the Company's proposed activities in connection
with the reorganization of its affairs:

(i) Common share capital to be consolidated on a 1 for 5 basis;
(ii) Change its name to "ETC Transaction Corporation";
(iii) Settle $552,500 of convertible debenture debt by the issuance of
552,500 post consolidated shares;
(iv) Settle $83,816 of trade creditor debt and $201,111 of shareholder debt
by the issuance of 284,927 post consolidated shares;
(v) Continue out of the Province of Alberta and into the State of Delaware;
(vi) Complete a merger with Electronic Transmission Corporation ("ETC"), a
Texas, USA based private company. The merger would become effective
in consideration of Solo issuing 1.25 post consolidated shares of
common stock for each issued and outstanding shares of common stock
in ETC. As of April 3, 1996, ETC had 6,545,935 shares issued and
outstanding and accordingly, the merger would result in the issuance
of 8,182,419 shares of Solo common stock. The merger is in effect a
reverse acquisition and will be accounted for as a recapitalization
of Electronic Transmission Corporation, with Electronic Transmission
Corporation as the acquirer. Additional, no goodwill or other
intangible assets will be recorded.

(vii) Solo and ETC file concurrently with the United States Securities and
Exchange Common (the "SEC") a S-4 Registration Statement for the
purpose of registering the Common Shares to be issued and outstanding
in Solo, after giving effect to the preceding transactions and
merger.

F-6
<PAGE> 79
SOLO PETROLEUMS LTD.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

(STATED IN U.S. DOLLARS)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND BACKGROUND
(CONTINUED)

On January 8, 1996 Solo filed with the ASC and sent to its security holders its
annual audited financial statements for the years ending December 31, 1991 to
and including 1994 and its interim unaudited quarterly financial statements for
the periods ending March 31, 1995, June 30, 1995 and September 30, 1995.

On March 12, 1996, in accordance with an order from the Court of Queen's Bench
of Alberta allowing Solo to hold its 1990 through 1994 annual meetings in 1996,
Solo held a special and annual meeting of its shareholders at which time items
(i), (iii) and (iv) were voted on and approved.

On March 21, 1996 the ASC varied its Cease Trade Order for the purpose of
completing the merger of Solo and ETC and items (iii) and (iv). The ASC also
ordered that its Cease Trade Order would be revoked forty-eight (48) hours
after delivery of the ASC of:

(i) verification that the SEC has declared effective the Registration
Statement on S-4;

(ii) confirmation by Solo of the issuance of a press release setting out
the material terms of the merger with ETC and the continuance of Solo
out of the Province of Alberta into the State of Delaware.

On March 26, 1996, the Company underwent a name change to "ETC Transaction
Corporation."

On April 1, 1996, the Company issued 552,500 post consolidated common shares in
the Company to Debenture Holders representing $552,500 of debt in full and
final settlement of all obligations under the debentures. In addition, the
Company issued 83,816 post consolidated shares of common stock to Trade
Creditors in full and final settlement of all obligations under $83,816 debt.
$26,500 of this debt was owed to a former officer of the Company. The Company
also issued 201,111 post consolidated shares of common stock to shareholders in
full and final settlement of all obligations under $201,111 debt. $160,215 of
this debt was owed to the Chairman of the Board/President of the Company and
$40,896 was owed to companies directly controlled by the Chairman of the
Board/President of the Company.

The proposed merger of Solo and ETC is subject to the approval of the
shareholders of Solo and ETC and possible other regulatory authorities, which
has not been obtained as of April 3, 1996.

F-7
<PAGE> 80
SOLO PETROLEUMS LTD.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

(STATED IN U.S. DOLLARS)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND BACKGROUND
(CONTINUED)

Earnings (Loss) Per Share -- Primary earnings (loss) per share is based upon
the weighted average number of shares outstanding during the year (1995 -
3,250,000 shares; 1994 - 3,250,000 shares). Fully diluted earnings per share is
calculated on the weighted average number of shares that would have been
outstanding during the year had the trade creditor debt outstanding at year end
that is to be converted into common shares at the settlement date (1995 -
4,821,784 shares). In 1994, common stock equivalents were excluded for the
calculation of earnings per share as such inclusion would have an anti-dilutive
effect; therefore, fully diluted earnings per share is considered to be the
same as primary earnings per share.

NOTE 2 - GOING CONCERN AND CONTINUED OPERATIONS

These financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern. Accordingly, they
do not reflect adjustments that would be necessary should the Company be unable
to continue as a going concern and therefore be required to realize its assets
and liquidate its liabilities and commitments in other than the normal course
of business and at amounts different from those in the accompanying financial
statements.

MANAGEMENT PLANS TO MITIGATE THE GOING CONCERN ISSUES BY CONVERTING ITS
OUTSTANDING INDEBTEDNESS TO COMMON STOCK AND SEPARATELY ISSUING SHARES OF
COMMON STOCK TO FINANCE OPERATIONS UNTIL THE MERGER BECOMES EFFECTIVE. CERTAIN
SHAREHOLDERS HAVE ALSO EXPRESSED THEIR INTENTIONS TO PROVIDE WORKING CAPITAL,
IF NECESSARY, TO FINANCE OPERATIONS. MANAGEMENT BELIEVES THAT IT WILL BE
SUCCESSFUL IN GENERATING SUFFICIENT CASH TO SUPPORT ITS OPERATIONS UNTIL THE
MERGER BECOMES EFFECTIVE DUE TO THE LIMITED ACTIVITY REQUIRED TO CONSUMMATE THE
MERGER. Because of the accumulated deficit of $1,068,497 and a working capital
deficiency of $980,930 as of December 31, 1995, the Company's ability to
continue as a going concern is UNCERTAIN. It is not possible to predict whether
financing efforts will be successful or if the Company will attain profitable
levels of operation AFTER THE MERGER.

NOTE 3 - CONVERTIBLE SHORT-TERM DEBENTURES

During 1991 and 1992, the Company issued $500,000 and $105,000, respectively,
for a total of $605,000 in short-term convertible debentures. These were due
180 days from issuance bearing an interest rate of 20%. The debentures provided
for the holder to receive ten common shares of common stock for each one U.S.
dollar of debenture.

F-8
<PAGE> 81
SOLO PETROLEUMS LTD.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

(STATED IN U.S. DOLLARS)

NOTE 3 - CONVERTIBLE SHORT-TERM DEBENTURES (CONTINUED)

During 1995, debenture holders formally agreed to forgive all accrued interest
on the debentures and convert the debentures into 552,500 post consolidated
shares of common stock in settlement of all obligations under the $552,500 of
outstanding debt. The accrued interest was charged to income in 1995 as an
extraordinary item for early extinguishment of debt. On April 1, 1996, the
Company converted the $552,500 of debentures into 552,500 common shares of the
Company.

NOTE 4 - RELATED PARTY TRANSACTIONS

Included in accounts payable at December 31, 1994 and 1995, is accounts payable
to previous officers totaling $26,500.

Amounts due to shareholders are for prior services rendered and working capital
infusions.

NOTE 5 - INCOME TAXES

The Company has Canadian net operating loss carryforwards for Canadian tax
purposes totaling C$255,000 that are available to offset its future Canadian
income tax liability. The net Canadian loss carryforwards expire as follows:

1996 C$ 41,000
1997 214,000
-----------

C$ 255,000
===========

The Company has U.S. net operating loss carryforwards for U.S. tax purposes
totaling $769,000 that are available to offset its future U.S. income tax
liability. The net U.S. operating loss carryforwards expire as follows:

2006 $ 170,000
2007 362,000
2008 117,000
2009 120,000
-----------

$ 769,000
===========

F-9
<PAGE> 82
SOLO PETROLEUMS LTD.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

(STATED IN U.S. DOLLARS)

NOTE 5 - INCOME TAXES (CONTINUED)

Realization of the benefit of these net operating loss carryforwards appears
uncertain, accordingly, a valuation allowance of $127,500 Canadian and U.S. has
been recorded against the deferred tax asset resulting from the net operating
loss carryforwards. There are no other significant temporary differences for
financial and income tax reporting purposes at December 31, 1994 or 1995.

NOTE 6 -SUBSEQUENT EVENT

On May 15, 1996, the Company sold 519,717 shares in a private placement
offering of common stock to raise working capital to fund its post-merger
business plan. The private placement issued common stock at a price of $1.50
per share and raised $779,575 in capital. Upon completion of the offering, the
capital was advanced to ETC for use as working capital.

NOTE 7 - SUPPLEMENTAL CASH FLOW INFORMATION

During the years ended December 31, 1995 and 1994, no cash payments were made
for interest or income taxes. There were no non-cash investing or financing
activities recorded, during the years ended December 31, 1995 and 1994.

F-10
<PAGE> 83

INDEPENDENT AUDITORS' REPORT

April 30, 1996

To the Board of Directors and Shareholders
of Electronic Transmission Corporation:

We have audited the accompanying balance sheets of Electronic Transmission
Corporation (a development stage enterprise), as of December 31, 1994 and 1995
and the related statements of operations, stockholders' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Electronic Transmission
Corporation as of December 31, 1994 and 1995, and the results of its operations
and cash flows for the years then ended in conformity with generally accepted
accounting principles.

As described in Note 2, the accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. The
Company has experienced a net loss of $1,093,329 and has not generated any
significant revenue since its inception. Additionally, the Company's current
assets exceeded its current liabilities by $53,346 at December 31, 1995. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. Unless the Company obtains additional financing, it will not be
able to meet its obligations as they come due and it will be unable to execute
its long-term business plan. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ SIMONTON, KUTAC & BARNIDGE, L.L.P.

Simonton, Kutac & Barnidge, L.L.P.
Houston, Texas

F-11
<PAGE> 84

ELECTRONIC TRANSMISSION CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
December 31,
-------------------------
1994 1995
----------- -----------
<S> <C> <C>
Current Assets:
Cash $ 1,000 $ 114,885
Accounts receivable -- 7,059
Employee advances -- 5,734
Advances to shareholder -- 82,744
Prepaid expense -- 9,204
----------- -----------
Total current assets 1,000 219,626
----------- -----------
Office furniture and equipment -- 169,521
Less: accumulated depreciation -- (32,173)
----------- -----------

Office furniture and equipment, net -- 137,348
----------- -----------

Total Assets $ 1,000 $ 356,974
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable $ -- $ 56,340
Interest payable -- 809
Accrued payroll and payroll taxes -- 109,131
----------- -----------
Total current liabilities -- 166,280
----------- -----------
Stockholders' Equity:
Preferred stock, no par value; 2,000,000 shares
authorized; no shares issued and outstanding
as of December 31, 1994 and 1995 -- --
Common stock, no par value; 8,000,000 shares
authorized; 6,158,210 and 1,000 shares issued
and outstanding as of December 31, 1994 and
1995, respectively 1,000 1,494,023
Deficit accumulated during the development stage -- (1,303,329)
----------- -----------
Total Stockholders' Equity 1,000 190,694
----------- -----------
Total Liabilities And Stockholders' Equity $ 1,000 $ 356,974
=========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-12
<PAGE> 85
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Corporation)

STATEMENTS OF OPERATIONS

Years ended December 31, 1994 and 1995 and Period
from December 22, 1994 (Inception) to December 31, 1995

<TABLE>
<CAPTION>
Period from
December 22,
Years Ended 1994 to
December 31, December 31,
------------------------------ ----------------
1994 1995 1995
------------- ------------- ----------------
<S> <C> <C> <C>
Service revenues, earned during development stage $ -- $ 66,612 $ 66,612

Costs and expenses:
Direct costs, incurred during development stage -- 40,764 40,764
Start up costs -- 939,347 939,347
Research and development -- 179,830 179,830
------------- ------------- ----------------

Total costs and expenses -- 1,159,941 1,159,941
------------- ------------- ----------------

Loss before income taxes -- (1,093,329) (1,093,329)

Income tax provision -- -- --
------------- ------------- ----------------

Net loss $ -- $ (1,093,329) $ (1,093,329)
============= ============= ================

Loss per common share:
Primary and full-diluted $ -- $ (0.32)
============= =============

Weighted average common shares outstanding:
Primary and full-diluted 53 3,377,069
============= =============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-13
<PAGE> 86
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Corporation)

STATEMENTS OF STOCKHOLDERS' EQUITY

Period from December 22, 1994 (Inception) to December 31, 1995

<TABLE>
<CAPTION>
Deficit
Common Stock Accumulated
------------------- During the
$ Per Development
Shares Share Amount Stage Total
--------- ------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Balance at December 22,1994
(date of inception) -- $ -- $ -- $ -- $ --

Issuance of shares for cash 1,000 1.0000 1,000 -- 1,000
--------- ------- -------- ---------- ----------
Balance at December 31, 1994 1,000 $ 1,000 $ -- $ 1,000

Issuance of shares for business 3,965,100 0.0052 20,751 -- 20,751
Dividend paid -- -- (210,000) (210,000)
Issuance of shares for cash 79,000 0.0040 316 -- 316
Issuance of shares for cash
to related party 50,000 0.0040 200 -- 200
Issuance of shares for cash 268,449 0.0373 10,000 -- 10,000
Issuance of shares for cash 20,000 0.0500 1,000 -- 1,000
Issuance of shares for cash
to related party 4,800 0.0600 288 -- 288
Issuance of shares for cash 258,288 0.1192 30,793 -- 30,793
Issuance of shares for cash 271,430 0.2210 60,000 -- 60,000
Issuance of shares for cash 16,000 0.3125 5,000 -- 5,000
Issuance of shares for cash 5,200 0.3846 2,000 -- 2,000
Issuance of shares for cash 120,212 0.6322 76,000 -- 76,000
Issuance of shares for cash 26,667 0.7500 20,000 -- 20,000
Issuance of shares for cash 58,824 0.8500 50,000 -- 50,000
Issuance of shares for cash
to related party 50,000 0.8640 43,200 -- 43,200
Issuance of shares for cash 202,000 1.0000 202,000 -- 202,000
Issuance of shares for cash 582,040 1.2500 727,550 -- 727,550
Issuance of shares for cash
to related party 55,200 1.2500 69,000 -- 69,000
Issuance of shares for cash 3,000 1.5000 4,500 -- 4,500
Issuance of shares for cash 5,000 2.5000 12,500 -- 12,500
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-14
<PAGE> 87
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Corporation)

STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)

Period from December 22, 1994 (Inception) to December 31, 1995

<TABLE>
<CAPTION>
Deficit
Common Stock Accumulated
--------------------------------- During the
$ Per Development
Shares Share Amount Stage Total
--------- ------- ---------- ----------- ---------------

<S> <C> <C> <C> <C> <C>
Issuance of shares for services
to related party 4,000 1.0000 4,000 -- 4,000

Issuance of shares for furniture
and equipment 16,000 2.1200 33,925 -- 33,925

Issuance of shares on conversion
of convertible debentures 96,000 1.2500 120,000 -- 120,000

Net loss -- -- (1,093,329) (1,093,329)
--------- ---------- ----------- ------------

Balance at December 31, 1995 6,158,210 $1,494,023 $(1,303,329) $ 190,694
========= ========== =========== ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-15
<PAGE> 88
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Corporation)

STATEMENTS OF CASH FLOWS

Years ended December 31, 1994 and 1995 and Period
from December 22, 1994 (Inception) to December 31, 1995

<TABLE>
<CAPTION>
Period from
December 22,
Years Ended 1994 to
December 31, December 31,
------------------------------ ---------------
1994 1995 1995
------------- ------------- ---------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net loss$ -- $ (1,093,329) $ (1,093,329)
Adjustments to Reconcile Net Loss to
Net Cash Used in Operating Activities:
Non-cash issuance of common stock for
services rendered -- 4,000 4,000
Depreciation and amortization -- 32,173 32,173
Increase in accounts receivable - trade -- (7,059) (7,059)
Increase in employee advances -- (5,734) (5,734)
Increase in advances to shareholder -- (82,744) (82,744)
Increase in prepaid expense -- (9,204) (9,204)
Increase in accounts payable -- 56,340 56,340
Increase in interest payable -- 809 809
Increase in accrued payroll and payroll taxes -- 109,131 109,131
------------- ------------- ------------

Net Cash Used in Operating Activities -- (995,617) (995,617)

Cash Flows From Investing Activities:
Purchase of office furniture and equipment -- (114,845) (114,845)
------------- -------------- ------------

Net Cash Used in Investing Activities -- (114,845) (114,845)
------------- ------------- ------------

Cash Flows by Financing Activities:
Issuance of convertible debentures -- 120,000 120,000
Dividend paid -- (210,000) (210,000)
Issuance of common stock for cash 1,000 1,314,347 1,315,347
------------- ------------- ------------

Net Cash Provided by Financing Activities 1,000 1,224,347 1,225,347
------------- ------------- ------------

Increase in Cash 1,000 113,885 114,885

Cash, beginning of period -- 1,000 --
------------- ------------- ------------

Cash, end of period $ 1,000 $ 114,885 $ 114,885
============= ============= ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-16
<PAGE> 89

ELECTRONIC TRANSMISSION CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995 AND 1994

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND BACKGROUND

Electronic Transmission Corporation ("ETC") is currently in the development
stage as it has had no significant revenue. ETC is developing its business plan
to provide electronic transaction processing services to the health care
market. The principal service being developed is the electronic capture and
transfer of medical claims for on-line eligibility, verification and
adjudication between health care providers, self-insured organizations, third
party administrators and other managed care organizations.

Background -- ETC was incorporated on December 22, 1994 as a Texas corporation
to transact any business authorized under the general corporation law of the
State of Texas. On April 19, 1995, the Company entered into an agreement to
purchase the rights to the technology and business of electronically editing
and transmitting medical claims from providers to payment organizations (the
Purchased Business) from Sterling National Corporation by issuing 3,965,100
shares and a cash payment of $210,000. Sterling National Corporation is a
company wholly owned and controlled by the Chairman of the Board, C.E.O. and
MAJORITY SHAREHOLDER of ETC. The transaction was accounted for using the
purchase method as follows:

<TABLE>
<S> <C>
Assets Acquired:
Accounts receivable $ 5,630
Computer hardware 1,403
Computer software 13,718
-----------
Total tangible assets 20,751

Consideration Paid:
Cash $ 210,000
3,965,100 shares 20,751
-----------
Total Consideration 230,751

Dividend paid to shareholder $ 210,000
===========
</TABLE>

Treatment of the excess cash consideration paid for the acquired business is
accounted for as a deemed dividend in accordance with generally accepted
accounting principles. Goodwill was not recorded since this transaction was
consummated with a related party and this treatment would have constituted a
step-up in basis. The transaction is reflected in the financial statements on
the date the transaction occurred of APRIL 19, 1995, in accordance with
generally accepted accounting principles.

F-17
<PAGE> 90
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 and 1994

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND BACKGROUND (CONTINUED)

The following supplemental schedule reflects the transaction had the purchase
taken place on January 1, 1994. There was no effect on the statement of
operations for year ended December 31, 1994.

<TABLE>
<CAPTION>
Pro-forma
December 31,
1994
------------
<S> <C>
Assets:
Accounts Receivable $ 5,630
Equipment 15,121
---------
$ 20,751
=========

Liabilities and Stockholder's Equity:
Accounts payable (209,000)
Stockholder's Equity 188,249
---------
$ 20,751
=========
</TABLE>

Cash Equivalents -- For purposes of the statement of cash flows, the Company
considers any short-term cash investment with a maturity of three months or
less to be a cash equivalent.

Accounts receivable -- The Company's trade receivables arise from sales in the
normal course of business. ETC uses the allowance method to account for
uncollectible accounts and management feels that all accounts are collectible
and no allowance is necessary at December 31, 1995.

Revenue recognition - The Company recognizes revenue when services are
performed.

Office Furniture and Equipment -- Office furniture, computer equipment and
office equipment, and software are stated at cost. Maintenance and repairs are
charged to operating expense. Costs of significant improvements and renewals
are capitalized. Depreciation is provided on the straight-line basis over the
following useful lives:

<TABLE>
<CAPTION>
Useful
Lives
-------
<S> <C>
Office furniture 5 years
Computer and office equipment 3 years
Computer software 3 years
</TABLE>

F-18
<PAGE> 91
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Corporation)

NOTES TO FINANCIAL STATEMENTS
December 31, 1995 and 1994

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND BACKGROUND (CONTINUED)

Periodically, the Company evaluates whether changes have occurred that would
require revision of the remaining estimated useful lives of the equipment or
rendered the value of the equipment not recoverable. The recoverability is
evaluated by estimating the future cash flows expected to result from use of
the asset and its eventual disposition. Equipment as of December 31, 1995, is
not considered to be impaired.

Start-Up Costs -- Start-up costs incurred during the period of developing ETC's
business plan are expensed as incurred in accordance with generally accepted
accounting principles.

Research and Development -- Research and development costs incurred are
expensed as incurred in accordance with generally accepted accounting
principles.

Income Taxes -- ETC utilizes the asset and liability approach to financial
accounting and reporting for income taxes. Deferred income tax assets and
liabilities are computed annually for differences between the financial
statement and tax basis of assets and liabilities that will result in taxable
or deductible amounts in the future based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. Income tax expense
is the tax payable or refundable for the period plus or minus the change during
the period in deferred tax assets and liabilities.

Loss Per Share -- Loss per common share was calculated by dividing the
Company's net loss by the weighted average common shares outstanding. Common
stock equivalents were excluded from the calculation as such inclusion would
have had an anti-dilutive effect; therefore, fully diluted earnings per share
is considered to be the same as primary earnings per share.

Loss per common share assuming full dilution was calculated in the same manner
as described in the preceding paragraph, except that those shares that were
issued in connection with debt conversions were assumed to be outstanding for
the entire period.

Use of Estimates and Assumptions -- Management uses estimates and assumptions
in preparing its financial statements. Those estimates and assumptions affect
the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities, and the reported amounts of revenues and expenses.
Actual results could vary from the estimates that were used.

Stock-based Compensation -- The Company compensated certain employees for
services rendered by issuing shares of common stock to these individuals during
1995. The measurement date for determining compensation costs is the date of
the grant. Compensation cost is the excess, if any, of the quoted market price
of the stock at grant date over the amount the employee must pay to acquire the
stock. Compensation cost is recognized as an expense over the period of
employment attributable to the option.

F-19
<PAGE> 92
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Corporation)

NOTES TO FINANCIAL STATEMENTS
December 31, 1995 and 1994

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND BACKGROUND (CONTINUED)

New Accounting Standards -- In October 1995, Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-based Compensation" (SFAS 123), was
issued. This statement requires the fair value of stock options and other
stock-based compensation issued to employees to either be included as
compensation expense in the income statement or the pro forma effect on net
income and earnings per share of such compensation expense to be disclosed in
the footnotes to the Company's financial statements commencing with the
Company's 1996 fiscal year. ETC adopted SFAS 123 on January 1, 1996.
Implementation of SFAS No. 123 is not expected to materially impact the
Company's financial statements. The Company will continue to measure
compensation costs using the "intrinsic value based method" of accounting for
stock issued to employees.

NOTE 2 - GOING CONCERN AND CONTINUED OPERATIONS

The financial statements have been prepared on the assumption that the Company
will continue as a going concern. The financial statements do not include any
adjustments to reflect the possible effects on the recoverability and
classification of assets or classification of liabilities which may result from
the inability of the Company to continue as a going concern. ETC sustained a
net operating loss of approximately $1,093,329 during the year ended December
31, 1995 and has accumulated losses and dividends of approximately $1,303,329
since its inception, December 22, 1994. Cash used by operating activities and
dividends for the same periods aggregated approximately $995,617. Additionally,
at December 31, 1995, ETC's current assets exceeded its current liabilities by
$53,346. ETC's continued existence depends upon the success of management's
efforts to raise sufficient capital to execute its business plan.

MANAGEMENT PLANS TO MITIGATE THE GOING CONCERN ISSUES BY MARKETING ITS SERVICES
TO LARGE SELF-INSURED COMPANIES TO DEVELOP ITS CUSTOMER BASE AND INCREASE
PROFITABILITY. MANAGEMENT BELIEVES THAT IT WILL BE SUCCESSFUL IN GENERATING
SUFFICIENT CASH TO SUPPORT ITS OPERATIONS. There can be no degree of assurance
that the Company will be successful IN RAISING ADDITIONAL WORKING CAPITAL or
executing its business plan to the extent that it will be profitable.

NOTE 3 - OFFICE FURNITURE AND EQUIPMENT

The following is a summary of office furniture and equipment:

<TABLE>
<S> <C>
Furniture $ 43,056
Computer & Office Equipment 68,752
Computer Software 57,713
--------
169,521
Less: accumulated depreciation (32,173)
--------
$137,348
========
</TABLE>

Depreciation expense is $0 and $32,173 for 1994 and 1995, respectively.

F-20
<PAGE> 93
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Corporation)

NOTES TO FINANCIAL STATEMENTS
December 31, 1995 and 1994

NOTE 3 - OFFICE FURNITURE AND EQUIPMENT (CONTINUED)

At various times throughout 1995 the Company issued convertible debentures
amounting to $120,000 in total. These debentures bore interest at 12% per annum
and were convertible into common shares at the option of the holder at a
conversion rate of one common share per $1.25 of debenture being converted.

NOTE 4 - CONVERTIBLE DEBENTURES

As of December 31, 1995 all debenture holders had exercised their options and
converted their debentures into a total of 96,000 common shares.

NOTE 5 - INCOME TAXES

ETC has net operating loss carryforwards totalling $1,093,000 that are
available to offset its future income tax liability. The net operating loss
carryforwards expire in the year 2010. The realization of the benefits from
these net operating loss carryforwards appears uncertain due to going concern
questions and the possible effects of the Solo merger discussed in Note 8.
Accordingly, a valuation allowance of $372,000 has been recorded in 1995
against the deferred tax asset resulting from the net operating loss
carryforward. There are no other significant temporary differences for
financial and income tax reporting purposes at December 31, 1994 or 1995.

NOTE 6 - STOCK OPTIONS

During 1995 ETC entered into an employment contract with its C.E.O. and
Chairman of the Board under which certain stock options were granted at an
exercise price of $0.001 per share and are exercisable as follows:

<TABLE>
<CAPTION>
Number of
Shares
---------
<S> <C>
Upon consummation of merger 100,000
January 1, 1996 100,000
January 1, 1997 100,000
January 1, 1998 100,000
---------
$ 400,000
=========
</TABLE>

F-21
<PAGE> 94
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Corporation)

NOTES TO FINANCIAL STATEMENTS
December 31, 1995 and 1994

NOTE 6 - STOCK OPTIONS (CONTINUED)

Under various other employment contracts the Company has offered certain stock
options which were granted at an exercise price of $0.001 per share to certain
employees of the Company that vest at various dates as set out below:

<TABLE>
Number of
Shares
---------
<S> <C>
1996 146,666
1997 51,667
1998 46,667
1999 30,000
--------
275,000
========
</TABLE>

Compensation costs will be recognized as an expense over the periods of
employment attributable to the options at an amount equal to the excess of the
fair market value of the stock at the measurement over the amount the employee
must pay. The measurement date is generally the grant date. AS OF DECEMBER 31,
1994 AND 1995, NO COMPENSATION COST WAS RECOGNIZED AS EXPENSE. DEFERRED
COMPENSATION COST RECORDED AS A CONTRA-EQUITY ACCOUNT AS OF DECEMBER 31, 1994
AND 1995, AMOUNTED TO APPROXIMATELY $0 AND $474,540, RESPECTIVELY.

NOTE 7 - COMMITMENTS

On January 5, 1995 ETC entered into a long term lease for office premises
expiring February 28, 2000. Future minimum lease payments under the terms of
the lease are as follows:

Rent expense is $0 and $49,988 for 1994 and 1995, respectively.

F-22
<PAGE> 95
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 and 1994

NOTE 7 - COMMITMENTS (CONTINUED)

On April 19, 1995, ETC entered into an agreement with Texas Administrators,
Inc., a Texas corporation ("TAI") being in the business of acting as a third
party administrator (a "TPA") for medical claims. The agreement called for TAI
to assign the rights to third party administrator accounts for a total purchase
price of $75,000, representing 1.15 times one year's contracted revenue. Of the
purchase price, $35,000 was paid to TAI subsequent to year end. Additionally,
ten (10) monthly payments of $4,000 commencing June 10, 1995, are payable to
TAI under an executed promissory note.

The agreement called for ETC to enter into consulting agreements with each of
the 3 key employees/sole shareholders of TAI. The consulting agreements called
for each of the individuals to assist ETC in retaining and servicing the
assigned accounts and to seek out new third party administrator accounts for
which the individuals would be paid commissions. The consulting agreements were
for a period of one year commencing April 30, 1995. The Company intended to use
TAI's third party administrator accounts as a basis to test ETC's electronic
processing work flow system for processing self-insured medical claims.

On June 1, 1995 ETC terminated the agreement for breach of contract as the
medical claims accounts assigned were not in full force and effect. As of
December 31, 1995, ETC has received $26,232 as third party administrator fees
from accounts assigned by TAI. ETC does not expect to be successful in
recovering the $35,000 paid to TAI for the accounts and accordingly the amount
has been expensed in 1995 as research and development third party administrator
fees. It is management's expectation that TAI will not challenge the
termination of the contract and ETC is seeking court protection releasing it
from any obligations to TAI under the contract.

On April 22, 1995 ETC also purchased office furniture from TAI having an
estimated value of $33,925, with the issuance of 16,000 common shares of ETC to
TAI.

In December 1995, the Company entered into an agreement with a marketing firm
to assist in obtaining and servicing customers. A member of the marketing firm
is a member of the Board of Directors. Compensation for services rendered to
the Company will be paid through November 1997 on a monthly basis equal to 15%
of the gross realized revenue from new accounts obtained on behalf of the
Company by the firm. In return, the Company has agreed to market the services
offered by the marketing representative and will be paid monthly over the same
term an amount equal to 10% of the gross realized revenue from new accounts
obtained on behalf of the firm by the Company.

The Company has an employee agreement with a shareholder and former officer of
the company which expires on August 1, 1996. The shareholder will assist the
Company in obtaining financing as deemed necessary and will be paid a
commission for any financing obtained during his tenure.

F-23
<PAGE> 96
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 and 1994

NOTE 8 - SUBSEQUENT EVENTS

In January 1996, the Company entered into a consulting agreement with a
director in which the director will perform services for the benefit of the
Company for a period of two years ending January 1998. In connection with this
agreement, the director was issued options to purchase 100,000 shares of
post-merger Solo common stock from ETC-Texas in compensation for his services.
COMPENSATION COSTS WILL BE RECOGNIZED AS AN EXPENSE OVER THE PERIODS OF
EMPLOYMENT ATTRIBUTABLE TO THE OPTIONS AT AN AMOUNT EQUAL TO THE EXCESS OF THE
FAIR MARKET VALUE OF THE STOCK AT THE MEASUREMENT DATE OVER THE AMOUNT THE
EMPLOYEE MUST PAY. THE MEASUREMENT DATE IS GENERALLY THE GRANT DATE.

Between January 1, 1996 and March 31, 1996, ETC made the following additional
common share issuances:

<TABLE>
<CAPTION>
# of $ per
Shares Share Amount
---------- ------ ---------
<S> <C> <C> <C>
Issuance of shares for cash 333,100 $ 1.25 $ 416,375
Issuance of shares for cash 3,000 1.00 3,000
Issuance of shares for cash 40,000 0.50 20,000
---------- ------ ---------
376,100 439,375

Issuance of shares for services 10,625 1.25 13,281
---------- ---------
Total shares issued 386,725 $ 452,656
========== =========
</TABLE>

Proposed Merger -- As of March 31, 1996, ETC is negotiating a merger with Solo
Petroleum Ltd. ("Solo"), an Alberta, Canada based Reporting Issuer. Solo is
presently inactive and is attempting to reorganize its affairs. The merger
would be effected by Solo issuing 1.25 shares for each issued and outstanding
common share in ETC. As of March 31, 1996, ETC has 6,544,935 shares issued and
outstanding and accordingly, the merger would result in the issuance of
8,181,169 shares in Solo for all of the issued and outstanding common shares of
Electronic Transmission Corporation.

The merger is in effect a reverse acquisition and will be accounted for as a
recapitalization of Electronic Transmission Corporation, with Electronic
Transmission Corporation as the acquirer. Additional, no goodwill or other
intangible assets will be recorded.

Solo is subject to a "Cease Trade Order" issued by the Alberta Securities
Commission for failing to file annual audited financial statements for the year
ended December 31, 1991, and first quarter interim unaudited financial
statements for the period ended March 31, 1992 and further that Solo failed to
concurrently send the foregoing financial statements to each holder of its
securities.

F-24
<PAGE> 97
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 and 1994

NOTE 8 - SUBSEQUENT EVENTS (CONTINUED)

Solo's common shares were automatically removed from The Alberta Stock Exchange
(the "ASE") on January 12, 1993, as trading in its securities had been
suspended for six months. Solo has no intention to apply to relist on the ASE.

The following is a summary of Solo's proposed activities in connection with the
reorganization of its affairs.

(i) Common share capital to be consolidated on a 1 for 5 basis;

(ii) Solo to change its name to ETC Transaction Corporation;

(iii) Settle $552,500 of convertible debenture debt by the issuance of
552,500 post consolidation shares;

(iv) Settle $83,816 of trade creditor debt and $201,111 of shareholder
debt by the issuance of 284,927 post consolidation shares;

(v) Solo to continue out of the Province of Alberta and into the State
of Delaware;

(vi) Solo and ETC to file concurrently with the United States
Securities and Exchange Commission (the "SEC") an S-4 Registration
Statement for the purpose of registering the Common Shares to be
issued and outstanding in Solo, after giving effect to the
preceding transactions.

On January 8, 1996, Solo filed with the ASC and sent to its security holders
its annual audited financial statements for the years ending December 31, 1991,
to and including 1994, and its interim unaudited quarterly financial statements
for the periods ending March 31, 1995, June 30, 1995 and September 30, 1995.

On March 12, 1996, in accordance with an order from the Court of Queen's Bench
of Alberta allowing Solo to hold its 1990 through 1994 annual meetings in 1996,
Solo held a special and annual general meeting of its shareholders at which
time items (i), (ii) and (v) were voted and approved.

On March 21, 1996, The Alberta Securities Commission varied its Cease Trade
Order for the purposes of completing the merger of Solo and ETC and items (iii)
and (iv). The Alberta Securities Commission also ordered that its Cease Trade
Order would be revoked forty-eight (48) hours after delivery to the ASC of:

(i) verification that the SEC has declared effective the Registration
Statement on S-4.

(ii) confirmation by Solo of the issuance of a press release setting
out the material terms of the acquisition of ETC and the
continuance of Solo out of Alberta and into the State of Delaware.

F-25
<PAGE> 98
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 and 1994

NOTE 8 - SUBSEQUENT EVENTS (CONTINUED)

On March 26, 1996 Solo underwent its name change to "ETC Transaction
Corporation".

On April 1, 1996, Solo consolidated its common shares on a 1 for 5 basis,
thereby reducing its common shares issued and outstanding from 3,250,000 to
650,000 before accounting for the additional common share issuances noted
below. In addition, Solo issued 552,500 post consolidated shares to debenture
holders in settlement of debt and 83,816 post consolidated shares to trade
creditors and 201,111 post consolidated shares to shareholders in settlement of
debt.

As of December 31, 1995, after the aforementioned debt settlements, Solo has
$143,646 in current liabilities and no tangible assets. Subject to the
consummation of the merger, ETC would become obligated to extinguish these
obligations. As Solo has no tangible assets or means to raise adequate funding
to transact its' reorganization, ETC has agreed to fund the reorganization. For
the year ended December 31, 1995 ETC funded $23,281 in such expenditures, all
of which has been expensed by ETC in 1995.

The proposed merger is subject to approval by the shareholders of ETC and Solo
and certain other regulatory authorities.

In April 1996, The Company entered into an equipment lease agreement and stock
option agreement with a leasing company which will effectively be recorded as
capital lease by the Company. The agreement is for a term of five years and
allows the Company to lease certain equipment for amounts specified in the
agreement. Rental payments will be due on the first of each month for thirty
months beginning the month following delivery of the equipment. As of May 1996,
monthly payments required under the lease agreement amounted to $3,441 expiring
in 1998. The Company has agreed to escrow all accounts received which are
derived from the use of this equipment, less third party costs, until any class
of securities of ETC, or any company with which ETC merges, is registered under
the Securities Exchange Act of 1934 or otherwise becomes publicly traded, or
the funds in escrow equal the total purchase price of the equipment as stated
in the agreement.

At any time during the term of the agreement, the leasing company has the right
to 1) sell to ETC any or all of the equipment in exchange for the number of
shares of ETC common stock, or stock of any company with which ETC merges, that
is equal to the purchase of the equipment divided by $1.25 per share or 2)
purchase, at $1.25 per share, the number of shares of ETC stock, or stock of
the merged company, equal to the purchase price of the equipment divided by
1.25, and give ETC the option to purchase the equipment at the end of the lease
for $1.00; provided, that if ETC issues, agrees to issue or grants an option to
purchase ETC stock to any other person for a price less than $1.25 per share,
the price payable to the leasing company will be reduced to such lower price.

F-26
<PAGE> 99
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 and 1994

NOTE 8 - SUBSEQUENT EVENTS (CONTINUED)

Under the agreement with the leasing company, ETC has obtained a $500,000 line
of credit from the leasing company to be used as working capital. ETC may draw
from this line up to 80% of its accounts receivable that are under 65 days due.
To secure this line of credit, ETC will pledge shares of its common stock on a
two for one basis (i.e., two dollars trade value of its stock for every one
dollar drawn from the line of credit). ETC will pay a loan origination fee,
beginning three months after ETC merges with a public company, in an amount to
10% of the leasing company's exposure under this agreement including the amount
spent to purchase equipment and the amount drawn on the line of credit. This
fee will be a cumulative amount calculated each quarter.

THE LEASING COMPANY AGREEMENT CONTAINS CERTAIN RESTRICTIVE COVENANTS WHICH (I)
REQUIRE ETC TO ESCROW ALL ACCOUNTS RECEIVED WHICH ARE DERIVED FROM THE USE OF
THIS EQUIPMENT, LESS THIRD PARTY COSTS, THROUGH MARCH 31, 1996 OR UNTIL ANY
CLASS OF STOCK IS REGISTERED WITH THE SEC OR OTHERWISE BECOMES PUBLICLY
TRADED, OR THE FUNDS IN ESCROW EQUAL THE TOTAL PURCHASE PRICE OF THE EQUIPMENT,
AND (II) RESTRICT ETC FROM ISSUING ADDITIONAL SECURITIES BEFORE ETC MERGES WITH
A PUBLIC COMPANY. ETC IS IN VIOLATION OF EACH OF THESE COVENANTS AND HAS
OBTAINED A WAIVER FROM THE LEASING COMPANY WHICH RELEASES ETC FROM ANY CLAIMS
UNDER THE ESCROW REQUIREMENT AND VIOLATIONS RELATING TO THE ISSUANCE OF
SECURITIES.

The Company has issued stock options to certain individuals for the right to
purchase shares of post-merger common stock at a price of $1 per one thousand
shares in compensation for assistance and services rendered. The stock options
are exercisable at various dates and replace stock options dated prior to year
ended December 31, 1995. The total number of outstanding stock options under
agreements amounted to 558,000 as of June 1, 1996.

In April 1996, the Company made an agreement with a large national self-insured
company to provide electronic transaction processing services for insurance
claims. The agreement allows for a 90-day trial period for processing claims
and the Company has been successful in providing the service at a fee of $1 per
claim. The parties are currently in negotiations for a two-year contract which
would utilize the Company's technology to electronically process the insurance
claims nationally. The Company is engaged in a marketing strategy of utilizing
the 90-day trial period with other organizations.

Effective June 1, 1996, the Company issued 220,000 stock warrants which expire
on June 15, 1997, and allow the holder of each warrant to purchase one share of
common stock at a price of $1.50 per share.

On May 15, 1996, the Company received a cash advance of $779,575 from Solo
Petroleums, Ltd. to be used as working capital to fund its post-merger business
plan. The capital for the Solo Petroleums, Ltd. cash advance was raised in a
private placement offering of Solo common stock.

F-27
<PAGE> 100
ELECTRONIC TRANSMISSION CORPORATION
(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 and 1994

NOTE 9 - RELATED PARTY TRANSACTIONS

Advances to Sterling National Corporation, a company wholly owned by the
Chairman of the Board, C.E.O. and MAJORITY SHAREHOLDER of ETC, and the company
from which ETC acquired its sole business from were fully repaid subsequent to
December 31, 1995. During the period January 1, 1996 through March 31, 1996
Sterling National has advanced ETC $106,100 for working capital purposes.

The Company has an agreement to purchase equipment from Sterling National
Corporation, an organization which is wholly-owned by the Chairman and Chief
Executive Officer. The relationship exists due to Sterling National Corporation
having a purchase contract with an equipment wholesaler which allows Sterling
National Corporation to purchase equipment at a significant discount. Since the
Company is able to purchase the equipment from SNC at the discounted price, the
Company intends to utilize this relationship for capital expenditures as deemed
necessary in the future. THE COMPANY WILL RECORD THE EQUIPMENT PURCHASES AT
STERLING NATIONAL CORPORATION'S COST.

NOTE 10 - CASH FLOW SUPPLEMENTAL INFORMATION

The following is a schedule of required supplemental cash flow information:

<TABLE>
<CAPTION>
1994 1995
--------------- ---------

<S> <C> <C>
Interest paid $ -- $ 6,424
=============== ==============

Income taxes paid $ -- $ --
=============== ==============
</TABLE>

F-28
<PAGE> 101

APPENDIX "A"

AGREEMENT AND PLAN OF MERGER

by and between

ELECTRONIC TRANSMISSION CORPORATION,
a Texas corporation

and

ETC TRANSACTION CORPORATION,
an Alberta, Canada corporation

May 1, 1996
<PAGE> 102
<TABLE>
<CAPTION>
ARTICLE/SECTION PAGE
- --------------- ----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 1 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Effective Time of the Merger . . . . . . . . . . . . . . . 2
1.4 Articles of Incorporation and Bylaws . . . . . . . . . . . 2
1.5 Directors and Officers of the Surviving Corporation . . . 2

ARTICLE 2 CONVERSION OF SHARES . . . . . . . . . . . . . . . . . . . 2
2.1 Conversion of Company Common Stock . . . . . . . . . . . . 2
2.2 Stock Certificates . . . . . . . . . . . . . . . . . . . . 3
2.3 Fractional Shares . . . . . . . . . . . . . . . . . . . . 3
2.4 Dissenting Shares . . . . . . . . . . . . . . . . . . . . 3

ARTICLE 3 REPRESENTATION AND WARRANTIES OF TRANSACTION CORP. . . . . 4
3.1 Organizations . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Certain Corporate Matters . . . . . . . . . . . . . . . . 4
3.4 Authority Relative to this Agreement . . . . . . . . . . . 4
3.5 Consents and Approvals; No Violations . . . . . . . . . . 4

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ETC-TEXAS . . . . . . . 5
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Capitalization and Ownership of ETC-Texas . . . . . . . . 5
4.3 Certain Corporate Matters . . . . . . . . . . . . . . . . 6
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 6
4.5 Authority Relative to this Agreement . . . . . . . . . . . 6
4.6 Consents and Approvals; No Violations . . . . . . . . . . 6
4.7 Reports . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.8 Financial Statements . . . . . . . . . . . . . . . . . . . 7
4.9 Events Subsequent to Financial Statements . . . . . . . . 7
4.10 Undisclosed Liabilities . . . . . . . . . . . . . . . . . 8
4.11 Tax Returns and Audits . . . . . . . . . . . . . . . . . . 8
4.12 Real Property . . . . . . . . . . . . . . . . . . . . . . 9
4.13 Books and Records . . . . . . . . . . . . . . . . . . . . 9
4.14 Questionable Payments . . . . . . . . . . . . . . . . . . 9
4.15 Environmental Matters . . . . . . . . . . . . . . . . . . 9
4.16 Intellectual Property . . . . . . . . . . . . . . . . . . 10
4.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 10
4.18 Contracts . . . . . . . . . . . . . . . . . . . . . . . . 10
4.19 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 11
4.20 Employees . . . . . . . . . . . . . . . . . . . . . . . . 11
4.21 Employee Benefit Plans . . . . . . . . . . . . . . . . . . 11
4.22 Legal Compliance . . . . . . . . . . . . . . . . . . . . . 11
4.23 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . 11
4.24 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE 5 CONDUCT OF BUSINESS PENDING THE CLOSING . . . . . . . . . 12
5.1 Conduct of Business by ETC-Texas Pending the Closing . . . 12
5.2 Other Actions . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE 6 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . 13
6.1 Access and Information . . . . . . . . . . . . . . . . . . 13
6.2 Registration Statement . . . . . . . . . . . . . . . . . 14
6.3 Meetings of Shareholders . . . . . . . . . . . . . . . . . 14
6.4 Press Releases . . . . . . . . . . . . . . . . . . . . . . 14
6.5 Reimbursement of Transaction Corp. . . . . . . . . . . . . 14

ARTICLE 7 CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . 15
7.1 Conditions to Obligations of Each Party to
Effect the Closing . . . . . . . . . . . . . . . . . . . . 15
</TABLE>

i
<PAGE> 103
<TABLE>
<S> <C>
7.2 Additional Conditions to Transaction Corp.'s Obligations . 15
7.3 Additional Conditions to ETC-Texas' Obligations . . . . . 17

ARTICLE 8 REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.1 Indemnification by ETC-Texas . . . . . . . . . . . . . . . 18
8.2 Indemnification by Transaction Corp. . . . . . . . . . . . 18
8.3 Conditions of Indemnification . . . . . . . . . . . . . . 18
8.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.5 Remedies Not Exclusive . . . . . . . . . . . . . . . . . . 20

ARTICLE 9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 20
9.1 Termination by Mutual Consent . . . . . . . . . . . . . . 20
9.2 Termination by Any Party . . . . . . . . . . . . . . . . . 20
9.3 Effect of Termination and Abandonment . . . . . . . . . . 20

ARTICLE 10 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . 20
10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . 21
10.3 Severability . . . . . . . . . . . . . . . . . . . . . . . 21
10.4 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 21
10.5 Separate Counsel . . . . . . . . . . . . . . . . . . . . . 21
10.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . 21
10.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>

ii
<PAGE> 104
AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of May 1,
1996, is made and entered into by and between ETC Transaction Corporation, an
Alberta, Canada corporation ("Transaction Corp.") f/k/a Solo Petroleums, Ltd.
("Solo") and Electronic Transmission Corporation, a Texas corporation ("ETC-
Texas").

RECITALS

WHEREAS, the Board of Directors of Transaction Corp. has adopted
resolutions approving and adopting the continuance and domestication of
Transaction Corp. into a Delaware corporation (the "Continuance") for the
purposes of merging with ETC-Texas (the "Merger");

WHEREAS, the Board of Directors of ETC-Texas has adopted resolutions
approving and adopting the Merger;

WHEREAS, the Merger is intended to qualify as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"); and

NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the conditions set forth herein, the parties
hereto agree as follows:

ARTICLE 1
THE MERGER

1.1 The Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.3 hereof), ETC-Texas shall be
merged with and into Transaction Corp. and the separate corporate existence of
ETC-Texas shall thereupon cease. Transaction Corp. (sometimes hereinafter
referred to as the "Surviving Corporation") shall be the surviving corporation
in the Merger. The Merger shall have the effects set forth in the applicable
provisions of the Delaware General Corporation Law (the "DGCL") and the Texas
Business Corporation Act (the "TBCA").

1.2 Closing. The closing of the Merger (the "Closing") shall take place at a
time and place to be mutually agreed upon by ETC-Texas and Transaction Corp. as
soon as the conditions set forth in Article 7 have been satisfied or waived or
as soon as practicable thereafter. Such date is herein referred to as the
"Closing Date."

1.3 Effective Time of the Merger. If all of the conditions to the Merger set
forth in Article 7 shall have been fulfilled or waived in accordance herewith
and this Agreement shall not have been terminated as provided in Article 9, the
parties hereto shall cause Articles of Merger (the "Articles of Merger") that
meet the requirements of the applicable provisions of the DGCL and the TBCA,
respectively, to be properly executed and filed with the Secretary of State of
the States of Delaware and Texas, respectively, on the Closing Date. The Merger
shall be effective at the time of acceptance of the filing of the Articles of
Merger with the Secretary of State of the States of Delaware and Texas in
accordance with the DGCL and the TBCA, respectively, or at such later time
which the parties hereto shall have agreed upon and designated in such filing
as the effective time of the Merger (the "Effective Time").

1.4 Certificate of Incorporation and Bylaws. In continuing and
domesticating into Delaware, Transaction Corp. shall file a Certificate of
Incorporation and Bylaws with the Secretary of State of the State of Delaware
and such Certificate of Incorporation and Bylaws of Transaction Corp. shall
become the Certificate of Incorporation and Bylaws of Transaction Corp. and of
the Surviving Corporation, subject always to the right of the Surviving
Corporation to amend its Articles of Incorporation and Bylaws in accordance
with the laws of the State of Delaware and the provisions of the Certificate of
Incorporation and Bylaws.

1.5 Directors and Officers of the Surviving Corporation. The directors and
officers of ETC-Texas immediately prior to the Effective Time shall be the
initial directors and officers of the Surviving Corporation and shall hold such
positions from the Effective Time until their respective successors are duly
elected or appointed and qualify in the manner provided in the Certificate of
Incorporation and Bylaws of the Surviving Corporation or as otherwise provided
by law.

ARTICLE 2
CONVERSION OF SHARES

2.1 Conversion of Company Common Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of Transaction Corp. or ETC-Texas
or any holder of capital stock of any of them:

AGREEMENT AND PLAN OF MERGER - Page 1
<PAGE> 105
(a) Subject to the limitations contained herein, each share of common
stock of ETC-Texas, no par value (the "ETC-Texas Common Stock"), issued
and outstanding immediately prior to the Effective Time shall be
automatically converted into the right to receive one and one-fourth of
a share of common stock of Transaction Corp. no par value (the
"Transaction Corp. Common Stock").

(b) All shares of ETC-Texas Common Stock shall be cancelled and cease
to be outstanding and each holder of a certificate representing ETC-
Texas Common Stock shall thereafter cease to have any rights with
respect thereto except as set forth in this Article 2.

2.2 Stock Certificates. At or following the Effective Time, each holder of
an outstanding certificate or certificates representing ETC-Texas Common Stock
shall surrender the same to Transaction Corp. and Transaction Corp. shall, in
exchange therefor, cause to be issued to the holder of such certificate(s) a
new certificate representing shares of Transaction Corp. Common Stock in
accordance with this Article 2, less any amount required to be withheld under
applicable federal, state or local tax requirements, and the surrendered
certificate(s) shall be cancelled. Until so surrendered and exchanged, each
such certificate shall represent solely the right to receive shares of
Transaction Corp. Common Stock in accordance with this Article 2, without
interest and less any tax withholding.

2.3 Fractional Shares. No fractional shares of Transaction Corp. Common
Stock shall be issued in the Merger. In lieu thereof, all fractional shares of
Transaction Corp. Common Stock that a holder of ETC-Texas Common Stock would
otherwise be entitled to receive as a result of the Merger shall be
automatically converted into the right to receive one full share of Transaction
Corp. Common Stock.

2.4 Dissenting Shares. Each share of ETC-Texas Common Stock issued and
outstanding immediately prior to the Effective Time not voted in favor of the
Merger, the holder of which has given written notice of the exercise of
dissenter's rights as required by the TBCA is herein called a "Dissenting
Share." Dissenting Shares shall not be converted into or represent the right
to receive shares of Transaction Corp. Common Stock pursuant to this Article 2
and shall be entitled only to such rights as are available to such holder
pursuant to the TBCA, unless the holder thereof shall have withdrawn or
forfeited his dissenter's rights. Each holder of Dissenting Shares shall be
entitled to receive the value of such Dissenting Shares held by him in
accordance with the applicable provisions of the TBCA. Transaction Corp. will
promptly pay to any holder of Dissenting Shares such amount as such holder
shall be entitled to receive in accordance with the applicable provisions of
the TBCA. If any holder of Dissenting Shares shall effectively withdraw or
forfeit his dissenter's rights under the TBCA, such Dissenting Shares shall be
converted into the right to receive shares of Transaction Corp. Common Stock in
accordance with this Article 2.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TRANSACTION CORP.

Transaction Corp. hereby represents and warrants to ETC-Texas as
follows:

3.1 Organization. Transaction Corp. has been duly incorporated, is validly
existing as a corporation and is in good standing under the laws of Alberta,
its province of incorporation, and has the requisite corporate power to carry
on its business as now conducted.

3.2 Capitalization. The authorized capital stock of Transaction Corp.
consists of an unlimited number of Class "A" Common Shares and an unlimited
number of Class "B" Preferred Shares in the capital stock of Transaction Corp.
As of the date of this Agreement, 1,487,428 Class "A" Common Shares of
Transaction Corp. are issued and outstanding. No Class "B" Preferred Shares
have been issued. All of the issued and outstanding shares of Transaction
Corp. Common Stock are validly issued, fully paid and nonassessable and free of
preemptive rights. All shares of Transaction Corp. Common Stock issuable in
accordance with this Agreement will be, when so issued, duly authorized,
validly issued, fully paid and nonassessable.

3.3 Certain Corporate Matters. Transaction Corp. is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the ownership of its properties, the employment of its personnel or
the conduct of its business requires it to be so qualified, except where such
failure would not have a material adverse effect on Transaction Corp.'s
financial condition, results of operations or business. Transaction Corp. has
full corporate power and authority and all authorizations, licenses and permits
necessary to carry on the business in which it is engaged and to own and use
the properties owned and used by it.

3.4 Authority Relative to this Agreement. Transaction Corp. has the
requisite corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution, delivery and performance of
this Agreement by Transaction Corp. and the consummation by Transaction Corp.
of the transactions contemplated hereby have been duly authorized by the Board
of Directors of Transaction Corp. and, subject to stockholder approval as set
forth in this Agreement, no other actions on the part of Transaction Corp. are
necessary to authorize this Agreement or the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Transaction
Corp. and constitutes, subject to stockholder approval as set forth in this
Agreement, a valid and binding agreement of Transaction Corp., enforceable
against

AGREEMENT AND PLAN OF MERGER - Page 2
<PAGE> 106
Transaction Corp. in accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.

3.5 Consents and Approvals; No Violations. Except for applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), state
securities or blue sky laws, and the filing and recordation of a certificate of
merger or the articles of merger as required by the DGCL and the TBCA, no
filing with, and no permit, authorization, consent or approval of, any public
body or authority is necessary for the consummation by Transaction Corp. of the
transactions contemplated by this Agreement. Neither the execution or delivery
of this Agreement by Transaction Corp. nor the consummation by Transaction
Corp. of the transactions contemplated hereby, nor compliance by Transaction
Corp. with any of the provisions hereof, will (a) conflict with or result in
any breach of any provisions of the Certificate of Incorporation or Bylaws of
Transaction Corp. (b) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Transaction
Corp. is a party or by which it or its properties or assets may be bound or (c)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Transaction Corp. or any of its properties or assets, except in
the case of clauses (b) and (c) for violations, breaches or defaults which are
not in the aggregate material to Transaction Corp. taken as a whole.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
ETC-TEXAS

ETC-Texas hereby represents and warrants to Transaction Corp. as
follows:

4.1 Organization. ETC-Texas is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and has the requisite corporate power to carry on its business as now
conducted.

4.2 Capitalization and Ownership of ETC-Texas. ETC-Texas' entire authorized
capital stock consists of 8,000,000 shares of ETC-Texas Common Stock, no par
value and 2,000,000 shares of ETC-Texas Preferred Stock, no par value. All
shares of ETC-Texas Common Stock have been duly authorized and are validly
issued, fully paid and nonassessable and have not been issued in violation of
any pre-emptive rights. Except as set forth on Schedule 4.2 hereto, there are
no outstanding or authorized options, rights, warrants, calls, convertible
securities, rights to subscribe, conversion rights or other agreements or
commitments to which ETC-Texas is a party or which is binding upon ETC-Texas
providing for the issuance by ETC-Texas or transfer by ETC-Texas of additional
shares of its capital stock and ETC-Texas has not reserved any shares of its
capital stock for issuance, nor are there any outstanding stock option rights,
phantom equity or similar rights, contracts, arrangements or commitments based
upon the book value, income or other attribute of ETC-Texas.

4.3 Certain Corporate Matters. ETC-Texas is duly licensed or qualified to do
business and is in good standing as a foreign corporation in every jurisdiction
in which the character of ETC-Texas' properties or nature of ETC-Texas'
business requires it to be so licensed or qualified other than such
jurisdictions in which the failure to be so licensed or qualified does not, or
insofar as can reasonably be foreseen, in the future will not, have a material
adverse effect on its financial condition, results of operations or business.
ETC-Texas has full corporate power and authority and all authorizations,
licenses and permits necessary to carry on the business in which it is engaged
or in which it proposes presently to engage and to own and use the properties
owned and used by it. ETC-Texas has delivered to Transaction Corp. true,
accurate and complete copies of its Articles of Incorporation and Bylaws, which
reflect all amendments made thereto at any time prior to the date of this
Agreement. The records of meetings of the shareholders and Board of Directors
of ETC-Texas are complete and correct in all material respects. The stock
records of ETC-Texas and the shareholder lists of ETC-Texas that ETC-Texas has
previously furnished to Transaction Corp. are complete and correct in all
material respects and accurately reflect the record ownership and the
beneficial ownership of all the outstanding shares of ETC-Texas' capital stock
and all other outstanding securities issued by ETC-Texas. ETC-Texas is not in
default under or in violation of any provision of its Articles of Incorporation
or Bylaws in any material respect. ETC-Texas is not in default or in violation
of any restriction, lien, encumbrance, indenture, contract, lease, sublease,
loan agreement, note or other obligation or liability by which it is bound or
to which any of its assets is subject.

4.4 Subsidiaries. ETC-Texas does not own, directly or indirectly, any of
the capital stock of any other corporation or any equity, profit sharing,
participation or other interest in any corporation, partnership, joint venture
or other entity.

4.5 Authority Relative to this Agreement. ETC-Texas has the requisite
corporate power and authority to enter into this Agreement and carry out its
obligations hereunder. The execution, delivery and performance of this
Agreement by ETC-Texas and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of ETC-Texas and,
subject to shareholder approval as set forth in this Agreement, no other
actions on the part of ETC-Texas are necessary to authorize this Agreement or
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by ETC-Texas and constitutes, subject to shareholder
approval as set forth in this Agreement, a valid and binding obligation of ETC-
Texas, enforceable in accordance with its terms, except as such enforcement may
be limited by

AGREEMENT AND PLAN OF MERGER - Page 3
<PAGE> 107
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.

4.6 Consents and Approvals; No Violations. Except for applicable
requirements of the Securities Act, the Exchange Act, state securities or blue
sky laws, and the filing and recordation of a certificate of merger or the
articles of merger as required by the DGCL and the TBCA, no filing with, and no
permit, authorization, consent or approval of, any public body or authority is
necessary for the consummation by ETC-Texas of the transactions contemplated by
this Agreement. Neither the execution or delivery of this Agreement by ETC-
Texas nor the consummation by ETC-Texas of the transactions contemplated
hereby, nor compliance by ETC-Texas with any of the provisions hereof, will (a)
conflict with or result in any breach of any provisions of the Articles of
Incorporation or Bylaws of ETC-Texas, (b) result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration) under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which ETC-Texas is a party or by which it or any of its properties or assets
may be bound or (c) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to ETC-Texas, or any of its properties or assets,
except in the case of clauses (b) and (c) for violations, breaches or defaults
which are not in the aggregate material to ETC-Texas taken as a whole.

4.7 Financial Statements. ETC-Texas has delivered to Transaction Corp. all
financial information requested by Transaction Corp. (the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods covered thereby and present fairly the financial condition of ETC-Texas
as of such dates and the results of its operations and changes in cash flows
for such periods.

4.8 Events Subsequent to Financial Statements. Since March 31, 1996, there
has not been:

(a) Any adverse change in the financial condition, results of operations
or business of ETC-Texas;

(b) Any sale, lease, transfer, license or assignment of any assets,
tangible or intangible, of ETC-Texas;

(c) Any damage, destruction or property loss, whether or not covered by
insurance, affecting adversely the properties or business of ETC-Texas;

(d) Any declaration, setting aside or payment of any dividend or
distribution with respect to the shares of capital stock of ETC-Texas or
any redemption, purchase or other acquisition of any such shares;

(e) Any subjection to any lien on any of the assets, tangible or
intangible, of ETC-Texas;

(f) Any incurrence of indebtedness or liability or assumption of
obligations by ETC-Texas;

(g) Any waiver or release by ETC-Texas of any right of any material
value;

(h) Any increase in compensation or benefits to officers or directors of
ETC-Texas;

(i) Any change made or authorized in the Articles of Incorporation or
Bylaws of ETC-Texas;

(j) Except as set forth on Schedule 4.9 hereto, any issuance, transfer,
sale or other disposition by ETC-Texas of any shares of its capital
stock or other equity securities, or any grant of any options, warrants
or other rights to purchase or obtain (including upon conversion or
exercise) shares of its capital stock or other equity securities;

(k) Any loan to or other transaction with any officer, director or
shareholder of ETC-Texas giving rise to any claim or right of ETC-Texas
against any such person or of such person against ETC-Texas; or

(l) Any other transaction or commitment entered into other than in the
ordinary course of business by ETC-Texas.

4.9 Undisclosed Liabilities. ETC-Texas has no material liability or
obligation whatsoever, either accrued, absolute, contingent or otherwise.

4.10 Tax Returns and Audits. ETC-Texas has duly and timely filed or caused
to be filed all federal, foreign, state and local income, franchise, sales,
value added and property tax returns (the "Tax Returns") required to be filed
by it and has paid in full or fully reserved against in the Financial
Statements all taxes, interest, penalties, assessments and deficiencies due or
claimed to be due by it to foreign, federal, state or local taxing authorities
(including taxes on properties, income, franchises, licenses, sales, use and
payrolls). The income tax returns filed by ETC-Texas are not being, to the
knowledge of ETC-Texas, examined by the Internal Revenue Service (the "IRS") or
other applicable taxing authorities for any period. All taxes or estimates
thereof that are due as of December 31, 1995, or are claimed or asserted by any
taxing authority to be due as of such date, have been (a) timely and
appropriately paid so as to avoid penalties for underpayment or (b) accrued for
on the balance sheet as of

AGREEMENT AND PLAN OF MERGER - Page 4
<PAGE> 108
December 31, 1995, as contained in the Financial Statements. Except for
amounts not yet due and payable, all tax liabilities to which the properties of
ETC-Texas may be subject have been paid and discharged. The provisions for
income and other taxes payable reflected in the Financial Statements make
adequate provision for all then accrued and unpaid taxes of ETC-Texas. There
are no tax liens on any property of ETC-Texas, nor are there any pending or
threatened examinations or tax claims asserted. ETC-Texas has not been granted
any extensions of limitation periods applicable to tax claims. Since December
31, 1996, except jurisdictions in which ETC-Texas filed tax returns, no claim
has been made by a taxing authority that ETC-Texas is or may be subject to
taxation by that jurisdiction. All copies of Tax Returns delivered to
Transaction Corp. by ETC-Texas are true and correct, and any and all notices
from foreign, federal, state and local taxing authorities, tax examination
reports and statements of deficiencies assessed against or agreed to by ETC-
Texas since December 31, 1996 have been made available to Transaction Corp.
ETC-Texas is not a party to, or bound by, any tax indemnity, tax sharing or tax
allocation agreement. ETC-Texas is not a member of an "affiliated group," as
defined in Section 1504(a) of the Code and is not the owner of any interest in
a partnership, joint venture, trust, limited liability company or other entity
or organization. All positions taken on federal Tax Returns that could give
rise to a penalty for substantial understatement pursuant to Section 6662(d) of
the Code have been disclosed on such Tax Returns. ETC-Texas has not agreed to
and is not required to make any adjustment pursuant to Section 481(a) of the
Code (or any predecessor provision) by reason of any change in any accounting
method. ETC-Texas has no application pending with any taxing authority
requesting permission for any changes in any accounting method, and the IRS has
not proposed any such adjustment or change in accounting method. ETC-Texas is
not subject to any limitation under Section 382 or Section 383 of the Code.

4.11 Real Property. ETC-Texas does not own any real property. ETC-Texas
does lease the premises located at 5025 Arapaho Road, Suite 515, Dallas, Texas
75248 as its principal place of business.

4.12 Books and Records. The books and records of ETC-Texas fairly reflect the
transactions to which ETC-Texas is a party or by which its properties are
bound.

4.13 Questionable Payments. ETC-Texas nor any employee, agent or
representative of ETC-Texas has, directly or indirectly, made any bribes,
kickbacks, illegal payments or illegal political contributions using ETC-Texas
funds or made any payments from ETC-Texas' funds to governmental officials for
improper purposes or made any illegal payments from ETC-Texas' funds to obtain
or retain business.

4.14 Environmental Matters.

(a) Environmental Laws. ETC-Texas is not currently in violation of, or
subject to any existing, pending or threatened investigation or inquiry
by any governmental authority or to any remedial obligations under, any
laws or regulations pertaining to health or the environment (hereinafter
sometimes collectively called "Environmental Laws"), including without
limitation (i) the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (42 U.S.C. 9601 et seq.), as amended by the
Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"), and the
regulations promulgated thereunder, (ii) the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. 6901 et seq.), as amended by the
Hazardous and Solid Waste Amendment of 1984 ("RCRA"), and the
regulations promulgated thereunder, (iii) any statutes, rules or
regulations, whether federal, state or local, relating to asbestos or
polychlorinated biphenyls, and (iv) the provisions contained in any
applicable state statutes, rules and regulations. This representation
and warranty would continue to be true and correct following disclosure
to the applicable governmental authorities of all relevant facts,
conditions and circumstances, if any, pertaining to the assets and
operations of ETC-Texas.

(b) Use of Assets. To the best knowledge of ETC-Texas, the assets of
ETC-Texas have never been used in a manner that would be in violation of
any of the Environmental Laws, including without limitation CERCLA, RCRA
and any applicable state statutes, rules or regulations.

(c) Permits. ETC-Texas has not obtained and is not required to obtain,
and ETC-Texas has no knowledge of any reason that Transaction Corp. will
be required to obtain, any permits, licenses or similar authorizations
to construct, occupy, operate or use any buildings, improvements,
fixtures and equipment owned or leased by ETC-Texas by reason of any
Environmental Laws.

(d) Superfund List. To the best knowledge of ETC-Texas, none of the
assets owned or leased by ETC-Texas are on any federal or state
"Superfund" list or subject to any environmentally related liens.

4.15 Intellectual Property. Except as set forth on Schedule 4.15, there are
no patents and patent applications, trade names, trademark and service mark
registrations and applications for or registered trade dress rights, common law
trademarks and copyright registrations and applications owned by ETC-Texas or
which ETC-Texas is licensed to use.

4.16 Insurance. Except as disclosed on Schedule 4.16, ETC-Texas has no
insurance policies in effect.

AGREEMENT AND PLAN OF MERGER - Page 5
<PAGE> 109
4.17 Contracts. Except as disclosed on Schedule 4.17, ETC-Texas has no
material contracts, leases, arrangements and commitments (whether oral or
written). ETC-Texas is not a party to or bound by or affected by any contract,
lease, arrangement or commitment (whether oral or written) relating to: (a)
collective bargaining with, or any representation of any employees by, any
labor union or association; (b) the purchase or sale of real property; (c)
distribution, agency or construction; and (d) lending or advancing of funds.

4.18 Litigation. ETC-Texas is not subject to any judgment or order of any
court or quasijudicial or administrative agency of any jurisdiction, domestic
or foreign, nor is there any charge, complaint, lawsuit or governmental
investigation pending or, to the best knowledge of ETC-Texas, threatened
against ETC-Texas. ETC-Texas is not a plaintiff in any action, domestic or
foreign, judicial or administrative. There are no existing actions, suits,
proceedings or investigations of ETC-Texas, and ETC-Texas knows of no basis for
such actions, suits, proceedings or investigations. There are no unsatisfied
judgments, orders, decrees or stipulations affecting ETC-Texas or to which ETC-
Texas is a party.

4.19 Employees. ETC-Texas currently leases 30 persons. ETC-Texas has entered
into written employment agreements with certain officers and/or directors of
ETC-Texas as outlined on Schedule 4.19. ETC-Texas is not a party to or bound
by any collective bargaining agreement. There are no loans or other obligations
payable or owing by ETC-Texas to any shareholder, officer, director or employee
of ETC-Texas, nor are there any loans or debts payable or owing by any of such
persons to ETC-Texas or any guarantees by ETC-Texas of any loan or obligation
of any nature to which any such person is a party.

4.20 Employee Benefit Plans. ETC-Texas has no (a) non-qualified deferred or
incentive compensation or retirement plans or arrangements, (b) qualified
retirement plans or arrangements, (c) other employee compensation, severance or
termination pay or welfare benefit plans, programs or arrangements or (d) any
related trusts, insurance contracts or other funding arrangements maintained,
established or contributed to by ETC-Texas within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended.

4.21 Legal Compliance. No claim has been filed against ETC-Texas alleging a
violation of any applicable laws and regulations of foreign, federal, state and
local governments and all agencies thereof. ETC-Texas holds all of the material
permits, licenses, certificates or other authorizations of foreign, federal,
state or local governmental agencies required for the conduct of its business
as presently conducted.

4.22 Broker's Fees. ETC-Texas nor anyone on its behalf has any liability to
any broker, finder, investment banker or agent, or has agreed to pay any
brokerage fees, finder's fees or commissions, or to reimburse any expenses of
any broker, finder, investment banker or agent in connection with the Merger or
any similar transaction.

4.23 Disclosure. The representations and warranties and statements of fact
made by ETC-Texas in this Agreement and in any Schedule hereto are, as
applicable, accurate, correct and complete and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements and information contained herein or therein not
misleading.

ARTICLE 5
CONDUCT OF BUSINESS PENDING THE CLOSING

5.1 Conduct of Business by ETC-Texas Pending the Closing. ETC-Texas
covenants and agrees that prior to the Closing Date:

(a) ETC-Texas shall conduct its business and operations only in the
usual and ordinary course of business and consistent with past custom
and practice;

(b) ETC-Texas shall not directly or indirectly do any of the following:
(i) sell, pledge, dispose of or encumber any of its assets; (ii) amend
or propose to amend its Articles of Incorporation or Bylaws; (iii)
split, combine or reclassify any outstanding shares of its capital
stock, or declare, set aside or pay any dividend or other distribution
payable in cash, stock, property or otherwise with respect to shares of
its capital stock; (iv) redeem, purchase or acquire or offer to acquire
any shares of its capital stock or other securities; (v) create any
subsidiaries; (vi) enter into or modify any contract, agreement,
commitment or arrangement with respect to any of the foregoing;

(c) ETC-Texas shall not (i) issue, sell, pledge or dispose of, or agree
to issue, sell, pledge or dispose of, any additional shares of, or any
options, warrants, conversion privileges or rights of any kind to
acquire any shares of, its capital stock; (ii) acquire (by merger,
consolidation, acquisition of stock or assets or otherwise) any
corporation, partnership or other business organization or division or
the material assets thereof; (iii) incur any indebtedness for borrowed
money, issue any debt securities or guarantee any indebtedness to
others; or (iv) enter into or modify any contract, agreement, commitment
or arrangement with respect to any of the foregoing;

AGREEMENT AND PLAN OF MERGER - Page 6
<PAGE> 110
(d) ETC-Texas shall not enter into any employment, severance or similar
agreements or arrangements with, or grant any bonus, salary increase,
severance or termination pay to, any officers or directors;

(e) ETC-Texas shall not adopt any bonus, profit sharing, compensation,
stock option, pension, retirement, deferred compensation, employment or
other employee benefit plan, agreement, trust, fund or arrangement for
the benefit or welfare of any employee;

(f) Except as otherwise required by its Articles of Incorporation or
Bylaws, by this Agreement or by applicable law, ETC-Texas shall not call
any meeting of its shareholders;

(g) ETC-Texas shall (i) use their best efforts not to take any action
which would render, or which reasonably may be expected to render, any
representation or warranty made by it in this Agreement untrue at any
time prior to the Closing Date as if then made; and (ii) notify
Transaction Corp. of any emergency or other change in the normal course
of its business or in the operation of its properties and of any tax
audits, tax claims, governmental or third party complaints,
investigations or hearings (or communications indicating that the same
may be contemplated) if such emergency, change, audit, claim, complaint,
investigation or hearing would be material, individually or in the
aggregate, to the financial condition, results of operations or business
of ETC-Texas, or to the ability of any of the parties hereto to
consummate the transactions contemplated by this Agreement;

(h) ETC-Texas shall notify Transaction Corp. promptly of any material
adverse event or circumstance affecting ETC-Texas (including the filing
of any material litigation against ETC-Texas or the existence of any
dispute with any person or entity which involves a reasonable likelihood
of such litigation being commenced); and

(i) ETC-Texas shall comply with all legal requirements and contractual
obligations applicable to its operations and business and pay all
applicable taxes.

5.2 Other Actions. Unless approved in writing by Transaction Corp., ETC-
Texas shall not take any action or permit any action to occur that might
reasonably be expected to result in any of the representations and warranties
of ETC-Texas contained in this Agreement becoming untrue after the date hereof
or any of the conditions to the Closing set forth in Article 7 of this
Agreement not being satisfied.

ARTICLE 6
ADDITIONAL AGREEMENTS

6.1 Access and Information. Except for information relating to any claims
any party may have against the other, ETC-Texas and Transaction Corp. shall
each afford to the other and to the other's financial advisors, legal counsel,
accountants, consultants and other representatives full access during normal
business hours throughout the period prior to the Effective Time to all of its
books, records, properties and personnel and, during such period, each shall
furnish promptly to the other (a) a copy of each report, schedule and other
document filed or received by it pursuant to the requirements of federal or
state securities laws, and (b) all other information as such other party may
reasonably request. Each party shall hold in confidence all non-public
information until such time as such information is otherwise publicly available
and, if this Agreement is terminated, each party will upon written request
deliver to the other all documents, work papers and other material obtained by
such party or on its behalf from the other party as a result of this Agreement
or in connection herewith, whether so obtained before or after the execution
hereof.

6.2 Registration Statement. ETC-Texas and Transaction Corp. shall jointly
prepare and file with the SEC as soon as practicable a Registration Statement
on Form S-4 (the "Registration Statement") under the Securities Act with
respect to all issued and outstanding Transaction Corp. Common Stock as well as
stock to be issued in the Merger. The Registration Statement shall also serve
as the proxy statement with the respect to the meetings of the respective
shareholders of ETC-Texas and Transaction Corp. to approve the Merger and the
transactions contemplated thereby. ETC-Texas and Transaction Corp. shall use
their reasonable best efforts to have the Registration Statement declared
effective by the SEC as promptly as practicable. ETC-Texas and Transaction
Corp. shall use their reasonable best efforts to obtain, prior to the effective
date of the Registration Statement, all necessary state securities or blue sky
permits or approvals required to carry out the transactions contemplated by the
Registration Statement. The Registration Statement, when declared effective by
the SEC, will not include an untrue statement of material fact or omit to state
a material fact which is required to be stated or that is necessary to make a
statement not misleading in light of the circumstances in which it is made.

6.3 Press Releases. ETC-Texas and Transaction Corp. shall consult with each
other as to the form and substance of any press release or other public
disclosure of matters related to this Agreement or any of the transactions
contemplated hereby; provided, however, that nothing in this Section 6.3 shall
be deemed to prohibit any party hereto from making any disclosure that is
required to fulfill such party's disclosure obligations imposed by law,
including, without limitation, federal, state or provincial securities laws.

AGREEMENT AND PLAN OF MERGER - Page 7
<PAGE> 111
ARTICLE 7
CONDITIONS TO CLOSING

7.1 Conditions to Obligations of Each Party to Effect the Closing. The
respective obligations of each party to effect the Closing shall be subject to
the fulfillment on or prior to the Closing Date of the following conditions:

(a) Transaction Corp. will have been continued and domesticated in the
State of Delaware;

(b) The Registration Statement shall have been deemed and declared
effective by the SEC, no stop order with respect thereto shall be in
effect and no proceedings for the purpose of suspending the
effectiveness of the Registration Statement shall have been issued by
the SEC;

(c) The Merger shall have been approved by the shareholders of ETC-Texas
and Transaction Corp., respectively, in accordance with the laws of the
State of Texas and the Province of Alberta, respectively; and

(d) No order shall have been entered and remain in effect in any action
or proceeding before any foreign, federal or state court or governmental
agency or other foreign, federal or state regulatory or administrative
agency or commission that would prevent or make illegal the consummation
of the transactions contemplated hereby.

7.2 Additional Conditions to Transaction Corp.'s Obligations. The
obligations of Transaction Corp. to effect the Closing are subject to the
satisfaction of the following additional conditions on or before the Closing
Date:

(a) The representations and warranties set forth in Article 4 of this
Agreement will be true and correct in all material respects as of the
date hereof and at and as of the Closing Date as though then made;

(b) ETC-Texas shall have performed, in all material respects, each
obligation and agreement and complied with each covenant to be performed
and complied with by it under Articles 5 and 6 of this Agreement prior
to the Closing Date;

(c) All consents by governmental or regulatory agencies or otherwise
that are required for the consummation of the transactions contemplated
hereby or that are required for Transaction Corp. to own, operate or
control ETC-Texas or any portion of the assets of ETC-Texas to prevent a
breach of or a default under or a termination of any agreement material
to ETC-Texas to which ETC-Texas is a party or to which any material
portion of the assets of ETC-Texas is subject, will have been obtained;

(d) No action or proceeding before any court or governmental body will
be pending or threatened wherein a judgment, decree or order would
prevent any of the transactions contemplated hereby or cause such
transactions to be declared unlawful or rescinded or which might
adversely affect the right of Transaction Corp. to own, operate or
control ETC-Texas;

(e) Transaction Corp. and its financial and legal advisors shall have
completed a due diligence review of the business, operations and
financial statements of ETC-Texas, the results of which shall be
satisfactory to Transaction Corp. in its sole discretion; and

(f) At the Closing, ETC-Texas shall have delivered or caused to be
delivered to Transaction Corp. the following:

(i) a certificate executed on behalf of ETC-Texas stating that
the conditions set forth in Sections 7.2(a) through (d) of this
Agreement have been satisfied;

(ii) certified copies of the resolutions duly adopted by ETC-
Texas' Board of Directors authorizing and approving the Merger
and the execution, delivery and performance of this Agreement;

(iii) certified copies of resolutions duly adopted by ETC-Texas'
shareholders authorizing and approving the Merger and the
execution, delivery and performance of this Agreement;

(iv) certificates of good standing or comparable certificates for
ETC-Texas from the jurisdiction of its incorporation and from
every jurisdiction where a failure to be qualified or licensed
would have a material adverse effect on its financial condition,
results of operations or business, dated not earlier than five
(5) days prior to the Closing Date;

(v) a copy of ETC-Texas' Articles of Incorporation certified as
of a recent date by the Secretary of State of the State of Texas;

(vi) an incumbency certificate of the officers of ETC-Texas; and

AGREEMENT AND PLAN OF MERGER - Page 8
<PAGE> 112
(vii) such other documents as Transaction Corp. may reasonably
request in connection with the transactions contemplated hereby.

7.3 Additional Conditions to ETC-Texas' Obligations. The obligations of
ETC-Texas to effect the Closing are subject to the satisfaction of the
following conditions on or before the Closing Date:

(a) The representations and warranties set forth in Article 3 of this
Agreement will be true and correct in all material respects as of the
date hereof and at and as of the Closing Date as though then made;

(b) Transaction Corp. shall have performed, in all material respects,
each obligation and agreement and complied with each covenant required
to be performed and complied with by it under Article 6 of this
Agreement prior to the Closing Date;

(c) No action or proceeding before any court or governmental body will
be pending or threatened wherein a judgment, decree or order would
prevent any of the transactions contemplated hereby or cause such
transactions to be declared unlawful or rescinded;

(d) On the Closing Date, Transaction Corp. shall have delivered to ETC-
Texas the following:

(i) a certificate executed on behalf of Transaction Corp.
stating that the conditions set forth in Sections 7.3(a) through
(c) of this Agreement have been satisfied;

(ii) certified copies of resolutions duly adopted by Transaction
Corp.'s Board of Directors authorizing and approving the Merger
and the execution, delivery and performance of this Agreement;

(iii) certified copies of the resolutions duly adopted by the
shareholders of Transaction Corp. authorizing and approving the
Merger and the execution, delivery and performance this
Agreement;

(iv) a good standing certificate for Transaction Corp. from the
Secretary of State of the State of Delaware, dated not earlier
than five (5) days prior to the Closing Date;

(v) a copy of Transaction Corp.'s Certificate of Incorporation
certified by the Secretary of State of the State of Delaware;

(vi) an incumbency certificate of the officers of Transaction
Corp.; and

(vii) such other documents as ETC-Texas may reasonably request
in connection with the transactions contemplated hereby.

ARTICLE 8
REMEDIES

8.1 Indemnification by ETC-Texas. Subject to the terms and conditions of
this Article 8, ETC-Texas agrees to indemnify, defend and hold Transaction
Corp. and its directors, officers, agents, attorneys and affiliates harmless
from and against all losses, claims, obligations, demands, assessments,
penalties, liabilities, costs, damages, attorneys' fees and expenses
(collectively, "Damages"), asserted against or incurred by any such person or
entity by reason of or resulting from a breach of any representation, warranty
or covenant of ETC-Texas contained in this Agreement.

8.2 Indemnification by Transaction Corp. Subject to the terms and conditions
of is Article 8, Transaction Corp. hereby agrees to indemnify, defend and hold
ETC-Texas and its directors, officers, agents, attorneys and affiliates
harmless from and against all Damages asserted against or incurred by any such
person or entity by reason of or resulting from a breach of any representation,
warranty or covenant of Transaction Corp. contained in this Agreement.

8.3 Conditions of Indemnification. The respective obligations and
liabilities of ETC-Texas and Transaction Corp. (the "indemnifying party") to
the other (the "party to be indemnified") under Sections 8.1 and 8.2 with
respect to claims resulting from the assertion of liability by third parties
shall be subject to the following terms and conditions:

(a) Within 20 days (or such earlier time as might be required to avoid
prejudicing the indemnifying party's position) after receipt of notice
of commencement of any action evidenced by service of process or other
legal pleading, the party to be indemnified shall give the indemnifying
party written notice thereof together with a copy of such claim, process
or other legal pleading, and the indemnifying party shall have the right
to undertake the defense thereof by representatives of its own choosing
and at its own expense; provided that the party to be indemnified may
participate in the defense with counsel of its own choice, the fees and
expenses of which counsel shall be paid by the party to be

AGREEMENT AND PLAN OF MERGER - Page 9
<PAGE> 113
indemnified unless (i) the indemnifying party has agreed to pay such
fees and expenses, (ii) the indemnifying party has failed to assume the
defense of such action or (iii) the named parties to any such action
(including any impleaded parties) include both the indemnifying party
and the party to be indemnified and the party to be indemnified has been
advised by counsel that there may be one or more legal defenses
available to it that are different from or additional to those available
to the indemnifying party (in which case, if the party to be indemnified
informs the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of
such action on behalf of the party to be indemnified, it being
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any
time for the party to be indemnified, which firm shall be designated in
writing by the party to be indemnified).

(b) If the indemnifying party, by the 30th day after receipt of notice
of any such claim (or, if earlier, by the 10th day preceding the day on
which an answer or other pleading must be served in order to prevent
judgment by default in favor of the person asserting such claim), does
not elect to defend against such claim, the party to be indemnified will
(upon further notice to the indemnifying party) have the right to
undertake the defense, compromise or settlement of such claim on behalf
of and for the account and risk of the indemnifying party and at the
indemnifying party's expense, subject to the right of the indemnifying
party to assume the defense of such claims at any time prior to
settlement, compromise or final determination thereof.

(c) Notwithstanding the foregoing, the indemnifying party shall not
settle any claim without the consent of the party to be indemnified
unless such settlement involves only the payment of money and the
claimant provides to the party to be indemnified a release from all
liability in respect of such claim. If the settlement of the claim
involves more than the payment of money, the indemnifying party shall
not settle the claim without the prior consent of the party to be
indemnified.

(d) The party to be indemnified and the indemnifying party will each
cooperate with all reasonable requests of the other.

8.4 Waiver. No waiver by any party of any default or breach by another party
of any representation, warranty, covenant or condition contained in this
Agreement shall be deemed to be a waiver of any subsequent default or breach by
such party of the same or any other representation, warranty, covenant or
condition. No act, delay, omission or course of dealing on the part of any
party in exercising any right, power or remedy under this Agreement or at law
or in equity shall operate as a waiver thereof or otherwise prejudice any of
such party's rights, powers and remedies. All remedies, whether at law or in
equity, shall be cumulative and the election of any one or more shall not
constitute a waiver of the right to pursue other available remedies.

8.5 Remedies Not Exclusive. The remedies provided in this Article 8 shall
not be exclusive of any other rights or remedies available to one party against
the other, either at law or in equity.

ARTICLE 9
TERMINATION

9.1 Termination by Mutual Consent. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by the mutual
consent of the parties hereto.

9.2 Termination by Any Party. This Agreement may be terminated and the
Merger may be abandoned by action of the Board of Directors of any party hereto
if a United States federal or state court of competent jurisdiction or United
States federal or state governmental, regulatory or administrative agency or
commission shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and non-appealable; provided, that the
party seeking to terminate this Agreement pursuant to this clause shall have
used all reasonable efforts to remove such injunction, order or decree.

9.3 Effect of Termination and Abandonment. In the event of termination of
this Agreement and the abandonment of the Merger pursuant to this Article 9,
all obligations of the parties hereto shall terminate, except the obligations
of the parties pursuant to Section 6.1.

ARTICLE 10
GENERAL PROVISIONS

10.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
sent by telex, telecopy, facsimile or overnight courier, or mailed by
registered or certified mail

AGREEMENT AND PLAN OF MERGER - Page 10
<PAGE> 114
(postage prepaid and return receipt requested), to the party to whom the same
is so delivered, sent or mailed at the following addresses (or at such other
address for a party as shall be specified by like notice):

(a) if to Transaction Corp.:

5025 Arapaho Road, Suite 515
Dallas, Texas 75248
Attn: L. Cade Havard
Phone: (214) 980-0900
Fax: (214) 980-0929

(b) if to ETC-Texas:

5025 Arapaho Road, Suite 515
Dallas, Texas 75248
Attn: L. Cade Havard
Phone: (214) 980-0900
Fax: (214) 980-0929

10.2 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.

10.3 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify this Agreement to preserve each party's anticipated
benefits under this Agreement.

10.4 Miscellaneous. This Agreement (together with all other documents and
instruments referred to herein): (a) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties with respect to the subject matter hereof; (b) except as
expressly set forth herein, is not intended to confer upon any other person any
rights or remedies hereunder and (c) shall not be assigned by operation of law
or otherwise.

10.5 Separate Counsel. Each party hereby expressly acknowledges that it has
been advised and urged to seek its own separate legal counsel for advice with
respect to this Agreement.

10.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF
TEXAS, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

10.7 Counterparts. This Agreement may be executed in two or more
counterparts which together shall constitute a single agreement.

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

ETC-TEXAS:

ELECTRONIC TRANSMISSION CORPORATION

By: /s/ L. Cade Havard
----------------------------------------
Name: L. Cade Havard
Its: Chief Executive Officer

TRANSACTION CORP.:

ETC TRANSACTION CORPORATION

By: /s/ L. Cade Havard
---------------------------------------
Name: L. Cade Havard
Its: Chief Executive Officer

AGREEMENT AND PLAN OF MERGER - Page 11
<PAGE> 115
APPENDIX "B"

NOTICE OF CHANGE OF AUDITOR

TO: THE ALBERTA SECURITIES COMMISSION;
AND TO: HANS P. CREMERS, CHARTERED ACCOUNTANT
AND TO: SIMONTON, KUTAC & BARNIDGE, LLP, CERTIFIED PUBLIC ACCOUNTANTS

TAKE NOTICE THAT effective June 1, 1996, ETC Transaction Corporation (the
"Company") has appointed Simonton, Kutac & Barnidge, LLP, Certified Public
Accountants, (the "Successor Auditor") of Houston, Texas as auditor of the
Company for the fiscal year ending December 31, 1996. The former auditor, Hans
P. Cremers, Chartered Accountant (the "Former Auditor"), was not reappointed
after the expiry of his term of office in 1996 after he completed the Company's
December 31, 1995 annual audited financial statements. This notice is given
pursuant to National Policy No. 31.

There were no reservations in the Former Auditor's Report for the period
specified in paragraph 3.2 of National Policy No. 31.

The recommendation to appoint the Successor Auditor was considered and approved
by the Company's Board of Directors.

In the opinion of the Company, there were no reportable events occurring prior
to the termination of the Former Auditor in 1996.

DATED at Dallas, Texas this ______ day of June, 1996.

ETC TRANSACTION CORPORATION

per:
------------------------------
L. Cade Havard, President
<PAGE> 116
APPENDIX "C"

CERTIFICATE OF DOMESTICATION

The undersigned, L. Cade Havard, Chief Executive Officer of ETC
Transaction Corporation, in accordance with the provisions of Section 388 of
Title 8 of the Delaware Code does hereby certify:

1. The corporation was first formed on September 5, 1986 in Calgary,
Alberta, Canada under the name Solo Petroleums Ltd.

2. The name of the corporation immediately prior to the filing of
this Certificate of Domestication was ETC Transaction Corporation.

3. The name of the corporation as set forth in its Certificate of
Incorporation is ETC Transaction Corporation.

4. The jurisdiction that constituted the seat, siege social,
principal place of business or central administration of the corporation
immediately prior to the filing of this Certificate of Domestication was
Calgary, Alberta, Canada.

IN WITNESS WHEREOF, I, being the Chief Executive Officer and being duly
authorized to sign this Certificate of Domestication on behalf of the
corporation have made, signed and sealed this Certificate of Domestication on
_____________, 1996.

ETC TRANSACTION CORPORATION

By:
-----------------------------------
L. Cade Havard, Chief Executive
Officer

CERTIFICATE OF DOMESTICATION - SOLO
<PAGE> 117

APPENDIX "D"

CERTIFICATE OF INCORPORATION

ETC TRANSACTION CORPORATION

I, the undersigned natural person acting as an incorporator of a
corporation (hereinafter called the "Corporation") under the General
Corporation Law of the State of Delaware (the "DGCL"), do hereby adopt the
following Certificate of Incorporation for the Corporation:

FIRST: The name of this corporation is ETC Transaction Corporation.

SECOND: The registered office of the Corporation in the State of
Delaware is located at Corporation Trust Center, 1209 Orange Street, in the
City of Wilmington, Delaware 19801, County of New Castle. The name of the
registered agent of the Corporation at such address is CT Corporation Systems.

THIRD: The purpose for which the Corporation is organized is to engage
in any and all lawful acts or activity for which corporations may be organized
under the DGCL. The Corporation will have perpetual existence.

FOURTH: The Corporation shall have authority to issue two classes of
shares to be designated respectively, "Common Stock" and "Preferred Stock." The
total number of shares which the Corporation is authorized to issue is
Seventeen Million (17,000,000) shares of which Fifteen Million (15,000,000)
shall be Common Stock and Two Million (2,000,000) shall be Preferred Stock.
Each share of Common Stock shall have a par value of $0.001, and each share of
Preferred Stock shall have a par value of $1.00.

The Preferred Stock authorized by this Certificate of Incorporation may
be issued from time to time in one or more series, each of which shall have
such designation(s) or title(s) as may be fixed by the Board of Directors prior
to the issuance of any shares thereof. The Board of Directors is hereby
authorized to fix or alter the dividend rates, conversion rights, rights and
terms of redemption, including sinking fund provisions, the redemption price or
prices, voting rights and liquidation preferences of any wholly unissued series
of Preferred Stock, and the number of shares constituting any such series and
the designation thereof, or any of them. The rights, powers, preferences,
limitations and restrictions, if any, accompanying such shares of Preferred
Stock shall be set forth by resolution of the Board of Directors providing for
the issue thereof prior to the issuance of any shares thereof, in accordance
with the applicable provisions of the DGCL. Each share of any series of
Preferred Stock shall be identical with all other shares of such series, except
as to the date from which dividends, if any, shall accrue.

FIFTH: The name of the incorporator is George L. Diamond, and the
mailing address of such incorporator is Looper, Reed, Mark & McGraw
Incorporated, 1601 Elm Street, Suite 4100, Dallas, Texas 75201.

SIXTH: The number of directors constituting the initial board of
directors is six (6), and the names and addresses of the persons who are to
serve as directors until the first annual meeting of stockholders or until
their successors are elected and qualified are as follows:

Name Address
- ---- -------

L. Cade Havard 5025 Arapaho Road
Suite 515
Dallas, Texas 75248

Elaine Boze 5025 Arapaho Road
Suite 515
Dallas, Texas 75248

Timothy P. Powell 5025 Arapaho Road
Suite 515
Dallas, Texas 75248

CERTIFICATE OF INCORPORATION - Page 1
<PAGE> 118
Michael Eckstein 5025 Arapaho Road
Suite 515
Dallas, Texas 75248

David O. Hannah 5025 Arapaho Road
Suite 515
Dallas, Texas 75248

Rick L. Snyder 5025 Arapaho Road
Suite 515
Dallas, Texas 75248

SEVENTH: Directors of the Corporation need not be elected by written
ballot unless the bylaws of the Corporation otherwise provide.

EIGHTH: The directors of the Corporation shall have the power to adopt,
amend and repeal the bylaws of the Corporation.

NINTH: No contract or transaction between the Corporation and one or
more of its directors, officers or stockholders, or between the Corporation and
any person (as used herein "person" means other corporation, partnership,
association, firm, trust, joint venture, political subdivision, or
instrumentality) or other organization in which one or more of its directors,
officers or stockholders are directors, officers or stockholders, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board or committee which authorizes the contract or transaction, or solely
because his, her or their votes are counted for such purpose, if: (i) the
material facts as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the board of directors or the
committee, and the board of directors or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (ii) the material facts as to his or her relationship or interest
and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified by the board of directors, a committee
thereof, or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of directors or
of a committee which authorizes the contract or transaction.

TENTH: The Corporation shall indemnify any person who was, is or is
threatened to be made a party to a proceeding (as hereinafter defined) by
reason of the fact that he or she (i) is or was a director or officer of the
Corporation or (ii) while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise, to the
fullest extent permitted under the DGCL, as the same exists or may hereafter be
amended. Such right shall be a contract right and as such shall run to the
benefit of any director or officer who is elected and accepts the position of
director or officer of the Corporation or elects to continue to serve as a
director or officer of the Corporation while this Article Tenth is in effect.
Any repeal or amendment of this Article Tenth shall be prospective only and
shall not limit the rights of any such director or officer or the obligations
of the Corporation with respect to any claim arising from or related to the
services of such director or officer in any of the foregoing capacities prior
to any such repeal or amendment to this Article Tenth. Such right shall
include the right to be paid by the Corporation expenses incurred in defending
any such proceeding in advance of its final disposition to the maximum extent
permitted under the DGCL, as the same exists or may hereafter be amended. If a
claim for indemnification or advancement of expenses hereunder is not paid in
full by the Corporation within sixty (60) days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim, and if
successful in whole or in part, the claimant shall also be entitled to be paid
the expenses of prosecuting such claim. It shall be a defense to any such
action that such indemnification or advancement of costs of defense are not
permitted under the DGCL, but the burden of proving such defense shall be on
the Corporation. Neither the failure of the Corporation (including its board
of directors or any committee thereof, independent legal counsel, or
stockholders) to have made its determination prior to the commencement of such
action that indemnification of, or advancement of costs of defense to, the
claimant is permissible in the circumstances nor an actual determination by the
Corporation (including its board of directors or any committee thereof,
independent legal counsel, or stockholders) that such indemnification or
advancement is not permissible shall be a defense to the action or create a
presumption that such indemnification or advancement is not permissible. In
the event of the death of any person having a right of indemnification under
the foregoing provisions, such right shall inure to the benefit of his or her
heirs, executors, administrators and personal representatives. The rights
conferred above shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, bylaw, resolution of stockholders
or directors, agreement, or otherwise.

CERTIFICATE OF INCORPORATION - Page 2
<PAGE> 119
Without limiting the generality of the foregoing, to the extent
permitted by then applicable law, the grant of mandatory indemnification
pursuant to this Article Tenth shall extend to proceedings involving the
negligence of such person.

The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.

As used herein, the term "proceeding" means any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, any appeal in such an action, suit or proceeding,
and any inquiry or investigation that could lead to such an action, suit or
proceeding.

The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under Section 145 of the DGCL.

ELEVENTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper benefit. Any repeal or
amendment of this Article Eleventh by the stockholders of the Corporation shall
be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation arising from an act or
omission occurring prior to the time of such repeal or amendment. In addition
to the circumstances in which a director of the Corporation is not personally
liable as set forth in the foregoing provisions of this Article Eleventh, a
director shall not be liable to the Corporation or its stockholders to such
further extent as permitted by any law hereafter enacted, including, without
limitation, any subsequent amendment to the DGCL.

TWELFTH: The Corporation prohibits the use of a written consent in
lieu of any meeting of the stockholders of the Corporation.

THIRTEENTH: Cumulative voting with respect to the election of directors
is expressly prohibited.

FOURTEENTH: The Corporation expressly elects not to be governed by
Section 203 of the DGCL.

I, the undersigned, for the purpose of forming the Corporation under the
laws of the State of Delaware, do make, file and record this Certificate of
Incorporation and do certify that this is my act and deed and that the facts
stated herein are true and, accordingly, I do hereunto set my hand on
_______________, 1996.

----------------------------------------
GEORGE L. DIAMOND

CERTIFICATE OF INCORPORATION - Page 3
<PAGE> 120
APPENDIX E

[FELESKY FLYNN LETTERHEAD]

September 13, 1996

ETC Transaction Corporation
5025 Arapaho Road, Suite 515
Dallas, Texas
U.S.A. 75248

Ladies and Gentlemen:

RE: AGREEMENT AND PLAN OF MERGER BETWEEN
ELECTRONIC TRANSMISSION CORPORATION ("ETC-TEXAS")
AND ETC TRANSACTION CORPORATION (THE "COMPANY")

Our opinion has been requested on certain specific matters of Canadian
federal income tax law with respect to ETC Transaction Corporation, an Alberta
corporation (the "Company") under the circumstances described below. This
letter is intended solely for the use of the Company, and accordingly, it is
not intended to be, and should not be, relied upon by any person, or entity,
other than the Company.

We have acted as special Canadian tax counsel for the Company in
connection with the Agreement and Plan of Merger (the "Merger Agreement")
pursuant to which Electronic Transmission Corporation, a Texas corporation
("ETC-Texas") will merge into the Company after the Company continues and
domesticates in the state of Delaware, all as described in the Company's Form
S-4 Registration Statement (the "Registration Statement"). In such capacity,
we have familiarized ourselves with the Merger Agreement and the Registration
Statement. The specific matters of Canadian federal income tax law upon which
you have requested our opinion are:

a) that the shareholders of the Company will not recognize gain or loss
solely due to the continuation and domestication of the Company from
Alberta to Delaware;
<PAGE> 121
- 2 -

b) that the shareholders of the Company will not recognize gain or loss
solely due to the merger of ETC-Texas into the Company, unless a
shareholder otherwise elects to recognize such gain or loss;

c) that the Company will be deemed to dispose of all its property at fair
market value immediately before the deemed year end immediately before the
continuance and may have a liability for tax under Part XIV of the Income
Tax Act (Canada); and

d) that dissenting shareholders of the Company who receive cash in respect of
their shares of the Company will recognize a gain or loss, and possibly a
deemed dividend.

No other opinions have been requested and no other opinions are
expressed or implied.

Our opinions are based upon the facts as set forth below, which facts
the Company has represented to us by its Certificate dated September 13, 1996
that we may assume for purposes of these opinions. We have no reason to
believe that any of these represented facts are not true and accurate or that
any assumed future event will not occur as contemplated. Further, we have no
reason to believe that we cannot rely upon the Company's statements relating to
these facts and events. However, we have no knowledge or information regarding
the formation, operation, management, tax status or finances of the Company or
ETC-Texas, other than as the Company has represented to us. To the extent the
facts of any actual situation are different from those relied upon, our
opinions should be disregarded as they might be different under the actual
facts than as stated below.

The Company has represented to us that for purposes of our opinions we
may assume the following facts.

i) The accuracy of the matters contained in the Company's Form S-4
Registration Statement.

ii) The Company will continue and domesticate into the state of Delaware (the
"Continuance"). Upon the Continuance, holders of issued and outstanding
shares of the Company ("Company Common Stock"), who do not exercise their
rights of dissent and appraisal, shall receive one share of the common
capital stock of the Company, as continued and domesticated (the
"Continued Common Stock") for each share of Company Common Stock held
before the Continuance.

iii) At the time of the Continuance, the Company Common Stock will not be
listed on any stock exchange.

iv) Immediately before the Continuance, the fair market value of the Company's
property will be less than the aggregate of its liabilities and "paid-up
capital" as defined in the Income Tax Act (Canada).

v) As of the effective time of the Merger Agreement (the "Effective Time")
and by virtue of the Continuance and the Merger Agreement, each share of
ETC-Texas common stock

<PAGE> 122
- 3 -

issued and outstanding immediately prior to the Effective Time will be
converted into 1.25 shares of validly issued, fully paid and
non-assessable shares of Continued Common Stock. Therefore, former
holders of ETC-Texas common stock (except holders who exercise
dissenter's rights of appraisal) will hold Continued Common Stock issued
pursuant to the Merger Agreement. No fractional shares of the Company
will be issued pursuant to the Merger Agreement. Holders of each share
of ETC-Texas common stock who would have otherwise been entitled to
fractional shares based on the exchange formula described above will
instead receive one share of Continued Company Stock.

vi) Substantially all of the shares (i.e., more than 90%) of the Company and
ETC-Texas will be exchanged for or become shares of the Company by virtue
of the Merger.

v) Substantially all of the property and liabilities (i.e., more than 90%) of
the Company and ETC-Texas will become the property and the liabilities of
the Company by virtue of the merger (with the exception of amounts
receivable from or payable to the other corporation).

vi) Shareholders of the Company who exercise their dissent rights with respect
to the Continuance or merger will be paid fair value by the Company.

Our opinions are based on the current provisions of the Income Tax Act
(Canada), the Regulations thereunder, the current provisions of the
Canada-United States Income Tax Convention, 1980, as amended, and our
understanding of the current administrative practices of Revenue Canada,
Customs, Excise & Taxation ("Revenue Canada"). Our opinions take into account
the amendments to the Income Tax Act and Regulations publicly announced by the
Minister of Finance prior to the date hereof (the "Proposed Amendments") and
assume that all Proposed Amendments will be enacted in their present form
although no assurances can be given that the Proposed Amendments will be
enacted in the form proposed, or at all. Our opinions do not take into account
or anticipate any changes in law, whether by legislative or judicial decision
or action, nor do they take into account provincial, territorial or foreign
income tax legislation.

Based upon our review of the Merger Agreement, the Registration
Statement and such other documents as we have deemed necessary, upon the
assumptions set forth above, and upon the representations made to us by the
Company, and assuming the Continuance and the merger and all other events occur
as contemplated in the Merger Agreement and the Registration Statement, our
opinions are:

1. Shareholders of the Company will not recognize gain or loss solely due to
the continuation and domestication of the Company from Alberta to
Delaware.

2. The shareholders of the Company will not recognize gain or loss as a
result of the merger of ETC-Texas into the Company unless a shareholder
otherwise elects to recognize such gain or loss.
<PAGE> 123
- 4 -

3. The Company will be deemed to dispose of all its property at fair market
value immediately before the deemed year end immediately before the
Continuance and may have a liability for tax under Part XIV of the Income
Tax Act (Canada).

4. Dissenting shareholders of the Company who receive cash in respect of
their shares of the Company will recognize a gain or loss and, if payment
is received before the Continuance, possibly a deemed dividend.

This opinion does not deal with the specific circumstances of any
particular shareholder of the Company. EACH SHAREHOLDER OF THE COMPANY SHOULD
CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE
CONTINUANCE AND THE MERGER AGREEMENT TO HIM OR HER, INCLUDING THE APPLICATION
AND EFFECT OF FEDERAL, TERRITORIAL, PROVINCIAL AND FOREIGN TAX LAWS.

You have not asked for, and we do not express, any opinion concerning the
tax consequences of the Continuance or Merger Agreement other than those
expressly set forth above.

We express no opinion with respect to the effect of any laws other than
the federal income tax laws of Canada.

Our opinions are rendered as of the date hereof based on the facts in
existence on the date hereof, and we undertake no, and hereby disclaim any,
obligation to advise you of any changes or any new developments, whether
material or not material, that may be brought to our attention at a later date.
Any change in the facts and assumptions stated above, upon which these
opinions are based, could modify the conclusions.

This opinion is furnished to you solely for use in connection with the
Registration Statement. We hereby consent to the inclusion of this opinion as
an Appendix to the Joint Proxy Statement/Prospectus and/or to the filing of
this opinion as an exhibit to the Registration Statement. We also consent to
the references to Felesky Flynn, Barristers & Solicitors, under the heading
"Certain Canadian Federal Income Tax Consequences of the Continuance and the
Merger" in the Registration Statement.

Yours truly,

FELESKY FLYNN

/s/ FELESKY FLYNN

SEJ:lal

<PAGE> 124
APPENDIX "F"

LOOPER, REED, MARK & McGRAW
INCORPORATED
ATTORNEYS
4100 THANKSGIVING TOWER HOUSTON OFFICE
1601 ELM STREET --------------
DALLAS, TEXAS 75201 713-625-9100
214-654-4135 TELECOPY 713-625-9191
TELECOPY 214-953-1332

September 13, 1996

Electronic Transmission Corporation
5025 Arapaho Road, Suite 515
Dallas, Texas 75248

Re: Agreement and Plan of Merger between Electronic Transmission
Corporation ("ETC-Texas") and ETC Transaction Corporation (the
"Company")

Ladies and Gentlemen:

Our opinion has been requested on certain specific matters of U.S.
Federal Income Tax law with respect to Electronic Transmission Corporation, a
Texas corporation ("ETC-Texas") under the circumstances described below. This
letter is intended solely for the use of ETC-Texas, and accordingly, it is not
intended to be, and should not be, relied upon by any person, or entity other
than ETC-Texas.

We have acted as special counsel for ETC-Texas in connection with the
Agreement and Plan of Merger (the "Merger Agreement") pursuant to which ETC-
Texas will merge into ETC Transaction Corporation, a Delaware corporation (the
"Company"), which is proposed to be the continuation and domestication of ETC
Transaction Corporation, an Alberta, Canada corporation ("ETC-Canada"), all as
described in ETC-Canada's Form S-4 Registration Statement, as amended (the
"Registration Statement"). In such capacity, we have familiarized ourselves
with the Merger Agreement and the Registration Statement. The specific matters
of federal income tax law upon which you have requested our opinion are:

(i) that the Merger Agreement between ETC-Texas and the
Company will constitute a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code");

(ii) that no gain or loss will be recognized by the Company or
ETC-Texas as a result of the Merger Agreement;

(iii) that the federal tax basis of ETC-Texas assets in the
hands of the Company will be the same as the federal tax basis of those assets
in the hands of ETC-Texas immediately prior to the Merger Agreement, and that
the holding period of the ETC-Texas assets in the hands of the Company will
include the period during which such assets were held by ETC-Texas;

(iv) that the shareholders of ETC-Texas will not recognize gain
or loss with respect to the their sole receipt of common stock of the Company
("Company Common Stock") in exchange for their shares of common stock in ETC-
Texas ("ETC-Texas Common Stock"); and

(v) that the federal tax basis and holding period for the
shares of the Company Common Stock received by ETC-Texas shareholders will be
the same as the federal tax basis and holding period for the ETC-Texas Common
Stock exchanged therefor, provided that, for purposes of the holding period,
the ETC-Texas Common Stock was held as a capital asset as of the Merger
Agreement.
<PAGE> 125
Electronic Transmission Corporation
September 13, 1996
Page 2

Other than the above specific requested tax opinions, no other opinions
have been requested and no other opinions are expressed or implied.

Our opinions are based upon the existence of the facts as set forth
below, which facts ETC-Texas has represented to us by its Certificate dated
September 11, 1996 that we may assume for purposes of this opinion. We have no
reason to believe that any of these represented facts are not true and accurate
or that any assumed future events will not occur as contemplated. Further, we
have no reason to believe that we cannot rely upon ETC-Texas' statement
relating these facts and events. However, we have no knowledge or information
regarding the formation, operation, management or finances of ETC-Texas, ETC-
Canada, or the Company, other than as ETC-Texas has represented to us. To the
extent the facts of any actual situation are different from those relied upon,
our opinion should be disregarded as it might be different under the actual
facts than as stated below.

ETC-Texas has represented to us that for purposes of this opinion we may
assume the following:

(a) The accuracy of the matters contained in the Registration
Statement;

(b) ETC-Canada will continue and domesticate into the state of
Delaware and be succeeded by the Company (the "Continuation"). Substantially
all of the historic shareholders (i.e., more than 99%) of ETC-Canada will
become shareholders of the Company after the Continuation is complete.

(c) As of the effective time of the Merger Agreement (the "Effective
Time") and by virtue of the Continuation and the Merger Agreement, each share
of ETC-Texas Common Stock issued and outstanding immediately prior to the
Effective Time will be converted into 1.25 shares of validly issued, fully paid
and nonassessable shares of Company Common Stock. Therefore, former holders of
ETC-Texas Common Stock (except holders who exercise dissenters' rights of
appraisal) will hold Company Common Stock issued pursuant to the Merger
Agreement. No fractional shares of the Company will be issued pursuant to the
Merger Agreement. Holders of ETC-Texas Common Stock who would have otherwise
been entitled to fractional shares based on the exchange formula described
above will instead receive one share of Continued Common Stock in lieu of
fractional shares.

(d) The Company will continue the historic business of ETC-Texas,
utilizing the historic assets of ETC-Texas.

(e) There is no plan or intention on the part of holders of ETC-Texas
Common Stock to sell, exchange or otherwise dispose of a number of shares of
the Company Common Stock received pursuant to the Merger Agreement that would
reduce the ETC-Texas historic shareholders' ownership of the Company Common
Stock to a number of shares having a value, as of the Effective Time of the
Merger Agreement, of less than 50% of the value of all of the formerly
outstanding shares of ETC-Texas Common Stock as of the same date. For purposes
of this assumption, shares of ETC-Texas Common Stock exchanged for cash in lieu
of fractional shares will be treated as outstanding ETC-Texas Common Stock as
of the date of the Merger Agreement.

(f) ETC-Texas shall pay the expenses incurred in connection with the
transaction.

(g) The payment of one share of Continued Common Stock to ETC-Texas
shareholders in lieu of fractional shares of the Company Common Stock is solely
for the purpose of avoiding the expense and inconvenience to the Company of
issuing fractional shares and does not represent separately bargained for
consideration.

(h) The Company has no plan or intention to redeem or otherwise
reacquire any of its stock issued in the transaction.

(i) The number of shares of the Company Common Stock received by each
ETC-Texas stockholder in exchange for his or her ETC-Texas Common Stock was
determined in arms-length negotiations between the Company and ETC-Texas. The
merger of ETC-Texas into the Company has an identifiable business purpose, and
is not being undertaken for the purpose of tax avoidance.
<PAGE> 126
Electronic Transmission Corporation
September 13, 1996
Page 3

Based upon our review of the Merger Agreement, the Registration
Statement and such other documents as we have deemed necessary, upon the
assumptions set forth above, and upon the representations made to us by ETC-
Texas, we are of the opinion that, assuming the Continuation and the merger and
all other events occur as contemplated in the Merger Agreement and the
Registration Statement, under the United States federal income tax laws in
effect on the date hereof:

(1) The merger and acquisition by the Company of substantially all of
the assets of ETC-Texas in exchange for shares of Company Common Stock will
constitute a reorganization within the meaning of Section 368(a) of the Code.
The Company and ETC-Texas will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code.

(2) No gain or loss will be recognized by the Company or ETC-Texas as
a result of the exchange of substantially all of the assets of ETC-Texas for
Company Common Stock.

(3) The federal tax basis of ETC-Texas assets in the hands of the
Company will be the same as the federal tax basis of those assets in the hands
of ETC-Texas immediately prior to the Effective Time of the Merger Agreement.
The holding period of the ETC-Texas assets in the hands of the Company will
include the period during which such assets were held by ETC-Texas.

(4) Shareholders of ETC-Texas Common Stock who receive solely shares
of Company Common Stock in exchange for their ETC-Texas Common Stock will not
recognize any gain or loss as a result of the Merger Agreement.

(5) The federal tax basis and holding period for the shares of the
Company Common Stock received by ETC-Texas shareholders will be the same as the
federal tax basis and holding period for the ETC-Texas Common Stock exchanged
therefor, provided that, for purposes of the holding period, the ETC-Texas
Common Stock was held as a capital asset at the Effective Time.

The discussion set forth above does not address the state, local or
foreign tax aspects of the Continuation or the Merger Agreement. The
discussion is based on currently existing provisions of the Code, existing and
proposed treasury regulations thereunder, and current administrative rulings
and court decisions. All of the foregoing is subject to change and any such
change could affect the continuing validity of the discussion. The opinion
does not deal with the specific circumstances of any particular ETC-Texas
shareholder. EACH ETC-TEXAS SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX
ADVISER AS TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER AGREEMENT TO HIM OR
HER, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN
TAX LAWS.

You have not asked for, and we do not express, any opinion concerning
the tax consequences of the Merger Agreement other than those expressly set
forth above. The foregoing opinion is qualified, and no opinion is expressed
as to the federal income tax consequences of the Continuation.

We express no opinion with respect to the effect of any laws other than
the federal income tax laws of the United States of America.

This opinion is furnished to you solely for use in connection with the
Registration Statement. We hereby consent to the inclusion of this opinion as
an Appendix to the Joint Proxy Statement/Prospectus and/or to the filing of
this opinion as an exhibit to the Registration Statement. We also consent to
the references to Looper, Reed, Mark & McGraw Incorporated under the heading
"Certain Federal Income Tax Consequences" in the Registration Statement and the
Joint Proxy Statement/Prospectus.

Very truly yours,

LOOPER, REED, MARK & McGRAW
INCORPORATED

By: /s/ Looper, Reed, Mark & McGraw
-------------------------------------
<PAGE> 127
APPENDIX "G"

DISSENTERS' RIGHTS UNDER
ALBERTA BUSINESS CORPORATIONS ACT

184(1) Subject to sections 185 and 234, a holder of shares of any class of a
corporation may dissent if the corporation resolves to

(a) amend its articles under section 167 or 168 to add, change or
remove any provisions restricting or constraining the issue or
transfer of shares of that class,

(b) amend its articles under section 167 or 168 to add, change or
remove any restrictions on the business or businesses that the
corporation may carry on,

(d) be continued under the laws of another jurisdiction under section
182, or

(e) sell, lease or exchange all or substantially all its property
under section 183.

(2) A holder of shares of any class or series of shares entitled to
subsection (20), a shareholder entitled to vote under section 170, other than
section 170(1)(a), may dissent if the corporation resolves to amend its
articles in a manner described in that section.

(3) In addition to any other right he may have, but subject to section (20),
a shareholder entitled to dissent under this section and who complies with this
section is entitled to be paid by the corporation the fair value of the shares
held by him in respect of which he dissents, determined as of the close of
business on the last business day before the day on which the resolution from
which he dissents was adopted.

(4) A dissenting shareholder may only claim under this section with respect
to all the shares of a class held by him or on behalf of any one beneficial
owner and registered in the name of the dissenting shareholder.

(5) A dissenting shareholder shall send to the corporation a written
objection to a resolution referred to in subsection (1) or (2)

(a) at or before any meeting of shareholders at which the resolution
is to be voted on, or

(b) if the corporation did not send notice to the shareholder of the
purpose of the meeting or of his right to dissent, within a
reasonable time after he learns that the resolution.

(6) An application may be made to the Court by originating notice after the
adoption of a resolution referred to in subsection (1) or (2)

(a) by the corporation, or

(b) by a shareholder if he has sent an objection to the corporation
under subsection (5)

to fix the fair value in accordance with subsection (3) of the shares of a
shareholder who dissents under this section.

(7) If an application is made under subsection (6), the corporation shall,
unless the Court otherwise orders, send to each dissenting shareholder a
written offer to pay him an amount considered by the directors to be the fair
value of the shares.

(8) Unless the Court otherwise orders, an offer referred to in
subsection (&) shall be sent to each dissenting shareholder

(a) at least 10 days before the date on which the application is
returnable, if the corporation is the applicant, or

(b) within ten days after the corporation is served with a copy of
the originating notice, if a shareholder is the applicant.
<PAGE> 128
(9) Every offer made under subsection (7) shall

(a) be made on the same terms, and

(b) contain or be accompanied by a statement showing how the fair
value was determined.

(10) A dissenting shareholder may make an agreement with the corporation for
the purchase of his shares by the corporation, in the amount of the
corporation's offer under subsection (7) or otherwise, at any time before the
Court pronounces an order fixing the fair value of the shares.

(11) A dissenting shareholder

(a) is not required to give security for costs in respect of an
application under subsection (6), and

(b) except in special circumstances shall not be required to pay the
costs of the application or appraisal.

(12) In connection with an application under subsection (6), the Court may
give directions for

(a) joining as parties all dissenting shareholders whose shares have
not been purchased by the corporation and for the representation
of dissenting shareholders who, in the opinion of the Court, are
in need of representation,

(b) the trial of issues and interlocutory matters, including
pleadings and examinations for discovery,

(13) On an application under subsection (6), the Court shall make an order

(a) fixing the fair value of the shares in accordance with subsection
(3) of all dissenting shareholders who are parties to the
application,

(b) giving judgment in that amount against the corporation and in
favor of each of those dissenting shareholders, and

(14) On

(a) the action approved by the resolution from which the shareholder
dissents becoming effective,

(b) the making of an agreement under subsection (10) between the
corporation and the dissenting shareholder as to the payment to
be made by the corporation for his shares, whether by the
acceptance of the corporation's offer under subsection (7) or
otherwise, or

whichever first occurs, the shareholder ceases to have any rights as a
shareholder other than the right to be paid the fair value of his shares in the
amount agreed to between the corporation and the shareholder or in the amount
of the judgment, as the case may be.

(15) Subsection 14(a) does not apply to a shareholder referred to in
subsection (5)(b).

(16) Until one of the events mentioned in subsection (14) occurs,

(a) the shareholder may withdraw his dissent, or

(b) the corporation may rescind the resolution,

and in either event proceedings under this section shall be discontinued.

-2-
<PAGE> 129
(17) The Court may in its discretion allow a reasonable rate of interest on
the amount payable to each dissenting shareholder, from the date on which the
shareholder ceases to have any rights as a shareholder by reason of subsection
(14) until the date of payment.

(18) If subsection (20) applies, the corporation shall, within 10 days after

(a) the pronouncement of an order under subsection (13), or

(b) the making of an agreement between the shareholder and the
corporation as to the payment to be made for his shares,

notify each dissenting shareholder that it is unable lawfully to pay dissenting
shareholders for their shares.

(19) Notwithstanding that a judgment has been given in favor of a dissenting
shareholder under subsection (13)(b), if subsection (20) applies, the
dissenting shareholder, by written notice delivered to the corporation within
30 days after receiving the notice under subsection (18), may withdraw his
notice of objection, in which case the corporation is deemed to consent to the
withdrawal and the shareholder is reinstated to his full rights as a
shareholder, failing which he retains a status as a claimant against the
corporation, to be paid as soon as the corporation is lawfully able to do so
or, in a liquidation, to be ranked subordinate to the rights of creditors of
the corporation but in prior to its shareholders.

(20) A corporation shall not make a payment to a dissenting shareholder under
this section if there are reasonable grounds for believing that

(a) the corporation is or would after the payment be unable to pay
its liabilities as they become due, or

(b) the realizable value of the corporation's assets would thereby be
less than the aggregate of its liabilities.

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<PAGE> 130
APPENDIX "H"

DISSENTERS' RIGHTS UNDER
TEXAS BUSINESS CORPORATION ACT

ART. 5.11. RIGHTS OF DISSENTING SHAREHOLDERS IN THE EVENT OF CERTAIN
CORPORATE ACTIONS

A. Any shareholder of a domestic corporation shall have the right to
dissent from any of the following corporate actions:

(1) Any plan of merger to which the corporation is a party if
shareholder approval is required by Article 5.03 or 5.16 of this Act and the
shareholder holds shares of a class or series that was entitled to vote thereon
as a class or otherwise;

(2) Any sale, lease, exchange or other disposition (not including any
pledge, mortgage, deed of trust or trust indenture unless otherwise provided in
the articles of incorporation) of all, or substantially all, the property and
assets, with or without good will, of a corporation requiring the special
authorization of the shareholders as provided by this Act;

(3) Any plan of exchange pursuant to Article 5.02 of this Act in
which the shares of the corporation of the class or series held by the
shareholder are to be acquired.

B. Notwithstanding the provisions of Section A of this Article, a
shareholder shall not have the right to dissent from any plan of merger in
which there is a single surviving or new domestic or foreign corporation, or
from any plan of exchange, if (1) the shares held by the shareholder are part
of a class shares of which are listed on a national securities exchange, or are
held of record by not less than 2,000 holders, on the record date fixed to
determine the shareholders entitled to vote on the plan of merger or the plan
of exchange, and (2) the shareholder is not required by the terms of the plan
of merger or the plan of exchange to accept for his shares any consideration
other than (a) shares of a corporation that, immediately after the effective
time of the merger or exchange, will be part of a class or series of shares of
which are (i) listed, or authorized for listing upon official notice of
issuance, on a national securities exchange, or (ii) held of record by not less
than 2,000 holders, and (b) cash in lieu of fractional shares otherwise
entitled to be received.

ART. 5.12. PROCEDURE FOR DISSENT BY SHAREHOLDERS AS TO SAID CORPORATE ACTIONS

A. Any shareholder of any domestic corporation who has the right to
dissent from any of the corporate actions referred to in Article 5.11 of this
Act may exercise that right to dissent only by complying with the following
procedures:

(1)(a) With respect to proposed corporate action that is submitted to a
vote of shareholders at a meeting, the shareholder shall file with the
corporation, prior to the meeting, a written objection to the action, setting
out that the shareholder's right to dissent will be exercised if the action is
effective and giving the shareholder's address, to which notice thereof shall
be delivered or mailed in that event. If the action is effected and the
shareholder shall not have voted in favor of the action, the corporation, in
the case of action other than a merger, or the surviving or new corporation
(foreign or domestic) or other entity that is liable to discharge the
shareholder's right of dissent, in the case of a merger, shall, within ten (10)
days after the action is effected, deliver or mail to the shareholder written
notice that the action has been effected, and the shareholder may, within ten
(10) days from the delivery or mailing of the notice, make written demand on
the existing, surviving, or new corporation (foreign or domestic) or other
entity, as the case may be, for payment of the fair value of the shareholder's
shares. The fair value of the shares shall be the value thereof as of the day
immediately preceding the meeting, excluding any appreciation or depreciation
in anticipation of the proposed action. The demand shall state the number and
class of the shares owned by the shareholder and the fair value of the shares
as estimated by the shareholder. Any shareholder failing to make demand within
the ten (10) day period shall be bound by the action.

(b) With respect to proposed corporate action that is approved pursuant
to Section A of Article 9.10 of this Act, the corporation, in the case of
action other than a merger, and the surviving or new corporation (foreign or
domestic) or other entity that is liable to discharge the shareholder's right
of dissent, in the case of a merger, shall, within ten (10) days after the date
the action is effected, mail to each shareholder of record as of the effective
date of the action notice of the fact and date of the action and that the
shareholder may exercise the shareholder's right to dissent from the action.
The notice shall be accompanied by a copy of this Article and any articles or
documents filed by the corporation with the Secretary of State to effect the
action. If the shareholder shall not have consented to the taking of the
action, the shareholder may, within twenty (20) days after the mailing of the
notice, make written demand on the existing, surviving, or new corporation
(foreign or domestic) or other entity, as the case may be, for payment of the
fair value of the shareholder's shares. The fair value of the shares shall be
the value thereof as of the date the written consent authorizing the action was
delivered to the corporation pursuant to Section A of

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<PAGE> 131
Article 9.10 of this Act, excluding any appreciation or depreciation in
anticipation of the action. The demand shall state the number and class of
shares owned by the dissenting shareholder and the fair value of the shares as
estimated by the shareholder. Any shareholder failing to make demand with the
twenty (20) day period shall be bound by the action.

(2) Within twenty (20) days after receipt by the existing, surviving,
or new corporation (foreign or domestic) or other entity, as the case may be,
of a demand for payment made by a dissenting shareholder in accordance with
Subsection (1) of this Section, the corporation (foreign or domestic) or other
entity shall deliver or mail to the shareholder a written notice that shall
either set out that the corporation (foreign or domestic) or other entity
accepts the amount claimed in the demand and agrees to pay that amount within
ninety (90) days after the date on which the action was effected, and, in the
case of shares represented by certificates, upon the surrender of the
certificates duly endorsed, or shall contain an estimate by the corporation
(foreign or domestic) or other entity of the fair value of the shares, together
with an offer to pay the amount of that estimate within ninety (90) days after
the date on which the action was effected, upon receipt of notice within sixty
(60) days after that date from the shareholder that the shareholder agrees to
accept that amount and, in the case of shares represented by certificates, upon
the surrender of the certificates duly endorsed.

(3) If, within sixty (60) days after the date on which the corporate
action was effected, the value of the shares is agreed upon between the
shareholder and the existing, surviving, or new corporation (foreign or
domestic) or other entity, as the case may be, payment for the shares shall be
made within ninety (90) days after the date on which the action was effected
and, in the case of shares represented by certificates, upon surrender of the
certificates duly endorsed. Upon payment of the agreed value, the shareholder
shall cease to have any interest in the shares or in the corporation.

B. If, within the period of sixty (60) days after the date on which
the corporate action was effected, the shareholder and the existing, surviving,
or new corporation (foreign or domestic) or other entity, as the case may be,
do not so agree, then the shareholder or the corporation (foreign or domestic)
or other entity may, within sixty (60) days after the expiration of the sixty
(60) day period, file a petition in any court of competent jurisdiction in the
county in which the principal office of the domestic corporation is located,
asking for a finding and determination of the fair value of the shareholder's
shares. Upon the filing of any such petition by the shareholder, service of a
copy thereof shall be made upon the corporation (foreign or domestic) or other
entity, which shall, within ten (10) days after service, file in the office of
the clerk of the court in which the petition was filed a list containing the
names and addresses of all shareholders of the domestic corporation who have
demanded payment for their shares and with whom agreements as to the value of
their shares have not been reached by the corporation (foreign or domestic) or
other entity. If the petition shall be filed by the corporation (foreign or
domestic) or other entity, the petition shall be accompanied by such a list.
The clerk of the court shall give notice of the time and place fixed for the
hearing of the petition by registered mail to the corporation (foreign or
domestic) or other entity and to the shareholders named on the list at the
addresses therein stated. The forms of the notices by mail shall be approved
by the court. All shareholders thus notified and the corporation (foreign or
domestic) or other entity shall thereafter be bound by the final judgment of
the court.

C. After the hearing of the petition, the court shall determine the
shareholders who have complied with the provisions of this Article and have
become entitled to the valuation of and payment for their shares, and shall
appoint one or more qualified appraisers to determine that value. The
appraisers shall have power to examine any of the books and records of the
corporation the shares of which they are charged with the duty of valuing, and
they shall make a determination of the fair value of the shares upon such
investigation as to them may seem proper. The appraisers shall also afford a
reasonable opportunity to the parties interested to submit to them pertinent
evidence as to the value of the shares. The appraisers shall also have such
power and authority as may be conferred on Masters in Chancery by the Rules of
Civil Procedure or by the order of their appointment.

D. The appraisers shall determine the fair value of the shares of
the shareholders adjudged by the court to be entitled to payment for their
shares and shall file their report of that value in the office of the clerk of
the court. Notice of the filing of the report shall be given by the clerk to
the parties in interest. The report shall be subject to exceptions to be heard
before the court both upon the law and the facts. The court shall by its
judgment determine the fair value of the shares of the shareholders entitled to
payment for their shares and shall direct the payment of that value by the
existing, surviving, or new corporation (foreign or domestic) or other entity,
together with interest thereon, beginning 91 days after the date on which the
applicable corporate action from which the shareholder elected to dissent was
effected to the date of such judgment, to the shareholders entitled to payment.
The judgment shall be payable to the holders of uncertificated shares
immediately but to the holders of shares represented by certificates only upon,
and simultaneously with, the surrender to the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may be, of duly
endorsed certificates for those shares. Upon payment of the judgment, the
dissenting shareholders shall cease to have any interest in those shares or in
the corporation. The court shall allow the appraisers a reasonable fee as
court costs, and all court costs shall be allotted between the parties in the
manner that the court determines to be fair and equitable.

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<PAGE> 132
E. Shares acquired by the existing, surviving, or new corporation
(foreign or domestic) or other entity, as the case may be, pursuant to the
payment of the agreed value of the shares or pursuant to payment of the
judgment entered for the value of the shares, as in this Article provided,
shall, in the case of a merger, be treated as provided in the plan of merger
and, in all other cases, may be held and disposed of by the corporation as in
the case of other treasury shares.

F. The provisions of this Article shall not apply to a merger if, on
the date of the filing of the articles of merger, the surviving corporation is
the owner of all the outstanding shares of the other corporations, domestic or
foreign, that are parties to the merger.

G. In the absence of fraud in the transaction, the remedy provided
by this Article to a shareholder objecting to any corporate action referred to
in Article 5.11 of this Act is the exclusive remedy for the recovery of the
value of his shares or money damages to the shareholder with respect to the
action. If the existing, surviving, or new corporation (foreign or domestic)
or other entity, as the case may be, complies with the requirements of this
Article, any shareholder who fails to comply with the requirements of this
Article shall not be entitled to bring suit for the recovery of the value of
his shares or money damages to the shareholder with respect to the action.

ART. 5.13. PROVISIONS AFFECTING REMEDIES OF DISSENTING SHAREHOLDERS

A. Any shareholder who had demanded payment for his shares in
accordance with either Article 5.12 or 5.16 of this Act shall not thereafter be
entitled to vote or exercise any other rights of a shareholder except the right
to receive payment for his shares pursuant to the provisions of those articles
and the right to maintain an appropriate action to obtain relief on the ground
that the corporate action would be or was fraudulent, and the respective shares
for which payment has been demanded shall not thereafter be considered
outstanding for the purposes of any subsequent vote of shareholders.

B. Upon receiving a demand for payment from any dissenting
shareholder, the corporation shall make an appropriate notation thereof in its
shareholder records. Within twenty (20) days after demanding payment for his
shares in accordance with either Article 5.12 or 5.16 of this Act, each holder
of certificates representing shares so demanding payment shall submit such
certificates to the corporation for notation thereon that such demand has been
made. The failure of holders of certificated shares to do so shall, at the
option of the corporation, terminate such shareholder's rights under Articles
5.12 and 5.16 of this Act unless a court of competent jurisdiction for good and
sufficient cause shown shall otherwise direct. If uncertificated shares for
which payment has been demanded or shares represented by a certificate on which
notation has been so made shall be transferred, any new certificate issued
therefor shall bear similar notation together with the name of the original
dissenting holder of such shares and a transferee of such shares shall acquire
by such transfer no rights in the corporation other than those which the
original dissenting shareholder had after making demand for payment of the fair
value thereof.

C. Any shareholder who has demanded payment for his shares in
accordance with either Article 5.12 or 5.16 of this Act may withdraw such
demand at any time before payment for his shares or before any petition has
been filed pursuant to Article 5.12 or 5.16 of this Act asking for a finding
and determination of the fair value of shares, but no such demand may be
withdrawn after such payment has been made or, unless the corporation shall
consent thereto, after any such petition has been filed. If, however, such
demand shall be withdrawn as hereinbefore provided, or if pursuant to Section B
of this Article the corporation shall terminate the shareholder's rights under
Article 5.12 or 5.16 of this Act, as the case may be, or if no petition asking
for a finding and determination of fair value of such shares by a court shall
have been filed within the time provided in Article 5.12 or 5.16 of this Act,
as the case may be, or if after the hearing of a petition filed pursuant to
Article 5.12 or 5.16, the court shall determine that such shareholder is not
entitled to the relief provided by those articles, then, in any such case, such
shareholder and all persons claiming under him shall be conclusively presumed
to have approved and ratified the corporate action from which he dissented and
shall be bound thereby, the right of such shareholder to be paid the fair value
of his shares shall cease, and his status as a shareholder shall be restored
without prejudice to any corporate proceedings which may have been taken during
the interim, and such shareholder shall be entitled to receive any dividends or
other distributions made to shareholders in the interim.

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<PAGE> 133
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under Section 145 of the Delaware General Corporation Law (the "DGCL"),
a Delaware corporation has the power, under specified circumstances, to
indemnify its directors, officers, employees and agents in connection with
threatened, pending or completed actions, suits or proceedings, whether civil,
criminal, administrative or investigative (other than an action by or in right
of the corporation), brought against them by reason of the fact that they were
or are such directors, officers, employees or agents, against expenses,
judgments, fines and amounts paid in settlement actually and reasonably
incurred in any such action, suit or proceeding. Article Tenth of the
Certificate of Incorporation of the Surviving Corporation together with Article
VI of its Bylaws provide for indemnification of each person who is or was made
a party to any actual or threatened civil, criminal, administrative or
investigative action, suit or proceeding because such person is or was an
officer or director of the Surviving Corporation or is a person who is or was
serving at the request of the Surviving Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service relating to employee benefit
plans, to the fullest extent permitted by the DGCL as it existed at the time
the indemnification provisions of the Surviving Corporation's Certificate of
Incorporation and the Bylaws were adopted or as may be thereafter amended.
Article VI of the Surviving Corporation's Bylaws and Article Tenth of its
Certificate of Incorporation expressly provide that they are not the exclusive
methods of indemnification.

Article VI of the Bylaws and Article Tenth of the Certification of
Incorporation also provide that the Surviving Corporation may maintain
insurance, at its own expense, to protect itself and any director, officer,
employee or agent of the Surviving Corporation or of another entity against any
expense, liability or loss, regardless of whether the Surviving Corporation
would have the power to indemnify such person against such expense, liability
or loss under the DGCL.

Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director' duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(relating to liability for unauthorized acquisitions or redemptions of, or
dividends on, capital stock), or (iv) for any transaction from which the
director derived an improper personal benefit. Article Eleventh of the
Surviving Corporation's Certificate of Incorporation contains such a provision.

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described under Item 20 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

ITEM 21. EXHIBITS AND FINANCIAL SCHEDULES

A. Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ ------------------------------------------------------------------
<S> <C>
2.1** Agreement and Plan of Merger dated as of May 1, 1996, by and
among the Registrant and Electronic Transmission Corporation.

3.1** Articles of Incorporation of the Registrant, dated September 5,
1986.

3.2** Articles of Amendment to the Articles of Incorporation of the
Registrant, dated March 26, 1996.

3.3** Bylaws of the Registrant, dated September 5, 1986.

3.4** Form of Certificate of Incorporation of the Registrant, as
continued and domesticated into the State of Delaware

3.5** Form of Bylaws of the Registrant, as continued and domesticated
into the State of Delaware.
</TABLE>
<PAGE> 134

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ ------------------------------------------------------------------
<S> <C>
4.1** Specimen of Continued Common Stock Certificate.

5.1* Opinion of Looper, Reed, Mark & McGraw Incorporated regarding
the legality of the securities being registered.

5.2** Opinion of Beaumont Church, Barristers and Solicitors, regarding
the legality of the securities being registered.

8.1** Opinion of Looper, Reed, Mark & McGraw Incorporated regarding
tax matters.

8.2** Opinion of Felesky Flynn, Barristers & Solicitors, regarding tax
matters.

9.1** Voting Trust Agreement, dated January 26, 1995, between Sterling
National Corporation and holders of Sterling Options.

10.1** Bill of Sale, dated effective January 1, 1995, by and between
Electronic Transmission Corporation and Sterling National
Corporation.

10.2** Agreement for Processing Medical Claims on a Temporary Basis,
dated effective March 5, 1996, by and between Electronic
Transmission Corporation and Wal-Mart.

10.3** Equipment Lease and Stock Option Agreement, effective April 23,
1996, by and between Electronic Transmission Corporation and
Ironwood Leasing Limited.

10.4** Letter Agreement, dated June 20, 1996, between Electronic
Transmission Corporation and Ironwood Leasing Limited.

10.5** Promissory Note, dated June 1, 1996, in the principal amount of
$779,574.50, executed in favor of the Registrant by Electronic
Transmission Corporation.

10.6** Staff Leasing Services Agreement, dated effective December 15,
1995, by and between Network Employers Group, Inc. and
Electronic Transmission Corporation.

10.7** Employment and Settlement Agreement, dated January 2, 1995,
between Electronic Transmission Corporation and L. Cade Havard.

10.8** Employment and Settlement Agreement, dated December 4, 1995,
between Electronic Transmission Corporation and Elaine Boze.

10.9** Employment and Settlement Agreement, dated March 1, 1995,
between Electronic Transmission Corporation and Timothy P.
Powell.

10.10** Employment Agreement, dated May 1, 1996, between Electronic
Transmission Corporation and Ann C. McDearmon.

10.11** Employment Agreement, dated April 1, 1996, between Electronic
Transmission Corporation and Louann Smith.

10.12** Settlement and Employment Agreement, dated May 1, 1996, between
Electronic Transmission Corporation and Roy W. Mers.

10.13** Office Lease, dated January 5, 1995, by and between Natron
Limited Partnership and Electronic Transmission Corporation,
including amendments thereto.

10.14** Agreement for Processing and Repricing Medical Claims, effective
September 1, 1996, by and between Electronic Transmission
Corporation and Wal-Mart.

16.1** Form of Notice of Change of Auditor.

16.2** Letter of Hans P. Cremers, Chartered Accountant, dated June 24,
1996.

16.3** Letter of Simonton, Kutac & Barnidge, L.L.P., dated June 24,
1996.

23.1* Consent of Looper, Reed, Mark & McGraw Incorporated (set forth
in Exhibit 5.1 and 8.1, respectively).

23.2** Consent of Beaumont Church, Barristers and Solicitors (set forth
in Exhibit 5.2).

23.3* Consent of Simonton, Kutac & Barnidge, L.L.P. as to the
financial statements of the Registrant.

23.4* Consent of Simonton, Kutac & Barnidge, L.L.P. as to the
financial statements of Electronic Transmission Corporation.

23.5** Consent of Felesky Flynn, Barristers & Solicitors (set forth in
Exhibit 8.2).
</TABLE>

II-2
<PAGE> 135

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ ------------------------------------------------------------------
<S> <C>
24.1** Power of Attorney. (See page II-4 of the Registration
Statement).

27.1* Financial Data Schedule

99.1** Form of Proxy for the Registrant.

99.2** Form of Proxy for Electronic Transmission Corporation.
</TABLE>

- ---------------
* Filed herewith.
** Previously filed.

B. Financial Statement Schedules:

Not applicable.

ITEM 22. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required in Section 10(a)(3) of
the Act;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;

PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement;

(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof;

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering;

(4) That, prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form
with respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other Items of the applicable
form;

(5) That every prospectus (a) that is filed pursuant to paragraph (4)
immediately preceding, or (b) that purports to meet the requirements of section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offering therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and

(6) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the Registration Statement when it
became effective.

(7) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 20 above, or
otherwise, the

II-3
<PAGE> 136

Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

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<PAGE> 137
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 2 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Dallas, State of Texas, on the 12th day of November, 1996.

ETC TRANSACTION CORPORATION
(Registrant)

By: /s/ L. Cade Havard
---------------------------------------
L. Cade Havard, Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been signed by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ L. Cade Havard Chief Executive November 12, 1996
------------------------------- Officer, Chairman of
L. Cade Havard the Board of Directors
and Principal Financial
and Accounting Officer

/s/ Edward Bollinger* Director November 12, 1996
-------------------------------
Edward Bollinger

/s/ Katherine L. MacDonald* Director November 12, 1996
-------------------------------
Katherine L. MacDonald

*By: /s/ L. Cade Havard
---------------------------
L. Cade Havard
Attorney-in-fact
</TABLE>

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<PAGE> 138
EXHIBIT INDEX