QUES-TEC COM INC, 10SB12G, 2000-03-02

QUES-TEC COM INC
10SB12G, 2000-03-02

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-SB

GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

QUESTEC.COM, INC.
-----------------------
(Name of Small Business Issuer in Its Charter)

Wyoming 11-3445299
------------------------------- ----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

160B West Industry Court, Deer Park, New York 11729
--------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)

(631) 243-1880
--------------
(Issuer's telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
------------------- ------------------------------

Common Stock, $0.0001 par value OTC Bulletin Board

Securities registered pursuant to Section 12(g) of the Act: None

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TABLE OF CONTENTS

Cover Page 1

Table of Contents 2

Cautionary Statement Regarding Forward-Looking Information 3

Part I 3

Description of Business 3

Description of Property 10

Directors, Executive Officers and Significant Employees 10

Remuneration of Directors and officers 14

Security Ownership of Management and certain Security Holders 14

Interest of Management and Others in Certain Transactions 14

Securities Being Offered 15

Part II 15

Market Price and Dividends on the Registrant's Common Equity and
Other Stockholder Matters 15

Legal Proceedings 18

Changes In and Disagreements with Accountants 18

Recent Sales of Unregistered Securities 18

Indemnification of Directors and Officers 18

Part F/S 19

Part III 19

Signatures 20

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained under "Description of Business", and elsewhere in
this Registration Statement on Form 10-SB, regarding matters that are not
historical facts, are "forward-looking statements", as such term is defined in
the Private Securities Litigation Reform Act of 1995 (promulgated under the
Securities Act of 1933, as amended) and are subject to the safe-harbor created
by that act. Because such forward-looking statements include risks and
uncertainties, actual results may differ materially from those expressed in or
implied by such forward-looking statements. There are several important factors
that could cause actual results to differ materially from those anticipated by
the forward-looking statements contained in such discussions. We undertake no
obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date of this Registration Statement on Form 10-SB or to reflect the
occurrence of unanticipated events.

PART I

The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.

Item 6. Description of Business.

QuesTec.Com, Inc. (the "Company") is a Wyoming corporation originally
incorporated on February 3, 1987 under the Company Act of British Columbia as
SZL Sportsight, Inc. The name of the corporation was changed to Questec Imaging
Inc. on April 29, 1996, and the corporation was then reorganized in Wyoming on
May 18, 1998. The corporate name was changed to QuesTec.Com, Inc. on
December 22, 1999.

Current Business

The Company is a technology-based information service provider, creating
computer-generated, real-time virtual replays and in-game digital analysis
content for professional sporting events covered on TV and the Internet. The
Company also provides realistic content for future development of sports video
games. The Company's patented products use a series of cameras, computers and
sophisticated military-grade technology to track moving objects (such as balls
or players) and instantly reconstruct digital 3D

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images which can be replayed in real-time, viewed from any angle, compared and
analyzed. Such products are routinely and increasingly used during coverage of
baseball, tennis and golf around the world, while development of new products
for other sports continues. The Company's digital video content has been
broadcast and used for analysis during coverage of such high-profile sporting
events as the World Series, the Major League Baseball All-Star Game, the French
Open, the ATP World Championships and World Cup Golf. The Company continues to
provide its products and services to companies covering these three major sports
throughout the year, including Fox Sports Productions, Fox SportsNet, NBC
Sports, MSG Network, CBS Sportsline, Major League Baseball, ACTV, Williams
ChoiceSeat, ZDF and ARD German National Television, France2 and France3 French
National Television, The Golf Channel and The Sports Network.

Current Products

SuperVision PitchTrax. This is used in Major League Baseball ("MLB") to create
virtual replays for television and provide a behind-the-scenes analysis tool for
commentators. SuperVision PitchTrax tracks each pitch, then measures the speed,
path and trajectory at various intervals as it approaches the strike zone.

Used for TV broadcast enhancement, coaching purposes and to provide strategical
game information, SuperVision PitchTrax uses the Company's patented
motion-tracking technology to create a three-dimensional view of the exact
trajectory, movement, speed and ultimate plate-location of every pitch thrown
during a game the instant after each pitch crosses home plate. Because
SuperVision PitchTrax is a three-dimensional perspective, it can be shown from
any angle or zoom level and it can better illustrate the true movement and
location of the baseball than any TV camera angle can.

SuperVision PitchTrax replays can be shown from any one angle or can be animated
from one perspective to others in its 3D environment which includes a digitally
created field and background designed to look and feel like the actual stadium
where the game is being played. In addition, because each pitch is automatically
stored by the software (both throughout the game and throughout the season) any
sequence of pitches can be instantly recalled and displayed individually, as a
full-screen group or as a split-screen comparison.

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This pitch-grouping feature allows TV networks to show the pitch-sequence to any
hitter for a just completed at bat, immediately after the decisive pitch has
crossed home plate. It can also display any number of pitches in any order to
illustrate crucial pitches, key at bats, enticing matchups, or pitching
tendencies. For example, the pitch-grouping feature might be used to show the
location of all the pitches that resulted in hits before a pitcher was pulled in
favor of a reliever, or it might show the pitch-sequences used to strike out a
.320 hitter three times in a game. Because SuperVision PitchTrax stores every
pitch throughout the season, the grouping feature could also be used to show how
a particular relief pitcher worked to a certain slugger the last time they faced
one another before the matchup actually occurs again in today's game. Any group
can be displayed as a full-screen graphic, as a split-screen comparison (between
two at bats for example) or as a split-screen combining any other video source
with the SuperVision PitchTrax display. All of SuperVision PitchTrax's features
combine to make it the most comprehensive tool in baseball when it comes to
illustrating the difference between certain kinds of pitches, describing
pitching trends within the game, showing outstanding pitches made or costly
mistakes given up, and comparing key at bats and situations during a game.
SuperVision PitchTrax brings new color to broadcast commentary and adds replay
options during television coverage. Importantly, SuperVision PitchTrax can also
generate revenue for the television networks as a new medium for advertiser
sponsorship. And, as with all of the Company's products SuperVision PitchTrax
can be applied into other areas, such as webcasting, "Interactive TV" and video
game development as well.

Beyond its applications in broadcasting, webcasting and "Interactive TV",
SuperVision can also be used as an aid to the players, coaches and team
management. To date, the system has been used by the Anaheim Angels, Atlanta
Braves, Arizona Diamondbacks, Boston Red Sox, Chicago Cubs, Chicago White Sox,
Cincinnati Reds, Cleveland Indians, Colorado Rockies, Detroit Tigers, Florida
Marlins, Houston Astros, Los Angeles Dodgers, New York Mets, New York Yankees,
Oakland Athletics, San Diego Padres, San Francisco Giants, Tampa Bay Devil Rays
and Texas Rangers, during games which aired over various television networks.

In addition to a growing number of regional television contracts during the
regular season, SuperVision PitchTrax was most recently contracted on an
international scale by CBS Sportsline and MajorLeagueBaseball.com for Internet
coverage of the 1999 World Series between the Yankees and Braves, and the 1999
Major League Baseball All-Star Game from Fenway Park in Boston. In 1998

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SuperVision was featured on Williams ChoiceSeat in-stadium interactive system
during the World Series between the Yankees and Padres. In 1997 SuperVision was
contracted nationally by NBC Sports during its coverage of both the National
League Championship Series and the World Series between the Marlins and Indians.

Efforts are also currently under way to further introduce SuperVision PitchTrax
internationally, with a strong emphasis being focused on Japanese and Australian
professional baseball.

GolfProView. This is used during television golf coverage as an "instant
preview". The GolfProView system locates the golfer's ball on the green, then
proceeds to calculate and display the optimal putt path using 3D graphics. In
addition, GolfProView displays in real-time the exact distance to the hole, the
ball's height with respect to the cup and quantifies the break or breaks in
inches. GolfProView is very unique, and actually differs from the Company's
other products in the fact that it is used during TV golf coverage primarily as
an "instant preview" rather than as an "instant replay." The GolfProView system
focuses on the crucial putting aspect of the game and it features the ability to
quickly calculate and display a real-time, three-dimensional animation which
shows the optimal putt-path to the hole for any lie on any green. TV networks
using GolfProView are able to show viewers the best way to approach any putt
before a player actually steps up to take the shot, because as soon as the ball
lands anywhere on the putting-surface the system locates it and quickly
calculates the optimal putt-path (taking into account the rises, dips and
overall contour of the green). GolfProView displays a computer-generated,
three-dimensional model of each putting green and its surroundings using digital
imagery and contour mapping, and the real-time animation can be viewed from any
angle to better illustrate the intricacies behind the short game than ever
before possible. As the most comprehensive tool in golf coverage today,
GolfProView also measures and displays the most critical information about each
putt, including the distance to the cup; the height of each lie above or below
the hole; and the break or breaks of the putt across the green. These features
combine to bring a new life to broadcast commentary and add a one-of-a-kind
"instant preview" option for the networks during TV coverage. As with the
Company's other broadcast enhancement products, GolfProView also has the
potential to generate revenue for the TV networks as a new medium for advertiser
sponsorship. And, GolfProView can be applied beyond its broadcasting
applications into such areas as webcasting, "Interactive TV," and video games.

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Since its television debut in 1995, during NBC's coverage of the World Cup of
Golf from Shenzen, China, GolfProView has been highlighted during additional
international tournaments on several TV networks. In 1996 The Sports Network
(TSN) contracted to use GolfProView during its coverage of the Greater Vancouver
Open. Also in 1996, GolfProView was prominently displayed by SABC and NBC during
the World Cup Tournament in Cape Town, South Africa and by SABC and FOX during
the Million-Dollar Challenge from Sun City, South Africa. In 1997 and 1998
GolfProView was aired nationally throughout Canada during TSN's coverage of the
Greater Vancouver Open.

TennisProView. The TennisProView system instantly captures and displays the
exact speed, trajectory and court impact of each serve during a tennis match.
TennisProView creates a virtual replay for television and a behind-the-scenes
analysis tool for commentators, providing spray charts, serve analysis and
player comparisons. Working with Live Motion Company of Wiesbaden, Germany and
Atlantic Aerospace Electronics Corporation of Boston, MA, in a manner very
similar to the Company's SuperVision PitchTrax system for baseball,
TennisProView uses the Company's patented motion-tracking technology to capture
live action during match play tennis and instantly create a computer-generated,
three-dimensional view of the exact trajectory, movement, speed and court
location of the ball. As with the Company's other television enhancement
products, TennisProView's three-dimensional perspective can be shown from any
angle or zoom level to better illustrate the true movement and location of the
ball than any TV camera angle can. In addition, because each shot is
automatically stored by the software (throughout each game, set and match) any
sequence of shots can be instantly recalled and displayed individually, as a
full-screen group or as a split-screen comparison. These features combine to
make TennisProView the most comprehensive tool in tennis when it comes to
showing the exact location of certain shots with respect to the lines, breaking
down the difference between first and second serves, illustrating "spray-charts"
of serve locations throughout a match, and so much more. All of TennisProView's
features bring an exciting new edge to broadcast commentary (providing
commentators with a definitive perspective in the booth), and add a replay
option for the networks on serves, critical "kill shots" and close line calls.
As with all of the Company's broadcast enhancement products, TennisProView also
has the potential to generate revenue for the TV networks as a new medium for
advertiser sponsorship. TennisProView can also be applied beyond its
broadcasting applications into such areas as webcasting, "Interactive TV," and
video games.

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Since TennisProView made its television debut in 1998 at the ATP World
Championships, it has already been featured during eleven more international
tournaments on a number of major TV networks. Most recently, TennisProView was
highlighted on both FOX SportsNet and the Madison Square Garden Network (MSG)
during coverage of the Chase Championships from New York City. TennisProView was
featured on the World-Feed of the Eurocard-Open in Stuttgart, Germany, which was
transmitted to over 150 countries and broadcast by such major networks as ESPN,
the BBC, EuroSport and Sky. In May, 1999, TennisProView made its first
appearance at a Grand Slam event during French National Television coverage of
the French Open. In March, 1999, TennisProView was seen throughout the United
States during FOX's national broadcast coverage of both the Lipton Championship
and the Family Circle Cup. Later in 1999 TennisProView was featured on various
networks during coverage of the WTA Sparkassen Cup from Leipzig, Germany; the
Mercedes Cup from Stuttgart, Germany; the Gerry Weber Open; the Franklin
Templeton; the Kroger/St. Jude and the Sybase Open.

eBaseball. This is the narrow band transmission of quantified baseball action
for interactive television and webcasting. eBaseball has been used by CBS
Sportsline, ACTV and Major League Baseball. eSports is the technology the
Company has developed to deliver the digital information used to create
eReplays, over the Internet. eSports is what makes it possible to take the
live-action the Company captures at the site of a sporting event and instantly
create the real-time, three-dimensional, moving images that appear on your
computer screen as eReplays. Because of eSports, the user can follow the action
as it happens, without missing a pitch or a shot. And, unlike many other
multi-media sources, eSports does not require additional high bandwidth
connections. All the user needs is a simple dial-up connection to the Internet
to enjoy the most comprehensive sports coverage the Internet has to offer!
eReplays add an exciting new dimension to Internet coverage of live sporting
events by bringing the same three-dimensional perspectives the Company provides
for the television networks (with products such as SuperVision PitchTrax for
baseball, TennisProView and GolfProView) to a home computer. eReplays differ
from any other aspect of sports coverage ever offered on the Internet in that
they continuously show real-time activity (captured live at the site of each
event by the Company's patented motion-tracking technologies) at almost the same
time that activity is actually taking place on the field or on the court.
eReplays take place on a pitch-by-pitch or shot-by-shot basis so Internet users
don't miss any of the live-action as it unfolds. And because eReplays display a
three-

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dimensional perspective of each sport, they can often better illustrate certain
aspects of the action better than any TV camera angle can.

eReplays are used by sports coverage providers (like cbs.sportsline.com and
majorleaguebaseball.com), in conjunction with other comprehensive information
about each event, to create what the Company believes is the most provocative
and compelling sports coverage ever offered on the Internet.

Current Partners

The Company has a 7-year agreement with Atlantic Aerospace Electronics
Corporation ("AAEC"), a Titan (NYSE: TTN) company. AAEC is a leading military
software developer specializing in acquiring and tracking multiple targets in
real-time. AAEC will provide the Company with all research and development of
live-motion-capture tracking technology for future sports related applications
in exchange for a 500,000 share equity interest in the Company and 10% of
product-related gross sales. The Company has a strategic partnership with Live
Motion Company ("LMC") of Wiesbaden, Germany, whereby LMC markets and produces
the Company 's products in Europe. The Company and LMC split costs and share
profits. So far, LMC has produced the French Open and several German
tournaments. LMC and LMC's customers are extremely enthusiastic about this
relationship and numerous further projects are under discussion or already
finalized.

The Company has a strategic alliance with Siscom Media to database, manage and
distribute the data collected by the Company's products. The Company's products
will be integrated with Siscom's existing data mining and video indexing systems
which are already in use by the NBA, NHL and soon to be beta tested with the
Arizona Diamond Backs. The integration of the two companies' technologies will
create a new league standard for professional sports. As part of this
relationship, the Company will look to develop and integrate its technology into
Siscom's existing products for the NBA and NHL. Siscom opens up new markets for
the Company, specifically, video-on-demand services for team training, Internet,
and Interactive TV.

Silicon Graphics is a long-time sponsor of the Company who provides technology
expertise and assistance. Silicon Graphics and the Company are currently working
on a major technology initiative which will be announced in the next few months.

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Research and Development

The Company is committed to the improvement of its present product line and the
development of new products to provide the opportunity for growth in an
ever-changing market as the 21st century begins. The Company , pursuant to the
terms of its agreement with AAEC, is provided with all research and development
of live-motion-capture tracking technology for future sports related
applications by AAEC, a leading military software developer specializing in
acquiring and tracking multiple targets in real-time. The Company believes that
its relationship with AAEC is imperative in maintaining its position as a
technological leader in the industry.

Employees.

The Company presently has 6 full-time and 20 part time employees from its Deer
Park, New York operation.

Item 7. Description of Property.

The Company's executive offices are located at 160B West Industry Court, Deer
Park, New York 11729 in an approximately 4,200 square foot space. The space,
which houses all of the Company's current operations, is leased for a period
through December 31, 2001, with an option to extend the term for 2 additional
years. The annual rent under the lease agreement is $30,282 for 2000 and $31,500
for 2001.

Item 8. Directors, Executive Officers and Significant Employees.

(a)(1) Directors.

Name Age Director Since
---- --- --------------
Michael W. Russo 52 December 1996
Geoffrey Hibner 50 December 1998
Felix Marggraff 29 December 1998
Philip Albanese 57 November 1998
Paul Baim 40 December 1998
William E. Cavanaugh 66 December 1998
Derek L. Donaldson 56 November 1990
Barbara Rene Stewart 47 October 1997

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(a)(2) Persons nominated to become directors.

None

(a)(3) Executive officers.

Michael W. Russo, 52, President.
Deirdre Gallagher, 36, Secretary.

(a)(4) Persons Chosen to Become Executive Officers.

None.

(a)(5) Significant employees.

Deirdre Gallagher, 36, Executive Assistant
Edward Plumacher, 39, Marketing Manager
Chris Malone, 36, New Media Manager
Dan Beard, 30, Production Manager
Ron Klimkowski, 57, Sports Marketing

(b) Family Relationships.

None.

Michael W. Russo, President and Director of the Company, has been employed by
the Company for the preceding five years. Mr. Russo joined the Company in
January 1995 as the Vice President of Investor Relations, a post which he held
until December 1997, when he became President of the Company.

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Deirdre Gallagher is the Secretary of the Corporation, having been appointed to
the position in December 1999. Prior to her appointment, she served as an
Executive Assistant at the Company from January 1998, which position she
continues to hold. She served as an Administrative Assistant at the Company from
January 1994 through December 1997.

Paul W. Baim is a Director of the Company, having been elected to the position
in December 1998. For the past five years, Mr. Baim has been the Director for
Software Engineering at Atlantic Aerospace Electronics Corporation in Waltham,
MA, which is now a subsidiary of Titan Corporation (NYSE:TTN). His business
responsibilities include directing engineering research and development, system
architecture, program management, technology assessment and business
development.

William E. Cavanaugh, a Director of the Company since December 1998, is a
retired business executive. Prior to his retirement in 1996, he was the Chief
Operating Officer of the Company for two years.

Philip Albanese has been a Director of the Company since 1998. He has been the
President of National Equipment Rental Program, Inc. since 1991.

Geoffrey J. Hibner, a Director of the Company since December 1998, is the Senior
Vice President - Finance and Administration and Chief Financial officer of The
Timberland Company, which is a wholesaler of footwear, apparel and licensed
products. Mr. Hibner has held this position since May 1997. From August 1995
through May 1997, he was the Chief Financial Officer of Frontier Technologies
Corporation, and served as the Vice President - Finance for Universal Foods
Corporation from July 1988 through January 1995.

Derek L. Donaldson has been a Director of the Company since November 1990. Mr.
Donaldson has also served as Secretary of the Company. He is an attorney in
Kamloops, British Columbia, Canada, and is the sole shareholder and director of
Derek Donaldson Law Corp.

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Barbara Rene Stewart, a Director of the Company since October 1997, is a legal
secretary and assistant with Derek Donaldson Law Corp., where she has been
employed for 17 years.

Felix Marggraff, a Director of the Company for the last year, is a principal of
Live Motion Company in Wiesbaden, Germany.

Edward Plumacher, the Company's Marketing Manager, has been employed by the
Company since 1991. Mr. Plumacher oversees the Company's technical operations on
a daily basis, and is responsible for the marketing of existing and new
products, as well as the set up and coordination of new product installations.

Chris Malone, The New Media Manager of the Company since January 1999,
coordinates development of new products and the research into new applications
for the Company's products. Prior to holding this position at the Company, Mr.
Malone was head of production services since December 1996 when he joined the
Company. From November 1993 through December 1996, Mr. Malone was General
Manager of Eastern Micro Systems, a small retail computer store.

Dan Beard, as Production manager for the Company, is responsible for setting up
and operating video productions for sporting events, including the coordination
of required equipment. Mr. Beard has been employed by the Company since June,
1998. He previously was an independent technical director from June, 1997
through June, 1998, and prior to that time served as a TV Director for
Cablevision from 1995 through June, 1997.

Ron Klimkowski, in his position as Sports Marketing Director, communicates with
sports teams in order to arrange the coordination of installation of the
Company's products at stadiums and training facilities, as well as the
scheduling of production at sporting events. Mr. Klimkowski, a former major
league pitcher with the New York Yankees, has been employed by the Company since
January, 1996, and prior to that time worked as a financial consultant at Paine
Webber for 3 years.

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(d) Involvement in Certain Legal Proceedings.

None.

Item 9. Remuneration of Directors and Officers.

Name of Individual or Capacities In Which Aggregate
Identity Of Group Remuneration Was Received Remuneration
- - ----------------- ------------------------- ------------

Michael W. Russo President $65,000.00
Deirdre Gallagher Secretary $35,000.00
Directors (8 as a group) Director $0 (each Director receives
a minimum of 50,000
options per year)

Item 10. Security Ownership of Management and Certain Security Holders.

Title Name and Amount Owned Percent
Of Address of Before the of
Class Owner Offering Class
- - ----- ----- -------- -----

Common Michael W. Russo
Stock 4 Cutter Court 767,655 2.57%
W. Islip, NY 11795

Common Deirdre Gallagher 86,433 .29%
Stock 4 Greenleaf Drive
Huntington, NY

Common Ed Plumacher 5,470,333 18.48%
Stock 15 Sexton Drive
W. Islip, NY 11795

Common All Officers and Directors 7,258,469 24.52%
Stock as a Group (9 as a group)

Directors of the Company receive a minimum of 50,000 options to purchase Common
Stock of the Company, the final amount being determined by the Board of
Directors as a whole based upon proportional worked performed on behalf of the
Company. The issuance of such options is then submitted to the shareholders of
the Company for approval.

Options Outstanding

Name of Amount of Common Stock Exercise
Holder Called for by Options Price

Michael W. Russo 225,000 $0.27

Deirdre Gallagher 100,000 $0.38

Edward Plumacher 180,000 $0.38

All Officers and
Directors as a Group
(9 Persons) 1,625,000 $0.35 (weighted average)

All options are currently exercisable.

Item 11. Interest of Management and Others in Certain Transactions.

Pursuant to the terms of the agreements dated September 9, 1998 between AAEC and
the Company, the parties have established a strategic alliance. AAEC received
certain interests in the Company as the result of such agreements. Paul Baim, a
director of the Company, is also the Director for Software Engineering at AAEC
and, as a director of the Company, is to receive at least 50,000 options to
purchase shares of the Company per annum as compensation for his service in such
capacity. In the fiscal year ended June 30, 1999, Mr. Baim received 200,000
options, 75,000 at $0.21 and 125,000 at $0.62. In the current fiscal year, Mr.
Baim has received 300,000 options at $0.38. Mr. Baim has no personal

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interest in connection with the agreements between AAEC and the Company.

Pursuant to the terms of the agreements dated June 9, 1998 between LMC and the
Company, the parties have established a strategic alliance. LMC received certain
interests in the Company as the result of such agreements. Felix Marggraff, a
director of the Company, is also a principal of LMC and, as a director of the
Company, is to receive at least 50,000 options to purchase shares of the Company
per annum as compensation for his service in such capacity. For the fiscal year
ended June 30, 1999, Mr. Marggraff received 125,000 options exercisable at
$0.21. As a principal of LMC, Mr. Marggraff has a personal interest in
connection with the agreements between LMC and the Company.

Item 12. Securities Being Offered.

No sale of securities is authorized by this filing. The common stock of the
Company is being registered under Section 12(b) of the Securities Exchange Act
of 1934. The Company has 80,000,000 common shares authorized. Each share of
Common Stock is entitled to share pro rata in dividends and distributions with
respect to the Common Stock when, as and if declared by the Board of Directors
from funds legally available for any of the Company's securities. Upon
dissolution, liquidation or winding up of the Company, the assets will be
divided pro rata on a share-for-share basis among holders of the shares of
Common Stock after-any required distribution to the holders of the preferred
stock. All shares of Common Stock outstanding are fully paid and non-assessable
and the shares will, when issued upon payment therefore as contemplated hereby,
be fully paid and non-assessable. Each holder of Common Stock is entitled to one
vote per share with respect to all matters that are required by law to be
submitted to shareholders.

PART II

Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Stockholder Matters

Price Range of Common Stock & Dividends

The Company's Common Stock, which is presently traded in the
over-the-counter market, is traded on the OTC Bulletin Board under the symbol
"QSTI". The following table shows the per share range of prices of the Company's
Common Stock for the most recent two-year period.

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Quarter-Ended

Year Mar 31 June 30 Sept 30 Dec 31
- - ---- ------ ------- ------- ------

1999 High $0.78 $0.98 $0.72 $1.02
Low $0.37 $0.48 $0.43 $0.31

1998 High $0.56 $0.51 $0.37 $0.64
Low $0.17 $0.22 $0.18 $0.15

Approximate Number of Equity Security Holders

At January 31, 2000, the approximate number of holders of record of the
Company's Common Stock was 2,500.

Dividends

The Company has never paid dividends. At present, the Company does not
anticipate paying any dividends on its Common Stock in the foreseeable future
and intends to devote any earnings to the development of the Company's business.

PENNY STOCK

Until the Company's shares qualify for inclusion in the NASDAQ system,
the trading of the Company's securities, if any, will be in the over-the-counter
markets which are commonly referred to as the "pink sheets" or on the OTC
Bulletin Board. As a result, an investor may find it more difficult to dispose
of, or to obtain accurate quotations as to the price of the securities offered.
Effective August 11, 1993, the Securities and Exchange Commission adopted Rule
15g-9, which established the definition of a "penny stock," for purposes
relevant to the Company, as any equity security that has a market price of less
than $5.00 per share 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 rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks; and (ii) the broker or dealer receive
from the investor a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or dealer must (i)
obtain financial information and investment experience and objectives of the
person; and (ii) make a reasonable determination that the transactions in penny
stocks

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are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have 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 National Association of Securities Dealers,
Inc. (the "NASD"), which administers NASDAQ, has recently made changes in the
criteria for continued NASDAQ eligibility. In order to continue to be included
on NASDAQ, a company must maintain $2,000,000 in net tangible assets or
$35,000,000 in market capitalization or $500,000 net income in latest fiscal
year or 2 or last 3 fiscal years, a $1,000,000 market value of its
publicly-traded securities and 500,000 shares in public float. In addition,
continued inclusion requires two market-makers and a minimum bid price of $1.00
per share. Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate which will allow the Company's
securities to be traded without the aforesaid limitations. However, there can be
no assurances that, upon a successful merger or acquisition, the Company will
qualify its securities for listing on NASDAQ or some other national exchange, or
be able to maintain the maintenance criteria necessary to insure continued
listing. The failure of the Company to qualify its securities or to meet the
relevant maintenance criteria after such qualification in the future may result
in the discontinuance of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's securities may then
continue in the over-the-counter market. As a result, a shareholder may find it
more difficult to dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.

17
<PAGE>

Item 2. Legal Proceedings.

The Company is the defendant in a legal proceeding commenced in May 1997 in the
Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County,
Florida by a former employee, Charles F. Mehler. Mr. Mehler has claimed damages
of approximately $161,000 for breach of employment agreement, non-payment of
wages, including damages therefrom, unreimbursed employment related expenses,
and loans made to the Company. The Company has denied the allegations and has
filed a counterclaim against Mr. Mehler alleging receipt of funds to which he
was not entitled.

Item 3. Changes In and Disagreements with Accountants

Not applicable.

Item 4. Recent Sales of Unregistered Securities

On October 1, 1997, the Company commenced an offering through Alexander Wescott
& Co., Inc., pursuant to Regulation D of the Securities Act of 1933 (the "Act"),
Rule 504, of up to 5,000,000 shares of its common stock at a price of $0.21 per
share, which price was later reduced to $0.14 per share. On November 16, 1998,
this offering was completed with 5,364,756 shares being sold and issued for a
total of $834,399 being received by the Company. Common stock was sold to a
total of 40 accredited investors. The proceeds from this offering were used for
working capital, legal and accounting fees, consulting fees and office
equipment.

In addition, on October 23, 1998, the Company sold shares of its Common Stock at
$0.15 per share, subject to Rule 144, to the following individuals for the
following reasons:

Recipient Number of Shares Reason for Sale
- - --------- ---------------- ---------------

Michael W. Russo 300,000 For prior salary owed
Chris Malone 300,000 For prior salary owed
Edward Plumacher 4,333,333 For prior salary owed
Dan Beard 100,000 For prior salary owed
Derek Donaldson 476,666 For accrued legal fees
William Cavanaugh 300,000 For prior salary owed

Item 5. Indemnification of Directors and Officers

The Company shall indemnify to the fullest extent permitted by, and in the
manner permissible under the laws of the State of Wyoming, any person made, or
threatened to be made, a party to an action or proceeding, whether criminal,
civil, administrative or investigative, by reason of the fact that he is or was
a director or officer of the Company, or served any other enterprise as
director, officer or employee at the request of the Company. The Board of
Directors, in its discretion, shall have the power on behalf of the Company to
indemnify any person, other than a director or officer, made a party to any
action, suit or proceeding by reason of the fact that he/she is or was an
employee of the Company. INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE
COMPANY FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST

18
<PAGE>

PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS THEREFORE
UNENFORCEABLE.

PART F/S

Financial Statements

The issuer has available audited financial statements for the fiscal years
ending June 30, 1999 and June 30, 1998.

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)

REPORT ON AUDIT OF FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 1999 AND 1998

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)
Years Ended June 30, 1999, and 1998

CONTENTS

PAGE

INDEPENDENT AUDITOR'S REPORT 1

BALANCE SHEET 2

STATEMENT OF OPERATIONS 3

STATEMENT OF SHAREHOLDERS' EQUITY 4

STATEMENT OF CASH FLOWS 5

NOTES TO FINANCIAL STATEMENTS 6

<PAGE>

----------------------------
Radin, Glass & Co., LLP
----------------------------
Certified Public Accountants

360 Lexington Avenue
New York, NY 10017
212.557.7505
Fax: 212.557.7591

INDEPENDENT AUDITOR'S REPORT

November 3, 1999

Shareholders and Directors
QuesTec Imaging Inc.
Deerpark, New York

We have audited the accompanying balance sheet of QuesTec Imaging Inc.
as of June 30, 1999 and 1998 and the related statement of operations,
shareholders' equity (deficit) and cash flows for each of the three years ended
June 30, 1999. 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 audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an 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
the 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.

In our opinion, the financial statements present fairly, in all
material respects, the financial position of QuesTec Imaging Inc. as of June 30,
1999 and 1998, and the results of its operations and cash flows for each of the
three years ended June 30, 1999 in accordance with generally accepted accounting
principles.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered recurring losses, owes $235,000
in payroll taxes at June 30, 1999 and has a working capital deficiency that
raise substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ Radin, Glass LLP

Certified Public Accountants

<PAGE>

QUESTEC IMAGING, INC.

BALANCE SHEET

<TABLE>
<CAPTION>
June 30,
---------------------------
1999 1998
---------------------------
<S> <C> <C>
ASSETS

CURRENT ASSETS:
Cash $ -- $ 3,454
Accounts receivable 22,811 82,800
Other assets 5,960 254
----------- -----------
TOTAL CURRENT ASSETS 28,771 86,508

INTANGIBLE ASSETS, net 570 633

SOFTWARE DEVELOPMENT COSTS, net of amortization
of $40,471 and $O. 255,898 --

FURNITURE AND EQUIPMENT, net 123,436 67,249
----------- -----------
$ 408,675 $ 154,390
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
Cash overdraft $ 3,259 $ --
Bank credit line 7,402 --
Accounts payable 158,979 138,851
Accrued liabilities 538,770 515,525
Deferred revenue -- 48,000
Advance from shareholder 93,183 480,490
----------- -----------
TOTAL CURRENT LIABILITIES 801,593 1,182,866

NOTE PAYABLE -- 10,000

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY: (DEFICIT)
Preferred stock, no par value, authorized 10,000,000
shares; none issued -- --
Common stock, no par value; authorized 40,000,000 shares;
issued and outstanding 29,321,143 shares and
20,701,274 shares. -- --
Paid - in capital 8,762,105 6,668,957
Accumulated deficit (9,155,023) (7,707,433)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (392,918) (1,038,476)
----------- -----------
$ 408,675 $ 154,390
============ ===========
</TABLE>

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

-2-
<PAGE>

QUESTEC IMAGING, INC.

STATEMENT OF OPERATIONS

Year ended June 30,
--------------------------------------------
1999 1998 1997
--------------------------------------------

REVENUE
Products $ -- $ -- $ 180,513
Services 127,944 165,395 84,600
----------- ------------ ------------
127,944 165,395 265,113
----------- ------------ ------------

COST OF GOODS SOLD 95,099 98,639 178,017
GROSS PROFIT 32,845 66,756 87,096

EXPENSES:
Amortization and depreciation 59,156 13,494 13,570
Payroll and consulting 928,359 291,538 511,921
Cost of aborted acquisition -- -- 152,052
General and administrative 492,920 887,389 570,507
----------- ------------ ------------
1,480,435 1,192,421 1,248,050
----------- ------------ ------------
NET LOSS $($1,447,590) $($1,125,665) $($1,160,954)
=========== ============ ============

NET LOSS PER SHARE:
EARNINGS PER COMMON SHARE $ ($0.05) $ ($0.06) ($0.07)
=========== ============ ============

WEIGHTED AVERAGE SHARES 26,656,097 18,093,820 15,821,932
=========== ============ ============

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

-3-

<PAGE>

QUESTEC IMAGING INC.

STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>

Common Stock Total
-------------------------- Additional Accumulated Shareholders'
Shares Amount Paid in Capital Deficit Equity
------ ------ --------------- ------- ------

<S> <C> <C> <C> <C> <C>
BALANCE - JUNE 30, 1996 15,180,289 $ 5,066,476 $ $ (5,420,814) $ (354,338)

Issued through private placement 440,477 185,000 185,000
Issued for options exercised 599,300 198,979 198,979
Issued for warrants exercised 566,952 258,352 258,352
Net loss (1,160,954) (1,160,954)
---------- ---------- -------- ------------ ---------

BALANCE - JUNE 30, 1997 16,787,018 5,708,807 -- (6,581,768) (872,961)

Issued through private placement 5,364,756 834,399 834,399
Issued for options exercised 424,500 125,751 125,751
Shares cancelled (1,875,000) --
Net loss (1,125,665) (1,125,665)
---------- ---------- -------- ------------ ---------

BALANCE - JUNE 30, 1998 20,701,274 6,668,957 -- (7,707,433) (1,038,476)

Issued through private placement 1,215,000 278,000 278,000
Issued for options exercised 927,608 320,704 320,704
Issued for warrants exercised 667,262 217,083 217,083
Debt converted to equity 5,809,999 1,156,999 1,156,999
Issuance of options for services 120,362 120,362
Net loss (1,447,590) (1,447,590)
---------- ---------- -------- ------------ ---------

BALANCE - JUNE 30, 1999 29,321,143 $8,641,743 $120,362 $ (9,155,023) (392,918)
========== ========== ======== ============ ========
</TABLE>

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

-4-

<PAGE>

QUESTEC IMAGING, INC.

STATEMENT OF CASH FLOWS

CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES:

<TABLE>
<CAPTION>
Year ended June 30,
------------------------------------------
1999 1998 1997
------------------------------------------
<S> <C> <C> <C>
NET LOSS (1,447,590) (1,125,665) (1,160,954)
Add: Non-cash item - amortization and
depreciation 59,156 13,494 13,570
Stock options issued to employees
and non-employees for services 120,362 -- --

INCREASE (DECREASE) TO CASH ATTRIBUTABLE TO
CHANGES IN ASSETS AND LIABILITIES:
Accounts receivable 59,989 (46,400) (36,400)
Inventories -- -- 24,977
Notes receivable -- -- 25,000
Other assets (5,706) 1,137 19,453
Accounts payable 20,128 (91,161) (41,752)
Accrued expenses 23,245 (41,921) 325,135
Software development costs (296,368) -- --
Deferred revenue (48,000) 39,000 9,000
Bankcredit line 7,402 -- --
------------------------------------------
(1,507,382) (1,251,516) (821,971)
--------- ---------- -------

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES:

ISSUANCE OF SHARES 1,972,786 960,150 711,615
Proceeds from (payments of)
advance from shareholders (387,307) 313,177 167,313
Proceeds from (payments of) notes payable (10,000) 10,000 (56,385)
--------- ---------- -------
1,575,479 1,283,327 822,543
--------- ---------- -------

CASH (USED IN) INVESTING ACTIVITIES:

Purchase of furniture and equipment (74,810) (31,217) --
--------- ---------- -------
(74,810) (31,217) --
--------- ---------- -------

(DECREASE) INCREASE IN CASH (6,713) 594 572

CASH, BEGINNING OF YEAR 3,454 2,860 2,288
--------- ---------- -------

(CASH DEFICIT) CASH, END OF YEAR $ (3,259) $ 3,454 $ 2,860
============ ============ ===========

SUPPLEMENTAL DISCLOSURES
Interest paid $ 4,312 $ -- $ --
Income taxes paid $ -- $ -- $ --
</TABLE>

The accompanying notes are an integral part of these financial statements

-5-

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)
(Incorporated under the laws of Wyoming, United States of America)

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1999

1. THE COMPANY

Questec Imaging, Inc. (the "Company") was incorporated in 1987 under the
Company Act of British Columbia. During the year ended June 30, 1996 the
Company changed its name to Questec Imaging, Inc. from SZL Sportsight, Inc.
During the year ended June 30, 1998, the Company was continued in Wyoming,
United States of America. The Company designs, develops, and markets
proprietary software and hardware systems, with shared technology bases, which
present three-dimensional computer analyzed images for sports entertainment,
business, and industrial markets.

2. SIGNIFICANT ACCOUNTING POLICIES

a. Software Development Costs- The Company capitalizes software
development costs in accordance with Statement of Financial Accounting
Standards No. 86, "Accounting for the Costs of Computer Software to be
Sold, Leased or Otherwise Marketed. The Company capitalized approximately
$296,000 and $0 in years ended June 30, 1999, and 1998 respectively.

b. Furniture and Equipment- Furniture and equipment are stated at cost and
are depreciated using the straight line method over the estimated useful
lives of the assets.

C. Use of Estimates- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

-6-

<PAGE>

d. Loss Per Share- Loss per share is computed on the basis of weighted
average number of common shares outstanding during the respective periods.

On December 31, 1997, the Company adopted SFAS No. 128, "Earnings per
Share." Earnings per common share are computed by dividing income
available to common stockholders by the weighted average number of common
shares outstanding during the period. The earnings per common share,
assuming dilution, computation gives effect to all dilutive potential
common shares during the period. The computation assumes that the
outstanding stock options and warrants were exercised and that the
proceeds were used to purchase common shares of the Company. Earnings per
share computation for the years ended June 30, 1997 have been restated to
reflect this new standard. For the years ended June 30, 1999, 1998 and
1997 respectively, the Company had no dilutive securities.

e. Fair Value of Financial Instruments- The carrying amounts reported in
the balance sheet for assets and liabilities approximate fair value based
on the short term maturity of these instruments.

f. Accounting for Long-Lived Assets- The Company reviews long-lived
assets, certain identifiable assets and any goodwill related to those
assets for impairment whenever circumstances and situations change such
that there is an indication that the carrying amounts may not be
recoverable. At June 30, 1999 the Company believes that there has been no
impairment of its long-lived assets.

3. BASIS OF PRESENTATION

The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate the continuation of the Company as a going concern. The
Company has reported significant recurring net losses of approximately
$1,448,000, $1,126,000 and $1,161,000 in years ended June 30, 1999, 1998
and 1997, respectively. The Company has a working capital deficiency of
approximately $773,100 at June 30, 1999 in comparison to $1,096,400 at
June 30, 1998 respectively. Consequently, recoverability of a major
portion of the recorded asset amounts shown in the accompanying balance
sheet is dependent upon the Company's ability to raise capital and
ultimately, to

-7-

<PAGE>

generate profitable operations. The financial statements do not include
any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classifications of liabilities that
might be necessary should the Company be unable to continue in existence.

The Company has previously presented its financial statements in
accordance with Canadian accounting principles and in Canadian dollars.
Effective June 30, 1996, the Company has changed its reporting. These
statements are in accordance with United States generally accepted
accounting principles and are stated in United States dollars.

4. FURNITURE AND EQUIPMENT

June 30
------------------------
1999 1998
--------- -----------
Furniture and equipment $226,102 $151,292

Accumulated depreciation (102,666) (84,043)
--------- --------
$123,436 $ 67,249
========= ========

5. ACCRUED LIABILITIES

June 30
------------------------
1999 1998
--------- -----------
Accrued taxes $234,657 $ 46,472

Accrued payroll 117,474 188,662

Litigation settlement 93,000 88,313

Accrued expenses 61,364 93,373

Accrued professional 32,275 98,705
--------- --------
$538,770 $ 515,525
========= ========

6. ADVANCE FROM SHAREHOLDER

A shareholder and former officer of the Company had made advances on
behalf of the Company over several years, for a portion which advances he
had not
-8-

<PAGE>

requested reimbursement. During the year ended June 30, 1998, the Board of
Directors approved a reimbursement resulting in an amount due the
shareholder of $480,490, including amounts previously recorded. The
advance is not interest bearing and is due on demand. The remaining
balance at June 30, 1999 approximates $93,000.

7. INCOME TAXES

The Company accounts for income taxes pursuant to the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"). SFAS 109 requires the recognition of deferred
tax assets and liabilities for both the expected tax impact of differences
between the financial statement and tax impact of assets and liabilities,
and for the expected future tax benefit to be derived from tax loss and
tax credit carryforwards. SFAS 109 additionally requires the establishment
of a valuation allowance to reflect the likelihood of realization of
deferred tax assets. At June 30, 1999, and 1998, the Company had deferred
tax assets of approximately $3,678,000, and $3,200,000, respectively,
which represent the tax impact of the Company's net operating loss
carryforwards. The Company has recorded a valuation for the full amount of
such deferred tax assets.

As a result of the U.S. Tax Reform Act of 1986, the Company is
obligated to pay an alternative minimum tax on its alternative minimum
taxable income, even though it has a loss carryforward. These
carryforwards are subject to possible limitations on annual utilization if
there are "equity structure shifts" or "owner shifts" involving "5%
shareholders" (as these terms are defined in Section 382 of the Internal
Revenue Code), which result in more than 50 percentage point change in
ownership. The company has net operating loss carryforwards approximating
$10,600,000 and $9,125,000 at June 30, 1999, and 1998, respectively,
available to offset any future taxable income through 2014.

8. ACCRUED PAYROLL TAXES

The Company owed payroll taxes at June 30, 1999 and 1998
approximating $235,000 and $46,000 respectively.

-9-

<PAGE>

9. RELATED PARTY TRANSACTIONS

During the years ended June 30, 1999 and 1998, legal services was
provided by an attorney who is also a member of the board of Directors.
The balance due at June 30, 1998 was approximately $33,000. The Company
repaid the balance in year ended June 30, 1999.

10. DISCONTINUATION OF RETAIL STORE

The Company's Eastern Micro Systems ("EMS") subsidiary was closed by
the assets being levied upon and sold at public auction in November 1996
and January 1997, respectively. The sales for EMS were approximately
$181,000 in year ended June 30, 1997.

11. SHARE CAPITAL

a. Authorized - The authorized share capital of the company consists of
50,000,000 shares, divided into 40,000,000 common shares without par
value and 10,000,000 preferred shares without par value.

b. Certain Shareholder Transactions - In January 1997, certain managing
shareholders received, for nominal consideration, an aggregate of 300,000
shares of the Company's common stock. The value of these shares, as
recorded by the Company, was $.42, which is the price realized in a
contemporaneous transaction involving the exchange of certain debt for
shares. In connection with the issuance of these shares, the shareholders
relinquished their rights to 300,000 previously issued warrants. The
Company has recorded $126,000 as compensation expense upon consummation of
this transaction.

c . Escrow Shares:

i. Principals' shares

750,000 common shares issued at a price of $.01 per share to two
principals of the Company were escrowed pursuant to an escrow agreement
dated June 30, 1987. The agreement provides that the principals will be
entitled to maintain ownership of these shares if the Company achieves the
financial objectives set out in its business plan. The release of the
shares is subject to the

-10-

<PAGE>

policies of the Superintendent of Brokers of the Vancouver Stock Exchange.

During the year ended June 30, 1989, the Vancouver Stock Exchange
approved a pro-rata release of 225,000 of the principals' escrowed
shares. 525,000 of the principals' shares were canceled in fiscal year
June 1998.

ii. Escrowed shares to be released on the basis of an earn-out formula.

In connection with the acquisition of Sportsight Inc; 3,000,000
common shares of the Company were escrowed. As of February 22, 1995
1,650,000 of the performance shares were canceled. The remaining 1,350,000
shares previously held by directors and employees of the Company were
canceled during fiscal year June 1998.

d. Accounting for Stock Options - The Company accounts for its stock
option plan under APB Opinion No. 25, "Accounting for Stock Issued to
Employees", ("APB 25") under which no compensation expense is recognized.
In fiscal 1997, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation", (SFAS 123") for disclosure purposes;
accordingly, no compensation has been recognized in the results of
operations for its stock option plan as required by APB 25.

For disclosure purposes, the fair value of each employee stock option
grant is estimated on the date of grant using the Black-Scholes Option
Pricing Model with the following weighted-average assumptions used for
employee stock options granted during the years ended June 30, 1999, 1998
and 1997; annual dividends of $0.00, expected volatility of 50.0%, and
risk-free interest rate of 6.0%, over the expected life of each grant.
The weighted-average fair value of the employee stock options granted the
years ended June 30, 1999, 1998 and 1997 was $.35, $.38 and $0.27
respectively.

If the Company recognized compensation cost for the employee stock
option plan in accordance with SFAS 123, the Company's proforma net loss
and loss per share would have been approximately $1.52 Million and $.06 in
1999, and $1.17 million and $0.06 in 1998, and $1.4 million and $0.09 in
1997.

-11-

<PAGE>

The following table summarizes the changes in options and warrants
outstanding, the weighted-average exercise price as calculated in
accordance with SFAS 123, and the related price ranges for shares of the
Company's common stock:

<TABLE>
<CAPTION>
STOCK OPTIONS WARRANTS
------------------------------------------- ---------------------------------
WEIGHTED RANGE OF
AVERAGE EXERCISE WARRANT
SHARES EXERCISE PRICE PRICE SHARES PRICE
------ -------------- ----- ------ -----
<S> <C> <C> <C> <C> <C>
OUTSTANDING AT JUNE 30, 1996 1,476,150 1.51 .35 to 2.26 1,917,557 .40 to .80
Granted/Issued 1,228,800 0.56 .44 to .88 440,477 .42 to .70
Expired -- -- -- (478,225) .42
Exercised (599,300) 0.40 .35 to .47 (566,952) .42 to .75
Canceled (664,000) 0.67 .35 to 1.20 -- --
----------- -----------
Outstanding at June 30, 1997 1,441,650 0.62 .44 to 1.20 1,312,857 .42 to .80
Granted/Issued 1,384,782 0.30 .23 to .38 -- --
Expired (38,650) 1.15 1.15 (886,669) .75
Exercised (424,500) 0.30 .23 to .318 -- --
Canceled (460,000) 0.75 .318 to 1.10 -- --
----------- -----------

Outstanding at June 30, 1998 1,903,282 0.39 .23 to 1.20 426,188 .42 to .80
Granted/Issued 2,160,000 0.47 .20 to .62 857,500 .25 to .30
Expired -- -- -- (261,902) .70
Exercised (927,608) 0.45 .21 to .62 (726,786) .25 to .42
----------- -----------

Outstanding at June 30, 1999 3,135,674 0.38 .20 to .62 295,000 .30
=========== ===========
</TABLE>

-12-

<PAGE>

e. Private Placement - In October 1997 through February 1998, the Company
issued 5,364,756 shares, raising $834,399. The shares were selling between
$.14 and $.21 during this time period.

12. COMMITMENTS AND CONTINGENCIES

The Company has been involved in the following law suits and claims:

i. Charles F. Mehler vs. Questec Imaging, Inc. - A suit brought by a
former employee of the Company claiming approximately $161,000 for breach
of employment agreement, non-payment of wages, including damages
therefrom, unreimbursed employment related expenses, and loans made to the
Company. The Company intends to vigorously defend this suit as it believes
that Mr. Mehler has been fully paid for all services rendered, and that he
in fact is the party who violated the employment agreement between the
parties. As management believes the Company has no obligation to Mr.
Mehler, no accrual has been made with respect to this litigation.
Management contends that Mr. Mehler was actually paid in excess of what
was due him and he owes the Company money.

ii. Fraser & Company - A claim with respect to debt for legal services
provided in the amount of $15,127. Payments totalling $10,062 and $2,980
were made on this claim in 1999 and 1998 respectively. At June 30, 1999,
there was no longer a balance on this claim. The final payoff was in April
1999.

iii. The Company has agreed to pay an employee additional compensation
(over and above current salary) of $60,000 per year for the next four
years, without condition. As of June 30, 1998, the employee has a balance
due of approximately $177,000. In fiscal year 1999, the balance was paid
down resulting in an amount due of approximately $111,000.

iv. In October 1998, the Company and the New York State Attorney General
signed an assurance of discontinuance in which, without admitting or
denying certain allegations related to the Company's sale of its stock
without proper New York State filings, the Company paid the state $20,000
and agreed not to sell stock in the future in New York without appropriate
filings with the Attorney General.

-13-

<PAGE>

v. Montreal Trust Company vs Questec Imaging, Inc.- An action commenced
with respect to debt and for which judgement was obtained in the amount of
$84,000. Questec made payments totalling $6,825 for the year ended June
30, 1999 and payments totalling $7,108 in June 30, 1998, respectively.

vi. Atlantic Aerospace Electronics Corporation agreement - In September
1998, the Company entered into an agreement with Atlantic Aerospace to
collaborate on the development of products that will display real time
graphic simulation of players and any and all action on the field of play
by combining sensing technology, signal processing, animation software,
custom interface software, peripheral hardware equipment, engineer
operators and graphic workstations. Atlantic shall retain ownership of
the software they develop under this agreement. The parts of each graphic
workstation not developed by Atlantic shall be owned by the Company.
Atlantic shall grant the Company a license to use executable software
libraries Atlantic develops under this agreement. This license shall give
the Company perpetual and exclusive rights to use the software for sports
related applications. In exchange for this license to use Atlantic's
software, the Company, will grant Atlantic options for 500,000 stock
options for shares in the common stock of the Company. The Company will
also pay Atlantic a 10% royalty on the Company's portion of gross revenues
derived directly or indirectly from the sale, license or use of the
graphic workstations. The options have a life of 5 years and will be
subject to a 1 year restriction.

vii. In May 1998 the Company entered into an agreement with an individual
to perform system development services. The agreement terminates
automatically on August 31, 2000. Either party may terminate agreement
upon notifying the other party in writing fourteen days prior to
termination.

The Company entered into a lease agreement for office space under
noncancellable operating leases on February 1, 1999 and expiring December
31, 2001. Minimum annual rental commitments under noncancellable operating
leases as of June 30, 1999 are as follows:

2000 $29,838
2001 30,888
2002 15,750
2003 - thereafter -

-14-

<PAGE>

Rental expense of $12,250, $5,380 and $4,474 for 1999, 1998, and 1997
respectively, has been charged to operations.

14. SIGNIFICANT CUSTOMERS

Approximately 54.2%, 14.0%, 13.3%, and 10.7% of the Company's revenue
was derived from four major customers during the year ended June 30, 1999.
During the year ended June 30, 1998, approximately 65.4%, 16.4%, and 10.9%
of the Company's revenue was derived from three major customers. During
the year ended June 30, 1997, there was one major customer which
contributed 25.1% of the Company's revenue.

15. SUBSEQUENT EVENTS

The Company's president exercised 50,000 options on July 9, 1999. A
shareholder and former officer of the Company exercised 200,000 options on
July 9, 1999 and received 400,000 shares for debt on the same date. An
employee of the Company exercised 50,000 options on July 9, 1999. An
employee of the Company received 130,000 shares for debt on July 9, 1999.

-15-

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)

REPORT ON AUDIT OF FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 1998 AND 1997

<PAGE>

INDEPENDENT AUDITOR'S REPORT

Shareholders and Directors
QuesTec Imaging Inc.
Deerpark, New York

We have audited the accompanying balance sheet of QuesTec Imaging Inc. as
of June 30, 1998 and 1997 and the related statement of operations,
shareholders' equity and cash flows for each of the three years ended June 30,
1998. 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 audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an 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 the 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.

In our opinion, the financial statements present fairly, in all material
respects, the financial position of QuesTec Imaging Inc., as of June 30, 1998
and 1997, and the results of its operations and cash flows for each of the
three years ended June 30, 1998 in accordance with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered recurring losses and has a
working capital deficiency that raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

RADIN, GLASS & CO., LLP
Certified Public Accountants

New York, New York
November 25, 1998

<PAGE>

QUESTEC IMAGING, INC.

STATEMENT OF OPERATIONS,
<TABLE>
<CAPTION>

Year ended June 30,
---------------------------------------------
1998 1997 1996
---------------------------------------------
<S> <C> <C> <C>
REVENUE:
Products $ -- $ 180,513 $ 811,982
Services 165,395 84,600 50,690
------- ------ ------
165,395 265,113 862,672
------- ------ ------

COST OF GOODS SOLD 98,639 178,017 628,088
GROSS PROFIT 66,756 87,096 234,584
EXPENSES:
Amortization and depreciation 13,494 13,570 38,388
Payroll and consulting 291,538 511,921 917,083
Cost of aborted acquisition -- 152,052 408,223
General and administrative 887,389 570,507 737,660
------- ------ ------
1,192,421 1,248,050 2,101,354
------- ------ ------

NET LOSS $ ($1,125,665) $ ($1,160,954) $($1,866,770)
============ =========== ============

NET LOSS PER SHARE:

EARNINGS PER COMMON SHARE $ ($0.06) $ $ ($0.07) $ ($0.13)
============ =========== ============

WEIGHTED AVERAGE SHARES 18,093,820 15,821,932 13,969,564
============ =========== ============

</TABLE>

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

-3-

<PAGE>

QUESTEC IMAGING, INC.

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
Year ended June 30,
---------------------------------------------
1998 1997 1996
---------------------------------------------
<S> <C> <C> <C>
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Net loss $ (1,125,665) $ (1,160,954) $ (1,866,770)
Add: Non-cash Item - amortization and depreciation 13,494 13,570 38,388

Changes in working capital items:
(Increase) decrease in accounts receivable (46,400) (36,400) 22,619
Decrease (increase) in inventories -- 24,977 6,259
(Increase) decrease in notes receivable -- 25,000 (25,000)
Decrease (increase) in other assets 1,137 19,453 (11,599)
(Increase) decrease in cash overdraft -- -- (12,190)
(Decrease) increase in accounts payable (91,161) (41,752) --
(Decrease) increase in accrued expenses (41,921) 325,135 72,527
Increase (decrease) in deferred revenue 39,000 9,000 --
--------------- ------------- --------------
(1,251,516) (821,971) (1,775,766)
--------------- ------------- --------------
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Issuance of shares 960,150 711,615 1,935,885
Proceeds from (payments of) advance from shareholders 313,177 167,313 (29,677)
Proceeds from (payments of) notes payable 10,000 (56,385) (40,000)
--------------- ------------- --------------
1,283,327 822,543 1,866,208
--------------- ------------- --------------
CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Purchase of capital assets (31,217) -- (88,154)
--------------- ------------- --------------
(31,217) -- (88,154)
--------------- ------------- --------------

INCREASE IN CASH 594 572 2,288
CASH, BEGINNING OF YEAR 2,860 2,288 --
--------------- ------------- --------------
CASH, END OF YEAR $ 3,454 $ 2,860 $ 2,288
=============== ============= ==============

SUPPLEMENTAL DISCLOSURES
Interest paid $ -- $ -- $ --
Income taxes paid $ -- $ -- $ --
</TABLE>

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

-5-

<PAGE>

revenues and expenses during the reporting period. Actual results could
differ from those estimates.

d. Loss Per Share- Loss per share is computed on the basis of weighted
average number of common shares outstanding during the respective periods.

On December 31, 1997, the Company adopted SFAS No. 128, "Earnings per
Share." Earnings per common share are computed by dividing income
available to common stockholders by the weighted average number of common
shares outstanding during the period. The earnings per common share,
assuming dilution, computation gives effect to all dilutive potential
common shares during the period. The computation assumes that the
outstanding stock options and warrants were exercised and that the
proceeds were used to purchase common shares of the Company. Earnings per
share computation for the years ended June 30, 1997 and 1996 have been
restated to reflect this new standard. For the years ended June 30, 1998,
1997 and 1996 respectively, the Company had no dilutive securities.

e. Fair Value of Financial Instruments- The carrying amounts reported in
the balance sheet for assets and liabilities approximate fair value based
on the short term maturity of these instruments.

f. Accounting for Long-Lived Assets- The Company reviews long-lived
assets, certain identifiable assets and any goodwill related to those
assets for impairment whenever circumstances and situations change such
that there is an indication that the carrying amounts may not be
recoverable. At June 30, 1998 the Company believes that there has been no
impairment of its long-lived assets.

3. BASIS OF PRESENTATION

-7-

<PAGE>

6. ADVANCE FROM SHAREHOLDER

A shareholder and former officer of the Company had made advances on
behalf of the Company over several years, for a portion which advances he
had not requested reimbursement. During the year ended June 30, 1998, the
Board of Directors approved a reimbursement resulting in an amount due the
shareholder of $480,490, including amounts previously recorded. The advance
is not interest bearing and is due on demand.

7. INCOME TAXES

The Company accounts for income taxes pursuant to the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"). SFAS 109 requires the recognition of deferred
tax assets and liabilities for both the expected tax impact of differences
between the financial statement and tax impact of assets and liabilities,
and for the expected future tax benefit to be derived from tax loss and
tax credit carryforwards. SFAS 109 additionally requires the establishment
of a valuation allowance to reflect the likelihood of realization of
deferred tax assets. At June 30, 1998, and 1997, the Company had deferred
tax assets of approximately $3,200,000, and $2,800,000, respectively,
which represent the tax impact of the Company's net operating loss
carryforwards. The Company has recorded a valuation for the full amount of
such deferred tax assets.

As a result of the U.S. Tax Reform Act of 1986, the Company is
obligated to pay an alternative minimum tax on its alternative minimum
taxable income, even though it has a loss carryforward. These
carryforwards are subject to possible limitations on annual utilization if
there are "equity structure shifts" or "owner shifts" involving "5%
shareholders" (as these terms are defined in Section 382 of the Internal
Revenue Code), which result in more than 50 percentage point change in
ownership. The company has net operating loss carryforwards approximating
$9,125,000 and $8,000,000 at June 30, 1998, and 1997, respectively,
available to offset any future taxable income through 2013.

-9-

<PAGE>

consideration, an aggregate of 300,000 shares of the Company's common
stock. The value of these shares, as recorded by the Company, was $.42,
which is the price realized in a contemporaneous transaction involving the
exchange of certain debt for shares. In connection with the issuance of
these shares, the shareholders relinquished their rights to 300,000
previously issued warrants. The Company has recorded $126,000 as
compensation expense upon consummation of this transaction.

c. Escrow Shares:

i. Principals' shares

During the year ended June 30, 1989, the Vancouver Stock Exchange
approved a pro-rata release of 225,000 of the principals' escrowed shares.
525,000 of the principals' shares were canceled in fiscal year June 1998.

ii. Escrowed shares to be released on the basis of an earn-out formula.

d. Accounting for Employee Stock Options - The Company accounts for its
stock option plan under APB Opinion No. 25, "Accounting for Stock Issued
to Employees", ("APB 25") under which no compensation expense is
recognized.

-11-

<PAGE>

The following table summarizes the changes in options and warrants
outstanding, the weighted-average exercise price as calculated in accordance
with SFAS 123, and the related price ranges for shares of the Company's
common stock:

<TABLE>
<CAPTION>
Stock Options Warrants
------------------------------------------------ -----------------------------
Weighted Range of
Average Exercise Warrant
Shares Exercise Price Price Shares Price
------------------------------------------------ -----------------------------
<S> <C> <C> <C> <C> <C>
Outstanding at June 30, 1995 840,400 0.34 .26 to .63 1,111,112 .40 to .42
Granted/Issued 1,875,000 2.26 2.26 957,500 .75 to .80
Exercised (831,536) 2.26 2.26 (151,055) .75 to .80
Expired (407,714) 1.30 .35 to 2.26 -- --
---------- ----------
Outstanding at June 30, 1996 1,476,150 1.51 .35 to 2.26 1,917,557 .40 to .80
Granted/Issued 1,228,800 0.56 .44 to .88 440,477 .42 to .70
Expired -- -- -- (478,225) .42
Exercised (599,300) 0.40 .35 to .47 (566,952) .42 to .75
Canceled (664,000) 0.67 .35 to 1.20 -- --
---------- ----------

Outstanding at June 30, 1997 1,441,650 0.62 .44 to 1.20 1,312,857 .42 to .80
Granted/Issued 1,384,782 0.30 .23 to .38 -- --
Expired (38,650) 1.15 1.15 (586,669) .75
Exercised (424,500) 0.30 .23 to .318 -- --
Canceled (460,000) 0.75 .318 to 1.10 -- --
---------- ----------

Outstanding at June 30, 1998 1,903,282 0.39 .23 to 1.20 426,188 .42 to .80
========== ==========
</TABLE>

-13-

<PAGE>

14. SIGNIFICANT CUSTOMERS

Approximately 65.4%, 16.4%, and 10.9% of the Company's revenue was
derived from three major customers during the year ended June 30, 1998.
During the year ended June 30, 1997, there was one major customer which
contributed 25.1% of the Company's revenue.

-15-

<PAGE>

Management is currently discussing SuperVision as well as other products for
Choice Seat's 1999 productions.

During the 1998 regular baseball season, SuperVision was broadcast by FOX
Sports Bay Area, Fox Sports Chicago, FOX Sports New York, FOX Sports Ohio, FOX
Sports Southwest, Madison Square Garden Network and WABU Boston. Our
productions with WABU came after 18 months of discussions and a NO for the 1997
season. During the second half of the season, SuperVision was sponsored by the
"Gillette Mach 3", on WABU's coverage of the Boston Red Sox.

In late August, QuesTec's GolfProView product was once again featured by
The Sports Network (TSN), during their coverage of The Greater Vancouver Open.
This was QuesTec's third appearance at the GVO, and the company's 5th PGA
event. This year the GOLF Channel also aired the GVO, which allowed millions of
viewers in the United States and Asia to see GolfProView. This years production
team was comprised of both QuesTec and Live Motion Company personnel. The GVO
was the perfect training venue for our German partners. GolfProView is
currently being marketed for the PGA Tour and the European PGA Tour.

QuesTec has been in negotiations with FOX Sports Net for more than a year.
Management realizes that shareholders expectations often exceed company
progress. To date, the company is able to fully comply with all of FOX Sports
Net's production requirements. The company is waiting for FOX Sports Net to
resolve their own "sponsorship rights issues". This is something that must be
worked out between production and the two independent marketing organizations
at FOX Sports Net. QuesTec management will make a public announcement at the
appropriate time. Shareholders are asked not to ask or speculate on this matter
until management has made a public statement.

The addition of Atlantic Aerospace as a strategic partner not only
advances and greatly improves QuesTec's existing product base, but it allows
the company to step up development of new sports related products for
television and internet broadcasting. This relationship provides QuesTec a
research and development organization that exceeds anything the company could
put together on its own. Development will no longer be compromised by the
company's cash flow or limited resources.

QuesTec has put together the most comprehensive and experienced computer
visualization and production services team in the world. The company is
aggressively marketing its products and production services on a global basis.
QuesTec's services are being promoted to Leagues, Networks, Sponsors and
internet providers on a world wide basis. The company is currently in
discussions with an Australian company to provide products and services to the
Pacific Rim.

Management has continued to pay down debt and clean up the company's
financial statements. The company has been working closely with the Internal
Revenue Service and the New York State Attorney General's office to insure that
QuesTec is and will continue to remain in full compliance.

Management believes that the developments of this last fiscal year have
established the proper foundation for growth and expansion.

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)

REPORT ON FINANCIAL STATEMENTS

3 MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)
3 Months Ended September 30, 1999, and 1998

CONTENTS

PAGE

BALANCE SHEET 1

STATEMENT OF OPERATIONS 2

STATEMENT OF CASH FLOWS 3

NOTES TO FINANCIAL STATEMENTS 4

<PAGE>

QUESTEC IMAGING, INC.

BALANCE SHEET

SEPTEMBER 30,
--------------------------
1999 1998
ASSETS --------------------------

CURRENT ASSETS:
Accounts receivable $ 27,480 $ 41,800
Other assets 5,960 --
----------- ----------
TOTAL CURRENT ASSETS 33,440 41,800

INTANGIBLE ASSETS, net 554 75,676

SOFTWARE DEVELOPMENT COSTS,
net of amortization 266,432 --

FURNITURE AND EQUIPMENT, net 126,877 63,800
----------- ----------
$ 427,303 181,276
=========== ==========

LIABILITIES

CURRENT LIABILITIES:
Cash overdraft 5,847 $ 4,368
Bank credit line 9,792 10,000
Accounts payable 172,465 149,748
Accrued liabilities 424,603 562,721
----------- ----------
TOTAL CURRENT LIABILITIES 612,707 726,837

ADVANCE FROM SHAREHOLDER -- 535,542
NOTE PAYABLE -- 10,000
----------- ----------
612,707 1,272,379
----------- ----------

SHAREHOLDERS' EQUITY:

Preferred stock, no par value,
authorized 10,000,000 shares;
none issued -- --

Common stock, no par value; authorized
40,000,000 shares; issued and
outstanding 30,251,543 shares
at September 30, 1999 and 20,701,274
shares at September 30, 1998 -- --

Paid - in capital 9,178,139 6,670,023

Accumulated deficit (9,363,543) (7,761,126)
----------- ----------

(185,404) (1,091,103)
----------- ----------
$ 427,303 $ 181,276
========== ============

Approved by the Directors

- - -------------------------------------------------------------------------------
Michael W. Russo
Director

Derek Donaldson
- - -------------------------------------------------------------------------------
Director

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

-1-
<PAGE>
QUESTEC IMAGING, INC.

STATEMENT OF OPERATIONS

Three months ended September 30,
--------------------------------
1999 1998
--------------------------------
Sales $ 45,130 $ 76,000

Cost of sales 37,208 23,689
----------- -----------
Gross profit 7,922 52,311
----------- -----------

Expenses:

Accounting and legal and consulting (22,228) 25,432
Amortization and depreciation 27,927 8,471
Bank charges and interest 2,929 1,439
Marketing & advertising 9,095 104
Office supplies and expenses (1,023) 1,286
Telephone 3,199 3,159
Travel and entertainment 43,961 (8,720)
Transfer agent and public company fees 930 2,958
Postage and shipping 4,548 2,993
Salaries and payroll taxes 123,523 62,875
Rent 7,800 336
Equipment rental 4,605 --
Utilities 976 --
New York State franchise tax - 380
Rubbish removal 104 --
Insurance 10,096 5,291
----------- -----------
216,442 106,004
----------- -----------

Loss for period (208,520) (53,693)
Deficit, beginning of period 9,155,023 7,707,433
----------- -----------
Deficit, end of period $ 9,363,543 $ 7,761,126
=========== ===========

Loss per Common Share $ (0.01) $ (0.00)
=========== ===========

Weighted Average Shares $29,033,631 $19,692,268
=========== ===========

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

-2-

<PAGE>

QUESTEC IMAGING, INC.

STATEMENT OF CASH FLOWS

Three months ended September 30,
--------------------------------
1999 1998
--------------------------------

CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Loss for period $ (208,520) $ (53,693)
Add: Non-cash item
-- depreciation and amortization 27,927 8,471

Changes in non-cash working capital items:
Accounts receivable (4,669) 41,000
Other assets -- 254
Intangible assets -- (80,062)
Software development costs (30,793) --
Deferred revenue -- (48,000)
Bankcredit line 2,390 10,000
Accounts payable and accrued liabilities (100,683) 58,090
----------- ---------
(314,348) (63,940)
----------- ---------

CASH PROVIDED BY (USED FOR) FINANCING
ACTIVITIES:
Share capital 416,034 1,066
Advances from shareholders (93,183) 55,052
----------- ---------
322,851 56,118
----------- ---------
CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Purchase of capital assets (11,091) --
-------
(11,091) --
----------- ---------

INCREASE (DECREASE) IN CASH (2,588) (7,822)

CASH, BEGINNING OF PERIOD (3,259) 3,454
----------- ---------

CASH, END OF PERIOD $ (5,847) $ (4,368)
=========== =========

SUPPLEMENTAL DISCLOSURES
Interest paid $ 59 $ --
Income taxes paid $ -- $ --

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

-3-

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)
(Incorporated under the laws of Wyoming, United States of America)

NOTES TO FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 1999

1. THE COMPANY

2. SIGNIFICANT ACCOUNTING POLICIES

a. Software Development Costs - The Company capitalizes software
development costs in accordance with Statement of Financial Accounting
Standards No. 86, "Accounting for the Costs of Computer Software to be
Sold, Leased or Otherwise Marketed." The Company capitalized approximately
$ 20,300 and $5,000 for the three months ended September 30, 1999, and
1998 respectively.

b. Furniture and Equipment - Furniture and equipment are stated at cost and
are depreciated using the straight line method over the estimated useful
lives of the assets.

c. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of

-4-

<PAGE>

revenues and expenses during the reporting period. Actual results could
differ from those estimates.

d. Loss Per Share - Loss per share is computed on the basis of weighted
average number of common shares outstanding during the respective periods.

On December 31, 1997, the Company adopted SFAS No. 128, "Earnings
per Share." Earnings per common share are computed by dividing income
available to common stockholders by the weighted average number of common
shares outstanding during the period. The earnings per common share,
assuming dilution, computation gives effect to all dilutive potential
common shares during the period. The computation assumes that the
outstanding stock options and warrants were exercised and that the
proceeds were used to purchase common shares of the Company. Earnings per
share computation for the period ending September 30, 1999 and 1998 have
been restated to reflect this new standard. For the periods ended
September 30, 1999 and 1998, the Company had no dilutive securities.

e. Fair Value of Financial Instruments - The carrying amounts reported in
the balance sheet for assets and liabilities approximate fair value based
on the short term maturity of these instruments.

f. Accounting for Long-Lived Assets - The Company reviews long-lived
assets, certain identifiable assets and any goodwill related to those
assets for impairment whenever circumstances and situations change such
that there is an indication that the carrying amounts may not be
recoverable. At September 30, 1999 the Company believes that there has
been no impairment of its long-lived assets.

3. BASIS OF PRESENTATION

The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate the continuation of the Company as a going concern. However,
the Company has reported significant recurring net losses of $208,520, and
$53,693 for the three months ended 1999 and 1998, respectively. The
Company has a working capital

-5-

<PAGE>

deficiency of approximately $579,000 at September 30, 1999 in comparison
to $685,000 at September 30, 1998 respectively. Consequently,
recoverability of a major portion of the recorded asset amounts shown in
the accompanying balance sheet is dependent upon the Company's ability to
raise capital and ultimately, to generate profitable operations. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or amounts and
classifications of liabilities that might be necessary should the Company
be unable to continue in existence.

4. FURNITURE AND EQUIPMENT

September 30,
---------------------------------
1999 1998
--------- --------
Furniture and equipment $ 237,193 $ 151,292
Accumulated depreciation (110,316) (87,492)
--------- ---------
$ 126,877 $ 63,800
========= =========

5. ACCRUED LIABILITIES

September 30,
---------------------------------
1999 1998
--------- --------

Accrued taxes $ 258,940 $ 47,549
Accrued payroll 962 248,170
Litigation settlement 92,349 102,249
Accrued expenses 61,552 44,622
Accrued professional 10,800 120,131
--------- -------
$ 424,603 $ 562,721
========= =========

-6-

<PAGE>

6. ADVANCES FROM SHAREHOLDER

A Shareholder and former officer of the Company had made advances
on behalf of the Company over several years, for a portion which advances
he had not requested reimbursement. During the year ended June 30, 1998,
the Board of Directors approved a reimbursement resulting in an amount due
the shareholder of $480,490, including amounts previously recorded. The
advance is not interest bearing and is due on demand. The remaining
balance at September 30, 1999 is $0.

7. INCOME TAXES

The Company accounts for income taxes pursuant to the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109") . SFAS 109 requires the recognition of
deferred tax assets and liabilities for both the expected tax impact of
differences between the financial statement and tax impact of assets and
liabilities, and for the expected future tax benefit to be derived from
tax loss and tax credit carryforwards. SFAS 109 additionally requires the
establishment of a valuation allowance to reflect the likelihood of
realization of deferred tax assets. At September 30, 1999, and 1998, the
Company had deferred tax assets of approximately $3,275,000, and
$3,200,000 representing the tax impact of the Company's net operating loss
carryforwards. The Company has recorded a valuation for the full amount of
such deferred tax assets.

As a result of the U.S. Tax Reform Act of 1986, the Company is
obligated to pay an alternative minimum tax on its alternative minimum
taxable income, even though it has a loss carryforward. These
carryforwards are subject to possible limitations on annual utilization if
there are "equity structure shifts" or "owner shifts" involving "5%
shareholders" (as these terms are defined in Section 382 of the Internal
Revenue Code), which result in more than 50 percentage point change in
ownership. The company has net operating loss carryforwards approximating
$10,800,000 at September 30, 1999, available to offset any future taxable
income through 2014.

8. ACCRUED PAYROLL TAXES

The Company owed payroll taxes at September 30,

-7-

<PAGE>

1999, and 1998 approximating $259,000 and $47,500 respectively.

9. RELATED PARTY TRANSACTIONS

During the periods ended September 30, 1999 and 1998, legal services
was provided by an attorney who is also a member of the board of Directors.
The balance due at September 30, 1999, and 1998 were approximately $0 and
$100,500 respectively.

10. SHARE CAPITAL

a. Authorized- The authorized share capital of the Company consists of
50,000,000 shares, divided into 40,000,000 common shares without par
value and 10,000,000 preferred shares without par value.

b. Escrow Shares:

i. Principals' shares

During the year ended June 30, 1989, the Vancouver Stock Exchange
approved a pro-rata release of 225,000 of the principals' escrowed shares.
525,000 of the principals' were canceled in fiscal year June 1998.

ii. Escrowed shares to be released on the basis of an earn-out formula.

-8-

<PAGE>

c . Accounting for Employee Stock Options - The Company accounts for its
stock option plan under APB Opinion No. 25, "Accounting for Stock Issued
to Employees", ("APB 25") under which no compensation expense is
recognized. In fiscal 1997, the Company adopted SFAS No. 123,
"Accounting for Stock-Based Compensation", (SFAS 123") for disclosure
purposes; accordingly, no compensation has been recognized in the results
of operations for its stock option plan as required by APB 25.

d. Private Placement - In October 1997 through February 1998, the Company
issued 5,364,756 shares, raising $834,399. The shares were selling between
$.14 and $.21 during this time period.

11. COMMITMENTS AND CONTINGENCIES

The Company has been involved in the following law suits and claims:

ii. Fraser & Company - A claim with respect to debt for legal services
provided in the amount of $15,127. Payments of $0 and $520 were made on
this claim during the periods ended September 30, 1999 and 1998
respectively. At September 30, 1999, there was no longer a balance on
this claim. The final payoff was in April 1999.

iii. The Company has agreed to pay an employee additional compensation
(over and above current salary) of $60,000 per year for the next four
years, without condition. As of September 30, 1999, the employee has a
balance due of approximately $39,000 in comparison to $195,000 at

-9-

<PAGE>

September 30, 1998.

v. Montreal Trust Company vs Questec Imaging, Inc.- An action commenced
with respect to debt and for which judgement was obtained in the amount of
$84,000. Questec made payments totalling $650 and $1,400 during the
periods ended September 30, 1999 and 1998 respectively.

vi. Atlantic Aerospace Electronics Corporation agreement - In September
1998, the Company entered into an agreement with Atlantic Aerospace to
collaborate on the development of products that will display real time
graphic simulation of players and any and all action on the field of play
by combining sensing technology, signal processing, animation software,
custom interface software, peripheral hardware equipment, engineer
operators and graphic workstations. Atlantic shall retain ownership of the
software they develop under this agreement. The parts of each graphic
workstation not developed by Atlantic shall be owned by the Company.
Atlantic shall grant the Company a license to use executable software
libraries Atlantic develops under this agreement. This license shall give
the company perpetual and exclusive rights to use the software for sports
related applications. In exchange for this license to use Atlantic's
software, the Company, will grant Atlantic options for 500,000 stock
options for shares in the common stock of the Company. The Company will
also pay Atlantic a 10% royalty on the Company's portion of gross revenues
derived directly or indirectly from the sale, license or use of the
graphic workstations. The option has a life of 5 years and will be
subject to a 1 year restriction.

12. SIGNIFICANT CUSTOMERS

Approximately 41.0%, 21.9% 21.6% and 11.1% of the Company's
revenue was derived from four major customers during the quarter ended
September 30, 1999. During the quarter ended September 30, 1998,

-10-

<PAGE>

approximately 63.2%, 23.6% and 13.2% of the Company's revenue was derived
from three major customers.

-11-

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)

REPORT ON FINANCIAL STATEMENTS

6 MONTHS ENDED DECEMBER 31, 1999 AND 1998

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)
6 Months Ended December 31, 1999, and 1998

CONTENTS

PAGE

BALANCE SHEET 1

STATEMENT OF OPERATIONS 2

STATEMENT OF CASH FLOWS 3

NOTES TO FINANCIAL STATEMENTS 4

<PAGE>

QUESTIC IMAGING, INC.
BALANCE SHEET

DECEMBER 31,
--------------------------------
1999 1998
--------------------------------

ASSETS
CURRENT ASSETS:
Cash $ -- 9,757
Accounts receivable 3,300 14,683
Prepaid expenses -- 77,977
Other assets 5,960 --
---------- ---------
TOTAL CURRENT ASSETS 9,260 102,417
INTANGIBLE ASSETS, net 538 93,778

SOFTWARE DEVELOPMENT COSTS,
net of amortization 268,938 --

FURNITURE AND EQUIPMENT, net 115,573 64,270
---------- ---------

$394,309 $ 260,465
========== =========
LIABILITIES

CURRENT LIABILITIES:
Cash overdraft $ 5,139 $ --
Bank credit line 9,741 9,608
Accounts payable 185,822 125,318
Accrued liabilities 416,837 383,489
---------- ---------
TOTAL CURRENT LIABILITIES $617,539 518,415

ADVANCE FROM SHAREHOLDER -- --
---------- ---------

SHAREHOLDERS' EQUITY: 617,539 518,415
---------- ---------

Preferred stock, no par value,
authorized 10,000,000 shares;
none issued -- --

Common stock, no par value;
authorized 40,000,000 shares;
issued and outstanding
30,651,543 shares at
December 31, 1999 and
28,103,881 shares at
December 31, 1998 -- --

Paid - in capital 9,369,599 7,896,372

Accumulated deficit (9,592,829) (8,154,322)
----------- -----------
(223,230) (257,950)
------------ -----------
$ 394,309 $ 260,465
========== =========

Approved by the Directors

Michael W. Russo
- - -------------------------------------------------------------------------------
Director

Derek Donaldson
- - -------------------------------------------------------------------------------
Director

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

-1-
<PAGE>

QUESTEC IMAGING, INC.

STATEMENT OF OPERATIONS

Six months ended December 31,
-----------------------------
1999 1998
------------- -------------
Sales $ 78,312 87,083
Cost of sales 74,397 33,472
------------- -------------
Gross profit 3,915 53,611
------------- -------------

Expenses:
Accounting and legal and consulting (7,672) 63,970
Amortization and depreciation 57,540 17,987
Bank charges and interest 8,086 7,647
Marketing & advertising 14,988 59,547
Office supplies and expenses 579 2,378
Telephone 9,507 3,664
Travel and entertainment 63,639 17,461
Transfer agent and public company fees 12,406 32,065
Postage and shipping 9,721 7,950
Education 699 --
Dues & publications 110 975
Salaries and payroll taxes 221,745 274,095
Rent 15,991 2,184
Equipment rental 9,396 --
Utilities 2,123 --
New York State franchise tax -- 380
Rubbish removal 242
Insurance 22,621 10,197
------------- -------------
441,721 500,500
------------- -------------

Loss for period (437,806) (446,889)
Deficit, beginning of period 9,155,023 7,707,433
------------- -------------
Deficit, end of period $ 9,592,829 $ 8,154,322
================ =============

Loss per Common Share $ (0.01) $ (0.02)
================ =============

Weighted Average Shares 29,700,963 22,150,058
================ =============

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

-2-

<PAGE>

QUESTEC IMAGING, INC.

STATEMENT OF CASH FLOWS

Six months ended December 31,
-----------------------------
1999 1998
------------- -------------

CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Loss for period $(437,806) $ (446,889)
Add: Non-cash item - depreciation and amortization 57,540 17,987

Changes in non-cash working capital items:

Accounts receivable 19,511 68,117
Other assets -- 254
Intangible assets -- (104,085)
Software development costs (55,276) --
Deferred revenue -- (48,000)
Prepaid expenses (77,977)
Bankcredit line 2,339 9,608
Accounts payable and accrued liabilities (95,092) (145,569)
---------- --------
(508,784) (726,554)
---------- --------

CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES:

Note payable -- (10,000)
Share capital 607,494 1,227,415
Advances from shareholders (93,183) (480,490)
------- --------
514,311 736,925
------- -------

CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Purchase of capital assets (7,407) (4,068)
-------- ------
(7,407) (4,068)
-------- ------
INCREASE (DECREASE) IN CASH (1,880) 6,303
CASH, BEGINNING OF PERIOD (3,259) 3,454
-------- ------

CASH, END OF PERIOD $ (5,139) $ 9,757
======== ==========

SUPPLEMENTAL DISCLOSURES
Interest paid $ 3,220 $ 5,000
Income taxes paid $ -- $ --

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

-3-

<PAGE>

QUESTEC IMAGING INC.
(Formerly SZL Sportsight Inc.)
(Incorporated under the laws of Wyoming, United States of America)

NOTES TO FINANCIAL STATEMENTS

SIX MONTHS ENDED DECEMBER 31, 1999

1. THE COMPANY

2. SIGNIFICANT ACCOUNTING POLICIES

a. Software Development Costs- The Company capitalizes software
development costs in accordance with Statement of Financial Accounting
Standards No. 86, "Accounting for the Costs of Computer Software to be
Sold, Leased or Otherwise Marketed." The Company capitalized approximately
$ 55,300 and $104,000 for the six months ended December 31, 1999, and 1998
respectively.

b. Furniture and Equipment - Furniture and equipment are stated at cost
and are depreciated using the straight line method over the estimated
useful lives of the assets.

c. Use of Estimates- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of

-4-

<PAGE>

revenues and expenses during the reporting period. Actual results could
differ from those estimates.

d. Loss Per Share - Loss per share is computed on the basis of weighted
average number of common shares outstanding during the respective periods.

On December 31, 1997, the Company adopted SFAS No. 128, "Earnings per
Share." Earnings per common share are computed by dividing income available to
common stockholders by the weighted average number of common shares outstanding
during the period. The earnings per common share, assuming dilution,
computation gives effect to all dilutive potential common shares during the
period. The computation assumes that the outstanding stock options and warrants
were exercised and that the proceeds were used to purchase common shares of the
Company. Earnings per share computation for the period ending December 31, 1999
and 1998 have been restated to reflect this new standard. For the periods ended
December 31, 1999 and 1998, the Company had no dilutive securities.

e. Fair Value of Financial Instruments- The carrying amounts reported in
the balance sheet for assets and liabilities approximate fair value based
on the short term maturity of these instruments.

f. Accounting for Long-Lived Assets - The Company reviews long-lived
assets, certain identifiable assets and any goodwill related to those
assets for impairment whenever circumstances and situations change such
that there is an indication that the carrying amounts may not be
recoverable. At December 31, 1999 the Company believes that there has been
no impairment of its long-lived assets.

3. BASIS OF PRESENTATION

The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate the continuation of the Company as a going concern. However,
the Company has reported significant recurring net losses of $437,806, and
$446,889 for the six months ended 1999 and 1998, respectively. The Company
has a working capital

-5-

<PAGE>

deficiency of approximately $608,000 at December 31, 1999 in comparison to
$416,000 at December 31, 1998 respectively. Consequently, recoverability
of a major portion of the recorded asset amounts shown in the accompanying
balance sheet is dependent upon the company's ability to raise capital and
ultimately, to generate profitable operations. The financial statements do
not include any adjustments relating to the recoverability and
classification of recorded asset amounts or amounts and classifications of
liabilities that might be necessary should the company be unable to
continue in existence.

4. FURNITURE AND EQUIPMENT

December 31,
------------------------
1999 1998
---------- -------------
Furniture and equipment $ 233,509 $155,360

Accumulated depreciation (117,936) (91,090)
-------- -------
$ 115,573 $ 64,270
========== ==========

5. ACCRUED LIABILITIES

December 31,
------------------------
1999 1998
---------- -------------
Accrued taxes $ 259,911 $ 239,245

Accrued payroll 28,691 15,430

Litigation settlement 92,349 101,599

Accrued expenses 34,086 --

Accrued professional 1,800 27,215
-------- -------
$ 416,837 $ 383,489
========== ==========

-6-

<PAGE>

6. ADVANCES FROM SHAREHOLDER

A Shareholder and former officer of the Company had made advances on
behalf of the Company over several years, for a portion which advances he
had not requested reimbursement. During the year ended June 30, 1998, the
Board of Directors approved a reimbursement resulting in an amount due the
shareholder of $480,490, including amounts previously recorded. The
advance is not interest bearing and is due on demand. The remaining
balance at December 31, 1999 is $0.

7. INCOME TAXES

The Company accounts for income taxes pursuant to the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"). SFAS 109 requires the recognition of deferred
tax assets and liabilities for both the expected tax impact of differences
between the financial statement and tax impact of assets and liabilities,
and for the expected future tax benefit to be derived from tax loss and
tax credit carryforwards. SFAS 109 additionally requires the establishment
of a valuation allowance to reflect the likelihood of realization of
deferred tax assets. At December 31, 1999, and 1998, the Company had
deferred tax assets of approximately $3,332,000, and $3,200,000
representing the tax impact of the Company's net operating loss
carryforwards. The Company has recorded a valuation for the full amount of
such deferred tax assets.

As a result of the U.S. Tax Reform Act of 1986, the Company is
obligated to pay an alternative minimum tax on its alternative minimum
taxable income, even though it has a loss carryforward. These
carryforwards are subject to possible limitations on annual utilization if
there are "equity structure shifts" or "owner shifts" involving "5%
shareholders" (as these terms are defined in section 382 of the Internal
Revenue Code), which result in more than 50 percentage point change in
ownership. The company has net operating loss carryforwards approximating
$11,030,000 at December 31 1999, available to offset any future taxable
income through 2014.

8. ACCRUED PAYROLL TAXES

The Company owed payroll taxes at December 31,

-7-

<PAGE>

1999, and 1998 approximating $260,000 and $239,000 respectively.

9. RELATED PARTY TRANSACTIONS

During the periods ended December 31, 1999 and 1998, legal services
was provided by an attorney who is also a member of the board of
Directors. The balance due at December 31, 1999, and 1998 were
approximately $0 and $0 respectively. Questec also accrued $16,250 in
salary to the president who is also a member of the Board of Directors in
1999 and accrued $16,250 in 1998 respectively.

10. SHARE CAPITAL

a . Authorized- The authorized share capital of the Company consists of
50,000,000 shares, divided into 40,000,000 common shares without par
value and 10,000,000 preferred shares without par value.

b. Escrow Shares:

i. Principals' shares

750,000 common shares issued at a price of $.01 per share to two
principals of the Company were escrowed pursuant to an escrow agreement
dated June 30, 1987 The agreement provides that the principals will be
entitled to maintain ownership of these shares if the Company achieves the
financial objectives set out in its business plan. The release of the
shares is subject to the policies of the Superintendent of Brokers of the
Vancouver Stock Exchange.

During the year ended June 30, 1989, the Vancouver Stock Exchange
approved a pro-rata release of 225,000 of the principals' escrowed
shares. 525,000 of the principals' were canceled in fiscal year June 1998.

ii. Escrowed shares to be released on the basis of an earn-out formula.

In connection with the acquisition of Sportsight Inc; 3,000,000
common shares of the Company were escrowed. As of February 22, 1995
1,650,000 of the performance shares were canceled. The remaining

-8-
<PAGE>

1,350,000 shares previously held by directors and employees of the
Company were canceled during fiscal year June 1998.

c. Accounting for Employee Stock Options - The Company accounts for
its stock option plan under APB Opinion No. 25, "Accounting for Stock
issued to Employees", ("APB 25") under which no compensation expense is
recognized. In fiscal 1997, the Company adopted SFAS No. 123, "Accounting
for Stock-Based Compensation", (SFAS 123") for disclosure purposes;
accordingly, no compensation has been recognized in the results of
operations for its stock option plan as required by APB 25.

d. Private Placement - In October 1997 through February 1998, the Company
issued 5,364,756 shares, raising $834,399. The shares were selling between
$.14 and $.21 during this time period.

11. COMMITMENTS AND CONTINGENCIES

The Company has been involved in the following law suits and claims:

i. Charles F. Mehler vs. Questec Imaging, Inc. - A suit brought by a
former employee of the Company claiming approximately $161,000 for breach
of employment agreement, non-payment of wages, including damages
therefrom, unreimbused employment related expenses, and loans made to the
Company. The Company intends to vigorously defend this suit as it believes
that Mr. Mehler has been fully paid for all services rendered, and that he
in fact is the party who violated the employment agreement between the
parties. As management believes the Company has no obligation to Mr.
Mehler, no accrual has been made with respect to this litigation.
Management contends that Mr. Mehler was actually paid in excess of what
was due him and he owes the Company money.

ii. Fraser & Company - A claim with respect to debt for legal services
provided in the amount of $15,127. Payments of $0 and $325 were made on
this claim during the periods ended December 31, 1999 and 1998
respectively. At September 30, 1999, there was no longer a balance on this
claim. The final payoff was in April 1999.

-9-

<PAGE>

iii. The Company has agreed to pay an employee additional compensation
(over and above current salary) of $60,000 per year for the next four
years, without condition. As of December 31, 1999, the employee has a
balance due of approximately $0 in comparison to $25,000 at December 31,
1998.

v. Montreal Trust Company vs Questec Imaging, Inc.- An action commenced
with respect to debt and for which judgement was obtained in the amount of
$84,000. Questec made payments totalling $0 and $650 during the periods
ended December 31, 1999 and 1998 respectively.

vi. Atlantic Aerospace Electronics Corporation agreement - In September
1998, the Company entered into an agreement with Atlantic Aerospace to
collaborate on the development of products that will display real time
graphic simulation of players and any and all action on the field of play
by combining sensing technology, signal processing, animation software,
custom interface software, peripheral hardware equipment, engineer
operators and graphic workstations. Atlantic shall retain ownership of the
software they develop under this agreement. The parts of each graphic
workstation not developed by Atlantic shall be owned by the Company.
Atlantic shall grant the Company a license to use executable software
libraries Atlantic develops under this agreement. This license shall give
the company perpetual and exclusive rights to use the software for sports
related applications. In exchange for this license to use Atlantic's
software, the Company, will grant Atlantic options for 500,000 stock
options for shares in the common stock of the Company. The Company will
also pay Atlantic a 10% royalty on the Company's portion of gross revenues
derived directly or indirectly from the sale, license or use of the
graphic workstations. The option has a life of 5 years and will be subject
to a 1 year restriction.

-10-

<PAGE>

12. SIGNIFICANT CUSTOMERS

Approximately 65.4% 13.2%, and 12.4% of the Company's revenue was
derived from three major customers during the quarter ended December 31,
1999. During the quarter ended December 31, 1998, approximately 55.12%
20.7%, 12.7% and 11.5% of the Company's revenue was derived from four major
customers.

-11-

<PAGE>

PART III

Exhibits

Index to Exhibits

2. Charter and By-Laws

6. Material Contracts

6a. Agreements with Atlantic Aerospace Electronics Corporation dated
September 9, 1998

6b. Agreement with Live Motion Company dated June 9, 1999

15. Private Placement Memorandum dated October 1, 1997.

Item 2. Description of Exhibits

As listed in the above Index, the appropriate exhibits are being filed. The
additional exhibits are marked and filed. The issuer is not a Canadian issuer
and is not filing a written consent and power of attorney.

19
<PAGE>

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934,
as amended, the Registrant caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.

QUESTEC.COM,INC.

February 28, 2000 By: /s/ Michael W. Russo
-----------------------------
Michael W. Russo,
President

February 28, 2000 /s/ Deirdre Gallagher
-----------------------------
Deirdre Gallagher,
Secretary

<PAGE>

AMENDMENT TO THE ARTICLES OF INCORPORATION
OF
QUESTEC IMAGING INC.

Upon majority vote of the shareholders of the QUESTEC IMAGING INC., at
the annual meetings on December 29, 1998 and December 16, 1999, the Directors
are authorized to, and hereby do, amend the Articles of Incorporation as
follows:

I. Schedule "A" of the Company Act current reads as follows:

"1. The name of the Company is Questec Imaging Inc.

2. The authorized capital of the Company consists of Fifty Million
(50,000,000) shares, divided into Forty Million (40,000,000)
Common Shares without par value and Ten Million (10,000,000)
Preferred shares without par value."

II. THE SAME SHALL BE AND HEREBY IS AMENDED TO READ AS FOLLOWS:

"1. THE NAME OF THE COMPANY IS QUESTEC.COM INC.

2. THE AUTHORIZED CAPITAL OF THE COMPANY CONSISTS OF ONE HUNDRED
MILLION (100,000,000) SHARES, DIVIDED INTO EIGHTY MILLION
(80,000,000) COMMON SHARES WITH A PAR VALUE OF $0.0001 PER SHARE
AND TWENTY MILLION (20,000,000) PREFERRED SHARES WITH A PAR VALUE
OF $0.0001 PER SHARE."

III. Part 27, Article 27.1 of the Articles currently reads as follows:

"27.1 Preferred Shares as a Class. The 10,000,000 Preferred Shares
without par value shall, as a class, have the following special rights
and restrictions attached thereto, namely:"

IV. The same shall be and hereby is amended to read as follows:

"27.1 PREFERRED SHARES AS A CLASS. THE 20,000,000 PREFERRED SHARES WITH
A PAR VALUE OF $0.0001 PER SHARE SHALL, AS A CLASS, HAVE THE FOLLOWING
SPECIAL RIGHTS AND RESTRICTIONS ATTACHED THERETO, NAMELY:"

DATED this 18th day of January, 2000.

QUESTEC IMAGING INC.

By: /s/ Derek Donaldson
-----------------------------
Derek Donaldson, Its Director

By: /s/ R. Stewart
-----------------------------
Rene Stewart, Its Director

<PAGE>

Secretary of State
State of Wyoming
The Capitol
Cheyenne, WY 82002-0020

APPLICATION FOR CERTIFICATE OF REGISTRATION
AND ARTICLES OF CONTINUANCE

Pursuant to W.S. 17-16-1710 of the Wyoming Business Corporation Act, the
undersigned hereby submits the following Articles of Continuance:

1. The name of the corporation is: QUESTEC IMAGING INC.

2. It is incorporated under the laws of: British Columbia

3. (a) The date of its incorporation is: February 3, 1987
(b) The period of its duration is: perpetual

4. The address of its principal office of the corporation is:

160A West Industry Court
Deer Park, NY 11729

5. The mailing address where correspondence and annual reports can be sent:
160A West Industry Court
Deer Park, NY, 11729

6. The mailing address of its proposed registered office in Wyoming and the
name of its registered agent at that address is:

STEPHANIE R. BRYANT
1712 Capitol Avenue
P.O. Box 968
Cheyenne, WY 82003

(The agent must be an individual who resides in this state, a domestic
corporation or a not-for-profit domestic corporation or a foreign
corporation or not-for-profit foreign corporation authorized to transact
business in this state.)

7. The purpose or purposes of the corporation which it proposes to pursue in
the transaction of business in this state: Software computer company

[WYOMING SECRETARY OF STATE SEAL]
<PAGE>

8. The names and respective addresses if its officers and directors are:

Office Name Address

President MICHAEL W. RUSSO 4 Cutter Court
West Islip, NY 11795

Vice President

Secretary DEIRDRE GALLAGHER 4 Greenleaf Drive
Huntington, NY 11743

Treasurer

Director DEREK DONALDSON 59 West Battle Street
Kamloops, BC V2C 1G7

Director RENE STEWART 311 Walnut Avenue
Kamloops, BC V2B 1H4

Director

9. The aggregate number of shares or other ownership units which it has the
authority to issue, itemized by classes, par value of shares, shares without
par value and series, if any, within a class is:

Number of Shares Class Series Par Value per Share

40,000,000 Common NPV
10,000,000 Preferred NPV

10. The aggregate number of issued shares or other ownership units itemized by
classes, par value of shares, shares without par value and series, if any,
within a class is:

Number of Shares Class Series Par Value per Share

22,416,274 Common NPV

11. The corporation accepts the Constitution of this state in compliance with
the requirements of Article 10, Section 5 of the Wyoming Constitution.

Date: March 16, 1998 Signed: /s/ Rene Stewart
-------------- ------------------------
Title: Director
------------------------

Province of British Columbia )
County of Yale )
Canada

I, Mary MacGregor, Notary Public, do hereby certify that on this 16th day of
March 1998, personally appeared before me Rene Stewart, who, being by me first
duly sworn, declared that she signed the foregoing document as Director of the
corporation, and that the statements therein are true.

In witness whereof, I have hereunto set my hand and seal this 16th day of
March, 1998.

(Notarial Seal) /s/ Mary MacGregor
-------------------------------
Mary MacGregor
My commission expires: N/A

Mary MacGregor
MARY MacGREGOR LAWYER
603 ST. PAUL STREET
KAMLOOPS, BC V2C 2K1

<PAGE>

ARTICLES

SPT SPORTSIGHT INC.

TABLE OF CONTENTS

PART ARTICLE SUBJECT
1 INTERPRETATION
1.1. Definition
Construction of Words
1.2. Definitions same as Company Act
1.3. Interpretation Act Rules of Construction apply

2 SHARES
2.1. Member entitled to Certificate
2.2. Replacement of Lost of Defaced Certificate
2.3. Execution of Certificates
2.4. Recognition of Trusts

3 ISSUE OF SHARES
3.1. Directors Authorized
3.2. Conditions of Allotment
3.3. Commissions and Brokerage
3.4. Conditions of Issue

4 SHARE REGISTERS
4.1 Registers of Members, Transfers and Allotments
4.2. Branch Registers of Members

5 TRANSFER AND TRANSMISSION OF SHARES
5.1. Transfer of Shares
5.2. Execution of Instrument of Transfer
5.3. Enquiry as to Title not Required
5.4. Submission of Instruments of Transfer
5.5. Transfer Fee
5.6. Personal Representative Recognized on Death
5.7. Death or Bankruptcy
5.8. Persons in Representative Capacity

<TABLE>
<CAPTION>
6 ALTERATION OF CAPITAL
<S> <C> <C>
6.1. Increase of Authorized Capital
6.2. Other Capital Alterations
6.3. Creation, Variation and Abrogation or Special Rights and Restrictions
6.4. Consent of Class Required
6.5. Special Rights of Conversion
6.6. Class Meetings of Members
</TABLE>

<PAGE>
PART ARTICLE SUBJECT
7 PURCHASE AND REDEMPTION OF SHARES
7.1. Company Authorized to Purchase or Redeem its Shares
7.2. Selection of Shares to be Redeemed
7.3. Purchased or Redeemed Shares Not Voted

<TABLE>
<CAPTION>
8 BORROWING POWERS
<S> <C> <C>
8.1. Powers of Directors
8.2. Special Rights Attached to and Negotiability of Debt Obligations
8.3. Register of Debentureholders
8.4. Execution of Debt Obligations
8.5. Register of Indebtedness
</TABLE>

9 GENERAL MEETINGS
9.1. Annual General Meetings
9.2. Waiver of Annual General Meeting
9.3. Classification of General Meetings
9.4. Calling of Meetings
9.5. Advance Notice for Election of Directors
9.6. Notice of General Meeting
9.7. Waiver or Reduction of Notice
9.8. Notice of Special Business at General Meeting

10 PROCEEDINGS AT GENERAL MEETINGS
10.1. Special Business
10.2. Requirements of Quorum
10.3. Quorum
10.4. Lack of Quorum
10.5. Chairman
10.6. Alternate Chairman
10.7. Adjournments
10.8. Resolutions Need Not Be Seconded
10.9. Decisions by Show of Hands or Poll
10.10. Casting Vote
10.11. Manner of Taking Poll
10.12. Retention of Ballots Cast on a Poll
10.13. Casting of Votes
10.14. Ordinary Resolution Sufficient

11 VOTES OF MEMBERS
11.1. Number of Votes Per Share or Member
11.2. Votes of Persons in Representative Capacity
11.3. Representative of a Corporate Member
11.4. Votes by Joint Holders
11.5. Votes by Committee for a Member
11.6. Appointment of Proxyholders
11.7. Execution of Form of Proxy
11.8. Deposit of Proxy
11.9. Validity of Proxy Note
11.10. Revocation of Proxy

<PAGE>
PART ARTICLE SUBJECT
12 DIRECTORS
12.1. Number of Directors
12.2. Remuneration and Expenses of Directors
12.3. Qualification of Directors

13 ELECTION OF DIRECTORS
13.1. Election at Annual General Meetings
13.2. Eligibility of Retiring Director
13.3. Continuance of Directors
13.4. Election of Less than Required Number of Directors
13.5. Filing a Casual Vacancy
13.6. Additional Directors
13.7. Alternate Directors
13.8. Termination of Directorship
13.9. Removal of Directors

14 POWERS OF DUTIES OF DIRECTORS
14.1. Management of Affairs and Business
14.2. Appointment of Attorney

15 DISCLOSURE OF INTEREST OF DIRECTORS
15.1. Disclosure of Conflicting Interest
15.2. Voting and Quorum re Proposed Contract
15.3. Director May Hold Office or Place of Profit with Company
15.4. Director Acting in Professional Capacity
15.5. Director Receiving Remuneration from Other Interests

16 PROCEEDINGS OF DIRECTORS
16.1. Chairman and Alternate
16.2. Meetings - Procedure
16.3. Meetings by Conference Telephone
16.4. Notice of Meeting
16.5. Waiver of Notice of Meetings
16.6. Quorum
16.7. Continuing Directors may Act During Vacancy
16.8. Validity of Acts of Directors
16.9. Resolution in Writing Effective

17 EXECUTIVE AND OTHER COMMITTEES
17.1. Appointment of Executive Committee
17.2. Appointment of Committees
17.3. Procedure at Meetings

18 OFFICERS
18.1. President and Secretary Required
18.2. Persons Holding More Than One Office and Remuneration
18.3. Disclosure of Conflicting Interests

<PAGE>
PART ARTICLE SUBJECT
19 INDEMNITY AND PROTECTION OF DIRECTORS, OFFICERS AND EMPLOYEES
19.1. Indemnification of Directors
19.2. Indemnification of Officers, Employees, Agents
19.3. Indemnification not invalidated by non-compliance
19.4. Company may Purchase Insurance

20 DIVIDENDS AND RESERVES
20.1. Declaration of Dividends
20.2. Declared Dividend Date
20.3. Proportionate to Number of Shares Held
20.4. Reserves
20.5. Receipts from Joint Holders
20.6. No Interest on Dividends
20.7. Payment of Dividends
20.8. Capitalization of Undistributed Surplus

21 DOCUMENTS, RECORDS AND REPORTS
21.1. Documents to be Kept
21.2. Accounts to be Kept
21.3. Inspection of Accounts
21.4. Financial Statements and Reports for General Meetings
21.5. Financial Statements and Reports for Members

22 NOTICES
22.1. Method of Giving Notice
22.2. Notice to Joint Holder
22.3. Notice to Personal Representative
22.4. Persons to Receive Notice

23 RECORD DATES
23.1. Record Date
23.2. No Closure of Register of Members

24 SEAL
24.1. Affixation of Seal to Documents
24.2. Reproduction of Seal
24.3. Official Seal for Other Jurisdictions

25 MECHANICAL REPRODUCTION OF SIGNATURES
25.1. Instruments may be Mechanically Signed
25.2. Definition of Instruments

<TABLE>
<CAPTION>
26 PROHIBITIONS
<S> <C> <C>
26.1. Number of Members and No Securities to be Offered to the Public
26.2. Restriction of Transfer of Shares
</TABLE>

<PAGE>
PART ARTICLE SUBJECT
27 PREFERRED SHARES AS A CLASS
27.1. Preferred Shares As a Class
27.2. Preferred Shares Issuable in Series
27.3. Priority
27.4. Parity of Preferred Shares
27.5. Liquidation, Dissolution or Winding-Up
27.6. Voting Rights in Case of Default
27.7. Approval of Holders of Preferred Shares
27.8. Interpretation

<PAGE>

PROVINCE OF BRITISH COLUMBIA

COMPANY ACT

ARTICLES
OF

SPT SPORTSIGHT INC.

PART 1

INTERPRETATION

1.1. In these Articles, unless there is something in the subject or context
inconsistent therewith:

"Board" and "the Directors" or "the directors" mean the Directors,
sole Director or alternate Director of the Company for the time
being.

"Company Act" means the Company Act of the Province of British
Columbia as from time to time enacted and all amendments thereto and
statutory modifications thereof and includes the regulations made
pursuant thereto.

"seal" means the common seal of the Company.

"month" means calendar month.

"registered owner" or "registered holder" when used with respect to a
share in the authorized capital of the Company means the person
registered in the register of members in respect of such share.

"personal representative" shall include executors, administrators,
trustees in bankruptcy and duly constituted representatives in
lunacy.

Expressions referring to writing shall be construed as including references
to printing, lithography, typewriting, photography and other modes of
representing or reproducing words in a visible form.

Words importing the singular include the plural and vice versa; and words
importing male persons include female persons and words importing persons shall
include corporations.

1.2. The meaning of any words or phrases defined in the Company Act shall,
if not inconsistent with the subject or context, bear the same meaning in these
Articles.

1.3. The Rules of Construction contained in the Interpretation Act shall
apply, mutatis mutandis, to the interpretation of these Articles.

PART 2

SHARES AND SHARE CERTIFICATES

2.1. Every member is entitled, without charge, to one certificate
representing the share or shares of each class held by him; provided that, in
respect of a share or shares held jointly by several persons, the Company shall
not be bound to issue more than one certificate, and delivery of a certificate
for a share to the first named of several joint registered holders or to his
duly authorized agent shall be sufficient delivery to all; and provided further
that the Company shall not be bound to issue certificates representing
redeemable shares, if such shares are to be redeemed within one month of the
date on which they were allotted. Any share certificate may be sent through the
mail by registered prepaid mail to the member entitled thereto, and neither the
Company nor any transfer agent shall be liable for any loss occasioned to the
member owing to any such share certificate so sent being lost in the mail or
stolen.

2.2. If a share certificate

(i) is worn out or defaced, the Directors shall, upon production to them
of the said certificate and upon such other terms, if any, as they may
think fit, order the said certificate to be cancelled and shall issue
a new certificate in lieu thereof:

<PAGE>

(ii) is lost, stolen or destroyed, then, upon proof thereof to the
satisfaction of the Directors and upon such indemnity, if any, as the
Directors deem adequate being given, a new share certificate in lieu
thereof shall be issued to the person entitled to such lost, stolen or
destroyed certificate; or

(iii) represents more than one share and the registered owner thereof
surrenders it to the Company with a written request that the Company
issue in his name two or more certificates each representing a
specified number of shares and in the aggregate representing the same
number of shares as the certificate so surrendered and, upon payment
of an amount determined from time to time by the Directors, the
Company shall cancel the certificate so surrendered and issue in lieu
thereof certificates in accordance with such request.

2.3. Every share certificate shall be signed manually by at least one
officer or Director of the Company, or by or on behalf of a registrar, branch
registrar, transfer agent or branch transfer agent of the Company and any
additional signatures may be printed, lithographed, engraved or otherwise
mechanically reproduced in accordance with these Articles.

2.4. Except as required by law, statute or these Articles, no person shall
be recognized by the Company as holding any share upon any trust, and the
Company shall not be bound by or compelled in any way to recognize (even when
having notice thereof) any equitable, contingent, future or partial interest in
any share or in any fractional part of a share or (except only as by law,
statute or these Articles provided or as ordered by a court of competent
jurisdiction) any other rights in respect of any share except an absolute right
to the entirety thereof in its registered holder.

PART 3

ISSUE OF SHARES

3.1. Subject to Article 3.2 and to any direction to the contrary contained
in a resolution passed at a general meeting authorizing any increase or
alteration of capital, the shares shall be under the control of the Directors
who may, subject to the rights of the registered holders of the shares of the
Company for the time being issued, issue, allot, sell or otherwise dispose of,
and/or grant options on or otherwise deal in, shares authorized but not
outstanding at such times, to such persons (including Directors), in such
manner, upon such terms and conditions, and at such price or for such
consideration, as they, in their absolute discretion, may determine.

3.2. If the Company is, or becomes, a company which is not a reporting
company and the Directors are required by the Company Act before allotting any
shares to offer them pro rata to the members, the Directors shall, before
allotting any shares, comply with the applicable provisions of the Company Act.

3.3. Subject to the provisions of the Company Act, the Company, or the
Directors on behalf of the Company, may pay a commission or allow a discount to
any person in consideration of his subscribing or agreeing to subscribe, whether
absolutely or conditionally, for any shares, debentures, share rights, warrants
or debenture stock in the Company, or procuring or agreeing to procure
subscriptions, whether absolutely or conditionally, for any such shares,
debentures, share rights, warrants or debenture stock, provided that, if the
Company is not a specially limited company, the rate of the commission and
discount shall not in the aggregate exceed 25 per centum of the amount of the
subscription price of such shares, and if the Company is a specially limited
company, the rate of the commission and discount shall not in the aggregate
exceed 98 per centum of the amount of the subscription price of such shares,
debentures, share rights, warrants or debenture stock. The Company may also pay
such brokerage as may be lawful.

3.4. No share may be issued until it is fully paid and the Company shall
have received the full consideration therefor in cash, property or past services
actually performed for the Company. The value of the property or services for
the purposes of this Article shall be the value determined by the Directors by
resolution to be, in all circumstances of the transaction, the fair market value
thereof.

<PAGE>

PART 4

SHARE REGISTERS

4.1. The Company shall keep or cause to be kept a register of members, a
register of transfers and a register of allotments within British Columbia, all
as required by the Company Act, and may combine one or more of such registers.
If the Company's capital shall consist of more than one class of shares, a
separate register of members, register of transfers and register of allotments
may be kept in respect of each class of shares. The Directors on behalf of the
Company may appoint a trust company to keep the register of members, register of
transfers and register of allotments or, if there is more than one class of
shares, the Directors may appoint a trust company, which need not be the same
trust company, to keep the register of members, the register of transfers and
the register of allotments for each class of shares. The Directors on behalf of
the Company may also appoint one or more trust companies, including the trust
company which keeps the said registers of its shares or of a class thereof, as
transfer agent for its shares or such class thereof, as the case may be, and the
same or another trust company or companies as registrar for its shares or such
class thereof, as the case may be. The Directors may terminate the appointment
of any such trust company at any time and may appoint another trust company in
its place.

4.2. Unless prohibited by the Company Act, the Company may keep or cause to
be kept one or more branch registers of members at such place or places as the
Directors may from time to time determine.

PART 5

TRANSFER AND TRANSMISSION OF SHARES

5.1. Subject to the provisions of the Memorandum and of these Articles that
may be applicable, any member may transfer any of his shares by instrument in
writing executed by or on behalf of such member and delivered to the Company or
its transfer agent. The instrument of transfer of any share of the Company shall
be in the form, if any, on the back of the Company's share certificates or in
such other form as the Directors may from time to time approve. Except to the
extent that the Company Act may otherwise provide, the transferor shall be
deemed to remain the holder of the shares until the name of the transferee is
entered in the register of members or a branch register of members thereof.

5.2. The signature of the registered holder of any shares, or of his duly
authorized attorney, upon an authorized instrument of transfer shall constitute
a complete and sufficient authority to the Company, its directors, officers and
agents to register, in the name of the transferee as named in the instrument of
transfer, the number of shares specified therein or, if no number is specified,
all the shares of the registered holder represented by share certificates
deposited with the instrument of transfer. If no transferee is named in the
instrument of transfer, the instrument of transfer shall constitute a complete
and sufficient authority to the Company, its directors, officers and agents to
register, in the name of the person in whose behalf any certificate for the
shares to be transferred is deposited with the Company for the purpose of having
the transfer registered, the number of shares specified in the instrument of
transfer or, if no number is specified, all the shares represented by all share
certificates deposited with the instrument of transfer.

5.3. Neither the Company nor any Director, officer or agent thereof shall
be bound to inquire into the title of the person named in the form of transfer
as transferee, or, if no person is named therein as transferee, of the person on
whose behalf the certificate is deposited with the Company for the purpose of
having the transfer registered or be liable to any claim by such registered
holder or by any intermediate holder of the certificate or of any of the shares
represented thereby or any interest therein for registering the transfer, and
the transfer, when registered, shall confer upon the person in whose name the
shares have been registered a valid title to such shares.

<PAGE>

5.4. Every instrument of transfer shall be executed by the transferor and
left at the registered office of the Company or at the office of its transfer
agent or registrar for registration together with the share certificate for the
shares to be transferred and such other evidence, if any, as the Directors or
the transfer agent or registrar may require to prove the title of the transferor
or his right to transfer the shares and the right of the transferee to have the
transfer registered. All instruments of transfer where the transfer is
registered shall be retained by the Company or its transfer agent or registrar
and any instrument of transfer, where the transfer is not registered, shall be
returned to the person depositing the same together with the share certificate
which accompanied the same when tendered for registration.

5.5. There shall be paid to the Company in respect of the registration of
any transfer such sum, if any, as the Directors may from time to time determine.

5.6. In the case of the death of a member, the survivor or survivors where
the deceased was a joint registered holder, and the legal personal
representative of the deceased where he was the sole holder, shall be the only
persons recognized by the Company as having any title to his interest in the
shares. Before recognizing any legal personal representative the Directors may
require him to obtain a grant of probate or letters of administration in British
Columbia.

5.7. Upon the death or bankruptcy of a member, his personal representative
or trustee in bankruptcy, although not a member, shall have the same rights,
privileges and obligations that attach to the shares formerly held by the
deceased or bankrupt member if the documents required by the Company Act shall
have been deposited at the Company's registered office.

5.8. Any person becoming entitled to a share in consequence of the death or
bankruptcy of a member shall, upon such documents and evidence being produced to
the Company as the Company Act requires or who becomes entitled to a share as a
result of an order of a Court of competent jurisdiction or a statute has the
right either to be registered as a member in his representative capacity in
respect of such share, or, if he is a personal representative, instead of being
registered himself, to make such transfer of the share as the deceased or
bankrupt person could have made; but the Directors shall, as regards a transfer
by a personal representative or trustee in bankruptcy, have the same right, if
any, to decline or suspend registration of a transferee as they would have in
the case of a transfer of a share by the deceased or bankrupt person before the
death or bankruptcy.

PART 6

ALTERATION OF CAPITAL

6.1. The Company may by ordinary resolution filed with the Registrar amend
its Memorandum to increase the authorized capital of the Company by:

(i) creating shares with par value or shares without par value, or both;

(ii) increasing the number of shares with par value or shares without par
value, or both; or

(iii) increasing the par value of a class of shares with par value, if no
shares of that class are issued.

All new shares shall be subject to the same provisions with reference to
transfers, transmissions and otherwise as the existing shares of the Company.

6.2. The Company may by special resolution alter its Memorandum to
subdivide, consolidate, change from shares with par value to shares without par
value, or from shares without par value to shares with par value, or change the
designation of, all or any of its shares but only to such extent, in such manner
and with such consents of members holding a class of shares which is the subject
of or affected by such alteration as the Company Act provides.

6.3. The Company may alter its Memorandum or these Articles

(i) by special resolution, to create, define and attach special rights or
restrictions to any shares, and
<PAGE>

(ii) by special resolution and by otherwise complying with any applicable
provision of its Memorandum or these Articles, to vary or abrogate any
special rights and restrictions attached to any shares

and in each case by filing a certified copy of such resolution with the
Registrar but no right or special right attached to any issued shares shall be
prejudiced or interfered with unless all members holding shares of each class
whose right or special right is so prejudiced or interfered with consent
thereto in writing, or unless a resolution consenting thereto is passed at a
separate class meeting of the holders of the shares of each such class by a
majority of three-fourths, or such greater majority as may be specified by the
special rights attached to the class of shares, of the issued shares of such
class.

6.4. Notwithstanding such consent in writing or such resolution, not such
alteration shall be valid as to any part of the issued shares of any class
unless the holders of the rest of the issued shares of such class either all
consent thereto in writing or consent thereto by a resolution passed by the
votes of members holding three-fourths of the rest of such shares.

6.5. If the Company is or become a reporting company, no resolution to
create, vary or abrogate any special right of conversion attaching to any class
of shares shall be submitted to any meeting of members unless, if so required by
the Company Act, the Superintendent of Brokers shall have consented to the
resolution.

6.6. Unless these Articles otherwise provide, the provisions of these
Articles relating to general meetings shall apply, with the necessary changes
and so far as they are applicable, to a class meeting of members holding a
particular class of shares but the quorum at a class meeting shall be one person
holding or representing by proxy one-third of the shares affected.

PART 7

PURCHASE AND REDEMPTION OF SHARES

7.1. Subject to the special rights and restrictions attached to any class
of shares, the Company may, by a resolution of the Directors and in compliance
with the Company Act, purchase any of its shares at the price and upon the terms
specified in such resolution or redeem any class of its shares in accordance
with the special rights and restrictions attaching thereto. No such purchase or
redemption shall be made if the Company is insolvent at the time of the proposed
purchase or redemption or if the proposed purchase or redemption would render
the Company insolvent. Unless the shares are to be purchased through a stock
exchange or the Company is purchasing the shares from dissenting members
pursuant to the requirements of the Company Act, the Company shall make its
offer to purchase pro rata to every member who holds shares of the class or
kind, as the case may be, to be purchased.

7.2. If the Company proposes at its option to redeem some but not all of
the shares of any class, the Directors may, subject to the special rights and
restrictions attached to such class of shares, decide the manner in which the
shares to be redeemed shall be selected.

7.3. Subject to the provisions of the Company Act, any shares purchased or
redeemed by the Company may be sold or issued by it, but, while such shares are
held by the Company, it shall not exercise any vote in respect of these shares.

PART 8

BORROWING POWERS

8.1. The Directors may from time to time on behalf of the Company

(i) borrow money in such manner and amount, on such security, from such
sources and upon such terms and conditions as they think fit,

<PAGE>

(ii) issue bonds, debentures, and other debt obligations either outright
or as security for any liability or obligation of the Company or any
other person, and

(iii) mortgage, charge, whether by way of specific or floating charge, or
give other security on the undertaking, or on the whole or any part
of the property and assets, of the Company (both present and future).

8.2. Any bonds, debentures or other debt obligations of the Company may be
issued at a discount, premium or otherwise, and with any special privileges as
to redemption, surrender, drawing, allotment of or conversion into or exchange
for shares or other securities, attending and voting at general meetings of the
Company, appointment of Directors or otherwise and may by their terms be
assignable free from any equities between the Company and the person to whom
they were issued or any subsequent holder thereof, all as the Directors may
determine.

8.3. The Company shall keep or cause to be kept within Province of British
Columbia in accordance with the Company Act a register of its debentures and a
register of debentureholders, which registers may be combined, and, subject to
the provisions of the Company Act, may keep or cause to be kept one or more
branch registers of its debentureholders at such place or places as the
Directors may from time to time determine and the Directors may by resolution,
regulation or otherwise make such provisions as they think fit respecting the
keeping of such branch registers.

8.4. Every bond, debenture or other debt obligation of the Company shall be
signed manually by at least one Director or officer of the Company or by or on
behalf of a trustee, registrar, branch registrar, transfer agent or branch
transfer agent for the bond, debenture or other debt obligation appointed by the
Company or under any instrument under which the bond, debenture or other debt
obligation is issued and any additional signatures may be printed or otherwise
mechanically reproduced thereon and, in such event, a bond, debenture or other
debt obligation so signed is as valid as if signed manually notwithstanding that
any person whose signature is so printed or mechanically reproduced shall have
ceased to hold the office that he is stated on such bond, debenture or other
debt obligation to hold at the date of the issue thereof.

8.5. The Company shall keep or cause to be kept a register of its
indebtedness to every Director or officer of the Company or an associate of any
of them in accordance with the provisions of the Company Act.

PART 9

GENERAL MEETINGS

9.1. Subject to any extensions of time permitted pursuant to the Company
Act, the first annual general meeting of the Company shall be held within
fifteen months from the date of incorporation and thereafter an annual general
meeting shall be held once in every calendar year at such time (not being more
than thirteen months after the holding of the last preceding annual general
meeting) and place as may be determined by the Directors.

9.2 If the Company is, or becomes, a company which is not a reporting
company and all the members entitled to attend and vote at an annual general
meeting consent in writing to all the business which is required or desired to
be transacted at the meeting, the meeting need not be held.

9.3. All general meetings other than annual general meetings are herein
referred to as and may be called extraordinary general meetings.

9.4. The Directors may, whenever they think fit, convene an extraordinary
general meeting. An extraordinary general meeting, if requisitioned in
accordance with the Company Act, shall be convened by the Directors or, if not
convened by the Directors, may be convened by the requisitionists as provided in
the Company Act.

<PAGE>

9.5. If the Company is or becomes a reporting company, advance notice of
any general meeting at which Directors are to be elected shall be published in
the manner required by the Company Act.

9.6. A notice convening a general meeting specifying the place, the day,
and the hour of the meeting, and, in case of special business, the general
nature of that business, shall be given as provided in the Company Act and in
the manner hereinafter in these Articles mentioned, or in such other manner (if
any) as may be prescribed by ordinary resolution, whether previous notice
thereof has been given or not, to such persons as are entitled by law or under
these Articles to receive such notice from the Company. Accidental omission to
give notice of a meeting to, or the non-receipt of notice of a meeting, by any
member shall not invalidate the proceedings at that meeting.

9.7. All the members of the Company entitled to attend and vote at a
general meeting may, by unanimous consent in writing given before, during or
after the meeting, or if they are present at the meeting by a unanimous vote,
waive or reduce the period of notice of such meeting and an entry in the minute
book of such waiver or reduction shall be sufficient evidence of the due
convening of the meeting.

9.8. Except as otherwise provided by the Company Act, where any special
business at a general meeting includes considering, approving, ratifying,
adopting or authorizing any document or the execution thereof or the giving of
effect thereto, the notice convening the meeting shall, with respect to such
document, be sufficient if it states that a copy of the document or proposed
document is or will be available for inspection by members at the registered
office or records office of the Company or at some other place in British
Columbia designated in the notice during usual business hours up to the date
of such general meeting.

PART 10

PROCEEDINGS AT GENERAL MEETINGS

10.1. All business shall be deemed special business which is transacted at

(i) an extraordinary general meeting other than the conduct of and voting
at, such meeting; and

(ii) an annual general meeting, with the exception of the conduct of, and
voting at, such meeting, the consideration of the financial statement
and of the respective reports of the Directors and Auditor, fixing or
changing the number of directors, approval of a motion to elect two or
more directors by a single resolution, the election of Directors, the
appointment of the Auditor, the fixing of the remuneration of the
Auditor and such other business as by these Articles of the Company
Act may be transacted at a general meeting without prior notice
thereof being given to the members or any business which is brought
under consideration by the report of the Directors.

10.2. No business, other than election of the chairmen or the adjournment
of the meeting, shall be transacted at any general meeting unless a quorum of
members, entitled to attend and vote, is present at the commencement of the
meeting, but the quorum need not be present throughout the meeting.

10.3. Save as herein otherwise provided, a quorum shall be two members or
proxyholders representing two members, or one member and a proxyholder
representing another member. The Directors, the Secretary or, in his absence, an
Assistant Secretary, and the solicitor of the Company shall be entitled to
attend at any general meeting but no such person shall be counted in the quorum
or be entitled to vote at any general meeting unless he shall be a member or
proxyholder entitled to vote thereat.

10.4. If within half an hour from the time appointed for a general meeting
the quorum is not present, the meeting, if convened upon the requisition of
members, shall be dissolved. In any other case it shall stand adjourned to the
same day in the next week, at the same time and place, and, if at the adjourned
meeting a quorum is not present within half an hour from the appointed time for
the meeting, the person or persons present and being, or representing by proxy,
a member or members entitled to attend and vote at the meeting shall be a
quorum.

<PAGE>

10.5. The Chairman of the Board, if any, or in his absence the President of
the Company or in his absence a Vice-President of the Company, if any, shall be
entitled to preside as chairman at every general meeting of the Company.

10.6. If at any general meeting, neither the Chairman of the Board nor
President nor a Vice-President is present within fifteen minutes after the time
appointed for holding the meeting or is willing to act as chairman, the
Directors present shall choose some one of their number to be chairman or if
all the Directors present decline to take the chair or shall fail to so choose
or if no Director be present, the members present shall choose some other
person in attendance, who need not be a member, to be chairman.

10.7. The chairman may and shall, if so directed by the meeting, adjourn
the meeting from time to time and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left unfinished at
the meeting from which the adjournment took place. When a meeting is adjourned
for thirty days or more, notice, but not advance notice, of the adjourned
meeting shall be given as in the case of an original meeting. Save as aforesaid,
it shall not be necessary to give any notice of an adjourned meeting or the
business to be transacted at an adjourned meeting.

10.8. No motion proposed at a general meeting need be seconded and the
chairman may propose or second a motion.

10.9. Subject to the provisions of the Company Act, at any general meeting
a resolution put to the vote of the meeting shall be decided on a show or hands,
unless (before or on the declaration of the result of the show of hands) a poll
is directed by the chairman or demanded by at least one member entitled to vote
who is present in person or by proxy. The chairman shall declare to the meeting
the decision on every question in accordance with the result of the show of
hands or the poll, and such decision shall be entered in the book of proceedings
of the Company. A declaration by the chairman that a resolution has been
carried, or carried unanimously, or by a particular majority, or lost or not
carried by a particular majority and an entry to that effect in the book of the
proceedings of the Company shall be conclusive evidence of the fact, without
proof of the number or proportion of the votes recorded in favour of, or
against, that resolution.

10.10. In the case of an equality of votes, whether on a show of hands or
on a poll, the chairman of the meeting at which the show of hands takes place or
at which the poll is demanded shall be entitled to a casting vote in addition to
the vote or votes to which he may be entitled as a member or proxyholder and
this provision shall apply notwithstanding the Chairman is interested in the
subject matter of the resolution.

10.11. No poll may be demanded on the election of a chairman. A poll
demanded on a question of adjournment shall be taken forthwith. A poll demanded
on any other question shall be taken as soon as, in the opinion of the chairman,
is reasonably convenient, but in no event later than seven days after the
meeting and at such time and place and in such manner as the chairman of the
meeting directs. The result of the poll shall be deemed to be the resolution of
and passed at the meeting upon which the poll was demanded. Any business other
than that upon which the poll has been demanded may be proceeded with pending
the taking of the poll. A demand for a poll way be withdrawn. In any dispute as
to the admission or rejection of a vote the decision of the chairman made in
good faith shall be final and conclusive.

10.12. Every ballot cast upon a poll and every proxy appointing a
proxyholder who casts a ballot upon a poll shall be retained by the Secretary
for such period and be subject to such inspection as the Company Act may
provide.

10.13. On a poll a person entitled to cast more than one vote need not, if
he votes, use all his votes or cast all the votes he uses in the same way.

10.14. Unless the Company Act, the Memorandum or these Articles otherwise
provide, any action to be taken by a resolution of the members may be taken by
an ordinary resolution.

<PAGE>

PART 11

VOTES OF MEMBERS

11.1. Subject to any special voting rights or restrictions attached to any
class of shares and the restrictions on joint registered holders of shares, on
a show of hands every member who is present in person and entitled to vote
thereat shall have one vote and on a poll every member shall have one vote for
each share of which he is the registered holder and may exercise such vote
either in person or by proxyholder.

11.2. Any person who is not registered as a member but is entitled to vote
at any general meeting in respect of a share, may vote the share in the same
manner as if he were a member; but, unless the Directors have previously
admitted his right to vote at that meeting in respect of the share; he shall
satisfy the Directors of his right to vote the share before the time for holding
the meeting, or adjourned meeting, as the case may be, at which he proposes to
vote.

11.3. Any corporation not being a subsidiary which is a member of the
Company may by resolution of its directors or other governing body authorize
such person as it thinks fit to act as its representative at any general
meeting or class meeting. The person so authorized shall be entitled to
exercise in respect of and at such meeting the same powers on behalf of the
corporation which he represents as that corporation could exercise if it were
an individual member of the Company personally present, including, without
limitation, the right, unless restricted by such resolution, to appoint a
proxyholder to represent such corporation, and shall be counted for the purpose
of forming a quorum if present at the meeting. Evidence of the appointment of
any such representative may be sent to the Company by written instrument,
telegram, telex or any method of transmitting legibly recorded messages.
Notwithstanding the foregoing, a corporation being a member may appoint a
proxyholder.

11.4. In the case of joint registered holders of a share the vote of the
senior who exercises a vote, whether in person or by proxyholder, shall be
accepted to the exclusion of the votes of the other joint registered holders;
and for this purpose seniority shall be determined by the order in which the
names stand in the register of members. Several legal personal representatives
of a deceased member whose shares are registered in his sole name shall for the
purpose of this Article be deemed joint registered holders.

11.5. A member of unsound mind entitled to attend and vote, in respect of
whom an order has been made by any court having jurisdiction, may vote, whether
on a show of hands or on a poll, by his committee, curator bonis, or other
person in the nature of a committee or curator bonis appointed by that court,
and any such committee, curator bonis, or other person may appoint a
proxyholder.

11.6. A member holding more than one share in respect of which he is
entitled to vote shall be entitled to appoint one or more (but not more than
five) proxyholders to attend, act and vote for him on the same occasion. If
such member should appoint more than one proxyholder for the same occasion he
shall specify the number of shares each proxyholder shall be entitled to vote. A
member may also appoint one or more alternate proxyholders to act in the place
and stead of an absent proxyholder.

11.7. A form of proxy shall be in writing under the hand of the appointor
or of his attorney duly authorized in writing, or, if the appointor is a
corporation, either under the seal of the corporation or under the hand of a
duly authorized officer or attorney. A proxyholder need not be a member of the
Company.

11.8. A form of proxy and the power of attorney or other authority, if any,
under which it is signed or a notarially certified copy thereof shall be
deposited at the registered office of the Company or at such other place as is
specified for that purpose in the notice convening the meeting, not less than 48
hours (excluding Saturdays, Sundays and holidays) before the time for holding
the meeting or such other time and place as is specified in the notice calling
the meeting. In addition to any other method of depositing proxies provided
for in these Articles, the Directors may from time to time by resolution make
regulations relating to the depositing of proxies at any place or places and
fixing the time or times for depositing the proxies not exceeding 48 hours
(excluding Saturdays, Sundays and holidays) preceding the meeting or adjourned
meeting specified in the notice calling a meeting of members and providing for
particulars of

<PAGE>

such proxies to be sent to the Company or any agent of the Company in writing
or by letter, telegram, telex or any method of transmitting legibly recorded
messages so as to arrive before the commencement of the meeting or adjourned
meeting at the office of the Company or of any agent of the Company appointed
for the purpose of receiving such particulars and providing that proxies so
deposited as required by this Part and votes given in accordance with such
regulations shall be valid and shall be counted.

11.9. A vote given in accordance with the terms of a proxy is valid
notwithstanding the previous death or incapacity of the member giving the proxy
or the revocation of the proxy or of the authority under which the form of proxy
was executed or the transfer of the share in respect of which the proxy is
given, provided that no notification in writing of such death, incapacity,
revocation or transfer shall have been received at the registered office of the
Company or by the chairman of the meeting or adjourned meeting for which the
proxy was given before the vote is taken.

11.10. Every proxy may be revoked by an instrument in writing

(i) executed by the member giving the same or by his attorney authorized
in writing or, where the member is a corporation, by a duly
authorized officer or attorney of the corporation; and

(ii) delivered either at the registered office of the Company at any time
up to and including the last business day preceding the day of the
meeting, or any adjournment thereof at which the proxy is to be used,
or to the chairman of the meeting on the day of the meeting or any
adjournment thereof before any vote in respect of which the proxy is
to be used shall have been taken.

or in any other manner provided by law.

PART 12

DIRECTORS

12.1. The subscribers to the Memorandum of the Company are the first
Directors. The Directors to succeed the first Directors may be appointed in
writing by a majority of the subscribers to the Memorandum or at a meeting of
the subscribers, or if not so appointed, they shall be elected by the members
entitled to vote on the election of Directors and the number of Directors shall
be the same as the number of Directors so appointed or elected. The number of
directors, excluding additional Directors, may be fixed or changed from time to
time by ordinary resolution, whether previous notice thereof has been given or
not, but notwithstanding anything contained in these Articles, the number of
Directors shall never be less than one or, if the Company is or becomes a
reporting company, less than three.

12.2. The remuneration of the Directors as such may from time to time be
determined by the Directors or, if the Directors shall so decide, by the
members. Such remuneration may be in addition to any salary or other
remuneration paid to any officer or employee of the Company as such who is also
a Director. The Directors shall be repaid such reasonable traveling, hotel and
other expenses as they incur in and about the business of the Company and if any
Director shall perform any professional or other services for the Company that
in the opinion of the Directors are outside the ordinary duties of a Director or
shall otherwise be specially occupied in or about the Company's business, he
may be paid a remuneration to be fixed by the Board, or, at the option of such
Director, by the Company in general meeting, and such remuneration may be either
in addition to, or in substitution for any other remuneration that he may be
entitled to receive. The Directors on behalf of the Company, unless otherwise
determined by ordinary resolution, may pay a gratuity or pension or allowance on
retirement to any Director who has held any salaried office or place of profit
with the Company or to his spouse or dependents and may make contributions to
any fund and pay premiums for the purchase or provision of any such gratuity,
pension or allowance.

12.3. A Director shall not be required to hold a share in the capital of
the Company as qualification for his office but shall be qualified as required
by the Company Act, to become or act as a Director.

<PAGE>

PART 13

ELECTION AND REMOVAL OF DIRECTORS

13.1. At each annual general meeting of the Company all the Directors
shall retire and the members shall elect a Board of Directors consisting of
the number of Directors for the time being fixed pursuant to these Articles.
If the Company is, or becomes, a company that is not a reporting company and
the business to be transacted at any annual general meeting is consented to
in writing by all the members who are entitled to attend and vote thereat
such annual general meeting shall be deemed for the purpose of this Part to
have been held on such written consent becoming effective.

13.2. A retiring Director shall be eligible for re-election.

13.3. Where the Company fails to hold an annual general meeting in
accordance with the Company Act, the Directors then in office shall be
deemed to have been elected or appointed as Directors on the last day on
which the annual general meeting could have been held pursuant to these
Articles and they may hold office until other Directors are appointed or
elected or until the day on which the next annual general meeting is held.

13.4. If at any general meeting at which there should be an election of
Directors, the places of any of the retiring Directors are not filled by
such election, such of the retiring Directors who are not re-elected as may
be requested by the newly-elected Directors shall, if willing to do so,
continue in office to complete the number of Directors for the time being
fixed pursuant to these Articles until further new Directors are elected
at a general meeting convened for the purpose. If any such election or
continuance of Directors does not result in the election or continuance of
the number of Directors for the time being fixed pursuant to these Articles
such number shall be fixed at the number of Directors actually elected or
continued in office.

13.5. Any casual vacancy occurring in the Board of Directors may be
filled by the remaining Directors or Director.

13.6. Between successive annual general meetings the Directors shall have
power to appoint one or more additional Directors but not more than
one-third of the number of Directors fixed pursuant to these Articles and in
effect at the last general meeting at which Directors were elected. Any
Director so appointed shall hold office only until the next following
annual general meeting of the Company, but shall be eligible for election
at such meeting and so long as he is an additional Director the number of
Directors shall be increased accordingly.

13.7. Any Director may by instrument in writing delivered to the Company
appoint any person to be his alternate to act in his place at meetings of
the Directors at which he is not present unless the Directors shall have
reasonably disapproved the appointment of such person as an alternate
Director and shall have given notice to that effect to the Director
appointing the alternate Director within a reasonable time after delivery
of such instrument to the Company. Every such alternate shall be entitled to
notice of meetings of the Directors and to attend and vote as a Director at
a meeting at which the person appointing him is not personally present, and,
if he is a Director, to have a separate vote on behalf of the Director he is
representing in addition to his own vote. A Director may at any time by
instrument, telegram, telex or any method of transmitting legibly recorded
messages delivered to the Company revoke the appointment of an alternate
appointed by him. The remuneration payable to such an alternate shall be
payable out of the remuneration of the Director appointing him.

13.8. The office of Director shall be vacated if the Director:

(i) resigns his office by notice in writing delivered to the registered
office of the Company; or

(ii) is convicted of an indictable offence and the other Directors shall
have resolved to remove him; or

(iii) ceases to be qualified to act as a Director pursuant to the
Company Act.

<PAGE>

13.9. The Company may by special resolution remove any Director before
the expiration of his period of office, and may by an ordinary resolution
appoint another person in his stead.

PART 14

POWERS AND DUTIES OF DIRECTORS

14.1. The Directors shall manage, or supervise the management of, the
affairs and business of the Company and shall have the authority to
exercise all such powers of the Company as are not, by the Company Act or by
the Memorandum or these Articles, required to be exercised by the Company in
general meeting.

14.2. The Directors may from time to time by power of attorney or other
instrument under the seal, appoint any person to be the attorney of the
Company for such purposes, and with such powers, authorities and
discretions (not exceeding those vested in or exercisable by the Directors
under these Articles and excepting the powers of the Directors relating to
the constitution of the Board and of any of its committees and the
appointment or removal of officers and the power to declare dividends) and
for such period, with such remuneration and subject to such conditions as
the Directors may think fit, and any such appointment may be made in favour
of any of the Directors or any of the members of the Company or in favour of
any corporation, or of any of the members, directors, nominees or managers
of any corporation, firm or joint venture and any such power of attorney
may contain such provisions for the protection or convenience of persons
dealing with such attorney as the Directors think fit. Any such attorney
may be authorized by the Directors to sub-delegate all or any of the powers,
authorities and discretions for the time being vested in him.

PART 15

DISCLOSURE OF INTEREST OF DIRECTORS

15.1. A Director who is, in any way, directly or indirectly interested in
an existing or proposed contract or transaction with the Company or who
holds any office or possesses any property whereby, directly or indirectly,
a duty or interest might be created to conflict with his duty or interest as
a Director shall declare the nature and extent of his interest in such
contract or transaction or of the conflict or potential conflict with his
duty and interest as a Director, as the case may be, in accordance with the
provisions or the Company Act.

15.2. A Director shall not vote in respect of any such contract or
transaction with the Company in which he is interested and if he shall do
so his vote shall not be counted, but he shall be counted in the quorum
present at the meeting at which such vote is taken. Subject to the
provisions of the Company Act, the foregoing prohibitions shall not apply to

(i) any such contract or transaction relating to a loan to the Company,
which a Director or a specified corporation or a specified firm in
which he has an interest has guaranteed or joined in guaranteeing
the repayment of the loan or any part of the loan;

(ii) any contract or transaction made or to be made with, or for the
benefit of a holding corporation or a subsidiary corporation of
which a Director is a director;

(iii) any contract by a Director to subscribe for or underwrite shares or
debentures to be issued by the Company or a subsidiary of the
Company, or any contract, arrangement or transaction in which a
Director is, directly or indirectly, interested if all the other
Directors are also, directly or indirectly interested in the
contract, arrangement or transaction;

(iv) determining the remuneration of the Directors;

<PAGE>

(v) purchasing and maintaining insurance to cover Directors against
liability incurred by them as Directors; or

(vi) the indemnification of any Director by the Company.

These exceptions may from time to time be suspended or amended to any
extent approved by the Company in general meeting and permitted by the
Company Act, either generally or in respect of any particular contract
or transaction or for any particular period.

15.3. A Director may hold any office or place of profit with the Company
(other than the office of auditor of the Company) in conjunction with his
office of Director for such period and on such terms (as to remuneration or
otherwise) as the Directors may determine and no Director or intended
Director shall be disqualified by his office from contracting with the
Company either with regard to this tenure at any such other office or place
of profit or as vendor, purchaser or otherwise, and, subject to compliance
with the provisions of the Company Act, no contract or transaction entered
into by or on behalf of the Company in which a Director is in any way
interested shall be liable to be voided by reason thereof.

15.4. Subject to compliance with the provisions of the Company Act, a
Director or his firm may act in a professional capacity for the Company
(except as auditor of the Company) and he or his firm shall be entitled to
remuneration for professional services as if he were not a Director.

15.5. A Director may be or become a director or other officer or employee
of, or otherwise interested in, any corporation or firm in which the Company
may be interested as a shareholder or otherwise and, subject to compliance
with the provisions of the Company Act, such Director shall not be
accountable to the Company for any remuneration or other benefits received
by him as director, officer or employee of, or from his interest in, such
other corporation or Am unless the Company in general meeting otherwise
directs.

PART 16

PROCEEDINGS OF DIRECTORS

16.1. The Chairman of the Board, if any, or in his absence, the
President shall preside as chairman at every meeting of the Directors, or if
there is no Chairman of the Board or neither the Chairman of the Board nor
the President is present within fifteen minutes of the time appointed for
holding the meeting or is willing to act as chairman, or, if the Chairman of
the Board, if any, and the President have advised the Secretary that they
will not be present at the meeting, the Directors present shall choose one
or their number to be chairman of the meeting.

16.2. The Directors may meet together for the dispatch of business,
adjourn and otherwise regulate their meetings, as they think fit. Questions
arising at any meeting shall be decided by a majority of votes. In case of
an equality of votes the chairman shall not have a second or casting vote.
Meetings of the Board held at regular intervals may be held at such place,
at such time and upon such notice (if any) as the Board may by
resolution from time to time determine.

16.3. A Director may participate in a meeting of the Board or of any
committee of the Directors by means of conference telephones or other
communications facilities by means of which all Directors participating in
the meeting can hear each other and provided that all such Directors agree
to such participation. A Director participating in a meeting in accordance
with this Article shall be deemed to be present at the meeting and to have
so agreed and shall be counted in the quorum therefor and be entitled to
speak and vote thereat.

16.4. A Director may, and the Secretary or an Assistant Secretary upon
request of a Director shall, call a meeting of the Board at any time.
Reasonable notice of such meeting specifying the place, day and hour of such
meeting shall be given by mail, postage prepaid, addressed to each of the
Directors and alternate Directors at his address as it appears on the books
of the Company or by leaving it at his usual business or residential
address or by telephone, telegram, telex, or any method of transmitting
legibly

<PAGE>

recorded messages. It shall not be necessary to give notice of a meeting of
Directors to any Director or alternate Director (i) who is at the time not
in the Province of British Columbia or (ii) if such meeting is to be held
immediately following a general meeting at which such Director shall have
been elected or is the meeting of Directors at which such Director is
appointed.

16.5. Any Director of the Company may file with the Secretary a document
executed by him waiving notice of any past, present or future meeting or
meetings of the Directors being, or required to have been, sent to him and
may at any time withdraw such waiver with respect to meetings held
thereafter. After filing such waiver with respect to future meetings and
until such waiver is withdrawn no notice need be given to such Director and,
unless the Director otherwise requires in writing to the Secretary, to his
alternate Director of any meeting of Directors and all meetings of the
Directors so held shall be deemed not to be improperly called or constituted
by reason of notice not having been given to such Director or alternate
Director.

16.6. The quorum necessary for the transaction of the business of the
Directors may be fixed by the Directors and if not so fixed shall be a
majority of the Directors or, if the number of Directors is fixed at one,
shall be one Director.

16.7. The continuing Directors may act notwithstanding any vacancy in
their body, but, if and so long as their number is reduced below the number
fixed pursuant to these Articles as the necessary quorum of Directors, the
continuing Directors may act for the purpose of increasing the number of
Directors to that number, or of summoning a general meeting of the Company,
but for no other purpose.

16.8. Subject to the provisions of the Company Act, all acts done by any
meeting of the Directors or of a committee of Directors, or by any person
acting as a Director, shall, notwithstanding that it be afterwards
discovered that there was some defect in the qualification, election or
appointment of any such Directors or of the members of such committee or
person acting as aforesaid, or that they or any of them were disqualified,
be as valid as if every such person had been duly elected or appointed and
was qualified to be a Director.

16.9. A resolution consented to in writing, whether by document, telegram,
telex or any method of transmitting legibly recorded messages or other
means, by all of the Directors or their alternates shall be as valid and
effectual as if it had been passed at a meeting of the Directors duly called
and held. Such resolution may be in two or more counterparts which together
shall be deemed to constitute one resolution in writing. Such resolution
shall be filed with the minutes of the proceedings of the Directors and
shall be effective on the date stated thereon or on the latest date stated
on any counterpart.

PART 17

EXECUTIVE AND OTHER COMMITTEES

17.1. The Directors may by resolution appoint an Executive Committee to
consist of such member or members of their body as they think fit, which
Committee shall have, and may exercise during the intervals between the
meetings of the Board, all the powers vested in the Board except the power
to fill vacancies in the Board, the power to change the membership of, or
fill vacancies in, said Committee or any other committee of the Board and
such other powers, if any, as may be specified in the resolution. The said
Committee shall keep regular minutes of its transactions and shall cause
them to be recorded in books kept for that purpose, and shall report the
same to the Board of Directors at such times as the Board of Directors may
from time to time require. The Board shall have the power at any time to
revoke or override the authority given to or acts done by the Executive
Committee except as to acts done before such revocation or overriding and to
terminate the appointment or change the membership of such Committee and to
fill vacancies in it. The Executive Committee may make rules for the conduct
of its business and may appoint such assistants as it may deem necessary. A
majority of the members of said Committee shall constitute a quorum thereof.

<PAGE>

17.2. The Directors may by resolution appoint one or more committees
consisting of such member or members of their body as they think fit and may
delegate to any such committee between meetings of the Board such powers of the
Board (except the power to fill vacancies in the Board and the power to change
the membership or fill vacancies in any committee of the Board and the power to
appoint or remove officers appointed by the Board) subject to such conditions as
may be prescribed in such resolution, and all committees so appointed shall keep
regular minutes of their transactions and shall cause them to be recorded in
books kept for that purpose, and shall report the same to the Board of Directors
at such times as the Board of Directors may from time to time require. The
Directors shall also have power at any time to revoke or override any authority
given to or acts to be done by any such committees except as to acts done before
such revocation or overriding and to terminate the appointment or change the
membership of a committee and to fill vacancies in it. Committees may make rules
for the conduct of their business and may appoint such assistants as they may
deem necessary. A majority of the members of a committee shall constitute a
quorum thereof.

17.3. The Executive Committee and any other committee may meet and adjourn
as it thinks proper. Questions arising at any meeting shall be determined by a
majority of votes of the members of the committee present, and in case of an
equality of votes the chairman shall not have a second or casting vote. A
resolution approved in writing by all the members of the Executive Committee or
any other committee shall be as valid and effective as if it had been passed at
a meeting of such Committee duly called and constituted. Such resolution may be
in two or more counterparts which together shall be deemed to constitute one
resolution in writing. Such resolution shall be filed with the minutes of the
proceedings of the committee and shall be effective on the date stated thereon
or on the latest date stated in any counterpart.

PART 18

OFFICERS

18.1. The Directors shall, from time to time, appoint a President and a
Secretary and such other officers, if any, as the Directors shall determine and
the Directors may, at any time, terminate any such appointment. No officer shall
be appointed unless he is qualified in accordance with the provisions of the
Company Act.

18.2. One person may hold more than one of such offices except that the
offices of President and Secretary must be held by different persons unless the
Company has only one member. Any person appointed as the Chairman of the Board,
the President or the Managing Director shall be a Director. The other officers
need not be Directors. The remuneration of the officers of the Company as such
and their terms and conditions of their tenure of office or employment shall
from time to time be determined by the Directors; such remuneration may be by
way of salary, fees, wages, commission or participation in profits or any other
means or all of these modes and an officer may in addition to such remuneration
be entitled to receive after he ceases to hold such office or leaves the
employment of the Company a pension or gratuity. The Directors may decide what
functions and duties each officer shall perform and may entrust to and confer
upon him any of the powers exercisable by them upon such terms and conditions
and with such restrictions as they think fit and may from time to time revoke,
withdraw, alter or vary all or any of such functions, duties and powers. The
Secretary shall, inter alia, perform the functions of the Secretary specified in
the Company Act.

18.3. Every officer of the Company who holds any office or possesses any
property whereby, whether directly or indirectly, duties or interests might be
created in conflict with his duties or interests as an officer of the Company
shall, in writing, disclose to the President the fact and the nature, character
and extent of the conflict.

<PAGE>

PART 19

INDEMNITY AND PROTECTION OF DIRECTORS, OFFICERS AND EMPLOYEES

19.1. Subject to the provisions of the Company Act, the Directors shall
cause the Company to indemnify a Director or former Director of the Company and
the Directors may cause the Company to indemnify a director or former director
of a corporation of which the Company is or was a shareholder and the heirs and
personal representatives of any such person against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonably incurred by him or them including an amount paid to
settle an action or satisfy a judgment in a civil, criminal or administrative
action or proceeding to which he is or they are made a party by reason of his
being or having been a Director of the Company or a director of such
corporation, including any action brought by the Company or any such
corporation. Each Director of the Company on being elected or appointed shall be
deemed to have contracted with the Company on the terms of the foregoing
indemnity.

19.2. Subject to the provisions of the Company Act, the Directors may cause
the Company to indemnify any officer, employee or agent of the Company or of a
corporation of which the Company is or was a shareholder (notwithstanding that
he is also a Director) and his heirs and personal representatives against all
costs, charges and expenses whatsoever incurred by him or them and resulting
from his acting as an officer, employee or agent of the Company or such
corporation. In addition, the Company shall indemnify the Secretary or an
Assistant Secretary of the Company (if he shall not be a full time employee of
the Company and notwithstanding that he is also a Director) and his respective
heirs and legal representatives against all costs, charges and expenses
whatsoever incurred by him or them and arising out of the functions assigned to
the Secretary by the Company Act or these Articles and each such Secretary and
Assistant Secretary shall on being appointed be deemed to have contracted with
the Company on the terms of the foregoing indemnity.

19.3. The failure of a Director or officer of the Company to comply with
the provisions of the Company Act or of the Memorandum or these Articles shall
not invalidate any indemnity to which he is entitled under this Part.

19.4. The Directors may cause the Company to purchase and maintain
insurance for the benefit of any person who is or was serving as a Director,
officer, employee or agent of the Company or as a director, officer, employee or
agent or any corporation of which the Company is or was a shareholder and his
heirs or personal representatives against any liability incurred by him as such
Director, director, officer, employee or agent.

PART 20

DIVIDENDS AND RESERVE

20.1. The Directors may from time to time declare and authorize payment of
such dividends, if any, as they may deem advisable and need not give notice of
such declaration to any member. No dividend shall be paid otherwise than out of
funds and/or assets properly available for the payment of dividends and a
declaration by the Directors as to the amount of such funds or assets available
for dividends shall be conclusive. The Company may pay any such dividend wholly
or in part by the distribution of specific assets and in particular by paid up
shares, bonds, debentures or other securities of the Company or any other
corporation or in any one or more such ways as may be authorized by the Company
or the Directors and where any difficulty arises with regard to such a
distribution the Directors may settle the same as they think expedient, and in
particular may fix the value for distribution of such specific assets or any
part thereof, and may determine that cash payments in substitution for all or
any part

<PAGE>

value so fixed in order to adjust the rights of all parties and may vest any
such specific assets in trustees for the persons entitled to the dividend as may
seem expedient to the Directors.

20.2. Any dividend declared on shares of any class by the Directors may be
made payable on such date as is fixed by the Directors.

20.3. Subject to the rights of members (if any) holding shares with special
rights as to dividends, all dividends on shares of any class shall be declared
and paid according to the number of such shares held.

20.4. The Directors may, before declaring any dividend, set aside out of
the funds properly available for the payment of dividends such sums as they
think proper as a reserve or reserves, which shall, at the discretion of the
Directors, be applicable for meeting contingencies, or for equalizing dividends,
or for any other purpose to which such funds of the Company may be properly
applied, and pending such application may, at the like discretion, either be
employed in the business of the Company or be invested in such investments as
the Directors may from time to time think fit. The Directors may also, without
placing the same in reserve, carry forward such funds, which they think prudent
not to divide.

20.5. If several persons are registered as joint holders of any share, any
one of them may give an effective receipt for any dividend, bonuses or other
moneys payable in respect of the share.

20.6. No dividend shall bear interest against the Company. Where the
dividend to which a member is entitled includes a fraction of a cent, such
fraction shall be disregarded in making payment thereof and such payment shall
be deemed to be payment in full.

20.7. Any dividend, bonuses or other moneys payable in cash in respect of
shares may be paid by cheque or warrant sent through the post directed to the
registered address of the holder, or in the case of joint holders, to the
registered address of that one of the joint holders who is first named on the
register, or to such person and to such address as the holder or joint holders
may direct in writing. Every such cheque or warrant shall be made payable to the
order of the person to whom it is sent. The mailing of such cheque or warrant
shall, to the extent of the sum represented thereby (plus the amount of any tax
required by law to be deducted) discharge all liability for the dividend, unless
such cheque or warrant shall not be paid on presentation or the amount of tax so
deducted shall not be paid to the appropriate taxing authority.

20.8. Notwithstanding anything contained in these Articles the Directors
may from time to time capitalize any undistributed surplus on hand of the
Company and may from time to time issue as fully paid and non-assessable any
unissued shares, or any bonds, debentures or debt obligations of the Company as
a dividend representing such undistributed surplus on hand or any part thereof.

PART 21

DOCUMENTS, RECORDS AND REPORTS

21.1. The Company shall keep at its records office or at such other place
as the Company Act may permit, the documents, copies, registers, minutes, and
records which the Company is required by the Company Act to keep at its records
office or such other place, as the case may be.

21.2. The Company shall cause to be kept proper books of account and
accounting records in respect of all financial and other transactions of the
Company in order properly to record the financial affairs and condition of the
Company and to comply with the Company Act.

21.3. Unless the Directors determine otherwise, or unless otherwise
determined by an ordinary resolution, no member of the Company shall be entitled
to inspect the accounting records of the Company.

21.4. The Directors shall from time to time at the expense of the Company
cause to be prepared and laid before the Company in general meetings such
financial statements and reports as are required by the Company Act.

<PAGE>

21.5. Every member shall be entitled to be furnished once gratis on demand
with a copy of the latest annual financial statement of the Company and, if so
required by the Company Act, a copy of each such annual financial statement and
interim financial statement shall be mailed to each member.

PART 22

NOTICES

22.1. A notice, statement or report may be given or delivered by the
Company to any member either by delivery to him personally or by sending it by
mail to him to his address as recorded in the register of members. Where a
notice, statement or report is sent by mail, service or delivery of the notice,
statement or report shall be deemed to be effected by properly addressing,
prepaying and mailing the notice, statement or report and to have been given on
the day, Saturdays, Sundays and holidays excepted, following the date of
mailing. A certificate signed by the Secretary or other officer of the Company
or of any other corporation acting in that behalf for the Company that the
letter, envelope or wrapper containing the notice, statement or report was so
addressed, prepaid and mailed shall be conclusive evidence thereof.

22.2. A notice, statement or report may be given or delivered by the
Company to the joint holders of a share by giving the notice to the joint holder
first named in the register of members in respect of the share.

22.3. A notice, statement or report may be given or delivered by the
Company to the persons entitled to a share in consequence of the death,
bankruptcy or incapacity of a member by sending it through the mail prepaid
addressed to them by name or by the title of representatives of the deceased or
incapacitated person or trustee of the bankrupt, or by any like description, at
the address (if any) supplied to the Company for the purpose by the persons
claiming to be so entitled, or (until such address has been so supplied) by
giving the notice in manner in which the same might have been given if the
death, bankruptcy or incapacity had not occurred.

22.4. Notice of every general meeting or meeting of members holding a
class of shares shall be given in a manner hereinbefore authorized to every
member holding at the time of the issue of the notice or the date fixed for
determining the members entitled to such notice, whichever is the earlier,
shares which confer the right to notice of and to attend and vote at any such
meeting. No other person except the auditor of the Company and the Directors of
the Company shall be entitled to receive notices of any such meeting.

PART 23

RECORD DATES

23.1. The Directors may fix in advance a date, which shall not be more than
the maximum number of days permitted by the Company Act preceding the date of
any meeting of members or any class thereof or of the payment of any dividend or
of the proposed taking of any other proper action requiring the determination of
members as the record date for the determination of the members entitled to
notice of, or to attend and vote at, any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend or for any other
proper purpose and, in such case, notwithstanding anything elsewhere contained
in these Articles, only members of record on the date so fixed shall be deemed
to be members for the purposes aforesaid.

23.2. Where no record date is so fixed for the determination of members as
provided in the preceding Article the date on which the notice is mailed or on
which the resolution declaring the dividend is adopted, as the case may be,
shall be the record date for such determination.
<PAGE>

PART 24

SEAL

24.1. The Directors may provide a seal for the Company and, if they do so,
shall provide for the safe custody of the seal which shall not be affixed to any
instrument except in the presence of the following persons, namely,

(i) any two Directors, or

(ii) one of the Chairman of the Board, the President, the Managing
Director, a Director and a Vice-President together with one
of the Secretary, the Treasurer, the Secretary-Treasurer, an
Assistant Secretary, an Assistant Treasurer and an Assistant
Secretary-Treasurer, or

(iii) if the Company shall have only one member, the President or the
Secretary, or

(iv) such person or persons as the Directors may from time to time by
resolution appoint

and the said Directors, officers, person or persons in whose presence the seal
is so affixed to an instrument shall sign such instrument. For the purpose of
certifying under seal true copies of any document or resolution the seal may be
affixed in the presence of any one of the foregoing persons.

24.2. To enable the seal of the Company to be affixed to any bonds,
debentures, share certificates, or other securities of the Company, whether in
definitive or interim form, on which facsimiles of any of the signatures of the
Directors or officers of the Company are, in accordance with the Company Act
and/or these Articles, printed or otherwise mechanically reproduced there may be
delivered to the firm or company employed to engrave, lithograph or print such
definitive or interim bonds, debentures, share certificates or other securities
one or more unmounted dies reproducing the Company's seal and the Chairman of
the Board, the President, the Managing Director or a Vice-President and the
Secretary, Treasurer, Secretary-Treasurer, an Assistant Secretary, an Assistant
Treasurer or an Assistant Secretary-Treasurer may by a document authorize such
firm or company to cause the Company's seal to be affixed to such definitive or
interim bonds, debentures, share certificates or other securities by the use of
such dies. Bonds, debentures, share certificates or other securities to which
the Company's seal has been so affixed shall for all purposes be deemed to be
under and to bear the Company's seal lawfully affixed thereto.

24.3. The Company may have for use in any other province, state,
territory or country an official seal which shall have on its face the name of
the province, state, territory or country where it is to be used and all of the
powers conferred by the Company Act with respect thereto may be exercised by the
Directors or by a duly authorized agent of the Company.

PART 25

MECHANICAL REPRODUCTIONS OF SIGNATURES

25.1. The signature of any officer, Director, registrar, branch registrar,
transfer agent or branch transfer agent of the Company, unless otherwise
required by the Company Act or by these Articles, may, if authorized by the
Directors, be printed, lithographed, engraved or otherwise mechanically
reproduced upon all instruments executed or issued by the Company or any officer
thereof; and any instrument on which the signature of any such person is so
reproduced shall be deemed to have been manually signed by such person whose
signature is so reproduced and shall be as valid to all intents and purposes as
if such instrument had been signed manually, and notwithstanding that the person
whose signature is so reproduced may have ceased to hold the office that he is
stated on such instrument to hold at the date of the delivery or issue of such
instrument.

25.2. The term "instrument" as used in Article 25.1, shall include deeds,
mortgages, hypothecs, charges, conveyances, transfers and assignments of
property, real or personal, agreements, releases, receipts and discharges for
the payment of money or other obligations, shares and share warrants of the
Company, bonds, debentures and other debt obligations of the Company, and all
paper writings.

<PAGE>

PART 26

PROHIBITIONS

26.1. If the Company is, or becomes, a company which is not a reporting
company, (i) the number of members for the time being of the Company, exclusive
of persons who are for the time being in the employment of the Company and
continue to be members after the termination of such employment, shall not
exceed 15; and (ii) no shares or debt obligations issued by the Company shall be
offered for sale to the public.

26.2. If the Company is, or becomes, a company which is not a reporting
company, or a reporting company but does not have any of its securities listed
for trading on any stock exchange wheresoever situate, or a reporting company
and has not with respect to any of its securities filed a prospectus with the
Superintendant of Brokers or any similar securities regulatory body and
obtained a receipt therefor, then no shares shall be transferred without the
previous consent of the Directors expressed by a resolution of the Board and
the Directors shall not be required to give any reason for refusing to any such
proposed transfer

<PAGE>

PART 27

PREFERRED SHARES AS A CLASS

27.1. Preferred Shares as a Class. The 10,000,000 Preferred Shares without
par value shall, as a class, have the following special rights and restrictions
attached thereto, namely:

27.2. Preferred Shares Issuable in Series. The Preferred Shares may be
issued from time to time in one or more series, each series to consist of such
number of Preferred Shares as may be fixed or determined by resolution of the
directors before issuance of any shares of such series. The number of shares in
any series may from time to time be increased by the directors by resolution
upon compliance with the same conditions as are applicable to the issue of
shares in a new series. The directors of the Company may (subject as hereinafter
provided) from time to time by resolution fix and determine before issuance the
designation, special rights, restrictions, conditions and limitations to attach
to the Preferred Shares of each series including, without limiting the
generality of the foregoing, the rate or the amount or the basis for calculating
preferential dividends, the dates and places of payment of preferential
dividends, the date or dates from which any such preferential dividend shall
accrue, redemption rights including terms and conditions of redemption,
conversion rights if any, the terms and conditions of any purchase plan or
sinking fund or any other provisions or limitations to attach to the Preferred
Shares of such series, and may authorize the issuance thereof. In furtherance of
the foregoing the directors may by resolution alter the Company's Memorandum or
the Articles or both, the whole subject to the filing with the Registrar of
Companies pursuant to the Company Act of such resolution or resolutions of the
directors.

27.3. Priority. The Preferred Shares shall be entitled to preference over
the common shares of the Company and any other shares of the Company ranking
junior to the Preferred Shares with respect to payment of dividends and/or
distribution of assets in the event of liquidation, dissolution or winding-up of
the Company, whether voluntary or involuntary, or any other distribution of
assets of the Company among its shareholders for the purpose of winding-up its
affairs, and may also be given such other preferences over the common shares of
the Company and any other shares of the Company ranking junior to the Preferred
Shares as may be fixed by the directors in the case of each such series
authorized to be issued.

27.4. Parity of Preferred Shares. The Preferred Shares of each series shall
rank on a parity with Preferred Shares of every other series unless the
resolution of the directors of the Company establishing any particular series
shall provide that such series shall be subordinate in any respect to any other
series of Preferred Shares; provided however, that where any cumulative
dividends in respect of a series of shares are not paid in full, or where
amounts payable on the winding-up or on the occurrence of any other event as a
result of which the holders of the shares of all series of the class are then
entitled to a return of capital, are not paid in full, then the shares of all
series of the class shall participate rateably in respect of the accumulated
dividends or in the return of capital in respect of the class, or both as the
case may be, in accordance with the amounts that would be payable on those
shares if all the accumulated dividends were paid in full or all amounts so
payable on a return of capital were paid in full, and no special rights or

<PAGE>

restrictions attached to a series of the Preferred Shares shall confer on the
series priority over another series of Preferred Shares then outstanding in
respect of dividends or a return of capital on a winding-up or on the occurrence
of any other event as a result of which the holders of all series of Preferred
Shares are then entitled to a return of capital.

27.5. Liquidation, Dissolution or Winding-up. In the event of the
liquidation, dissolution or winding-up of the Company or any other distribution
of assets of the Company among its shareholders for the purpose of winding-up
its affairs, the holders of the Preferred Shares shall be entitled to receive
the amount paid up on such shares, together with all declared and unpaid
non-cumulative dividends or all accrued and unpaid cumulative dividends, as the
case may be, and, if such liquidation, dissolution, winding-up or other
distribution is voluntary, then in respect of any series of the Preferred Shares
with respect to which there is a premium payable on redemption, an additional
amount equal to the premium, if any, which would be payable upon the Preferred
Shares of such series as part of the redemption price of such shares if such
shares were redeemed on the date of such distribution under provisions entitling
the Company to redeem such Preferred Shares at its option and not pursuant to
any compulsory purchase or retirement obligation imposed upon the Company, in
all cases before any amount shall be paid or any property or assets of the
Company shall be distributed to any holders of common shares or any other shares
of the Company of any other class ranking junior to the Preferred Shares. After
payment to the holders of the Preferred Shares of the amount so payable to them
they shall not be entitled to share in any further distribution of the property
or assets of the Company.

27.6. Voting Rights in Case of Default. The holders of the Preferred Shares
shall not be entitled to such (except as in the Company Act or hereinafter
specifically provided) to receive notice of or to attend any meeting of
shareholders of the Company or to vote at any such meeting unless and until
eight quarterly dividends on the Preferred Shares of any one series shall remain
outstanding in whole or in part and be unpaid whether or not consecutive and
whether or not such dividends have been declared and whether or not there are
any monies of the Company properly applicable to the payment of dividends.

Thereafter, but only so long as any dividends on the Preferred Shares of
any series remain in arrears, the holders of the Preferred Shares shall be
entitled to receive notice of and to attend all meetings of the shareholders of
the Company and shall be entitled, voting separately and as a class, to elect
two members of the Board of Directors of the Company. For the purposes of such
election the holders of the Preferred Shares shall have one vote in respect of
each such share held.

Notwithstanding anything contained in the Articles of the Company, when the
right to elect directors shall accrue to the holders of Preferred Shares as
herein provided because of arrears of dividends, the term of office of each
director whose term of office will otherwise expire at the next annual general
meeting of shareholders shall expire at the earlier of such next annual general
meeting or at a special general meeting of shareholders held after the accrual
of such rights as hereinafter provided. A special general meeting of
shareholders may be held at any time after the right to elect directors shall
accrue to the holders of Preferred Shares for the purpose of electing directors
to represent the holders of the Preferred Shares

<PAGE>

exclusively and for the purpose of electing directors to fill any remaining
vacancy or vacancies in the Board of Directors, upon not less than twenty-one
(21) days written notice, and which shall be called by the Secretary of the
Company upon the written request of holders of at least one-tenth (1/10th) of
the outstanding Preferred Shares. In default of the calling of such special
general meeting by the Secretary within twenty-one (21) days after the making of
such request, such meeting may be called by any holder of record of Preferred
Shares. Nothing herein contained shall be deemed to limit the right of the
Company or the Board of Directors from time to time to increase or decrease the
number of members of the Board of Directors.

Any vacancy or vacancies occurring among members of the Board of Directors
elected to represent the holders of Preferred Shares in accordance herewith may
be filled with the Board of Directors with the consent and approval of the
remaining director elected to represent the holders of Preferred Shares, but if
there be no such remaining director, the Board may elect or appoint sufficient
holders of Preferred Shares to fill the vacancies. Whether or not such a vacancy
or vacancies are to filled by the Board, the holders of record of at least
one-tenth (1/10th) of the outstanding Preferred Shares shall have the right to
require the Secretary of the Company to call a meeting of the holders of the
Preferred Shares as a class for the purpose of filling the vacancy or vacancies
or replacing all or any of the persons elected or appointed to fill such vacancy
or vacancies and the provisions hereof shall apply with respect to the calling
of any such meeting. Notwithstanding anything contained in the Articles of the
Company, when no dividends on the Preferred Shares of any series are in arrears,
the term of office of the persons elected as directors to represent the holders
of Preferred Shares shall forthwith terminate. In addition to the voting rights
herein provided for in case of default for the benefit of the holders of
Preferred Shares, the special rights and restrictions attached to the shares of
any particular series of the Preferred Shares may provide other voting and
related rights for the holders of shares of the particular series.

27.7. Approval of Holders of Preferred Shares. The consent required by
Section 250 of the Company Act, and any other authorization, approval or consent
which may be required from time to time of the holders of the Preferred Shares
as a class, including consent to the variation or abrogation of any rights
attached to the Preferred Shares as a class or the creation of shares ranking in
priority to the Preferred Shares as a class, may be given in writing by the
holders of three-fourths (3/4) of the outstanding Preferred Shares or by a
resolution passed by at least three-fourths (3/4) of the votes cast at a meeting
of the holders of the Preferred Shares duly called for that purpose and held
upon at least twenty-one (21) days notice at which the holders of at least a
majority of the outstanding Preferred Shares are present or represented by
proxy. If at any such meeting the holders of a majority of the outstanding
Preferred Shares are not present or represented by proxy within one-half hour
after the time appointed for such meeting, then the meeting shall be adjourned
to such date being not less than fourteen (14) days later and to such time and
place as may be appointed by the Chairman, and not less than seven (7) days
notice shall be given of such adjourned meeting, but it shall not be necessary
in such notice to specify the purpose for which the meeting was originally
called. At such adjourned meeting the holders of the Preferred Shares present or
represented by proxy may transact the business for which the meeting was
originally called and a resolution passed thereat by

<PAGE>

not less than three-fourths (3/4) of the votes cast at such meeting shall
constitute the authorization of the holders of the Preferred Shares referred to
above. The formalities to be observed in respect of the giving of notice of any
such meeting or adjourned meeting and the conduct thereof and the voting thereat
shall be those from time to prescribed by the Articles of the Company with
respect to meetings of shareholders.

27.8. Interpretation. For the purpose of the foregoing provisions and the
provisions of each series of Preferred Shares, unless the context expressly or
by implication requires otherwise, the expressions "accrued and unpaid
dividends" and "accumulations" and "accumulated" mean an amount computed at the
rate of dividend, if any, attaching to the Preferred Shares of a series as
though dividends on such shares had been accruing on a day to day basis in
accordance with the terms thereof to the date to which the computation of
accrued and unpaid dividends is to be made, after deducting all dividend
payments made on Preferred Shares of such series to such date; "Directors",
"directors" , "Board" and "Board of Directors" and similar expressions means the
Directors of the Company from time to time; and "Subsidiary" or "subsidiary"
has the meaning ascribed to the term subsidiary by the Company Act (British
Columbia).

<PAGE>

STRATEGIC ALLIANCE
RESEARCH AND DEVELOPMENT AGREEMENT

This Agreement entered into this ninth day of September, 1998.

BY AND AMONG:

QuesTec Imaging, Inc., a corporation duly organized and existing under the laws
of Wyoming, United States, and having its principle office of business at 160 A
West Industry Court, Deer Park, New York 11729 (hereinafter referred to as
"QuesTec").

Atlantic Aerospace Electronics Corporation, a corporation duly organized and
existing under the laws of Delaware, United States, and having its principle
office of business at 6404 Ivy Lane, Suite 300, Greenbelt, Maryland 20770
(hereinafter referred to as "Atlantic").

WITNESSETH THAT:

WHEREAS, QuesTec is the owner of several technologies relating to software
systems developed for sports broadcasts, athletic analysis and production
services.

WHEREAS, Atlantic is a developer of signal processing and motion/static tracking
systems and software technology.

WHEREAS, QuesTec and Atlantic desire to participate on software and product
development as defined hereinafter through QuesTec's research and development.
QuesTec desires to undertake such software development and distribution thereof
employing said technologies developed and acquired by QuesTec and Atlantic and
the parties hereto desire to encourage others to participate in the same to the
mutual benefit of QuesTec and Atlantic and

WHEREAS, QuesTec and Atlantic are willing to enter into an Agreement which calls
for the development of software related broadcast enhancement and quantitative
motion sensing/capture products in the field of sports broadcasting and athletic
performance and statistical analysis.

NOW THEREFORE, it is agreed among the parties as follows:

ARTICLE 1. DEFINITIONS

"QUESTEC INTELLECTUAL PROPERTY" shall mean certain patents, trademarks,
servicemarks and copyrights which are held by QuesTec on software series and
relate to the fabrication and use of the Software, and know-how which includes
all descriptions of data, technical know-how and trade secrets (including but
not limited to, information on QuesTec's customers) relating to the fabrication
and use of the Software, all of which shall be fully described in the individual
contracts.

<PAGE>

"INTELLECTUAL PROPERTY" shall mean software related products developed by
QuesTec and partially funded by Atlantic directly through their own research and
development or indirectly as an agent.

"PATENTS" shall mean any patents and patent application relating to software,
products, business models and any patents issuing upon any divisions or
continuation of such patents and patent applications; any patents which issue
upon patent application corresponding to any of the aforesaid patents and patent
applications; and any reissues, extensions or additions to any of the foregoing,
all of which are obtained through the development during the life of the
Agreement.

"COPYRIGHTS" shall mean any copyrights relating to the Software which are
obtained through the Development during the life of the Agreement.

"THE SOFTWARE" shall mean certain software in the fields of sports to be used
for sports broadcasting, athletic performance and statistical analysis and
production services that exist and/or are to be developed by QuesTec employing
Patents, Improvement Patents and know-how.

"DEVELOPMENT" shall mean research, development, creation, invention and any
other work to be conducted and performed by QuesTec and Atlantic hereto for the
successful manufacture of the Software.

"INDIVIDUAL CONTRACTS" shall mean those contracts between the parties where the
parties agree to develop specified software applications under this Agreement.

ARTICLE 2. WARRANTIES AND UNDERTAKINGS

QuesTec and Atlantic represent and warrant that they have the full right and
power to grant the rights set forth herein. QuesTec further represents and
warrants that to the best of its knowledge it has full title to its own QuesTec
Intellectual Property, and that there are no outstanding agreements, licenses,
assignments, ship rights or other encumbrances in any manner inconsistent with
the provisions of this Agreement.

ARTICLE 3. INDIVIDUAL CONTRACTS

Specifications of the Software, term for development, share for the expenses for
development, the amount of the royalty for the Intellectual Property, and any
other detailed terms and conditions shall be provided for in the Individual
Contracts.

If there is any inconsistency between the provisions of such Individual
Contracts and this Agreement, the former shall prevail.

<PAGE>

ARTICLE 4. TECHNICAL INTERFACE

Each party shall have a Manager for the exchange of know-how. The Manager shall
supervise the exchange of know-how, arrange conferences and visitations,
maintain pertinent records, and the like, and shall be responsible for authoring
transmissions, disclosure and receipt of know-how.

Prior to disclosure of Intellectual Property, the Manager of the supplying party
shall generally identify the proposed disclosure and obtain a written agreement
from the Manager of the other Party, so that the latter understands the nature
of and reason for the identified disclosure and is willing to accept the
identified disclosure. The identified Intellectual Property may thereafter be
disclosed by the Manager of the disclosing party to the Manager of the other
party under a Confidential Information designation. Such disclosure shall be
deemed to be confidential only to the extent that it is received in writing from
the disclosing party, or, if received only to the extent that it is confirmed in
writing by the disclosing party within fourteen (14) days of the oral
disclosure. The receipt of confidential Intellectual Property shall be promptly
acknowledged in writing by the Manager of Atlantic.

Respecting any confidential Intellectual Property transmitted and received in
accordance with Article 5, to the extent that such Intellectual Property remains
confidential pursuant to Article 5, Atlantic shall use the same efforts to avoid
publication or dissemination of such confidential Intellectual Property as it
employs with respect to information of its own which it does not desire to be
published or disseminated. Notwithstanding expiration or termination of this
Agreement pursuant to Articles 9 and 10, this paragraph shall remain effective
for another two (2) years from the date of expiration or termination of this
Agreement.

ARTICLE 5. COPYRIGHT

QuesTec and Atlantic shall jointly acquire and hold the copyright in "The
Software" which is developed by QuesTec and Atlantic pursuant to this Agreement.

ARTICLE 6. APPLICATIONS FOR PATENTS

QuesTec and Atlantic shall jointly apply for patents for "The Software" and
"Inventions" which are required and developed under this Agreement, and shall
jointly own the Patents. QuesTec and Atlantic shall share the expenses in
obtaining and maintaining such patents.

ARTICLE 7. INTELLECTUAL PROPERTY PROTECTION

In the event that Intellectual Property licensed hereunder to Atlantic by
QuesTec is infringed by the use, sale or lease of The Software by an unlicensed
third party, QuesTec may at its option and at its expense, file and prosecute a
lawsuit against such infringer and, in the case of an award of damages related
directly to the Software, after deducting its relevant costs therefrom, any
excess of each damage award shall be divided equally between QuesTec and
Atlantic. If QuesTec elects not to pursue such infringer for all of their
infringement of said Intellectual Property, then Atlantic may at their option
pursue such infringer, at their expense, and, in the case of an award of
damages, whether or not related directly to The Software, after deducting their
costs from such

<PAGE>

damages, any excess of any damage award shall be divided equally between QuesTec
and Atlantic. The parties hereto shall each extend to the others full
cooperation in all such litigation proceedings, and either party may join the
other as a party thereto.

In the event that on account of the use of QuesTec Intellectual Property, the
Copyrights, or the use or lease/sale of The Software, either Atlantic or QuesTec
is sued for patent, copyright or any other intellectual Property infringement by
a third party, then QuesTec and Atlantic shall promptly and continuously share
and exchange all information relevant to the defense of each lawsuit.

Either party may join the other as a defendant, and both parties shall give due
and reasonable credence to the legal and business judgment of the other party in
adopting a reasonable settlement or continuance of each litigation. No
settlement shall be reached which affects the royalty income of the other party
without the written consent of such other party which consent shall not be
unreasonably withheld whether the proposed compromise, if any, be in regard to
the terms of settlement or a reasonable design change in The Software.

ARTICLE 8. AGREEMENT BETWEEN QUESTEC AND ATLANTIC

In the event that QuesTec and Atlantic shall enter into additional Agreements,
unless specified, all Agreements shall remain binding. Atlantic is to inform
QuesTec of any and all inquiries concerning the use of the above mentioned
products and or services.

ARTICLE 9. TERM

This Agreement shall come into force on the day first above written and continue
in full force and effect for seven (7) years, and, thereafter, be automatically
renewed for one (1) year periods unless terminated by a written notice given by
either party to the other at least 6 months prior to the expiration date of the
initial period or of any subsequent one year period of this Agreement.

ARTICLE 10. TERMINATION

Should QuesTec or Atlantic at any time commit any breach of this Agreement and
should such failure or breach not be cured within sixty (60) days after written
notice from either party to the defaulting party specifying the nature of the
default, the notifying party shall thereafter have the right to terminate this
Agreement and/or any licensing rights hereunder as the case may be, by giving
written termination notice to the other party, and such termination shall become
effective on the sixtieth (60) day after the dispatch of such termination
notice. A termination under this Article shall place the parties in the
respective legal position which existed prior to the effective date of this
Agreement.

Should either QuesTec or Atlantic become insolvent, make an assignment for the
benefit of creditors or be adjudged bankrupt, or should a receiver or trustee of
the property of either QuesTec or Atlantic be appointed, the other party may
forthwith terminate this Agreement.

<PAGE>

ARTICLE 11. NOTICE

All notices and statements to be given shall be sent by mail or facsimile to the
respective addresses of the parties as set forth above unless notification of a
change of address is given in writing. When such notice is given by mail, the
date of mailing shall be deemed the date the notice or statement is given. A
notice given by facsimile shall be deemed effective one day after dispatch,
subject to being followed by mail.

ARTICLE 12. ARBITRATION

All disputes, controversies or differences which may arise among the parties
hereto, out of or in relation to or in connection with this Agreement, or the
breach thereof, shall be finally settled by arbitration in the United States in
accordance with The Commercial Arbitration Rules of The U.S. Commercial
Arbitration Association. The award rendered by arbitrator(s) shall be final and
binding upon the parties.

ARTICLE 13. FORCE MAJEURE

Neither party shall be liable to the other for failure or delay in the
performance of any of its obligations under this Agreement for the time and to
the extent such failure or delay is caused by riots, civil commotions, wars,
hostilities between nations, governmental laws, orders or regulations,
embargoes, actions by the government or any agency thereof, acts of God, storms,
fires, accidents, strikes, sabotage, explosions, or other similar or different
contingencies beyond the reasonable control of the respective parties. If, as a
result of legislation or governmental action, any party or parties are precluded
from receiving any benefit to which they are entitled hereunder, the parties
shall review the terms of this Agreement so as to be in the same relative
positions as previously obtained hereunder.

ARTICLE 14. NON-ASSIGNABILITY

Neither party hereto shall assign any of its rights or obligations under this
Agreement without the prior written consent of the other party hereto.

ARTICLE 15. INTERPRETATION

This Agreement shall be construed and interpreted according to the laws of the
United States and the state of New York.

ARTICLE 16. MODIFICATION

This Agreement supersedes any and all prior agreements between the parties
hereto regardless of whether such agreements, if any, existed by reason of
direct contract, assignment or otherwise whatsoever, and it embodies all of the
understandings and agreements between the parties pertaining to the subject
matter hereof and may be amended or modified only by written instrument duly
executed by the parties.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed
and sealed by their duly authorized office or representative as of the date
first above written.

"QuesTec"

QuesTec Imaging, Inc.

by: /s/ Edward J. Plumacher
------------------------
Edward J. Plumacher

by: /s/ Michael W. Russo
------------------------
Michael W. Russo

"Atlantic"

Atlantic Aerospace Electronics Corporation

by: /s/ Robert S. Cooper
------------------------
Robert S. Cooper

by: /s/ Thomas V. Robertson
------------------------
Thomas V. Robertson

<PAGE>

INDIVIDUAL CONTRACT
SPORTS RELATED DEVELOPMENT

THIS DEVELOPMENT AGREEMENT ("Agreement") is made this ninth day of September,
1998, by and between QuesTec Imaging, Inc., having its principle office of
business at 160 A West Industry Court, Deer Park, New York 11729 ("QuesTec") and
Atlantic Aerospace Electronics Corporation, having its principle office of
business at 6404 Ivy Lane, Suite 300, Greenbelt, Maryland 20770 ("Atlantic").

RECITALS

QuesTec and Atlantic wish to collaborate on the development of products that
will display real time graphic simulation of players (athletes) and any and all
action on the field of play by combining sensing technology, signal processing,
animation software, custom interface software, peripheral hardware equipment,
engineer operators and graphic workstations (the "Systems"). When operated, the
System will produce quantified data and 3-dimensional graphics from both live
and manual data entry.

THEREFORE, in consideration of the following terms and conditions, QuesTec and
Atlantic agree as follows:

1. OWNERSHIP OF THE SYSTEMS.

Atlantic shall retain ownership of the Software Atlantic develops under this
Agreement and is incorporated into the Systems. The parts of each System not
developed by Atlantic shall be owned by QuesTec.

2. DISTRIBUTION PARTNERSHIP.

Atlantic shall grant QuesTec a license to use executable software libraries
("Software") Atlantic develops under this Agreement. This license shall give
QuesTec perpetual and exclusive rights to use the Software for sports related
applications. In exchange for this license to use Atlantic's Software, QuesTec
will grant Atlantic options for 500,000 stock options for shares in the common
stock of QuesTec Imaging, Inc. QuesTec will also pay Atlantic a 10% royalty on
QuesTec's portion of gross revenues derived directly or indirectly from the
sale, license or use of the Systems. These stock options will have a life of 5
years and will be subject to a 1 year restriction.

If after 9 months Atlantic is not satisfied with this arrangement they may
convert the above mentioned form of remuneration for a flat 15% royalty on
QuesTec's portion of gross revenues derived from the sale, license or use of the
Systems, retroactive to the effective date of this Agreement, at which time
Atlantic will forfeit any and all rights to the above mentioned stock options.
Atlantic must notify QuesTec on or before the 10 month anniversary of this
agreement if it wishes to change the original remuneration agreement.

<PAGE>

QuesTec shall reimburse Atlantic for travel costs associated with joint
marketing activities.

3. COMPLETION OF DEVELOPMENT.

The Systems will be developed, tested and ready for use according to schedules
mutually agreed to by QuesTec and Atlantic.

4. RESPONSIBILITY OF QUESTEC.

QuesTec will:

(a) design packages of software and hardware peripherals which comprise
turnkey applications for non-intrusive tracking of sports activities
(the "Tracking Mechanisms") during live events

(b) compile and translate the data from the Tracking Mechanism into a
format that can be rendered on a graphics workstation for live
television broadcasts, pregame and postgame productions and athletic
analysis;

(c) support Atlantic's development activities by providing hardware,
software, data, and assistance in operational testing

(d) market Systems and services developed by QuesTec and Atlantic to the
broadcast industry and other potential customers, and acquire
contracts for their use

(e) inform Atlantic of potential markets and contracts in broadcast sports
and other industries, and share revenue projections

(f) integrate, install and operate Systems and services developed by
QuesTec and Atlantic and collect associated revenue

(g) credit Atlantic in QuesTec communications and advertising, and expend
best efforts to obtain on-air credits for Atlantic

(h) retain the exclusive use and distribution rights to the Systems.

(i) grant licenses for the Systems to third parties in other geographical
areas and will share any and all profits resulting from these
licensing and royalty fees with Atlantic on a fifty-fifty (50/50)
basis.

5. RESPONSIBILITY OF ATLANTIC.

Atlantic will:

(a) develop software to track players and objects and derive quantitative
data during sports events

<PAGE>

(b) provide executable software libraries and licenses for use in QuesTec
Systems, in exchange for equity and royalty payments as described in
Section 2 above. These licenses will grant QuesTec exclusive use of
this software for sports applications

(d) participate in the integration of Atlantic software into the Systems,
and operational testing

(e) participate in Questec marketing activities; QuesTec will reimburse
travel expenses

(f) negotiate revenue sharing with QuesTec for any non-sports business
that QuesTec brings to Atlantic

(g) participate in the specification, development, and integration of any
signal processing technology acquired by QuesTec from a third party.

6. INSTALLATION SITES.

Atlantic acknowledges that QuesTec will be negotiating with networks and
sponsors to license use of the Systems during live sporting events. If
Questec finalizes an agreement regarding the use of the Systems, then
Atlantic agrees that it may assist in the installation and operation of the
Systems if requested by QuesTec. Sites at which the Systems will be used
shall be determined by QuesTec's clients.

7. NOTICES.

All notices, requests, instructions, consents and other communications to
be given pursuant to this Agreement shall be in writing and shall be deemed
received (i) on the same day if delivered in person, by same-day courier or
by facsimile transmission so long as confirmation of such transmission is
received; (ii) on the next day if delivered by overnight mail or courier;
or (iii) on the date indicated on the return receipt, or if there is no
such receipt, on the third calendar day (excluding Saturdays and Sundays),
if delivered by certified or registered mail, postage prepaid, to the party
for whom intended to the following address:

If to QuesTec:

QuesTec International, Inc.
160-A West Industry Court
Deer Park, New York 11729
Attn.: Mr. Edward J. Plumacher

If to Atlantic:

<PAGE>

Atlantic Aerospace Electronics Corporation
470 Totten Pond Road
Waltham, MA 02154
Attn.: Mr. Paul Baim

Any party may, by written notice given to the other in accordance with this
Agreement, change the address or facsimile number to which notices to such
party are to be sent.

8. ENTIRE AGREEMENT; AMENDMENT.

This Agreement constitutes the entire agreement and understanding between
the parties hereto, QuesTec and Atlantic acknowledge that there are no
representations, warranties, covenants, or agreements regarding the Systems
other than those contained herein. The provisions of this Agreement may be
amended, modified or waived only by writing and executed by both parties
hereto. Except as set forth in this Agreement, QuesTec has made no
representations or warranties of any kind with respect to rights granted
herein.

9. WAIVER.

No failure of QuesTec to exercise any right hereunder or to insist upon
strict compliance by Atlantic with the terms hereof, and no custom or
practice of the parties at variance with the terms hereunder, shall
constitute a waiver of QuesTec's right to demand exact compliance with the
terms of this Agreement. Waiver by QuesTec of any particular default by
Atlantic shall not affect or impair QuesTec's rights in respect of any
subsequent default of the same or of a different nature, nor shall any
delay or omission by QuesTec to exercise any rights arising from a default
impair its rights as to such default or any subsequent default.

10. GOVERNING LAW AND INTERPRETATION.

This Agreement shall be construed in accordance with the laws of the United
States and the state of New York, without reference to conflict to laws,
principles and the parties attorn to the jurisdiction and venue of the New
York courts.

11. ARBITRATION.

Any dispute between QuesTec and the Atlantic involving the interpretation
of this Agreement or the obligations of a party to it shall be determined
by binding arbitration in accordance with the arbitration rules of the
American Arbitration Association in the county of Suffolk, state of New
York. The arbitrator shall have the authority to permit discovery upon
request of a party. The cost of the arbitration shall be shared equally.
The arbitration award issued by the arbitrator may be enforced in any court
of competent jurisdiction in the United States.

<PAGE>

12. HEADINGS.

The captions and headings contained in this Agreements are for reference
purposes only and shall not affect the interpretation or meaning of this
Agreement.

13. COUNTERPARTS.

This Agreement may be executed in several counterparts, each of which shall
be deemed an original, and all of such counterparts together shall
constitute one agreement, binding on all parties hereto. If a copy or
counterpart of this Agreement is originally executed and such copy or
counterpart is thereafter transmitted electronically by facsimile or
similar device, such facsimile document shall for all purposes be treated
as if manually signed by the party whose facsimile signature appears.

14. TERM.

This Agreement shall come into force upon signing, and shall continue in
full force according to the terms and conditions set forth in the Strategic
Alliance, Research and Development Agreement between QuesTec and Atlantic.

IN WITNESS WHEREOF, the parties to this Agreement have caused it to be executed
as of the day and year first written above.

"QuesTec"

QuesTec Imaging, Inc.

by: /s/ Edward J. Plumacher
------------------------
Edward J. Plumacher

by: /s/ Michael W. Russo
------------------------
Michael W. Russo

"Atlantic"

Atlantic Aerospace Electronics Corporation

by: /s/ Robert S. Cooper
------------------------
Robert S. Cooper

by: /s/ Thomas V. Robertson
------------------------
Thomas V. Robertson

<PAGE>

STRATEGIC ALLIANCE
RESEARCH AND DEVELOPMENT AGREEMENT

This Agreement, entered into this ninth day of June, 1998.

BY AND AMONG:

LMC Live Motion Company, a corporation duly organized and existing under the
laws of Germany, and having its principal office of business at Unter den Eichen
7, Wiesbadan, Germany, 65195 (Felix Marggraff, Heiko Schweim), (hereinafter
referred to as "LMC").

WITNESSETH THAT:

WHEREAS, QuesTec is the owner of several technologies relating to software
systems developed for sports broadcasts, athletic analysis and production
services.

WHEREAS, LMC is a provider of production services and athletic analysis for
Sporting events.

WHEREAS, QuesTec and LMC desire to participate in software and product
development as defined hereinafter through QuesTec's research and development.
QuesTec desires to undertake such software development and distribution thereof
employing said technologies developed and acquired by QuesTec and LMC, and the

<PAGE>

parties hereto desire to encourage others to participate in the same to the
mutual benefit of QuesTec and LMC and

WHEREAS, QuesTec and LMC are willing to enter into an Agreement which calls for
the development of software related broadcast enhancement products in the field
of sports broadcasting and athletic analysis.

NOW THEREFORE, it is agreed among the parties as follows:

ARTICLE 1. DEFINITIONS

"QUESTEC INTELLECTUAL PROPERTY" shall mean certain patents, trademarks,
servicemarks and copyrights which are held by QuesTec on software series and
relate to the fabrication and use of the Software, and know-how which includes
all descriptions of data, technical know-how and trade secrets (including but
not limited to, information on QuesTec's customers) relating to the fabrication
and use of The Software, al of which shall be fully described in the individual
Contracts.

"INTELLECTUAL PROPERTY" shall mean software related products developed by
QuesTec and partially funded by LMC directly or as an agent.

<PAGE>

"PATENTS" shall mean any patents and patent application relating to the
software, any patents issuing upon any divisions or continuation of such Patents
and patent applications; any patents which issue upon patent application
corresponding to any of the aforesaid Patents and patent applications; and any
reissues, extensions, or additions to any of the foregoing, all of which are
obtained through the Development during the life of the Agreement.

"COPYRIGHTS" shall mean any copyrights relating to The Software which are
obtained through the Development during the life of the Agreement.

"THE SOFTWARE" shall mean certain software in the fields of sports to be used
for sports broadcasting, athletic analysis, and production services which exist
and/or are to be developed by QuesTec employing Patents, Improvement Patents and
know-how.

"DEVELOPMENT" shall mean research, development, creation, invention and any
other work to be conducted and performed by QuesTec hereto for the successful
manufacture of The Software.

"INDIVIDUAL CONTRACTS" shall mean those contracts between the parties where the
parties agree to develop specified

<PAGE>

software applications under this Agreement.

ARTICLE 2. WARRANTIES AND UNDERTAKINGS

QuesTec and LMC represent and warrant that they have the full right and power to
grant the rights set forth herein. QuesTec further represents and warrants that
to the best of its knowledge it has full title to its own QuesTec Intellectual
Property, and that there are no outstanding agreements, licenses, assignments,
ship rights or other encumbrances in any manner inconsistent with the provisions
of this Agreement.

ARTICLE 3. INDIVIDUAL CONTRACTS

Specifications of The Software, term for development, share for the expenses for
development, the amount of the royalty for the Intellectual Property, and any
other detailed terms and conditions shall be provided for in the Individual
Contracts.

If there is any inconsistence between the provisions of such Individual
Contracts and this Agreement, the former shall prevail.

ARTICLE 4. LICENSES

<PAGE>

QuesTec shall grant to LMC an exclusive license to QuesTec Intellectual
property, and Intellectual Property with the right to use, lease, sell and/or
hypothecate in Europe (excluding Great Britain), Dubai and the United Arab
Emirates. QuesTec will grant to LMC the exclusive rights to Great Britain on or
before March 1, 1999. The Software, pursuant to this Agreement and the
Individual Contracts.

The amount of the licensing fee and royalty for the above licenses shall be
stipulated in the Individual Contracts.

ARTICLE 5. TECHNICAL INTERFACE

<PAGE>

Manager of the disclosing party to the Manager of the other party under a
Confidential Information designation. Such disclosure shall be deemed to be
confidential only to the extent that it is received in writing from the
disclosing party, or, if received only to the extent that it is confirmed in
writing by the disclosing party within fourteen (14) days of the oral
disclosure. The receipt of confidential Intellectual Property shall be promptly
acknowledged in writing by the Manager of LMC.

Respecting any confidential Intellectual Property transmitted and received in
accordance with Article 5.3, to the extent that such Intellectual Property
remains confidential pursuant to Article 5.3, LMC shall use the same efforts to
avoid publication or dissemination of such confidential Intellectual Property as
it employs with respect to information of its own which it does not desire to be
published or disseminated. Notwithstanding expiration or termination of this
Agreement pursuant to Articles 9 and 10, this paragraph shall remain effective
for another two (2) years from the date of expiration or termination of this
Agreement.

ARTICLE 6. COPYRIGHT

QuesTec shall acquire and hold the copyright in The Software

<PAGE>

which is developed by QuesTec pursuant to this Agreement.

ARTICLE 7. APPLICATIONS FOR PATENTS

QuesTec shall apply for patents for "The Software" and "Inventions' which are
required and developed under this Agreement, and shall won the Patents. QuesTec
shall bear the expenses in obtaining and maintaining such patents.

ARTICLE 8. INTELLECTUAL PROPERTY PROTECTION

In the event that Intellectual Property licensed hereunder to LMC by QuesTec is
infringed by the use, sale or lease of The Software by an unlicensed third
party, QuesTec may at its option and at its expense, file and prosecute a
lawsuit against such infringer and, in the case of an award of damages related
directly to the Software, after deducting its relevant costs therefrom, any
excess of each damage award shall be divided equally between QuesTec and LMC. If
QuesTec elects not to pursue such infringer for all of their infringement of
said Intellectual Property, than LMC may at there option pursue such infringer,
at their expense, and, in the case of an award of damages, whether or not
related directly to The Software, after deducting their costs from such damages,
any excess of any damage award shall be divided equally between QuesTec and LMC.
The parties hereto

<PAGE>

shall each extend to the others full cooperation in all such litigation
proceedings, and either party may join the other as a party thereto.

In the event that on account of the use of QuesTec Intellectual Property, the
Copyrights, or the use or lease/sale of The Software, either LMC or QuesTec is
sued for patent, copyright or any other Intellectual Property infringement by a
third party, then QuesTec and LMC shall promptly and continuously share and
exchange all information relevant to the defense of each lawsuit. Either party
may join the other as a defendant, and both party shall give due and reasonable
credence to the legal and business judgement of the other party in adopting a
reasonable settlement or continuance of each litigation. No settlement shall be
reached which affects the royalty income of the other party without the written
consent of such other party which consent shall not be unreasonably withheld
whether the proposed compromise, if any, be in regard to the terms of settlement
or a reasonable design change in The Software.

ARTICLE 9. AGREEMENT BETWEEN QUESTEC AND LMC

In the event that QuesTec and LMC shall enter into additional Agreements, unless
specified all Agreements shall remain binding. All European clients/prospects
and clients/prospects from Dubai and the United Arab Emirates

<PAGE>

are to be serviced by LMC directly. If QuesTec is approached by such
clients/prospects they will be referred to LMC. LMC is to inform QuesTec of any
and all inquiries concerning the use of the above mentioned products and or
services.

ARTICLE 10 DISTRIBUTION

In addition to development, QuesTec will designate LMC as its distributor in
Europe, Dubai and United Arab Emirates, of The Software developed by QuesTec.
The amount of the licensing fee and royalty for LMC's distribution of such
Software and products shall be determined separately by and between QuesTec and
LMC.

ARTICLE 11. TERM.

ARTICLE 12. TERMINATION

<PAGE>

Should QuesTec or LMC at any time commit any breach of this Agreement and should
such failure or breach not be cured within sixty (60) days after written notice
from either party to the defaulting party specifying the nature of the default,
the notifying party shall thereafter have the right to terminate this Agreement
and/or any licensing rights hereunder as the case may be, by giving written
termination notice to the other party, and such termination shall become
effective on the sixtieth (60) day after the dispatch of such termination
notice. A termination under this Article shall place the parties in the
respective legal position which existed prior to the effective date of this
Agreement.

Should either QuesTec or LMC become insolvent, make an assignment for the
benefit of creditors or be adjudged bankrupt, or should a receiver or trustee of
the property of either QuesTec or LMC be appointed, the other party may
forthwith terminate this Agreement.

ARTICLE 13. NOTICE

<PAGE>

statement is given. A notice given by facsimile shall be deemed effective one
day after dispatch, subject to being following by mail.

ARTICLE 14. ARBITRATION

ARTICLE 15. FORCE MAJEURE

<PAGE>

governmental action, any party or parties are precluded from receiving any
benefit to which they are entitled hereunder, the parties shall review the terms
of this Agreement so as to be in the same relative positions as previously
obtained hereunder.

ARTICLE 16. NON-ASSIGNABILITY

Neither party hereto shall assign any of its rights or obligations under this
Agreement without the prior written consent of the other party hereto.

ARTICLE 17. INTERPRETATION

This Agreement shall be construed and interpreted according to the laws of the
United States and the state of New York.

ARTICLE 18. MODIFICATION

<PAGE>

parties.

IN WITNESS WHEREOF, the parties hereto have caused this agreement to by signed
and sealed by their duly authorized office or representative as of the date
first above written.

"QuesTec"

QuesTec Imaging, Inc.

by: /s/ Edward J. Plumacher
------------------------
Edward J. Plumacher (CS)

by: /s/ Michael W. Russo
------------------------
Michael W. Russo

"LMC"

LMC Live Motion Company

by: /s/ Felix Marggraff
------------------------
Felix Marggraff

by: /s/ Heiko Schweim
------------------------
Heiko Schweim

<PAGE>

QuesTec Imaging, Inc.

PRIVATE PLACEMENT OFFERING
SUBSCRIPTION AGREEMENT AND QUESTIONNAIRE

AGREEMENT, effective this 1st day of October, 1997, between Questec
Imaging, Inc., a corporation incorporated under the laws of British Columbia
(the "Company"), and _____________ (the "Subscriber").

RECITALS

A. The Company desires to provide financing for itself by selling to
accredited investors, shares (the "Shares") of the Company's Common Stock,
without par value (the "Common Stock"), for an aggregate purchase price of not
more than $800,000.

B. Purchase of the Shares involves significant investment risks. The shares
are being offered to only accredited investors as such term is defined under
Regulation D of the Securities and Exchange Commission ("SEC").

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as
follows:

1. Purchase of Shares.

The Company agrees to sell to the Subscriber, and the Subscriber agrees to
purchase from the Company, Shares for the aggregate purchase price set forth in
the signature page hereof. The number of Shares to be issued to the Subscriber
hereunder on or before December 31, 1997 shall be equal to a quotient, the
numerator of which shall be the aggregate purchase price paid by the Subscriber
to the Company hereunder and the denominator of which shall be Zero Dollars and
Twenty-one Cents ($.21). The number of Shares to be issued to the Subscriber
hereunder from and after November 1, 1997 shall be equal to a quotient, the
numerator of which shall be the aggregate purchase price paid by the Subscriber
to the Company hereunder and the denominator of which shall be the closing bid
price (adjusted as set forth below) of the Common Stock on the business day
immediately preceding receipt by the Company of a fully-executed copy of this
Agreement and the purchase price to be paid hereunder; it being understood and
agreed, however, that for the purposes hereof, such closing bid price shall be
discounted by the following percentages in the event that this Agreement is
executed and this Agreement and the purchase prices to be paid hereunder are
received by the Company on or before the dates set forth opposite such
percentages:

<PAGE>

Percentage Date
30% December 31, 1997
25% January 31, 1997
20% February 28, 1998

2. Payment of Purchase Price.

Concurrently with the delivery of this Agreement, the Subscriber has
delivered a check or made a wire transfer in the amount set forth in the
signature page hereof, in payment of the purchase price for the Shares. Checks
shall be made payable, or wired funds shall be sent, to: Chase Manhattan Bank,
ABA 021000021, FBO A/C#910-2-758829 Escrow incoming Wire Acct., FFC: E00704
Questec Imaging, Inc., Attn: Connie Hum.

3. Representations and Warranties of the Company.

(a) The Shares will be, when issued, delivered and paid for in accordance
with this Agreement, duly and validly issued, fully paid and non-assessable; all
presently outstanding shares of Common Stock of the Company have been duly
authorized, validly issues and are fully paid and non-assessable; the Shares
are not being issued in violation of the preemptive rights of any of the
Company's security holders, and there are no outstanding options, warrants or
rights or other agreements outstanding or in existence entitling any person to
purchase or otherwise acquire, or any outstanding securities convertible or
exchangeable into, any capital stock or other securities of the Company, other
than (1) the options and warrants described in Exhibit A, attached hereto, and
(ii) an agreement with Alexander, Wescott of a warrant to purchase up to
1,000,000 shares of Common Stock; all corporate action required to be taken by
the Company prior to the issuance and sale of the Shares to qualified
subscribers has been or, prior to the sale thereof, will have been taken.

(b) The authorized capital stock of the Company consists of 50,000,000
shares divided into 40,000,000 shares of Common Stock, without par value, and
10,000,000 shares of Preferred Stock, with par value, of which approximately
16,770,000 shares of such Common Stock are issued and outstanding and 0 shares
of such Preferred Stock are issued and outstanding.

(d) The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which its activities or its
ownership or leasing of property requires such qualification.

<PAGE>
(e) This Agreement has been duly and validly authorized and executed and
delivered by and on behalf of the Company and constitutes a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, subject to any applicable bankruptcy, insolvency, reorganization or other
laws affecting the enforcement of creditors' rights generally.

(f) The Company is not in violation of (i) any term or provision of its
charter or bylaws or (ii) any material term or provision of any indenture,
mortgage, deed of trust, note, license agreement, or other material agreement or
instrument to which the Company is a party or by which it is or may be bound or
to which any of its material assets, property or business is or may be subject,
or (iii) any material term of any significant indebtedness, or (iv) of any
statute or (v) any material judgment, decree, order, rule or regulation
applicable to the Company of any court, regulatory body or administrative agency
or other federal, state or other governmental body, domestic or foreign, having
jurisdiction over it or its material assets, property or business, which
violation or violations, either in any case or in the aggregate, might result in
any material adverse change, financial or otherwise, in the assets, properties,
condition, business, earnings or prospects of the Company; and the execution
and delivery by the Company of this Agreement, the consummation by the Company
of the transactions herein contemplated, and the compliance by the Company with
the terms of this Agreement will not result in any such violation or violations.
All material licenses, approvals or permits from the federal or any state, local
or foreign government or agency thereof having jurisdiction over the Company
reasonably required for the conduct of the business or operations of the
Company have been obtained and are outstanding, and there are no proceedings
pending or to the Company's knowledge threatened, seeking to cancel, terminate
or limit such licenses, approvals or permits.

(g) There are no actions, investigations, statutes, rules or regulations or
other proceedings of any nature in effect or pending or to the Company's
knowledge threatened, as the case may be, which, either in any case or in the
aggregate, if decided adversely, might result in any material adverse change,
financial or otherwise, in the assets, properties, condition, business, earnings
or prospects of the Company or which question the validity of the capital stock
of the Company, this Agreement or any action taken or to be taken by the Company
pursuant to or in connection with this Agreement. The Company hereby advises the
Subscriber, however, that the Company has been named as a defendant in an action
entitled Charles F. Mehler, Plaintiff, vs. Questec Imaging, Inc. fka SZL
Sportsight, Inc., Defendant, filed in the Circuit Court of the Fifteenth
Judicial Circuit in and for Palm Beach County, Florida. Notwithstanding the
foregoing, however, the Company hereby represents and warrants to the Subscriber
that, if decided adversely, such action will not result in any material adverse
change, financial or otherwise, in the assets, properties, condition, business,
earnings or prospects of the Company and that such action does not question the
validity of the capital stock of the Company, this Agreement or any action taken
or to be taken by the Company pursuant to or in connection with this Agreement.

-3-

<PAGE>

(h) The Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated, other
than placement agent fees as described in the Memorandum.

(i) The Company's unaudited financial statements and notes thereto
provided to the Subscriber present fairly the financial position of the Company
as of the respective dates thereof and the results of operations and cash flows
for the respective periods covered thereby and are all, except for the lack of
footnotes in the unaudited financial statements, in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
entire period involved. Since the dates of the unaudited financial statements,
there has been no material adverse change, financial or otherwise, in the
assets, properties, condition, business, earnings or prospects of the Company.

(j) The Company has filed each tax return which is required to be filed, or
has requested an extension therefor and has paid or otherwise provided for all
taxes shown on such return and all related assessments to the extent that the
same have become due, provided, however, that the Company has accrued during the
past three years, but not paid, up to $50,000.00 in Canadian taxes and has
accrued since December 1995, but not paid, up to $ 150,000.00 in United States
federal withholding taxes, all of which the Company hereby represents and
warrants shall be paid within thirty (30) days from the date hereof.

(k) All information from the Company which is included in this Subscription
Agreement is accurate and complete and does not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

4. Representations and Warranties of the Subscriber.

The Subscriber hereby represents, warrants and acknowledges to the Company
as follows:

(a) The Subscriber and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Shares which have been requested
by the Subscriber or its advisors. The Subscriber and its advisors, if any, have
been afforded the opportunity to ask questions of the Company and have received
satisfactory answers to any such inquiries. Neither such inquiries nor any other
due diligence investigation conducted by the Subscriber shall modify, amend or
affect the Subscriber's right to rely on the Company's representations and
warranties contained in Section 3 above. The Subscriber acknowledges that, in
making the decision to purchase the Shares, it has relied solely upon
independent investigations made by it and not upon any representations made by
the Company with respect to the Company or the Shares, other than those
representations set forth in Section 3 hereof.

-4-

<PAGE>

(b) This Agreement has been executed and delivered by the Subscriber and is
a valid and binding agreement enforceable against the Subscriber in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws of general applicability relating
to or affecting creditors' rights generally, and the Subscriber has full power
and authority necessary to enter into this Agreement and to perform its
obligations hereunder.

(c) No consent, approval, authorization, or order of any court,
governmental agency or body, or arbitrator having jurisdiction over the
Subscriber is required for execution of this Agreement, including, without
limitation, the purchase of the Shares, or the performance of the Subscriber's
obligations hereunder.

(d) The Subscriber understands that no United States or other governmental
agency has passed on or made any recommendation or endorsement of the Shares.

(e) The Subscriber understands that the Shares are being offered and sold
in reliance upon specific exemptions from the registration requirements of
United States federal and state securities laws and that the Company is relying
upon the truth and accuracy of, and the Subscriber's compliance with, the
representations, warranties, agreements, acknowledgements and understandings of
the Subscriber set forth herein in order to determine the availability of such
exemptions and the eligibility of the Subscriber to acquire the Shares.

(f) The Subscriber is acquiring the Shares pursuant to this Agreement for
investment for its own account and not with a view to the distribution (as such
term is used in Section 2(11) of the Securities Act of 1933, as amended (the
"Securities Act")) thereof.

(g) The Subscriber realizes that the Shares are speculative, illiquid and
involve a high degree of risk, including the risks of receiving no return on the
investment and of losing the investment in the Company.

(h) The Subscriber is able to bear the economic risk of investment in the
Shares, including the total loss of such investment.

(i) The Subscriber believes that subscribing for the Shares pursuant to the
terms of this Agreement is an appropriate and suitable investment for the
Subscriber.

(j) The Subscriber is experienced and knowledgeable in financial and
business matters, and is capable of evaluating the merits and risks of
purchasing securities of the Company.

(k) The Subscriber is a resident of the State of ____________.

-5-

<PAGE>

(l) The Subscriber is an "accredited investor" as defined in Rule 501 of
Regulation D under the Securities Act and (check all that apply):

[ ] (i) A natural person whose individual net worth (assets less
liabilities), or joint net worth with his or her spouse, exceeds
$1,000,000.

[ ] (ii) A natural person whose individual income was in excess of
$200,000, or whose joint income with his or her spouse was in excess of
$300,000, each of the two most recent years, and who has a reasonable
expectation of reaching the same income level for the current year.

[ ] (iii) A bank, insurance company, registered investment company,
business development company, small business investment company or employee
benefit plan.

[ ] (iv) A savings and loan association, credit union, or similar
financial institution, or a registered broker or dealer.

[ ] (v) A private business development company.

[ ] (vi) An organization described in Section 501(c)(3) of the
Internal Revenue Code with assets in excess of $5,000,000.

[ ] (vii) A corporation, Massachusetts or similar business trust, or
partnership with assets in excess of $5,000,000.

[ ] (viii) A trust with assets in excess of $5,000,000.

[ ] (ix) A director or an executive officer of the Company.

[ ] (x) An entity in which all of the equity owners are accredited
investors.

[ ] (xi) A self-directed IRA, Keogh, or similar plan of which the
individual directing the investments qualifies as an "accredited investor"
under one or more of items (i)-(x), above. Also check the item(s) [(i)-(x)]
that applies.

The Company reserves the right to request additional information from the
Subscriber to verify the information represented by the Subscriber herein.

-6-
<PAGE>

5. Investment Purpose in Acquiring the Shares.

The Subscriber and the Company acknowledge that the securities comprising
the Shares have not been registered under the Securities Act, or applicable
state securities laws, and that such securities will be issued to Subscriber in
reliance on exemptions from the registration requirements of the Securities Act
and applicable state securities laws, based in part on Subscriber's
representations and undertakings contained herein, including Subscriber's
investment intent. The Subscriber has no present intention to divide his
participation with others or to resell or otherwise dispose of all or any part
of the Shares.

6. Compliance with Securities Act.

The Subscriber agrees that if the Shares or any part thereof are to be
sold or transferred by the Subscriber in the future, the Subscriber will sell or
distribute them pursuant to the requirements of the Securities Act and
applicable state securities laws. The Subscriber agrees that the Subscriber will
not transfer any part of the Shares without (i) obtaining an opinion of counsel
satisfactory in form and substance to the counsel for the Company to the effect
that such transfer is exempt from the registration requirements under the
Securities Act and applicable state securities laws or (ii) undertaking the
required registration.

7. Restrictive Legend.

Subscriber agrees that the Company may place a restrictive legend on the
documents representing the securities comprising the Shares containing
substantially the following language:

"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or any state securities laws.
They may not be sold, offered for sale, or transferred in the absence of
either an effective registration under federal and state securities laws,
or an opinion of counsel for the Company that such transaction is exempt
from registration under the Securities Act of 1933, as amended, and under
such laws."

8. Stop Transfer Order.

The Subscriber agrees that the Company may place a stop transfer order with
its registrar and stock transfer agent (if any) covering all certificates
representing the securities comprising the Shares.

9. Knowledge of Restrictions Upon Transfer of the Shares.

-7-
<PAGE>

The Subscriber understands that the securities comprising the Shares are
not freely transferable and may in fact be prohibited from sale for an extended
period of time and that, as a consequence thereof, the undersigned must bear the
economic risk of investment in the Shares for an indefinite period of time and
may have extremely limited opportunities to dispose of the Shares.

10. Registration and Other Rights with regard to the Shares.

(a) If any time prior to the fifth anniversary of the delivery of the
purchase price set forth in the signature page hereof to the Company, the
Company shall file with the SEC a Registration Statement relating to an offering
for its own account or the account of others under the Securities Act of any of
its equity securities (other than on Form S-4 or Form S-8 or its then equivalent
relating to equity securities issuable in connection with any acquisition of any
entity or business or equity securities issuable under a stock option or other
employee benefit plan) the Company shall send to the Subscriber written notice
of such determination and, if within twenty (20) days after the effective date
of such notice, the Subscriber shall so request in writing, the Company shall
include in such Registration Statement all or any part of the Shares the
Subscriber requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because, in
such underwriter(s) judgment, marketing or other factors dictate such limitation
is necessary to facilitate public distribution, then the Company shall be
obligated to include in such Registration Statement only such limited portion of
the Shares with respect to which the Subscriber has requested inclusion
hereunder, provided, however, that the Company shall not exclude any Shares
unless the Company has first excluded all outstanding securities, the holders of
which are not entitled to inclusion of such securities in such Registration
Statement or are not entitled to pro rata inclusion with the Shares, and
provided, further, however, that after giving effect to the immediately
proceeding proviso, any exclusion of Shares shall be made pro rata with holders
of other securities having the right to include such securities in the
Registration Statement other than other holders of securities entitled to
inclusion of their securities in such Registration Statement by reason of demand
registration rights. If an offering in connection with which the Subscriber is
entitled to registration under this paragraph (c) is an underwritten offering,
then the Subscriber shall, unless otherwise agreed by the Company, offer and
sell the Shares included in such Registration Statement in an underwritten
offering using the same underwriter or underwriters and, subject to the
provisions of this Agreement, on the same terms and conditions as other shares
of Common Stock included in such underwritten offering.

(b) In connection with the filing of a registration statement pursuant to
this section, the Company shall:

i) notify the Subscriber as to the filing and status thereof and of all
amendments thereto filed prior to the effective date of said
registration statement;

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<PAGE>

ii) notify such Subscriber promptly after it shall have received notice
of the time when the registration statement becomes effective or
any supplement to any prospectus forming a part of the registration
statement has been filed;

iii) prepare and file without expense to such Subscriber any necessary
amendment or supplement to such registration statement or
prospectus as may be necessary to comply with the 1933 Act or
advisable in connection with the proposed distribution of the
securities by such Subscriber;

iv) take all reasonable steps to qualify the Shares for sale under
the securities or blue sky laws of such reasonable number of states
as such Subscriber may designate in writing and to register or
obtain the approval of any federal or state authority which may be
required in connection with the proposed distribution, except in
each case, in jurisdictions in which the Company must either
qualify to do business or file a general consent to service of
process as a condition of the qualification of such securities;

v) notify such Subscriber of any stop order suspending the
effectiveness of the registration statement and use reasonable
best efforts to remove such stop order;

vi) undertake to keep such registration statement and prospectus
effective for a period of twelve months after its effective date;

vii) furnish to such Subscriber as soon as available, copies of any such
registration statement and each preliminary or final prospectus and
any supplement or amendment required to be prepared pursuant to the
foregoing provisions of this section, all in such quantities as
such Subscriber may from time to time reasonably request.

(c) The Subscriber agrees to pay any underwriting discounts and
commissions, transfer taxes, registration fees and his own counsel fees with
respect to the Shares being registered. The Company will pay all other costs and
expenses in connection with a registration statement to be filed pursuant to
this Section 10 including, without limitation, the fees and expenses of counsel
for the Company, the fees and expenses of its accountants, and all other costs
and expenses incident to the preparation, printing and filing under the Act of
any such registration statement, each prospectus and all amendments and
supplements thereto, for costs incurred in connection with the qualification of
such securities for sale in such reasonable number of states as the Subscriber
have designated, including fees and disbursements of counsel for the Company,
and the costs of supplying a reasonable number of copies of the registration
statement, each

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<PAGE>

preliminary prospectus, final prospectus and any supplements or amendments
thereto to such Subscriber.

(d) The Company agrees to enter into an appropriate cross-indemnity
agreement with any underwriter (as defined in the Securities Act) for such
Subscriber in connection with the filing of a registration statement pursuant to
this section.

(e) If the Company shall file any registration statement including therein
all or any part of the Shares held by the Subscriber, the Company and each
Subscriber shall enter into an appropriate cross-indemnity agreement whereby the
Company shall indemnify and hold harmless the Subscriber against any losses,
claims, damages or liabilities (or actions in respect thereof) arising out of or
based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading unless such statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by any such Subscriber, and each such Subscriber shall indemnify
and hold harmless the Company, each of its directors and officers who have
signed the registration statement and each person, if any, who controls the
Company within the meaning of the Securities Act against any losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or based
upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by such Subscriber expressly for use in such registration
statement.

(f) For a period of one year after the effective date of the registration
statement filed pursuant to this Section 10, the Company at its expense will
file such post-effective amendments as may be necessary to make available for
use a prospectus meeting the requirements of the Securities Act. The Company
will cause copies of such prospectus to be delivered to any person selling the
shares of Common Stock as may be required by the Securities Act and the rules
and regulations of the SEC.

11. Representations to Survive Delivery.

The representations, warranties, and agreements of the Company and of the
Subscriber contained in this Agreement will remain operative and in full force
and effect and will survive the payment of the purchase price pursuant to
Section 2 above and the delivery of certificates representing the securities
comprising the Shares.

12. Miscellaneous. (a) Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the transactions
contemplated by this Agreement and supersedes all prior arrangements or
understandings with respect thereto.

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<PAGE>

(b) Binding Effect. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto, and their respective heirs,
legal representatives, successors and assigns.

(c) Third Party Rights. Notwithstanding any other provision of this
Agreement, this Agreement shall not create benefits on behalf of any third
party, and this Agreement shall be effective only as between the parties hereto
and their respective successors, heirs and permitted assigns.

(d) Descriptive Headings. The descriptive headings of this Agreement are
for convenience only and shall not control or affect the meaning or construction
of any provision of this Agreement.

(e) Notices. Any notice hereunder to or upon either party hereto shall be
deemed to have been duly given for all purposes if (a) in writing and sent by
(i) messenger or an overnight courier service against receipt, or (ii) certified
or registered mail, postage paid, return receipt requested, or (b) sent by
telegram, telecopy, telex or similar electronic means, provided that a written
copy thereof is sent on the same day by postage paid first class mail, to such
party at the following address:

To Subscriber: at its address set forth on the signature page hereof

To the Company at: 160 A West Industry Court
Deer Park, NY 11729

or such other address as either party hereto may at any time, or from time to
time, direct by notice given to the other party in accordance with this Section.

(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and of the United States of
America, without regard to choice of law provisions.

(g) Remedies. In the event of any actual or prospective breach or default
by either party hereto, the other party shall be entitled to equitable relief
including remedies in the nature of rescission, injunction and specific
performance. All remedies hereunder are cumulative and not exclusive, and
nothing herein shall be deemed to prohibit or limit either party from pursuing
any other remedy or relief available at law or in equity for such actual or
prospective breach or default, including the recovery of damages.

(h) Disputes and Jurisdiction. Disputes arising under this Agreement shall
be resolved in a federal or state court of general jurisdiction sitting in the
County and State of New York. Each of the parties hereto hereby irrevocably
consents and submits to the jurisdiction of such court.

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<PAGE>

(i) Severability. The provisions hereof are severable and in the event that
any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall, subject to the discretion of
such court, remain in full force and effect, and any invalid or unenforceable
provision shall be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.

(j) Assignment, Etc. This Agreement may not be assigned without the prior
written consent of the parties, and any purported assignment without such
consent shall be void and without effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. This Agreement is not intended, and shall not be deemed,
to create or confer any right or interest for the benefit of any person not a
party hereto.

(k) Amendment. Except as otherwise provided herein, no amendment of this
Agreement shall be valid or effective, unless in writing and signing by or on
behalf of the parties hereto.

(l) Waiver. No course of dealing or omission or delay on the part of either
party hereto in asserting or exercising any right hereunder shall constitute or
operate as a waiver of any such right. No waiver of any provision hereof shall
be effective, unless in writing and signed by or on behalf of the party to be
charged therewith. No waiver shall be deemed a continuing waiver or waiver in
respect of any other or subsequent breach or default, unless expressly so stated
in writing.

(m) Further Assurances. Each party hereto covenants and agrees promptly to
execute, delivery, file or record such agreements, instruments, certificates and
other documents and to perform such other and further acts as the other party
hereto may reasonably request or as

-12-
<PAGE>

may otherwise be necessary or proper to consummate and perfect the transactions
contemplated hereby.

(n) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and which together shall constitute one and
the same agreement.

----------------------------------
Subscriber (Signature)

----------------------------------
Subscriber (Signature, if more
than one investor)

----------------------------------
Print Name

----------------------------------
Print Name (If more than one investor)

----------------------------------
Address

The Company hereby accepts the subscription evidenced by this Subscription
Agreement and Questionnaire:

QUESTEC IMAGING, INC.

By:
----------------------------
Name:
Title:

Dated:
-----------------------------

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<PAGE>

SUBSCRIBER INFORMATION

- - --------------------------------------------------------------------------------
(Please print name(s) in which the Shares are to be issued)

- - --------------------------------------------------------------------------------
Taxpayer I.D. No. Taxpayer I.D. No.
(If more than one investor)

- - --------------------------------------------------------------------------------
Street Address

- - --------------------------------------------------------------------------------
City State Zip Code

- - --------------------------------------------------------------------------------
Telephone Number

- - --------------------------------------------------------------------------------
Occupation

Check One:

[ ] Individual Ownership [ ] Tenants in Common

[ ] Joint Tenants (JTWROS) [ ] Corporation

[ ] Partnership [ ] Other

-14-
<PAGE>

CERTIFICATE OF SIGNATORY

(To be completed if Shares are being subscribed for by an Entity)

I,_________________________, am the_____________________of ___________
_________ (the "Entity").

I certify that I am empowered and duly authorized by the Entity to execute
and carry out the terms of the Subscription Agreement and Questionnaire and to
purchase and hold the Shares, and certify further that such Subscription
Agreement and Questionnaire has been duly and validly executed on behalf of the
Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ______ day of _______________, 1997.

-----------------------------
(Signature)

-----------------------------
(Title)

-----------------------------
(Print Name)

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