1999-08-03~ 10SB12G

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Cyber Mark International Corp.

95 West Beaver Creek, Units 8 and 9
Richmond Hill, Ontario, Canada
L4B 1H4
[phone]

DESCRIPTION OF BUSINESS

Introduction

The Company, through its wholly owned subsidiary, The CM300 Corporation, manufacturers virtual reality equipment and develops games for use with its equipment. The two main products currently manufactured and sold by the Company are the Cobra Immersive Virtual Reality System ("Cobra System") which includes up to six different games and the Virtual Speedway 300 ("Virtual Speedway"). Uniquely the Company designs and assembles the hardware, creates the games for use with its hardware, writes the software for the operation of its hardware and games and offers remote technical support.

Virtual reality is an emerging technology which attempts to fully immerse the user in an interactive computer generated environment. The participant in a virtual reality experience interacts with the system through a series of sophisticated sensors which are both input and output devices. Input devices include data gloves which track hand positions and configurations and body suits which sense the entire orientation of the virtual reality participant. Output devices include complex head mounted displays and surround-sound audio systems. The result is an illusion to the participant that he is surrounded by three-dimensional computer generated objects.

From its initial beginnings, merely thirty years ago, virtual reality is evolving into many applications including those in the fields of industry, architecture, medicine, science and entertainment. The Company believes that
virtual reality technology is developing in a manner similar to the personal computer where it was initially thought there were limited applications and purposeful for only limited tasks. Although entertainment promises the most
potential, the Company believes that many other uses will be developed as the technology is refined and more readily available at commercially competitive prices.

At this time the market for virtual reality products is limited. The recent bankruptcy of a major producer of a virtual reality entertainment system has caused disruption in the market, and the acceptance of virtual reality in the commercial entertainment setting. Although the Company believes there is commercial and entertainment viability for virtual reality, there is uncertainty about the prospects of this industry.

Products and Services

The principal products of the Company are the Cobra System and the related six games and the Virtual Speedway.

Cobra System

The Cobra System is an immersive virtual reality system generated by computer. The Company has developed a second generation system that it is currently marketing. The Cobra System pod incorporates a cross platform capability which allows it to use PC based games adapted from systems such as Nintendo 64, Sony and Sega. The pod uses 18 1/2 square feet of space and weighs about 150 pounds. It is constructed from modular parts making it portable and easily repairable. The pod is designed with built in instructional videos and token, card, coin or bill verification to reduce the need for dedicated
operational personnel for each or a limited number of pods as is the case with many competing products. The Company has been selling the Cobra System and itsearlier versions since 1996, and the current average selling price of a Cobra
System is approximately $10,000.

The six games currently available for use with the Cobra System are:

Terminal Velocity; Descent II; Duke Nukem; Quake; Rise of the Triads; and Blood. Because maintaining and expanding the variety of games available for use in this type of entertainment equipment is essential to their continued appeal, the Company devotes substantial resources to developing various game applications.

It is anticipated that it will develop additional games for use on the Cobra System as demand and sales increase.

Virtual Speedway

The Virtual Speedway is a real time virtual reality (as opposed to computer generated) system based on miniature models and motion video. To achieve a true sense of motion and involvement, a virtual race, the Virtual
Speedway uses a miniature race track measuring 40 by 20 feet. Up to six race cars, built to scale, are equipped with miniature television cameras and transmitters to replicate the kind of television coverage in use at race tracks. Next to the track, there are six control consoles equipped with a steering wheel, accelerator and reverse pedals and a head mounted device with reception capability and optics. The player's view, from the car mounted camera, "literally" places the participant inside the car as they race around the track. The Virtual Speedway is fully developed and was commercially available for the first time in November 1997. The current average selling price of a Virtual Speedway system is approximately $90,000.

The Company is in the process of developing a remote system to be used with the Virtual Speedway. The planned remote system, as yet untested in real-time situations, will enable players to race against each other from remote, off-site locations. the tracks, cars and computer will be situated in one central location. Up to 24 control consoles (play stations) per track will be dispersed throughout specific geographic territories in bars, entertainment centers, theaters and the like. any remote station can participate in any race.

Markets

The principal markets for the Cobra System are amusement arcades and family entertainment centers of which there are approximately 6,500 amusement arcades and 2,500 family entertainment centers in Canada and the United States. The principal markets for the Virtual Speedway will be amusement parks, theme parks, shopping malls, bars and major exhibitions as well as amusement arcades and family entertainment centers. The Company generally sells more than one unit for use at each of the parks and centers. The Company has installed Cobra
Systems in Canada, the United States, Denmark, Hungary, Ukraine, Lebanon, Brazil, Peoples Republic of China, Hong Kong, Malaysia and Guam. To date the Company has installed one Virtual Speedway system in the United States but anticipates that its market will be as internationally widespread as the Cobra System.

In the recent past, the Company has experienced slow acceptance of its virtual reality products. In 1997-1999, sales were impacted by the bankruptcy of a major producer of a virtual reality entertainment system which raised questions in the market as to the viability of virtual reality in commercial and entertainment settings. The Company has responded to this by developing a second
generation of the Cobra System and improving the related programming. Although the Company believes there are market opportunities for virtual reality products

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and its Cobra System and Virtual Speedway, there can be no assurance that the
Company will achieve market acceptance of its products, especially in light of
the recent market disruptions.

The Company has shown its products at trade shows and similar venues.
The Company derives exposure and sales, including beta testing sales, from
participation in these venues.

The Company seeks to create brand recognition for its group of products
through advertising in appropriate trade publications and participating in trade
show exhibitions. Marketing is oriented towards the entertainment industry
primarily using in-house personnel. The Company researches potential markets to
establish whether basic criteria are met. As is the case with retail
establishments, demographic data, site assessment and competitive review are
essential to the success of the product. The Company products are installed
using both lease and revenue sharing arrangements and sales to end users.

Manufacturing

The Company's products are manufactured from a large number of
components, approximately 85% of which are commercially available parts and the
remainder of which are designed and manufactured to the Company specifications
by outside manufacturers. The Company's policy is to maintain more than one
source for each of its major components, to the extent possible, although
certain suppliers are currently the sole source of one or more items. No
assurance can be given that the necessary components will be available from the
current sources.

The Company employs its own programmers to maintain quality control.
From time to time, the Company may outsource some programming. In the past, some
outsourcing of programming has not resulted in quality levels needed for its
products; thus, the Company does not anticipate outsourcing except in special
circumstances.

The Company offers on-line diagnostic capability for servicing
world-wide. The use of modular construction and an open architecture of
non-proprietary parts make repairs easy and quick. The Company also believes
that its products are better constructed than those of its competitors resulting
in longer useful lives and less repair problems.

Research and Development

The Company expensed $229,066 on research and development activities in
1998 and no amount in 1997. These expenses were for the purpose of developing
the second generation Cobra System. The Company has budgeted to spend
approximately $200,000 in 1999, but this amount will depend on sales improving
and obtaining financing, among other things. To the extent that revenues are not
sufficient and outside financing is not available, research and development
expenses will be reduced or curtailed, which will significantly affect product
enhancement and development. This may also have a subsequent adverse impact on
product sales and revenues.

Competition

The Company's products compete directly with video games and similar
amusement arcade and park entertainments. Entities that the Company competes
with include Sega, Midway, Nintendo and Atari. These and other entities with
competing products have substantially greater financial resources, manufacturing
and marketing capabilities, research and development staff and production
facilities than those of the Company. No assurance can be given that thesecompetitors and potential competitors will not develop technology and/or
products that will be as or more advanced and affordable than those of the
Company. The Company competes on the basis of price, its program of development
of new games and the quality of its products which result in longer useful lives
and higher profit margins. In addition, the Company products generally require
no operational staff, resulting in substantial savings for the entertainment
facility which is another competitive factor.

Employees

The Company currently has 11 employees, of which two are senior
executives, three are programmers, two are supervisors and four are assembly
technicians.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward Looking Statements

When used in this Form 10 and in future filings by the Company with the
Securities and Exchange Commission, the words or phrases "will likely result,"
"management expects," or "The Company expects," "will continue," "is
anticipated," "estimated" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance
on any such forward-looking statements, each of which speak only as of the date
made. These statements are subject to risks and uncertainties, some of which are
described below. Actual results may differ materially from historical earnings
and those presently anticipated or projected. The Company has no obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect anticipated events or circumstances
occurring after the date of such statements.

Selected Financial Data

Because the Company continues to develop its products and is still in
the earlier stages of its marketing, selected financial date would not be
meaningful. Reference is made to the financial statements of the Company
included elsewhere in the document.

Sales

The Company had sales of $434,107 for fiscal year 1997 and sales of
$288,873 for fiscal year 1998. The decline in sales was the result of
dislocation in the market for virtual reality entertainment products caused by
the bankruptcy of a major producer. This bankruptcy caused some to question
whether virtual reality will be a viable entertainment medium. As a result of
the business failure, there was substantial discounting of its existing
inventory which affected the Company's ability to sell and maintain the selling
price of the Cobra System. To offset this unfavorable market condition, the
Company began development of the second generation of the Cobra System. The
marketing efforts of the Company were curtailed while research and development
were undertaken for the new system.

For the six months ended June 30, 1999 the Company had sales of
$189,035 compared to sales of $123,183 for the corresponding period in fiscal
year 1998. The increase in sales in 1999 is the result of being able to offer
the second generation of the Cobra System that had been developed during 1998and early 1999. The Company believes that aggregate sales should continue to
increase in the near term as the second generation Cobra System is marketed and
as there is completion of certain software for its products, expected to occur
in August 1999. Of course, because of the need to achieve market acceptance and
the possibilities of delays in achieving development targets, there can be no
assurance that sales will continue to improve and the Company will become
profitable in the near term.

Cost of Sales

The cost of sales for fiscal year 1997 was $138,395 and for fiscal year
1998 was $170,381. The cost of sales for the six months ended June 30, 1999 was
$68,796 compared to a cost of sales for the corresponding period in the prior
fiscal year of $17,055.

Expenses

The expenses of the Company for fiscal year 1997 were $364,015 and for
fiscal year 1998 were $673,448. The principal increase in expenses is the
increase in research and development for new products to be offered by the
Company and for improvements to existing products. The increase in expenses also
resulted from increased wages and benefits due to additional employees,
professional fees, interest expense, rent and office expense, and provision for
bad debts. There were some savings in certain categories of expenses, but these
were insufficient to off set the increase in other expenses. The expenses
related to administration and general expenses increased because of the
Company's move to new premises.

For the six months ended June 30, 1999, expenses were $293,476 compared
to $171,279 for the corresponding period in the prior fiscal year. The reasons
for the increase were generally the same as for the change from 1997 to 1998.

In fiscal year 1998 the Company expensed $229,066 for research and
development. The Company had no research and developmental expenses in fiscal
year 1997. For the six month period ended June 30, 1999 the Company had $27,768
in research and development expenses compared to no research and development
expenses for the corresponding period in the prior fiscal year. For the six
months ended June 30, 1999 they were related to the continued development and
testing of the second generation of the Cobra System.

Losses

The Company had a loss of $45,107 for fiscal year 1997 and $524,793 for
fiscal year 1998. The principal reasons for the significant increase in losses
was the reduced sales and other income, increased general and administrative
expenses and the expenses of research and development. The net loss per share
increased for the same periods from $.01 to $.06, however, there were additional
shares outstanding for the later period. The Company had a loss of $117,437 for
the six months ended June 30, 1999 compared to $139,113 for the corresponding
period for the prior year. The principal reason for the decrease in the losses
of the Company is the increase in sales of the second generation of the Cobra
Systems.

Liquidity and Capital Requirements

The working capital of the Company at December 31, 1998 was $266,915
and $197,479 at June 30, 1999. The Company had cash and cash equivalent assets
of $ 106,865 at December 31, 1998 and nil at June 30, 1999. Since June 30, 1999,

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the Company has received seasonal summer revenues from Cobra Systems at an
amusement part in New Jersey and made additional sales of the Cobra System. Both
of these have been providing cash to the Company since June 30, 1999. The
working capital requirements of the Company has been funded by the sale of
securities from time to time, borrowings (including bank overdrafts) and
revenues from sales. During 1998 the Company sold an aggregate of $720,977 worth
of common stock for cash and conversion of debt of the Company. The proceeds of
these sales were used to fund losses and for developmental activities.

At December 31, 1998 the Company had aggregated debt and loans from
shareholders of $258,605. The interest expense of the outstanding debt during
fiscal year 1998 was $42,580. The aggregate debt and loans from shareholders at
June 30, 1999 was $224,881 and interest expense for the six months then ended
was $15,769.

Of the outstanding debt, $131,483 at December 31, 1999 and $119,511 at
June 30, 1999 was a business development loan from The Business Development Bank
of Canada. This loan bears interest at the rate of 5% above the floating base
interest rate charged by the bank. The loan is repayable at the rate of $2,739
per month and matures June 2002. The Company must also pay a royalty to the bank
of .1942% per annum, until June 2002 which aggregated $4,190 in fiscal year 1998
and $2,775 for the six months ended June 30, 1999. This loan is secured by a
pledge of all the assets of CM300 and shareholder guarantees.

The Company has a term loan with the Royal Bank of Canada. The
outstanding principal amount at December 31, 1998 was $59,785 and at June 30,
1999 was $43,285. The Company pays interest at 3% over the bank's prime rate,
and the loan matures in May 2000. This loan is secured by a general pledge of
the assets of CM300 and shareholder guarantees.

The Company is negotiating interim and long term financing which is
anticipated to be through private placements of debt securities and warrants to
purchase common stock. The Company believes the private placements will be with
individual investors who are "accredited investors." The terms of these
arrangements are still being negotiated and are contingent on many factors,
including determination of the final terms, due diligence by the purchasers,
regulatory compliance and obtaining the commitment of the investors. Funding is
also dependent on the business and financial prospects of the Company. No
assurance can be given that the Company will obtain any portion or all of these
funds.

The Company requires additional financing to continue to develop its
business. Principally funds are required for product research and development,
manufacturing and production, marketing activities and operational losses. If
the Company does not increase its income or obtain funding, it will not be able
to continue its business. Management cannot determine how long the Company will
require to fund operational losses and its other activities with funds from the
sale of securities and credit arrangements. Management believes the amount of
funds required now and in the future will be substantial. Except as discussed
above, the Company currently has no regular sources of financing, including bank
or private lending sources, or equity capital sources. No assurance can be given
that the Company will be able to develop sources of financing in the future when
funds are needed or on acceptable terms.

Year 2000

Overview

The Company has evaluated the potential impact of the situation
commonly referred to as the "Year 2000 Issue". Y2K concerns the inability of
information systems, primarily computer software programs, to properly recognize
and process date sensitive information relating to the year 2000 and beyond.
Many of the world's computer systems currently record years in a two-digit
format. These computer systems will be unable to property interpret dates beyond
the year 1999, which could lead to business disruptions in the U.S. and
internationally. The potential costs and uncertainties associated with Y2K will
depend on a number of factors, including software, hardware and the nature of
the industry in which a company operates.

Accounting Systems and Production Equipment

Because the Company has begun operations during 1996 when the issues of
Y2K were being recognized, management believes that the computer programs it
purchases are Y2K compliant. Management has made an informal assessment of its
computer programs and the products its purchases for use in its Cobra System and
Virtual Speedway, and at this time, management believes that it does not have
any assets with embedded computer chips or programs that will be affected by the
Y2K issues. Generally, many of the programs and products used by the Company do
not rely on dating elements, thus, management does not believe that its products
will be affected by Y2K issues.

Other Entity Compliance

The Company does not engage in electronic data interchange with other
entities on any significant basis. Therefore, management believes it does not
have a significant Y2K exposure directly from other entities and their failure
to be Y2K compliant. Tangently, however, the failure of other entities to be Y2K
compliant may cause the Company issues, none of which are yet apparent to
management.

Contingency Planning

Management does not have a contingency plan for its computer systems
that may be found not to be Y2K compliant. Management does not have a
contingency plan in the event a critical service, supplier or customer will not
be Y2K compliant. Cost of Year 2000 Compliance

The Company has not spent any amount on Y2K compliance. It does not
expect to have to spend any material amount on Y2K compliance in the future.


Item 3. DESCRIPTION OF PROPERTY

Executive Offices

The executive office is located at 95 West Beaver Creek Road, Units 8 &
9, Richmond Hill, Ontario, Canada L4B 1H4 and its telephone number is (905)
707-3441. The Company rents this space for its offices and
manufacturing/assembly facilities. The Company lease expires in February 2000and is committed to paying $27,276 per year. The Company believes that its
current office and other facilities are adequate to meet its needs into the near
future.


ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of July 1, 1999 based on
information obtained from the persons named below. With respect to the
beneficial ownership of shares of the common stock of the Company by (1) each
person known to be the owner of more than 5% of the outstanding shares of common
stock, (2) each director and (3) all executive officers and directors as a
group.
Number of
Shares of Percent of
common stock Ownership of
Beneficially* common stock
Name of Beneficial Owner Owned Outstanding
- - --------------------------- ------------ -----------
Samuel Singal. . . . . . . . . . . . . . . 4,130,000(1) 67.7%
Chancery Corporate Services. . . . . . . . 1,000,000(2) 16.4%
Directors and officers as a group (3 persons). 4,650,000(3) 73.6%


* Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
issuable upon the exercise of options or warrants currently exercisable, or
exercisable or convertible within 60 days, are deemed outstanding for
computing the percentage ownership of the person holding such options or
warrants but are not deemed outstanding for computing the percentage
ownership of any other person.

(1) The address for Mr. Singal is care-of Cyber Mark International Corp. at 95
West Beaver Creek, Units 8 and 9, Richmond Hill, Ontario, Canada L4B 1H4.

(2) The address for Chancery Corporate Services ("CCS") is Nassau, Bahamas. CCS
is the corporate trustee with full voting and dispositive authority for the
trusts which own Tinto Inc. and Dungavel Inc. Each of Tinto Inc. and
Dungavel Inc. own 500,000 shares of Common Stock.

(3) Includes 200,000 shares of common stock under currently exercisable options
and excludes 200,000 shares of common stock under options which vest in the
future.


ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The sole directors and officers of the Company is:
Name Age Position

Samuel Singal 51 Chairman of the Board and Chief Operating
Officer and sole director

Joseph Byck 67 Treasurer

Monika Runge 24 Secretary

Mr. Samuel Singal founded the Company's principal subsidiary, CM300 in
1996 and the Company in 1998 as a holding company. Mr. Singal has been the
Chairman and Chief Operating Officer of the Company since 1998 and the President
of CM300 since 1996. From 1994 until 1996, Mr. Singal was employed at Cybermind
Systems, where he held the position of President.

Mr. Joseph Byck has been the Marketing Director of CM300, the Company's
principal subsidiary, since 1996. Mr. Byck has been the Treasurer of the Company
since July 1999. From 1994 to 1999, Mr. Byck was the president of Herbs
International Corp., a company that manufacturers specialty herbal products
related to the neutralizing effects of alcohol.

Ms. Monika Runge has been employed by CM300 since February 1999. From
February 1997 to date Ms. Runge has been a student for a degree in business
administration at York University, Ontario and from September 1996 to February
1997 she was a student at Trinity Western University in British Columbia. From
May 1994 to September 1996, Ms. Runge held various positions with Cybermind
Canada Inc.

Board Meetings and Committees

During the fiscal year ended December 31, 1998, the board of directors
met on three occasions and took written action on ten occasions. All the members
of the board of directors attended the meetings. The written actions were by
unanimous consent. The board of directors has established no committees.
Directors serve for a term of one year after election or until their earlier
resignation or their successor is elected or appointed and qualified.

ITEM 6. EXECUTIVE COMPENSATION

Executive Compensation

The Company currently does not pay any salaries to Messrs. Singal or
Byck. The Company pays a monthly salary of $1,280 to Ms. Runge. None of the
executive officers is employed under a written contract of employment.

Mr. Byck was granted an option to purchase an aggregate of 400,000 of
Common Stock on August 5, 1998. This option vested as to 200,000 shares of
Common Stock on December 31, 1998 and will vest as to 100,000 shares of Common
Stock on each of December 31, 1999 and 2000. The vested portion of the option is
exercisable at $.50 per share. The options that vest December 31, 1998 are
exercisable at $1.00 per share, and the options that vest December 31, 2000 are
exercisable at $1.25 per share. The exercise period is three years from vesting.

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Remuneration of the Board of Directors

A director who is an employee does not receive any compensation as a
director. There is no plan in place for compensation of persons who are
directors who are not employees of the Company.

Keyman Life Insurance

The Company does not own life insurance covering the death of any
officer, director or key employee.

1998 Stock Option Plan

The Company has a Performance Equity Plan which provides for the
issuance of stock-based awards for up to 260,000 shares of Common Stock. The
awards under this plan may be granted separately or together with other awards.
The awards include incentive and non-incentive stock options, stock bonuses and
cash payment awards. Incentive stock options may only be granted to persons who
are employees of the Company. Other forms of awards may be granted to
consultants, directors, employees and officers of the Company. The Company has
not granted any options under this plan.

Other Stock Options

On August 25, 1998, the Company granted options to purchase an aggregate
of 90,000 shares of Common Stock to five employees. Each of these options is
exercisable at $1.00 per share until August 25, 2001. Each options is a
non-incentive option.


ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.


ITEM 8. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED

The authorized capital stock consists of 10,500,000 shares of capital
stock of which 10,000,000 shares are common stock, $0.0001 par value and 500,000
shares are preferred stock, $0.001 par value. There are 6,104,300 shares of
common stock issued and outstanding.

Common Stock

The holders of common stock are entitled to one vote per share on all
matters submitted to a vote of the shareholders of the Company. In addition,
such holders are entitled to receive ratably such dividends, if any, as may be
declared from time to time by the board of directors out of funds legally
available therefor. In the event of the dissolution, liquidation or winding-up,
the holders of common stock are entitled to share ratably in all assets
remaining after payment of all liabilities of the Company and subject to the
prior distribution rights of any preferred stock that may be outstanding at that
time. The holders of common stock do not have cumulative voting rights or
preemptive or other rights to acquire or subscribe for additional, unissued or
treasury shares, which means that the holders of more than 50% of suchoutstanding shares, voting at an election of directors can elect all the
directors on the board of directors if they so choose and, in such event, the
holders of the remaining shares will not be able to elect any of the directors.
All outstanding shares of common stock are, and when issued, the shares of
common stock offered hereby, are fully paid and non-assessable.

Preferred Stock

The Company's Certificate of Incorporation authorizes the issuance of
"blank check" preferred stock with such designations, rights and preferences as
may be determined from time to time by the Board of Directors. Accordingly, the
Board of Directors is empowered, without stockholder approval, to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
the Company's common stock. In the event of issuance, the preferred stock could
be utilized, under certain circumstances, as a method of discouraging, delaying
or preventing a change in control of the Company, which could have the effect of
discouraging bids for the Company and, thereby, prevent stockholders from
receiving the maximum value for their shares. The Company has no present
intention to issue any shares of its preferred stock. However, there can be no
assurance that preferred stock of the Company will not be issued at some time in
the future.

Stock Transfer Agent

The stock transfer agent for the common stock is Continental Stock
Transfer & Trust Company, 2 Broadway, New York, New York 10004, Telephone
212/509-4000.


PART II


ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER STOCKHOLDER MATTERS

Market Information

The common stock of the Company is not traded on any stock exchange, any
NASDAQ Stock Market medium or the "pink sheets". Consequently, there is no
public market for the common stock and no market price data to report. The
Company intends to obtain inclusion on the OTC Bulletin Board in the future, but
there can be no assurance that the common stock will be included in the trading
medium. Even if inclusion in the OTC Bulletin Board is achieved, there is no
assurance that the common stock will be actively traded. Therefore, there can be
no assurance that there will be liquidity in the common stock.

Holders

As of July 1, 1999, there were 39 holders of record of the common
stock.

Dividend Policy

The Company has never declared or paid cash dividends on its common
stock and anticipates that all future earnings (for the near future) will be
retained for working capital and business expansion. The payment of any future dividends will be at the sole discretion of the board of directors and will
depend upon, among other things, future earnings, capital requirements, the
company financial condition and general business conditions. Therefore, there
can be no assurance that any dividends on the common stock will be paid in the
future.


ITEM 2. LEGAL PROCEEDINGS

None.


ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Citrin Cooperman & Company, LLP, certified public accountants were
engaged by the Company on December 1, 1998 as the independent accountants. Prior
to this engagement, the Company did not engage any independent accountants to
review its financial statements. The Company is unaware of any disagreements or
other issues which are required to be disclosed by the rules and regulations
applicable to this Form 10.


ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES

The Company, on June 16, 1998, in connection with its formation and
reorganization as a holding company, issued 3,930,000 shares of common stock to
its founder in exchange for the outstanding stock of CM300, an Ontario
corporation, in which CM300 became a wholly owned subsidiary of the Company.
This transaction was exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended ("Securities Act")

The Company, on June 16, 1998, sold 320,000 shares of common stock to a
then executive officer and director of the Company for $32.00, in a private
offering exempt from registration under Section 4(2) of the Securities Act.

The Company, on July 2, 1998, sold 1,330,000 shares of common stock to
two investors in an offering pursuant to Rule 504 of Regulation D, under the
Securities Act, at a price of $.375 per share.

The Company, on August 5, 1998, sold 100,000 shares of common stock to a
then executive officer of the Company for $10.00 in a private offering exempt
from registration under Section 4(2) of the Securities Act.

The Company, on August 16, 1998, exchanged 46,000 shares of common stock
for cancellation of an outstanding debt of $23,000 to a then executive officer
of the Company in a private offering exempt from registration under Section 4(2)
of the Securities Act.

The Company, on September 18, 1998, sold 186,000 shares of common stock
to 27 investors in an offering pursuant to Rule 504 of Regulation D, under the
Securities Act, at a price $1.125 per share.

The Company, on October 1, 1998, sold an aggregate of 152,300 shares of
common stock to seven investors in an offering pursuant to Rule 504 of Regulation D, under the Securities Act. Of these shares, 102,300 were sold at a
price of $1.125 per share and 50,000 shares were sold at a price of $.50 per
share.

The Company, on March 10, 1999, sold 40,000 shares of common stock to an
investor in an offering pursuant to Rule 504 of Regulation D, under the
Securities Act, at a price of $.50 per share.

All the proceeds of the above offerings, unless otherwise indicated,
were used for general working capital purposes.


ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law provides for the
indemnification of officers and directors under certain circumstances against
expenses and liabilities incurred as a result of a claim against them as
corporate agents and requires Delaware corporations to indemnify their officers
and directors against expenses incurred in legal proceedings because of their
being or having been an officer or a director, if the corporate agent is
successful in his defense on the merits or otherwise in a proceeding against
him.

Insofar as indemnification for liabilities arising under the federal
securities laws may be permitted to directors, officers and controlling persons
of the Company pursuant to the corporate law of Delaware or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy and is, therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred by a
director, officer or controlling person in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being offered or sold, the Company will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Federal
Securities laws, and will be governed by the final adjudication of such case.

The Company does not have any directors or officers liability insurance.


PART F/S

The financial statements of the Company are included in this report
beginning on page F-1.

[Franko10 ™]

PART III

CYBER MARK INTERNATIONAL CORP.

CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED
DECEMBER 31, 1998 AND 1997

CYBER MARK INTERNATIONAL CORP.

YEARS ENDED DECEMBER 31, 1998 AND 1997



TABLE OF CONTENTS



Page
------

Independent Auditors' Report 1

Consolidated Balance Sheets 2

Consolidated Statements of Operations 3

Consolidated Statements of Stockholders' Equity
and Comprehensive Income 4

Consolidated Statements of Cash Flows 5

Notes to Consolidated Financial Statements 6-10

INDEPENDENT AUDITORS' REPORT



Board of Directors
Cyber Mark International Corp.

We have audited the consolidated balance sheet of Cyber Mark International Corp.
as at December 31, 1998 and the related consolidated statements of operations,
stockholders' equity and comprehensive income and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of Cyber Mark
International Corp. as of December 31, 1997 were audited by other auditors whose
report dated July 9, 1998 expressed an unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits 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 and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the financial position of Cyber Mark
International Corp. as at December 31, 1998 and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.




Citran Cooperman & Company, LLP
-------------------------------
CERTIFIED PUBLIC ACCOUNTANTS



March 31, 1999
New York, New York


CYBER MARK INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997




ASSETS

1998 1997
-------- --------

Current assets:
Cash and cash equivalents $106,865 $
Investment tax credits receivable 252,401 213,306
Accounts receivable 11,447 12,005
Inventory 87,573 107,325
Prepaid expenses 20,879
---------- --------
6,739
Total current assets 479,165 339,375

Property and equipment - net 181,688 200,062
Development costs 81,758
--------- -------

Total assets $660,853 $621,195
========= ========


LIABILITIES AND STOCKHOLDERS' EQUITY

Current:
Bank indebtedness $ $ 37,150
Accounts payable and accrued liabilities 68,559 48,242
Long-term debt - current portion 76,354 101,416
Advances from shareholder 67,337 95,004
-------- ---------
Total current liabilities 212,250 281,812

Long-term debt, less current portion 114,914 188,788
Deferred income taxes 15,380
-------- ---------

Total liabilities 327,164 485,980
-------- ---------

Stockholders' equity:
Capital stock 606 425
Additional paid in capital 719,948
Cumulative translation adjustment 4,283 1,568
Retained earnings (deficit) (391,148) 133,222
-------- ---------

Total stockholders' equity 333,689 135,215
-------- ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $660,853 $621,195
======== ========


See accompanying notes to consolidated financial statements.
CYBER MARK INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998



1998 1997
------ ------
Revenues:
Sales $ 288,873 $ 434,107
Other 14,783 23,196
--------- ----------
303,656 457,303
Cost of sales 170,381 138,395
--------- ----------

Gross profit 133,275 318,908
--------- ----------

Expenses:
Wages and benefits 99,952 66,653
Professional fees 52,949 30,910
Interest 42,580 27,554
Rent and occupancy 39,818 22,372
Office and general 33,741 18,209
Trade shows and events 32,761 26,074
Marketing 25,585 32,987
Bad debts 24,498 18,425
Telephone 12,929 18,023
Travel and entertainment 11,510 18,146
Automobile 7,233 14,721
Insurance 6,497 3,712
Consulting fees 5,145 33,352
Depreciation and amortization 49,184 32,877
Research and development 229,066
--------- ---------

673,448 364,015

Loss before income taxes (540,173) (45,107)

Income tax provision (recovery) - deferred (15,380) 3,530
--------- ---------

NET LOSS $(524,793) $ (48,637)
========= =========

Loss per share $ (0.06) $ (0.01)
========= =========




See accompanying notes to consolidated financial statements.
CYBER MARK INTERNATONAL CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


<TABLE>
<CAPTION>
Common Stock Total
------------ Additional Retained Cumulative Comprehen- Share-
Paid in Earnings Translation sive Income holder's
Shares Amount Capital (Deficit) Adjustment (Loss) Equity
--------- --------- -------- --------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance - January 1, 1997 4,250,000 $ 425 $ $ 181,859 $ $182,284
Net loss (48,637) $ (48,637)
Other comprehensive income:
Cumulative translation adjustment 1,568 1,568
--------
Total comprehensive loss $ (47,069) (47,069)
---------- ---------- --------- ---------- ------- ========= ---------
Balance - December 31, 1997 4,250,000 425 133,222 1,568 135,215

Common stock issued to officer 100,000 10 10

Common stock issued in private
placement July 2, 1998 1,330,000 133 499,947 500,080

Common stock issued upon
conversion of loan and interest 46,000 4 22,996 23,000

Common stock issued in private
placement September 18, 1998 186,000 19 119,856 119,875

Common stock issued in private
placement October 1, 1998 152,300 15 77,572 77,587

Net loss (524,793) $(524,793)
Other comprehensive income:
Cumulative translation adjustment 2,715 2,715
---------
Total comprehensive loss $(522,078) (522,078)
--------- -------- -------- --------- -------- ========= -------
Balance December 31, 1998 6,064,300 $ 606 $720,371 $(391,571) $ 4,283 $333,689
========= ======== ======== ========= ======== ========

[Franko10 ™]

CYBER MARK INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997



1998 1997
--------- ---------
Cash flows from operating activities:
Net loss $(524,793) $ (48,637)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization 49,184 32,877
Deferred income taxes (15,380) 3,530
Changes in assets and liabilities:
Investment tax credits receivable (53,405) (112,900)
Accounts receivable (248) 48,063
Inventory 12,552 (90,552)
Prepaid expenses (14,568) (136)
Accounts payable and accrued
liabilities 23,520 (56,984)
---------- ----------

Net cash used by operating
activities (523,138) (224,739)
--------- ---------

Cash flows from investing activities:
Purchase of property and equipment (42,528) (134,846)
Development costs 76,273 (81,758)
Loan receivable 11,674
--------- ----------

Net cash used by investing
activities 33,745 (204,930)
--------- ----------

Cash flows from financing activities:
Issuance of capital stock 720,617
Long-term debt (79,467) 290,204
Advances from shareholder (21,293) 64,710
Bank indebtedness (37,150) 37,150
--------- ----------

Net cash provided by financing
activities 582,707 392,064
--------- ----------

Effect of exchange rate changes on cash 13,551
--------- ----------

Increase (decrease) in cash and cash
equivalents 106,865 (37,605)

Cash and cash equivalents - beginning 37,605
--------- ----------

CASH AND CASH EQUIVALENTS - ENDING $106,865 $
========= ==========


See accompanying notes to consolidated financial statements.

CYBER MARK INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

On July 2, 1998, the shareholders of The CM 300 Corp. ("CM300")
exchanged all their issued common shares for common shares of Cyber
Mark International Corp. ("Cyber"). The acquisition of CM300 by Cyber
is a reverse takeover whereby CM300 is identified as the acquiring
company. Cyber was incorporated in Delaware in June 1998, and prior to
the acquisition Cyber was inactive. The consolidated financial
statements include the operations of CM300 for the years. The
consolidated financial statements include the accounts of the Company
and its subsidiary after eliminating all intercompany accounts and
transactions.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of
three months or less from time of purchase to be cash equivalents.

Inventory

Inventory is valued at lower of cost or market. Cost is determined on
the first-in-first-out basis.

Property and equipment

Property and equipment are stated at cost. Depreciation is provided on
a straight-line basis over the estimated useful life of the assets,
usually five years. For leasehold improvements, depreciation is
provided on a straight-line basis over five years.

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 as of
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results
could differ from those estimates and assumptions.

Financial instruments

The Company considers the fair value of all financial instruments to
be not materially different from their carrying value at year end.

CYBER MARK INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Translation of foreign currencies

The Company uses the local currency as the functional currency and
translates all assets and liabilities at year-end exchange rates, all
income and expense accounts at average rates and records adjustments
resulting from the translation in a separate component of common
shareholders' equity.

NOTE 2 - UNCERTAINTY DUE TO THE YEAR 2000 ISSUE

The Year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in
errors when information using year 2000 dates is processed. In
addition, similar problems may arise in some systems which use certain
dates in 1999 to represent something other than a date.

The effects of the Year 2000 issue may be experienced before, on, or
after January 1, 2000, and, if not addressed, the impact on operations
and financial reporting may range from minor errors to significant
systems failure, which could affect an entity's ability to conduct
normal business operations. It is not possible to be certain that all
aspects of the Year 2000 issue affecting the entity, including those
related to the efforts of customers, suppliers, or other third
parties, will be fully resolved.

NOTE 3 - PROPERTY AND EQUIPMENT
Accumulated
Depreciation
and Amorti- Net Book Value
Cost zation 1998 1997
------- ------- -------- --------

Manufacturing equipment $ 84,801 $38,337 $ 46,464 $ 61,941
Furniture and fixtures 12,336 5,879 6,457 10,888
Office and ship equipment 23,480 4,788 18,692 12,022
Entertainment equipment 75,595 22,197 53,398 70,602
Moulds 14,932 1,493 13,439
Software 4,486 2,243 2,243
Leasehold improvements 51,283 10,288 40,995 44,609
------- ------- -------- --------

$266,913 $85,225 $181,688 $200,062
======== ======= ======== ========

Depreciation expense for the years ended December 31, 1998 and 1997
amounted to $49,184 and $32,877, respectively.

CYBER MARK INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

NOTE 4 - BANK INDEBTEDNESS

The bank indebtedness is payable on demand, bears interest at the bank
prime rate plus 1 3/4% per annum and is secured by a general security
agreement and a postponement of claim signed by the shareholder.

NOTE 5 - LONG-TERM DEBT

1998 1997
-------- ------
<S> <C> <C> <C>
Business development loan bearing interest at a rate of 5% above the
bank's daily floating base interest rate, repayable in monthly
installments of $2,739 and matures June, 2002. The Company is required
to pay the bank additional interest in the form of a royalty of
0.1942% on the combined sales of the Company. The royalty is payable
monthly at the rate of one twelfth of .1942 percent of combined sales.
Total royalties paid during 1998 and 1997 were $4,190 and $1,461,
respectively. The loan is secured by a general security agreement,
joint and several guarantees of the shareholders, assignment of
shareholder loans, life insurance on the lives of the shareholders and
assignment of property insurance $131,483 $157,996

Bank term loan bearing interest at the bank prime rate plus 3% per
annum, repayable in monthly installments of $3,624, maturing May,
2000. Monthly principal payments were deferred until September, 1998
at which time all principal payments in arrears were due. The loan is
secured by a general security agreement, postponement and assignment
of claim signed by the shareholder and a guarantee in the amount of
$100,000 by the shareholder 59,785 112,633

Secured debenture payable bears interest at a rate of 15% per annum,
payable quarterly commencing December 8, 1997, maturing September 7,
1998 and secured by specific equipment of the Company. This debenture
was convertible at the option of the holder at any time that the
shares of the Company become freely tradeable pursuant to applicable
securities legislation, prior to maturity of this debenture, into
common shares of the Company at the rate of 1 share for every
seventy-five cents ($0.75) of principal amount of the debenture. In

CYBER MARK INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997



NOTE 5 - LONG-TERM DEBT (CONTINUED)

<TABLE>
<S> <C> <C> <C>
August 1998 the principal and unpaid interest were converted to 46,000
common shares of Cyber based on a modification and conversion
agreement. 19,575
-------- -------

191,268 290,204

Less: current portion 76,354 101,416
-------- --------

$114,914 $188,788
======== ========

Principal repayments required are due as follows:

1999 $ 76,354
2000 49,174
2001 32,870
2002 32,870
--------
$191,268
========
</TABLE>

NOTE 6 - ADVANCES FROM SHAREHOLDER

These advances are unsecured and non-interest bearing with no specific
terms of repayment.

NOTE 7 - CAPITAL STOCK

<TABLE>

1998 1997
Authorized Issued -------- --------
---------- ------
<S> <C> <C> <C> <C> <C>
500,000 Preferred shares,
issuable in series,
par value $.001
10,000,000 6,064,300 Common shares, par
value $.0001 $ 606 $ 425
======== ========
</TABLE>

During the year ended December 31, 1998, the Company issued 1,768,300
common shares in private placements for $697,552 and converted
principal debt and interest of $23,000 for 46,000 common shares. In
addition, 4,250,000 common shares were issued in exchange for all the
issued and outstanding shares of CM300, which has been reflected back
to January 1, 1997 in the accompanying consolidated financial
statements.

During 1998, the Company adopted a plan for granting stock options to
employees to purchase common stock at a price not lower than its fair
market value at the respective date of grant. On August 6, 1998
options to purchase a total of 490,000 common shares at prices ranging
from $.50 to $1.25 per share were granted to certain employees. The
options are exercisable until three years from date of grant subject
to certain conditions.

CYBER MARK INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 7 - CAPITAL STOCK (CONTINUED)

The Company applies Accounting Principles Board Opinion No. 25
(Accounting for Stock Issued to Employees) and related interpretations
in accounting for its stock option plans. Accordingly, no compensation
expense is recognized when options are granted. Had compensation
expense been determined based on the fair market methodology
prescribed SFAS No. 123 (Accounting for Stock-Based Compensation)
issued by the Financial Accounting Standards Board in October, 1995,
net earnings for the current year would have been reduced by
approximately $29,000 for options granted during 1998. The fair value
for options granted during 1998 was estimated at $.07 on the date of
grant using the Black-Scholes option-pricing model with the following
assumptions: dividend yield 0%, volatility o%, risk-free interest rate
of 5.25% and an expected life of 3 years.

NOTE 8 - INCOME TAXES

The Company's net deferred tax assets as of December 31, 1998 are
estimated as follows:

Net operating loss carryforward $ 210,000
Valuation allowance (210,000)
---------
Net deferred tax asset $ -
=========

A valuation allowance has been applied to offset the deferred tax
asset in recognition of the uncertainty that such benefits will be
realized.

At December 31, 1998, the Company has available net operating loss
carryforwards for tax reporting purposes of approximately $525,000
which is available to offset future taxable income, if any. This
carryforward expires in 2018. For Canadian income tax purposes, the
Company has available net operating loss carryforward of approximately
$549,000 which are available to offset future taxable income, if any.
These carryforwards expire in 2004 and 2005. The deferred tax recovery
in 1998 represents a 1997 Canadian deferred tax liability which was
reversed during 1998.

NOTE 9 - LOSS PER COMMON SHARE

Loss per common share is based on the weighted average number of
common shares outstanding during each period.

NOTE 10 - COMMITMENTS

The Company is committed under various operating leases for occupied
premises and equipment which expire in the year 2003. Future minimum
annual payments (exclusive of taxes, insurance and maintenance costs)
as of December 31, 1998 as are follows:

1999 $ 49,058
2000 52,103
2001 54,105
2002 50,981
2003 8,750
-----------
$214,997

[Franko10 ™]

CYBER MARK INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997



NOTE 10 - COMMITMENTS (CONTINUED)

Rent expense for the years ended December 31, 1998 and 1997 amounted
to $39,818 and $22,372, respectively.

Cyber Mark International Corp.
Consolidated Balance Sheet
As at June 30, 1999 and 1998
(Unaudited)

<TABLE>

ASSETS 1999 1998

<S> <C> <C> <C>
Current
Cash and cash equivalents $ - $ 395,936
Investment tax credits receivable 277,097 150,189
Accounts receivable 14,523 45,631
Inventory 92,642 106,908
Prepaid expenses 36,110 7,567
------------- ------------
Total current assets 420,372 706,231
Property and equipment 168,450 181,374
Development costs - 79,676
------------- ------------

Total assets $ 588,822 $ 967,281
============= ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current
Bank indebtedness $ 21,658 $ -
Accounts payable and accrued liabilities 124,886 69,093
Long-term debt -current portion 76,354 109,237
------------ ------------

Total current liabilities 222,898 178,330
Long-term debt 86,442 172,609
Advances from shareholder 62,085 116,337
Deferred income taxes - 14,989
------------ ------------

Total liabilities 371,425 482,265
------------ ------------

STOCKHOLDERS' EQUITY

Preferred stock, $.001 par value; authorized 0 0
500,000 shares, none issued or outstanding
Common stock, $.001 par value, authorized
10,000,000 shares; issued and outstanding
6,104,300 and 5,580,000 respectively 610 165
Additional paid in capital 739,944 499,919
Cumulative translation adjustment (14,149) -
Deficit (509,008) (15,068)
------------ ------------
Total stockholders' equity 217,397 485,016
------------ ------------

Total liabilities and stockholders' equity $ 588,822 $ 967,281
============ ============

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements
<PAGE>

Page 2
Cyber Mark International Corp.
Consolidated Statement of Operations
For the Six Months Ended June 30, 1999
(Unaudited)

1999 1998


Revenue
Sales $ 189,035 $ 123,183
Other 107,522 15,111
------------ ------------

296,557 138,294
Cost of sales 120,239 106,128
------------ ------------

Gross profit 176,318 32,166
------------ ------------

Expenses
Wages and benefits 63,884 44,248
Marketing 43,066 3,866
Office and general 34,675 15,942
Rent and occupancy 32,803 20,489
Research & development 27,768 -
Professional fees 25,449 18,369
Interest 15,769 22,271
Insurance 6,567 6,237
Consulting fees 6,346 -
Travel and entertainment 6,200 3,652
Telephone 5,020 5,868
Automobile 3,146 2,502
Trade shows and events 1,457 7,449
Bad debts 425 -
Amortization 21,180 20,386
------------ ------------

293,755 171,279
------------ ------------

Net loss $ (117,437) $ (139,113)
============ ============

Loss per share $ (0.02) $ (0.02)
============ ============


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

<PAGE>


Page 3
Cyber Mark International Corp.
Consolidated Statement of Cash Flows
For the Six Months Ended June 30, 1999
(Unaudited)

1999 1998

Cash flows from operating activities
Net loss $ (117,437) $ (139,113)
Adjustments to reconcile net loss to
net cash used by operating activities
Amortization 21,180 20,386
Changes in assets and liabilities
Investment tax credits receivable (24,696) 57,686
Accounts receivable (3,076) (33,932)
Inventory (5,069) (2,316)
Prepaid expenses (15,231) (999)
Accounts payable and accrued liabilities 56,324 (2,622)
----------- ------------

Net cash used by operating activities (88,005) (100,910)
------------ ------------

Cash flows from investing activities
Purchase of property and equipment (913) (6,575)
------------ ------------

Net cash used by investing activities (913) (6,575)
------------ ------------

Cash flows from financing activities

Issuance of capital stock 20,000 500,080
Long-term debt (28,472) (969)
Advances from shareholder (5,252) 23,753
Bank indebtedness 21,658 (19,443)
------------ ------------

Net cash provided by financing activities 7,934 503,421
------------ ------------


Effect of exchange rate changes on cash (25,881) -
------------ ------------


Increase (decrease) in cash and cash
equivalents (106,865) 395,936
Cash and cash equivalents, beginning
of period 106,865 -
------------ ------------

Cash and cash equivalents, end of period $ - $ 395,936
============ ============




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

<PAGE>

Page 4

Cyber Mark International Corp.
Notes to Consolidated Financial Statements
For the Six Months Ended June 30, 1999
(Unaudited)


1. The financial information included herein is unaudited; however, such
information reflects all adjustments, consisting solely of normal recurring
adjustments which are, in the opinion of management, necessary for a fair
presentation of the periods indicated. Certain information and footnote
disclosures normally included in financial statements prepared in
conformity with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. These condensed financial statements
should be read in conjunction with the consolidated financial statements
and related notes contained in the Company's Annual Report for the twelve
months ended December 31, 1998.

The following is a summary of the significant accounting policies followed
by the Company:

Basis of Presentation

The accompanying consolidated financial statements include the accounts of
the company and its wholly-owned subsidiary. All significant intercompany
transactions and balances have been eliminated in consolidation.

Cash and cash equivalents

The company considers all highly liquid investments with a maturity of
three months or less from time of purchase to be cash equivalents.

Inventory

Inventory is valued at lower of cost or market. Cost is determined on the
first-in-first-out basis.

Property and equipment

Property and equipment are stated at cost. Depreciation is provided on a
straight-line basis over the estimated useful life of the assets, usually
five years. For leasehold improvements, depreciation is provided on
straight-line basis over five years.

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 as of the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates and assumptions.

Financial instruments

The company considers the fair value of all financial instruments to be not
materially different from their carrying value at year end.

Translation of foreign currencies

The company uses the local currency as the functional currency and
translates all assets and liabilities at year-end exchange rates, all
income and expense accounts at average rates and records adjustments
resulting from the translation in a separate component of common
shareholders' equity.



<PAGE>


Page 5
Cyber Mark International Corp.
Notes to Consolidated Financial Statements
For the Six Months Ended June 30, 1999
(Unaudited)



Loss per common share

Loss per common share is based on the weighted average number of common
shares outstanding during each period.

[Franko10 ™]

ITEM 1. INDEX TO EXHIBITS

(a) Exhibits

3.1* Certificate of Incorporation of the Registrant

3.2* By-laws of the Registrant

4.1* Form of common stock Certificate of Registrant

10.1* 1998 Performance Equity Plan

21.1* Subsidiaries of Registrant

27.1* Financial Data Schedule



* Filed herewith.

<PAGE>



SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on the 3rd day of August,
1999.


CYBER MARK INTERNATIONAL CORP.

/S/ SAMUEL SINGAL
---------------------------------
SAMUEL SINGAL
President and
Chief Operating Officer



CERTIFICATE OF INCORPORATION
OF
CYBER MARK INTERNATIONAL CORP.

The undersigned, being of legal age, in order to form a corporation under
and pursuant to the laws of the State of Delaware, does hereby set forth, as
follows:

FIRST: The name of the corporation (herein referred to as the "Corporation") is:
Cyber Mark International Corp.

SECOND: The address of the registered office of the Corporation in the State of
Delaware is c/o National Corporate Research, Ltd., 9 East Loockerman Street,
County of Kent, Dover, Delaware 19901. The name of the Corporation's registered
agent at such address is National Corporate Research, Ltd.

THIRD: The purposes of the Corporation are to engage in, promote, conduct, and
carry on any lawful acts or activities for which corporations may be organized
under the General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of capital stock of all classes which the
Corporation shall have authority to issue is 10,500,000 shares, of which 500,000
shares shall be Preferred Stock, par value $.001 per share, and 10,000,000
shares shall be Common Stock, par value $.0001 per share.

A Preferred Stock

(1) Shares of Preferred Stock may be issued in one or more series at
such time or times and for such consideration as the Board of Directors may
determine. All shares of any one series shall be of equal rank and identical in
all respects.

(2) Authority is hereby expressly granted to the Board of Directors to
fix from time to time, by resolution or resolutions providing for the
establishment and/or issuance of any series of Preferred Stock, the designation
of the series and the powers, preferences, and rights of the shares of the
series, and the qualifications, limitations, or restrictions thereof, including
the following:

(a) The distinctive designation and number of shares
comprising the series, which number may, except where otherwise provided by the
Board of Directors in creating the series, be increased or decreased from time
to time by action of the Board of Directors, but not below the number of shares
then outstanding;

(b) The rate of dividends, if any, on the shares of that
series, whether dividends shall be noncumulative, cumulative to the extent
earned, or cumulative, and if cumulative, from which date or dates, whether
dividends shall be payable in cash, property, or rights, or in shares of the
Corporation's capital stock, and the relative rights of priority, if any, of
payment of dividends on shares of that series over shares of any other series;

(c) Whether the shares of that series shall be redeemable and,
if so, the terms and conditions of the redemption, including the date or dates upon or after which they shall be redeemable, the event or events upon or after
which they shall be redeemable or at whose option they shall be redeemable, and
the amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates, or the property or
rights, including securities of any other corporation, payable in case of
redemption;

(d) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series and, if so, the terms and
amounts payable into the sinking fund;

(e) The rights to which the holders of the shares of that
series shall be entitled in the event of voluntary or involuntary liquidation,
dissolution, or winding-up of the Corporation, and the relative rights of
priority, if any, of payment of shares of that series in any such event;

(f) Whether the shares of that series shall be convertible
into or exchangeable for shares of stock of any other class or any other series
and, if so, the terms and conditions of the conversion or exchange, including
the rate or rates of conversion or exchange, the date or dates upon or after
which they shall be convertible or exchangeable, the duration for which they
shall be convertible or exchangeable, the event or events upon or after which
they shall be convertible or exchangeable or at whose option they shall be
convertible or exchangeable, and the method, if any, of adjusting the rates of
conversion or exchange in the event of a stock split, stock dividend,
combination of shares, or similar event;

(g) Whether the issuance of any additional shares of the
series, or of any shares of any other series, shall be subject to restrictions
as to issuance, or as to the powers, preferences, or rights of any such other
series; and (h) Any other preferences, privileges, and powers and
relative, participating, optional, or other special rights and qualifications,
limitations, or restrictions of the series, as the Board of Directors may deem
advisable and as shall not be inconsistent with the provisions of this
Certificate of Incorporation and to the full extent now or hereafter permitted
by the laws of the State of Delaware.

(3) Payment of dividends shall be as follows:

(a) The holders of any series of Preferred Stock, in
preference to the holders of the Common Stock and the holders of any
junior-ranking series of Preferred Stock, shall be entitled to receive, as and
when declared by the Board of Directors out of funds legally available therefor,
dividends in cash, property, or rights, or in shares of the Corporation's
capital stock, at the rate for such series fixed in accordance with the
provisions of paragraph A(2)(b) of this Article Fourth.


(b) No dividend shall be paid upon, or declared or set aside
for, any series of Preferred Stock with respect to any dividend period unless:

(i) All dividends on all senior-ranking series
of Preferred Stock shall, for the same dividend period, and for all past
dividend periods, to the extent the dividends on such senior-ranking series of
Preferred Stock are cumulative, have been fully paid or declared and provided
for; and (ii) At the same time, a like proportionate dividend
with respect to the same dividend period, ratably in proportion to the
respective annual dividend rates fixed therefor, shall be paid upon, or declared
and provided for, all equally ranking series of Preferred Stock.

(c) As long as any shares of any series of Preferred Stock
shall be outstanding, in no event shall any dividend, whether in cash, property,
excluding shares of Common Stock of the Corporation, or rights, be paid upon, or
declared and provided for, nor shall any distribution be made, on the
outstanding shares of Common Stock, unless all dividends on all cumulative
series of Preferred Stock with respect to all past dividend periods and unless
all dividends on all series of Preferred Stock for the then current dividend
period shall have been paid upon, or declared and provided for, and unless the
Corporation shall not be in default under any of its obligations with respect to
any sinking fund for any series of Preferred Stock. The foregoing provisions of
this paragraph (c) shall not, however, in any way prohibit or limit the
Corporation from making a dividend or other distribution of shares of Common
Stock on the outstanding shares of Common Stock.

(d) No dividends shall be deemed to have accrued on any share
of any series of Preferred Stock with respect to any period prior to the date of
the original issuance of the share or the dividend payment date immediately
preceding or following the date or original issue, except as may otherwise be
provided in the resolution or resolutions of the Board of Directors creating
such series. Accruals of dividends shall not bear interest.

(4) In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Corporation, the holders of the shares of any series of Preferred Stock then outstanding shall be entitled to receive out of
the net assets of the Corporation, whether capital or surplus, but only in
accordance with the preferences, if any, provided for such series, before any
distribution or payment shall be made to the holders of the Common Stock and the
holders of any junior-ranking series of Preferred Stock, the amount per share
fixed by the resolution or resolutions of the Board of Directors to be received
by the holders of such shares on such voluntary or involuntary liquidation,
dissolution, or winding-up, as the case may be. If the payment shall have been
made in full to the holders of all outstanding Preferred Stock of all series, or
duly provided for, the remaining net assets of the Corporation shall be
available for distribution to the holders of the Common Stock to the extent the
Board of Directors shall determine as provided for in paragraph B(2) of this
Article Fourth. If, upon any such voluntary or involuntary liquidation,
dissolution, or winding-up, the net assets of the Corporation available for
distribution among the holders of any one or more series of the Preferred Stock
which (i) are entitled to a preference over the holders of the Common Stock upon
such voluntary or involuntary liquidation, dissolution, or winding-up, and (ii)
rank equally in connection therewith, shall be insufficient to make payment in
full of the preferential amount to which the holders of such shares shall be
entitled, then the assets shall be distributed among the holders of each series
of the Preferred Stock ratably according to the respective amounts to which they
would be entitled in respect of the shares held by them upon the distribution if
all amounts payable on or with respect to the shares were paid in full. Neither
the consolidation nor merger of the Corporation, nor a reduction of the capital
of the Corporation, nor the sale, lease, or conveyance of all or part of its
assets, whether for cash, securities or other property, shall be deemed a
voluntary or involuntary liquidation, dissolution, or winding-up of the
Corporation within the meaning of the foregoing provisions.

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(5) The shares of Preferred Stock shall have no voting power or voting rights with respect to any matter whatsoever, except as may be otherwise
required by law or may be provided in the resolution or resolutions of the Board
of Directors creating the series of which such shares are a part.

B Common Stock

(1) After the requirements with respect to preferential dividends, if
any, on any series of Preferred Stock, fixed pursuant to paragraph A(2)(b) and
as further provided for in paragraph A(3), both of this Article Fourth, shall
have been met, and after the Corporation shall have complied with all
requirements, if any, with respect to the setting aside of sums in a sinking
fund for the purchase or redemption of shares of any series of Preferred Stock,
fixed pursuant to paragraph A(2)(d) of this Article Fourth, then, and not
otherwise, the holders of Common Stock shall receive, to the extent permitted by
law and to the extent the Board of Directors shall determine, such dividends as
may be declared from time to time by the Board of Directors.

(2) After distribution in full of the preferential amount, if any,
fixed pursuant to paragraph A(2)(e) and as further provided for in paragraph
A(4), both of this Article Fourth, to be distributed to the holders of any
series of Preferred Stock in the event of the voluntary or involuntary
liquidation, dissolution, or winding-up of the Corporation, the holders of the
Common Stock shall be entitled to receive such of the remaining assets of the
Corporation of whatever kind available for distribution to the extent the Board
of Directors shall determine.

(3) Except as may be otherwise required by law or by this Certificate
of Incorporation, each holder of Common Stock shall have one vote in respect of each share of such stock held by him on all matters voted upon by the
stockholders.

C Preemptive Rights

No holder of shares of the Corporation of any class, now or hereafter
authorized, shall have any preferential or preemptive right to subscribe for,
purchase, or receive any shares of stock of the Corporation of any class, now or
hereafter authorized, or any options or warrants for such shares, or any rights
to subscribe to or purchase such shares, or any securities convertible into or
exchangeable for such shares, which may at any time or from time to time be
issued, sold, or offered for sale by the Corporation.

FIFTH: The name and mailing address of the sole incorporator are: Andrew D.
Hudders, Graubard Mollen & Miller, 600 Third Avenue, 32nd floor, New York, New
York 10016.

SIXTH: The Corporation is to have perpetual existence.

SEVENTH: The private property or assets of the stockholders of the Corporation
shall not to any extent whatsoever be subject to the payment of the debts of the
Corporation.

EIGHTH: Elections of directors need not be by written ballot unless otherwise
provided in the By-laws of the Corporation.

NINTH: The number of directors of the Corporation shall be such number as from
time to time shall be fixed by, or in the manner provided in, the By-laws of the Corporation. None of the directors need be a stockholder or a resident of the
State of Delaware.

TENTH: The books of the Corporation may be kept outside the State of Delaware at
such place or places as may be designated from time to time by the Board of
Directors or in the By-laws of the Corporation, subject to any provision
contained in the statutes.

ELEVENTH: Any action required by law or by the Certificate of Incorporation or
Bylaws of the Corporation to be taken at a meeting of the stockholders of the
Corporation or any other action which may be taken at a meeting of the
stockholders, may be taken without a meeting if a written consent setting forth
the action so taken, shall be signed by all the stockholders entitled to vote on
the action to be taken.

TWELFTH: Special meetings of the stockholders of the Corporation for any purpose
or purposes may be called at any time by the board of directors, the chairman of
the board of directors or the president of the Corporation. Special meetings of
the stockholders of the Corporation may not be called by any other person or
persons.

THIRTEENTH: At an annual meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
brought before the annual meeting (a) by, or at the direction of, a majority of
the directors, or (b) by any shareholder of the Corporation who complies with
the notice procedures set forth in this Article Thirteenth. For a proposal to be
properly brought before an annual meeting by a shareholder, the shareholder must
have given timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a shareholder's notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than 60
days prior to the scheduled annual meeting, regardless of any postponements,
deferrals or adjournments of that meeting to a later date; provided, however,
that if less than 70 days' notice or prior public disclosure of the date of the
scheduled annual meeting is given or made, notice by the shareholder to be
timely, must be so delivered or received not later than the close of business on
the tenth day following the earlier of the day on which such notice of the date
of the scheduled annual meeting was mailed or the day on which such public
disclosure was made. A shareholder's notice to the Secretary shall set forth as
to each matter the shareholder proposes to bring before the annual meeting (a) a
brief description of the proposal desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (b)
the name and address, as they appear on the Corporation's books, or the
shareholder proposing such business and any other stockholders known by such
shareholder to be supporting such proposal, (c) the class and number of shares
of the Corporation's stock which are beneficially owned by the shareholder on
the date of such shareholder notice and by any other stockholders known by such
shareholder to be supporting such proposal on the date of such shareholder
notice, and (d) any financial interest of the shareholder in such proposal and
by any other stockholders known by such shareholder to be supporting such
proposal.

The presiding officer of the annual meeting shall determine and declare
at the annual meeting whether the shareholder proposal was made in accordance
with the terms of this Article Thirteenth. If the presiding officer determines
that a shareholder proposal was not made in accordance with the terms of this
Article Thirteenth, he or she shall so declare at the annual meeting and any
such proposal shall not be acted upon at the annual meeting.

This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers, directors and
committees of the board of directors, but, in connection with such reports, no
new business shall be acted upon at such annual meeting unless stated, filed and
received as herein provided.

FOURTEENTH: Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors. Nominations of persons
for election to the board of directors of the Corporation may be made at a
meeting of stockholders by or at the direction of the board of directors, by a
nominating committee or person appointed by the board of directors or by any
shareholder of the Corporation entitled to vote for the election of directors at
the meeting who complies with the notice procedures set forth in this Article
Fourteenth. Such nominations, other than those made by or at the direction of
the board of directors, shall be made pursuant to timely notice in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to, or mailed and received at, the principal executive offices of the
Corporation not less than 60 days prior to the scheduled annual meeting,
regardless of any postponements, deferrals or adjournments of that meeting to a
later date; provided however, that if less than 70 days' notice or prior public
disclosure of the date of the scheduled annual meeting is given or made, notice
by the shareholder, to be timely, must be so delivered or received not later
than the close of business on the tenth day following the earlier of the day on
which such notice of the date of the scheduled annual meeting was mailed or the
day on which such public disclosure was made. A shareholder's notice to the
Secretary shall set forth (a) as to each person whom the shareholder proposes to
nominate for election or reelection as a director, (i) the name, age, business
address and residence address of the person, (ii) the principal occupation or
employment of the person, (iii) the class and number of shares of capital stock of the Corporation which are beneficially owned by the person, and (iv) any
other information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to any rules or
regulations under the Securities Exchange Act of 1934, as amended; and (b) as to
the shareholder giving the notice (i) the name and address, as they appear on
the Corporation's books, of the shareholder, and (ii) the class and number of
shares of the Corporation's stock which are beneficially owned by the
shareholder on the date of such shareholder notice. The Corporation may require
any proposed nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such proposed
nominee to serve as a director of the Corporation.

The presiding officer of the annual meting shall determine and
declare at the annual meeting whether the nomination was made in accordance with
the terms of this Article Fourteenth. If the presiding officer determines that a
nomination was not made in accordance with the terms of this Article Fourteenth,
he or she shall so declare at the annual meeting and any such defective
nomination shall be disregarded.

FIFTEENTH: Subject to, and to the fullest extent permitted by, Section 102(b)(7)
of the Delaware General Corporation Law, as amended from time to time, no
director shall be liable to the Corporation or to any of its stockholders for
monetary damages for breach of fiduciary duty as a director, except with respect
to (1) a breach of the director's duty of loyalty to the Corporation; (2) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (3) liability under Section 174 of the Delaware
General Corporation Law; or (4) a transaction from which the director derived an
improper personal benefit.

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SIXTEENTH: Notwithstanding anything contained in the Certificate of
Incorporation to the contrary, the affirmative vote of at least 66-2/3% of the
outstanding shares of Common Stock of the Corporation shall be required to amend
or repeal Articles Eleven, Twelve, Thirteen, Fourteen and Sixteen of this
Certificate of Incorporation or to adopt any provision inconsistent therewith.

The undersigned, being the sole incorporator hereinabove
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, does make this Certificate of
Incorporation, hereby declaring, affirming, acknowledging, and certifying, under
penalties of perjury, that this is the act and deed of the undersigned and that
the facts stated herein are true, and accordingly has hereunto set his hand this
9th day of June, 1998.


/s/ Andrew D. Hudders
-----------------------------------
Andrew D. Hudders, Incorporator

[Franko10 ™]

BY-LAWS

OF

CYBER MARK INTERNATIONAL CORP.


ARTICLE I

Stockholders

Section 1.1 Annual Meetings. An annual meeting of stockholders
shall be held for the election of directors at such date, time and place either
within or without the State of Delaware as may be designated by the Board of
Directors from time to time. Any other proper business may be transacted at the
annual meeting.

Section 1.2 Special Meetings. Special meetings of stockholders
may be called at any time by the Chairman of the Board, the President or the
Board of Directors, to be held at such date, time and place either within or
without the State of Delaware as may be stated in the notice of the meeting.

Section 1.3 Notice of Meetings. Whenever stockholders are
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting. In the case of a special meeting, the notice shall also state the
purpose or purposes for which the meeting is called and no other business shall
be transacted at such special meeting. Unless otherwise provided by law, the
written notice of any meeting shall be given not less than ten nor more than
sixty days before the date of the meeting to each stockholder entitled to vote
at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the
stockholder at such stockholder's address as it appears on the records of the
Corporation. A failure to give or any defect or irregularity in giving the
notice for an annual meeting shall not affect or invalidate the proceedings of
such annual meeting.

Section 1.4 Adjournments. Any meeting of stockholders, annual
or special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business which
might have been transacted at the original meeting. If the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.

Section 1.5 Quorum. At each meeting of stockholders, except
where otherwise provided by law or the Certificate of Incorporation or these
By-laws, the holders of a majority of the outstanding shares of each class of
stock entitled to vote at the meeting, present in person or represented by
proxy, shall constitute a quorum. For purposes of the foregoing, two or more
classes or series of stock shall be considered a single class if the holders
thereof are entitled to vote together as a single class at the meeting. In the
absence of a quorum, the stockholders so present may, by majority vote, adjourn
the meeting from time to time in the manner provided by Section 1.4 of these
By-laws until a quorum shall attend. Shares of its own capital stock belonging
on the record date for the meeting to the Corporation or to another corporation,
if a majority of the shares entitled to vote in the election of directors of
such other corporation is held, directly or indirectly, by the Corporation,
shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the
Corporation to vote stock, including but not limited to its own stock, held by
it in a fiduciary capacity.

Section 1.6 Organization. Meetings of stockholders shall be
presided over by the Chairman of the Board or in the absence of the Chairman of
the Board, by the President, or in the absence of the President by a Vice
President, or in the absence of the foregoing persons by a chairman designated
by the Board of Directors, or in the absence of such designation, by a chairman
chosen at the meeting. The Secretary shall act as secretary of the meeting, or
in the absence of the secretary by an Assistant Secretary, or in their absence
the Chairman of the meeting may appoint any person to act as secretary of the
meeting.

Section 1.7 Voting; Proxies. Unless otherwise provided in the
Certificate of Incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
such stockholder which has voting power upon the matter in question. Each
stockholder entitled to vote at a meeting of stockholders may authorize another
person or persons to act for such stockholder by proxy, but no such proxy shall
be voted or acted upon after three years from this date, unless the proxy
provides for a longer period. A duly executed proxy shall be irrevocable if it
states that it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A stockholder may
revoke any proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or another duly
executed proxy bearing a later date with the Secretary of the Corporation.
Voting at meetings of stockholders need not be by written ballot and need not be
conducted by inspectors unless the chairman of such meeting shall so determine.
At all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect. With respect to other matters,
unless otherwise provided by law or by the Certificate of Incorporation or these
By-laws, the affirmative vote of the holders of a majority of the shares of all
classes of stock present in person or represented by proxy at the meeting and
entitled to vote on the subject matter shall be the act of the stockholders.
Where a separate vote by class is required, the affirmative vote of the holders
of a majority of the shares of each class present in person or represented by
proxy at the meeting shall be the act of such class, except as otherwise
provided by law or by the Certificate of Incorporation or these By-laws.

Section 1.8 Fixing Date for Determination of Stockholders of
Record. In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall
not be more than sixty nor less than ten days before the date of such meeting,
nor more than sixty days prior to any other action. If no record date is fixed:
(1) the record date for determining stockholders entitled to notice of or to
vote at a meeting of stockholders shall be at the close of business on the day
next preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; and (2) the record date for determining stockholders for any other purpose
shall be at the close of business on the date on which the Board adopts the
resolution relating thereto. A determination of stockholders or record entitled
to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.

Section 1.9 List of Stockholders Entitled to Vote. The
Secretary shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the meeting, during the whole time
thereof, and may be inspected by any stockholder who is present.

ARTICLE II

Board of Directors

Section 2.1 Powers; Number; Qualifications. The business and
affairs of the Corporation shall be managed by or under the director of the
Board of Directors, except as may be otherwise provided by law or in the
Certificate of Incorporation. The Board shall consist of one or more members,
the number thereof to be determined from time to time by the Board.

Section 2.2 Election; Term of Office; Resignation; Removal;
Vacancies. Each director shall hold office until the annual meeting of
stockholders next succeeding his or her election and until his or her successor
is elected and qualified or until his or her earlier resignation or removal. Any
director may resign at any time upon written notice to the Board of Directors,
the Chairman of the Board or the Secretary of the Corporation. Such resignation
shall take effect at the time specified therein, and unless otherwise specified
therein no acceptance of such resignation shall be necessary to make it
effective. A director or the entire Board of Directors may be removed, with or
without cause, by the holders of a majority of the shares then entitled to vote
at an election of directors. Whenever the holders of any class or series of
stock are entitled to elect one or more directors by the provisions of the
Certificate of Incorporation, the provisions of the preceding sentence shall
apply, in respect to the removal without cause of the director or directors so
elected, to the vote of the holders of the outstanding shares of that class or
series and not to the vote of the outstanding shares as a whole. Unless
otherwise provided in the Certificate of Incorporation or these By-laws,
vacancies and newly created directorships resulting from any increase in the
authorized number of directors elected by all of the stockholders having the
right to vote as a single class or from any other cause may be filled by a
majority of the directors then in office, although less than a quorum, or by the
sole remaining director. Whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more directors by the provisions
of the Certificate of Incorporation, vacancies and newly created directorships
of such class or classes or series may be filled by a majority of the directors
elected by such class or classes or series thereof then in office, or by the
sole remaining director so elected.

Section 2.3 Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board may from time to time determine, and if so determined
notice thereof need not be given.

Section 2.4 Special Meetings. Special meetings of the Board
of Directors may be held at any time or place within or without the State of
Delaware whenever called by the Chairman of the Board and Chief Executive
Officer, by the Executive Committee of the Board, or by any three directors or
the entire Board of Directors. At least two days prior written notice thereof
shall be given by the person or persons calling the meeting.

Section 2.5 Participation in Meetings by Conference Telephone
Permitted. Unless otherwise restricted by the Certificate of Incorporation or
these By-laws, members of the Board of Directors, or any committee designated by
the Board of Directors, may participate in a meeting of the Board of Directors
or of such committee, as the case may be, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
Bylaw shall constitute presence in person at such meeting.

Section 2.6 Quorum; Vote Required for Action. At all meetings
of the Board of Directors, a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business. The vote of a majority of
the directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors unless the Certificate of Incorporation or these
By-laws shall require a vote of a greater number. In case at any meeting of the
Board of Directors a quorum shall not be present, the members of the Board of Directors present may adjourn the meeting from time to time until a quorum shall
attend.

Section 2.7 Organization. Meetings of the Board of Directors
shall be presided over by the Chairman of the Board, or in his or her absence by
a chairman chosen at the meeting. The Secretary, or in the absence of the
Secretary an Assistant Secretary, shall act as secretary of the meeting, but in
the absence of the Secretary and any Assistant Secretary the chairman of the
meeting may appoint any person to act as secretary of the meeting.

Section 2.8 Annual Meeting. The Board of Directors shall meet
at such time and place as shall be determined by the Chairman of the Board, on
the day of the annual meeting of stockholders, or as soon as practicable
thereafter, to elect the officers of the Corporation for the ensuing year. The
Board of Directors shall also elect the members of the several committees
provided for by these By-laws. Such meeting shall be the Annual Meeting and
shall be a regular meeting of the Board of Directors for the transaction of
business.

Section 2.9 Compensation. Each member of the Board of
Directors who is not a salaried officer of the Corporation or of any subsidiary
of the Corporation, may be paid such fees, retainers and other compensation, if
any, as shall be fixed by the Board of Directors, in addition to transportation
and other expenses actually incurred by the directors in attending special or
regular meetings of the Board of Directors or of any committee of which the
director is a member.

[Franko10 ™]

Section 2.10 Action by Directors Without a Meeting. Unless
otherwise restricted by the Certificate of Incorporation or these By-laws, any
action required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a meeting if all
members of the Board or of such committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.



ARTICLE III

Committees of the Board of Directors

Section 3.1 Establishment of Committees. The following
committees are hereby established as committees of the Board of Directors:

(a) Executive Committee
(b) Audit Committee
(c) Nominating Committee

The Board of Directors shall elect members of such committees only from this own
members. The Board of Directors shall determine the number of members of each
committee and may increase or decrease that number from time to time; provided
that the number of members of each committee shall not be less than the number
hereinafter provided in this Article III. The Board of Directors may remove
members form any committee and fill vacancies in membership. Each committee shall have such authority as shall be delegated to it by the Board of Directors
from time to time and the authority to determine its own rules of procedure, the
time and place of its meetings and the kind, time, and contents of notice of
meetings to be given to its members. No committee shall have the power or
authority in reference to amending the Certificate of Incorporation (except that
a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of Directors,
fix any of the preferences or rights of such shares relating to dividends,
redemption, dissolution, any distribution of assets of the Corporation or the
conversion into, or the exchange of such shares for, shares of any other class
or classes or any other series of the same or any other class or classes of
stock of the Corporation), adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
removing or indemnifying directors or amending the By-laws of the Corporation;
and, unless the resolution, By-laws, or Certificate of Incorporation expressly
so provide, no committee shall have the power or authority to declare a dividend
or to authorize the issuance of stock.

Section 3.2 The Executive Committee. The Executive Committee
shall consist of at least three members, a majority of whom shall be persons who
are not officers or employees of the Corporation. The Executive Committee shall
meet on call, when required, to act during the intervals between meetings of the
Board of Directors with a quorum of not less than three members. Subject to the
limitations set forth in Section 3.1, the Executive Committee shall have and may
exercise all of the authority of the Board of Directors in the management of the
business of the Corporation, except for: (a) those powers which are to be exercised only with the approval of other committees, as provided in the By-laws
or by the Board of Directors; and (b) the filling of vacancies in the Board of
Directors or in any committee.

The Chairman of the Board shall be the Chairman of the
Executive Committee and the Board of Directors may designate a Vice-Chairman.
The Executive Committee may itself elect a Secretary to keep minutes of its
meetings and, from time to time, if it so desires, may name a member to act as
Secretary and keep the minutes of a particular meeting. the Executive Committee
may fill vacancies among the officers of the Corporation, but any officer
appointed by the Executive Committee may be removed by the Board of Directors.
All actions taken by the Executive Committee shall be reported to the Board of
Directors at the meeting of the Board of Directors following such actions.

Section 3.3 The Audit Committee. The Audit Committee shall
consist of at least two members. The membership of the Audit Committee shall
include either one person, if the Audit Committee is two persons, or a majority
of persons, if the Audit Committee is more than two persons, who are not
officers or relatives of principal executive officers, employees, and
consultants compensated on a continuing basis by the Corporation.

The Audit Committee shall periodically review with the General
Auditor and with the independent accountants the scope of the auditing
procedures and the policies relating to internal accounting procedures and
controls of the Corporation and its subsidiaries and shall make recommendations
to management in relation thereto. The Audit Committee shall review the public
financial statements of the Corporation with the Comptroller and may call upon
the Comptroller for such other reports and discussions as the Audit committee may consider desirable. The Audit Committee shall review each annual report on
the consolidated financial statements submitted by the independent accountants
and may call upon them for such other reports and discussions as the Audit
Committee may consider desirable. The Audit Committee shall report its findings,
recommendations and conclusions to the Board of Directors at least once each
year.

The Audit Committee shall consult with management and
recommend to the Board of Directors the independent accountants to be nominated
for appointment by the shareholders each year, and upon appointment, the
independent accountants shall have direct access to the Committee.

Section 3.4 Nominating Committee. The Nominating Committee
shall consist of at least two members. The Nominating Committee shall review and
make recommendations to the Board of Directors with respect to candidates or
directors of the Corporation, review appointments of directors to committees of
the Board of Directors and review and recommend the scope of activities to be
undertaken by the committees of the Board of Directors.

Section 3.5 Other Committees. The Board of Directors may also
appoint other committees from time to time composed wholly of members of the
Board of Directors and may confer such powers upon each of such committees as
the Board of Directors may desire.

ARTICLE IV

Officers

Section 4.1 Election of Officers. The Board of Directors shall
elect at the Annual Meeting a President, one or more Vice Presidents, a
Secretary, and a Treasurer. The Board of Directors may elect a Chairman of the
Board (who shall be a member of the Board of Directors). The Board of Directors
may also elect or appoint a Comptroller Assistant Secretaries, Assistant
Treasurers, Assistant Comptrollers, and such other officers or agents as the
Board of Directors shall determine necessary or desirable.

Section 4.2 Term of Officer; Resignation; Removal; Vacancies.
Except as otherwise provided in the resolution of the Board of Directors
electing any officer, each officer shall hold office until the Annual Meeting of
the Board of Directors after the annual meeting of stockholders next succeeding
his or her election, and until his or her successor is elected and qualified or
until his or her earlier resignation or removal. Any officer may resign at any
time upon written notice to the Board of Directors or to the President or the
Secretary of the Corporation. Such resignation shall take effect at the time
specified therein, and unless otherwise specified therein no acceptance of such
resignation shall be necessary to make it effective. The Board of Directors may
remove any officer with or without cause at any time. Any such removal shall be
without prejudice to the contractual rights of such officer, if any, with the
Corporation, but the election of an officer, if any, with the Corporation, but
the election of an officer shall not of itself create contractual rights. Any
vacancy occurring in any office of the Corporation by death, resignation,
removal or otherwise may be filled for the unexpired portion of the term by the
Board of Directors at any regular or special meeting.


Section 4.3 The Chairman of the Board. The Chairman of the
Board shall preside at all meetings of the Board of Directors.

Section 4.4 The President. The President shall have authority
to execute all contracts and agreements authorized by the Board of Directors and
shall perform such other duties and have other responsibilities and authorities
as shall be prescribed from time to time by the Board of Directors, including
but, not limited to the following:

(a) have general supervision of the entire business of
the Corporation, subject to the control of the Board
of Directors;

(b) have general supervision over the officers of the
Corporation and shall prescribe the duties to be
performed by them in addition to those prescribed by
these By-laws or by the Board of Directors;

(c) see that all orders and resolutions of the Board of
Directors are carried into effect;

(d) from time to time report to the Board of Directors
all matters which the interests of the Corporation
may require to be brought to their notice; and

(e) have the general powers and duties of supervision and
management usually vested in the President of a
corporation.

Section 4.5 The Vice Presidents. The Vice Presidents shall
have authority to execute contracts and agreements authorized by the board of
Directors and shall perform such other duties and have other responsibilities
and authorities as shall be prescribed from time to time by the Board of
Directors. Any Vice President may be designated by the Board of Directors or by
the Chairman of the Board and Chief Executive Officer as an Executive Vice
President, a Senior Vice President or an Administrative Vice President.

Section 4.6 The Secretary. The Secretary shall give notice of
all meetings of the stockholders and the Board of Directors and shall record all
votes and proceedings of the stockholders and the Board of Directors in a minute
book kept for that purpose. The Secretary shall have custody of the seal of the
Corporation and shall affix it to any instrument requiring the same. The
Secretary shall perform such other duties and have such other responsibilities
and authorities as shall be prescribed form time to time by the Board of
Directors.

Section 4.7 The Assistant Secretaries. The assistant
Secretaries shall be vested, under the supervision of the Secretary, with all of
the powers of the Secretary and shall, in the absence of the Secretary, perform
all duties of the Secretary required to be performed.

Section 4.8 The Treasurer. The Treasurer shall:

(a) select, subject to change by the Board of Directors,
financially sound depositories in which shall be
deposited all monies and other valuable effects of
the Corporation;

b) be responsible for the investment and reinvestment of
funds of the Corporation in accordance with general
investment policies determined from time to time by
the Corporation;

(c) see that the Corporation is adequately insured
against liability and that its properties are
adequately insured against loss or destruction and
administer such programs for insurance and
self-insurance as may from time to time be approved
by the Corporation;

(d) disburse the funds of the Corporation in the regular
conduct of the Corporation's business or as may be
ordered by the Board of Directors;

(e) ensure that the Corporation is adequately funded at
all times, arranging at the direction of the Board of
Directors, for issuance of debt, equity and other
forms of securities which may be necessary or
appropriate;

(f) keep full and accurate books of account;

(g) furnish to the Corporation a fidelity bond in a sum
and containing provisions as the Board of Directors
may require, if at all;

h) keep the accounts of stock registered and transferred
in a form and manner and under such regulations as
the Board of Directors may prescribe; and

(i) perform other duties and shall have other
responsibilities and authorities as prescribed form
time to time by the Board of Directors.

Section 4.9 The Assistant Treasurers. The Assistant Treasurers
shall be vested, under the supervision of the Treasurer, with all of the powers
of the Treasurer and shall, in the absence of the Treasurer, perform all duties
of the Treasurer required to be performed. When required by the Board of
Directors, each Assistant Treasurer shall furnish to the Corporation a bond in
an amount and with such conditions as may be satisfactory to the Board of
Directors.

Section 4.10 The Comptroller. The Comptroller shall:

(a) keep full and accurate books of account of all
assets, liabilities, and business transactions of the
Corporation and supervise preparation of the budgets
and adherence to them by the departments of the
Corporation;

(b) establish and maintain such other controls as may be
necessary or desirable to assure adequate protection
of the assets of the Corporation;

(c) have administrative supervision over credit matters
in consultation with the various officers and
department heads concerned with sales on credit
terms; and

(d) perform such other duties and have such other
responsibilities and authorities as shall be
prescribed from time to time by the Board of
Directors.

Section 4.11 The Assistant Comptrollers. The Assistant
Comptrollers shall be vested, under the supervision of the Comptroller, with all
of the powers of the Comptroller and shall, in the absence of the Comptroller,
perform all duties of the Comptroller required to be performed.

Section 4.12 Other Officers. The other officers, if any, of
the Corporation shall have such powers and duties in the management of the
Corporation as shall be stated in a resolution of the Board of Directors which
is not inconsistent with these By-laws and, to the extent not so stated, as
generally pertain to their respective offices, subject to the control of the
Board of Directors. The Board of Directors may require any officer, agent or
employee to give security for the faithful performance of his or her duties.

[Franko10 ™]

ARTICLE V

Stock

Section 5.1 Certificates. Every holder of stock of the
Corporation shall be entitled to have such shares of stock represented by share
certificates, which shall be numbered and entered in the records of the
Corporation as they are issued. Such share certificates shall state that the
Corporation is organized under the laws of the State of Delaware, the name of
the registered owner represented thereby the number and class of shares, and the
designation of the series, if any, which the certificate represents and the par
value of each share represented, or a statement that the shares are without par
value. Every share certificate shall be signed by the Chairman of the Board, the
President or a Vice President and by the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary, and sealed with the corporate seal,
which may be a facsimile, engraved or printed, but where such certificate is
signed by a transfer agent or a registrar, the signature of any such officer
upon such certificate may be a facsimile, engraved or printed. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue.

Section 5.2 Lost, Stolen or Destroyed Stock Certificates;
Issuance of New Certificates. The Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by it, alleged to have
been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to
give the Corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate.

Section 5.3 Owners of Shares. The Corporation shall be
entitled to treat the holder of record of any share or shares of the Corporation
as the holder and owner in fact for all purposes. The Corporation shall not be
bound to recognize any equitable or other claim to or right, title or interest
in such shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise expressly provided by law.

Section 5.4 Registrar. The Board of Directors or Executive
Committee of the Board may appoint a registrar or registrars to record the
transfer of the Corporation's shares, and so long as the appointment of such
registrar or registrars shall be in effect, no certificate for shares issued
pursuant to Section 5.1 hereof shall be binding upon the Corporation or have any
validity unless countersigned by such registrar or one of such registrars.

Section 5.5 Transfer Agents. Transfers of shares shall be made
only upon the books of the Corporation by the holder in person or by power of
attorney duly executed and filed with the Treasurer, and on surrender of the
certificate or certificates for such shares; but the Board of Directors or
Executive Committee of the Board may appoint one or more suitable banks or trust
companies or agents to effect transfers of shares under such regulations as the
Board of Directors may form time to time prescribe.

Section 5.6 Dividends. Except as otherwise provided by law,
dividends may be declared by the Board of Directors from time to time in cash or
property and shall be payable at such times as the Board of Directors may
determine.


ARTICLE VI

Indemnification

Section 6.1 Indemnification of Directors, Officers and
Employees. The Corporation shall indemnify to the full extent authorized by law
any person made or threatened to be made a party to any action, suit or
proceeding, whether criminal, civil, administrative or investigative, by reason
of the fact that such person or such person's testator or intestate is or was a
director, officer or employee of the Corporation or serves or served at the
request of the Corporation any other enterprise as a director, officer or
employee. For purposes of this By-law, the term "other enterprise" shall
include, but not be limited to, any corporation, limited liability company,
partnership, joint venture, trust or employee benefit plan; service "at the
request of the Corporation" shall include, but not be limited to, service as a
director, officer or employee of the Corporation which imposes duties on, or
involves services by, such director, officer or employee with respect to an
employee benefit plan, its participants or beneficiaries; any excise taxes
assessed on a person with respect to an employee benefit plan shall be deemed to
be indemnifyable expenses; and action by a person with respect to an employee benefit plan which such person reasonably believes to be in the interest of the
participants and beneficiaries of such plan shall be deemed to be action not
opposed to the best interests of the Corporation.

Section 6.2 Advance Payments. Expenses incurred by an officer
or director in defending a civil or criminal action, suit or proceeding may be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding as authorized by the Board of Directors in the specific case upon
receipt of an undertaking by or on behalf of such director or officer to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article VI. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.

Section 6.3 Non-Exclusivity. The indemnification provided by
this Article VI shall not be deemed exclusive of any rights to which those
seeking indemnification may be entitled under any By-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.

Section 6.4 Reliance on Provisions. Each person who shall act
as a director, officer, employee or agent of the Corporation shall be deemed to
be doing so in reliance upon the rights of indemnification provided by this
Article VI.

ARTICLE VII

Miscellaneous

Section 7.1 Fiscal Year. The fiscal year of the Corporation
shall be determined by the Board of Directors.

Section 7.2 Seal. The Corporation may have a corporate seal
which shall have the name of the Corporation inscribed thereon and shall be in
such form as may be approved from time to time by the Board of Directors. The
corporate seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any other manner reproduced.

Section 7.3 Waiver of Notice of Meetings of Stockholders,
Directors and Committees. Whenever notice is required to be given by law or
under any provision of the Certificate of Incorporation or these By-laws, a
written waiver thereof, signed by the person entitled to notice, whether before
or after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Certificate
of Incorporation or these By-laws.


Section 7.4 Form of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.

Section 7.5 Amendment of By-Laws. These By-laws may be amended
or repealed, and new by-laws adopted, by the Board of Directors, but the
stockholders entitled to vote may adopt additional by-laws and may amend or
repeal any by-law whether or not adopted by them.

Section 7.6 Contributions. The Corporation shall have the
power to make contributions and donations for the public welfare or for
religious, charitable, scientific or educational purposes.

Section 7.7 Governing Law. Reference to "law" in these
By-laws shall mean the laws of the State of Delaware.

Form of common stock Certificate

Incorporated under the Laws of the
State of Delaware



Number Shares


Cyber Mark International Corp.
10,000,000 Shares of common stock, Par Value $.0001
500,000 Shares of Preferred Stock, Par Value $.001

This is to certify that _____________ is the owner of ____________
fully paid and non-assessable shares of the above Corporation, transferable only
on the books of the Corporation, by the holder hereof in person or by duly
authorized attorney upon surrender of their certificate properly endorsed.


Witness, the seal of the corporation and the signatures of its
duly authorized officers.



___________________________,Secretary [SEAL] _________________, President

[Franko10 ™]

1998 PERFORMANCE EQUITY PLAN


<PAGE>


Approved by Board of Directors on ______, 1998
Approved by Stockholders on ______, 1998


CYBER MARK INTERNATIONAL CORP.

1998 Performance Equity Plan


Section 1 Purpose; Definitions.

1.1 Purpose. The purpose of the Cyber Mark International Corp. (the
"Company") 1998 Performance Equity Plan (the "Plan") is to enable the Company to
offer to its key employees, officers, directors and consultants whose past,
present and/or potential contributions to the Company and its Subsidiaries have
been, are or will be important to the success of the Company, an opportunity to
acquire a proprietary interest in the Company. The various types of long-term
incentive awards which may be provided under the Plan will enable the Company to
respond to changes in compensation practices, tax laws, accounting regulations
and the size and diversity of its businesses.

1.2 Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:

(a) "Agreement" means the agreement between the Company and the Holder
setting forth the terms and conditions of an award under the Plan.

(b) "Board" means the Board of Directors of the Company.

(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto and the regulations promulgated
thereunder.

(d) "Committee" means the Stock Option Committee of the Board or any
other committee of the Board, which the Board may designate to administer the
Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.

(e) "Common Stock" means the Common Stock of the Company, par value
$.0001 per share.

(f) "Company" means Cyber Mark International Corp., a corporation
organized under the laws of the State of Delaware.

(g) "Deferred Stock" means Stock to be received, under an award made
pursuant to Section 9, below, at the end of a specified deferral period.

(h) "Disability" means disability as determined under procedures
established by the Committee for purposes of the Plan.

(i) "Effective Date" means the date set forth in Section 13.1, below.

(j) "Fair Market Value", unless otherwise required by any applicable
provision of the Code or any regulations issued thereunder, means, as of any
given date: (i) if the Common Stock is listed on a national securities exchange
or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the last sale
price of the Common Stock in the principal trading market for the Common Stock
on the last trading day preceding the date of grant of an award hereunder, as
reported by the exchange or Nasdaq, as the case may be; (ii) if the Common Stock
is not listed on a national securities exchange or quoted on the Nasdaq National
Market or Nasdaq SmallCap Market, but is traded in the over-the-counter market,
the closing bid price for the Common Stock on the last trading day preceding the date of grant of an award hereunder for which such quotations are reported by
the OTC Bulletin Board or the National Quotation Bureau, Incorporated or similar
publisher of such quotations; and (iii) if the fair market value of the Common
Stock cannot be determined pursuant to clause (i) or (ii) above, such price as
the Committee shall determine, in good faith.

(k) "Holder" means a person who has received an award under the Plan.

(l) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.

(m) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.

(n) "Normal Retirement" means retirement from active employment with
the Company or any Subsidiary on or after age 65.

(o) "Other Stock-Based Award" means an award under Section 10, below,
that is valued in whole or in part by reference to, or is otherwise based upon,
Stock.

(p) "Parent" means any present or future parent corporation of the
Company, as such term is defined in Section 424(e) of the Code.

(q) "Plan" means the Cyber Mark International Corp. 1998 Performance
Equity Plan, as hereinafter amended from time to time.

(r) "Restricted Stock" means Stock, received under an award made
pursuant to Section 8, below, that is subject to restrictions under said
Section 8.

(s) "SAR Value" means the excess of the Fair Market Value (on the
exercise date) of the number of shares for which the Stock Appreciation Right is
exercised over the exercise price that the participant would have otherwise had
to pay to exercise the related Stock Option and purchase the relevant shares.

(t) "Stock" means the Common Stock of the Company, par value $.0001
per share.

(u) "Stock Appreciation Right" means the right to receive from the
Company, on surrender of all or part of the related Stock Option, without a cash
payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the exercise price of the Stock Option.

(v) "Stock Option" or "Option" means any option to purchase shares of
Stock which is granted pursuant to the Plan.

(w) "Stock Reload Option" means any option granted under Section 6.3,
below, as a result of the payment of the exercise price of a Stock Option and/or
the withholding tax related thereto in the form of Stock owned by the Holder or
the withholding of Stock by the Company.

(x) "Subsidiary" means any present or future subsidiary corporation of
the Company, as such term is defined in Section 424(f) of the Code.

Section 2 Administration.

2.1 Committee Membership. The Plan shall be administered by the Board or a
Committee. Committee members shall serve for such term as the Board may in each case determine, and shall be subject to removal at any time by the Board. The
Committee members, to the extent possible, shall be "non-employee" as defined in
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended.

2.2 Powers of Committee. The Committee shall have full authority to award,
pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock Appreciation
Rights, (iii) Restricted Stock, (iv) Deferred Stock, (v) Stock Reload Options
and/or (vi) Other Stock-Based Awards. For purposes of illustration and not of
limitation, the Committee shall have the authority (subject to the express
provisions of this Plan):

(a) to select the officers, key employees, directors and consultants
of the Company or any Subsidiary to whom Stock Options, Stock Appreciation
Rights, Restricted Stock, Deferred Stock, Reload Stock Options and/or Other
Stock-Based Awards may from time to time be awarded hereunder.

(b) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder (including, but not limited
to, number of shares, share price or other consideration, such as other
securities of the Company or other property, any restrictions or limitations,
and any vesting, exchange, surrender, cancellation, acceleration, termination,
exercise or forfeiture provisions, as the Committee shall determine);

(c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder;

(d) to determine the terms and conditions under which awards granted
hereunder are to operate on a tandem basis and/or in conjunction with or apart
from other equity awarded under this Plan and cash awards made by the Company or
any Subsidiary outside of this Plan;

(e) to permit a Holder to elect to defer a payment under the Plan
under such rules and procedures as the Committee may establish, including the
crediting of interest on deferred amounts denominated in cash and of dividend
equivalents on deferred amounts denominated in Stock;

(f) to determine the extent and circumstances under which Stock and
other amounts payable with respect to an award hereunder shall be deferred which
may be either automatic or at the election of the Holder; and

(g) to substitute (i) new Stock Options for previously granted Stock
Options, which previously granted Stock Options have higher option exercise
prices and/or contain other less favorable terms, and (ii) new awards of any
other type for previously granted awards of the same type, which previously
granted awards are upon less favorable terms.

2.3 Interpretation of Plan.

(a) Committee Authority. Subject to Section 12, below, the Committee
shall have the authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall, from time to time, deem
advisable, to interpret the terms and provisions of the Plan and any award
issued under the Plan (and to determine the form and substance of all Agreements
relating thereto), and to otherwise supervise the administration of the Plan.
Subject to Section 12, below, all decisions made by the Committee pursuant to
the provisions of the Plan shall be made in the Committee's sole discretion and
shall be final and binding upon all persons, including the Company, its
Subsidiaries and Holders.

(b) Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term or provision of the Plan relating to Incentive Stock
Options (including but limited to Stock Reload Options or Stock Appreciation
rights granted in conjunction with an Incentive Stock Option) or any Agreement
providing for Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify the Plan under Section 422 of the Code, or, without the consent
of the Holder(s) affected, to disqualify any Incentive Stock Option under such
Section 422.

Section 3 Stock Subject to Plan.

3.1 Number of Shares. The total number of shares of Common Stock reserved
and available for distribution under the Plan shall be 260,000 shares. Shares of
Stock under the Plan may consist, in whole or in part, of authorized and
unissued shares or treasury shares. If any shares of Stock that have been
granted pursuant to a Stock Option cease to be subject to a Stock Option, or if
any shares of Stock that are subject to any Stock Appreciation Right, Restricted
Stock, Deferred Stock award, Reload Stock Option or Other Stock-Based Award
granted hereunder are forfeited or any such award otherwise terminates without a
payment being made to the Holder in the form of Stock, such shares shall again
be available for distribution in connection with future grants and awards under
the Plan. Only net shares issued upon a stock-for-stock exercise (including
stock used for withholding taxes) shall be counted against the number of shares
available under the Plan.

3.2 Adjustment Upon Changes in Capitalization, Etc. In the event of any
change in the number of outstanding shares of Common Stock of the Company
occurring as the result of a stock split, reverse stock split or stock dividend
on the Common Stock, after the grant of an Award, the Company shall
proportionately adjust the number of shares of Stock subject to the Award and
the price to be paid on exercise of an Award as well as the aggregate number of
shares reserved for issuance under the Plan. Any right to acquire a fractional
share of Stock resulting from any adjustments will be rounded to the nearest
whole share of Stock. If the Company shall be the surviving corporation in any
merger, combination or consolidation, any outstanding Award shall pertain and
apply to the shares of Stock to which the Holder is entitled, without adjustment
for issuance by the Company of any securities in the merger, combination or
consolidation. In the event of a change in the par value of the Common Stock of
the Company which is subject to any outstanding Award, such Award will be deemed
to pertain to the shares of Stock resulting from any such change. To the extent
that the foregoing adjustments relate to the Common Stock of the Company, the
adjustments will be made by the Committee whose determination will be final,
binding and conclusive.

Section 4 Eligibility.

Awards may be made or granted to key employees, officers,
directors and consultants who are deemed to have rendered or to be able to
render significant services to the Company or its Subsidiaries and who are
deemed to have contributed or to have the potential to contribute to the success
of the Company. No Incentive Stock Option shall be granted to any person who is
not an employee of the Company or a Subsidiary at the time of grant.

Section 5 Required Six-Month Holding Period.

A period of not less than six months must elapse from the date of grant
of an award under the Plan, (i) before any disposition by a Holder of a
derivative security (as defined in Rule 16a-1 promulgated under the Securities
Exchange Act of 1934, as amended) issued under this Plan or (ii) before any
disposition by a Holder of any Stock purchased or granted pursuant to an award
under this Plan.

Section 6 Stock Options.

6.1 Grant and Exercise. Stock Options granted under the Plan may be of two
types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, not inconsistent
with the Plan and the Code, as the Committee may from time to time approve. The
Committee shall have the authority to grant Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options and which may be
granted alone or in addition to other awards granted under the Plan. To the
extent that any Stock Option intended to qualify as an Incentive Stock Option
does not so qualify, it shall constitute a separate Nonqualified Stock Option.
An Incentive Stock Option may be granted only within the ten-year period
commencing from the Effective Date and may only be exercised within ten years of
the date of grant (or five years in the case of an Incentive Stock Option granted to an optionee ("10% Stockholder") who, at the time of grant, owns Stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company.

6.2 Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions:

(a) Exercise Price. The exercise price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant
and may not be less than 100% of the Fair Market Value of the Stock as defined
above; provided, however, that the exercise price of an Incentive Stock Option
granted to a 10% Stockholder shall not be less than 110% of the Fair Market
Value of the Stock.

(b) Option Term. Subject to the limitations in Section 6.1, above,
the term of each Stock Option shall be fixed by the Committee.

(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee and as set forth in Section 11, below. If the Committee provides, in
its discretion, that any Stock Option is exercisable only in installments, i.e.,
that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.

(d) Method of Exercise. Subject to whatever installment, exercise and
waiting period provisions are applicable in a particular case, Stock Options may
be exercised in whole or in part at any time during the term of the Option, by
giving written notice of exercise to the Company specifying the number of shares
of Stock to be purchased. Such notice shall be accompanied by payment in full of
the purchase price, which shall be in cash or, unless otherwise provided in the
Agreement, in shares of Stock (including Restricted Stock and other contingent
awards under this Plan) or, partly in cash and partly in such Stock, or such
other means which the Committee determines are consistent with the Plan's
purpose and applicable law. Cash payments shall be made by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; provided, however, that the Company shall not be required to
deliver certificates for shares of Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Payments in the form of Stock
shall be valued at the Fair Market Value of a share of Stock on the date prior
to the date of exercise. Such payments shall be made by delivery of stock
certificates in negotiable form which are effective to transfer good and valid
title thereto to the Company, free of any liens or encumbrances. Subject to the
terms of the Agreement, the Committee may, in its sole discretion, at the
request of the Holder, deliver upon the exercise of a Nonqualified Stock Option
a combination of shares of Deferred Stock and Common Stock; provided that,
notwithstanding the provisions of Section 9 of the Plan, such Deferred Stock
shall be fully vested and not subject to forfeiture. A Holder shall have none of
the rights of a stockholder with respect to the shares subject to the Option
until such shares shall be transferred to the Holder upon the exercise of the
Option.

(e) Transferability. Except as may be set forth in the Agreement, no
Stock Option shall be transferable by the Holder other than by will or by the
laws of descent and distribution, and all Stock Options shall be exercisable,
during the Holder's lifetime, only by the Holder.

(f) Termination by Reason of Death. If a Holder's employment by the
Company or a Subsidiary terminates by reason of death, any Stock Option held by
such Holder, unless otherwise determined by the Committee at the time of grant
and set forth in the Agreement, shall be fully vested and may thereafter be
exercised by the legal representative of the estate or by the legatee of the
Holder under the will of the Holder, for a period of one year (or such other
greater or lesser period as the Committee may specify at grant) from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.

[Franko10 ™]

(g) Termination by Reason of Disability. If a Holder's employment by
the Company or any Subsidiary terminates by reason of Disability, any Stock
Option held by such Holder, unless otherwise determined by the Committee at the
time of grant and set forth in the Agreement, shall be fully vested and may
thereafter be exercised by the Holder for a period of one year (or such other
greater or lesser period as the Committee may specify at the time of grant) from
the date of such termination of employment or until the expiration of the stated
term of such Stock Option, whichever period is the shorter.

(h) Other Termination. Subject to the provisions of Section 14.3,
below, and unless otherwise determined by the Committee at the time of grant and
set forth in the Agreement, if a Holder is an employee of the Company or a
Subsidiary at the time of grant and if such Holder's employment by the Company
or any Subsidiary terminates for any reason other than death or Disability, the
Stock Option shall thereupon automatically terminate, except that if the
Holder's employment is terminated by the Company or a Subsidiary without cause
or due to Normal Retirement, then the portion of such Stock Option which has
vested on the date of termination of employment may be exercised for the lesser
of three months after termination of employment or the balance of such Stock
Option's term.

(i) Additional Incentive Stock Option Limitation. In the case of an
Incentive Stock Option, the aggregate Fair Market Value of Stock (determined at
the time of grant of the Option) with respect to which Incentive Stock Options
become exercisable by a Holder during any calendar year (under all such plans of
the Company and its Parent and Subsidiary) shall not exceed $100,000.

(j) Buyout and Settlement Provisions. The Committee may at any time,
in its sole discretion, offer to buy out a Stock Option previously granted,
based upon such terms and conditions as the Committee shall establish and
communicate to the Holder at the time that such offer is made.

(k) Stock Option Agreement. Each grant of a Stock Option shall
be confirmed by, and shall be subject to the terms of, the Agreement executed by
the Company and the Holder.

6.3 Stock Reload Option. The Committee may also grant to the Holder
(concurrently with the grant of an Incentive Stock Option and at or after the
time of grant in the case of a Nonqualified Stock Option) a Stock Reload Option
up to the amount of shares of Stock held by the Holder for at least six months
and used to pay all or part of the exercise price of an Option and, if any,
withheld by the Company as payment for withholding taxes. Such Stock Reload
Option shall have an exercise price equal to the Fair Market Value as of the
date of the Stock Reload Option grant. Unless the Committee determines
otherwise, a Stock Reload Option may be exercised commencing one year after it
is granted and shall expire on the date of expiration of the Option to which the
Reload Option is related.

Section 7 Stock Appreciation Rights.

7.1 Grant and Exercise. The Committee may grant Stock Appreciation Rights
to participants who have been, or are being granted, Options under the Plan as a
means of allowing such participants to exercise their Options without the need
to pay the exercise price in cash. In the case of a Nonqualified Stock Option, a
Stock Appreciation Right may be granted either at or after the time of the grant
of such Nonqualified Stock Option. In the case of an Incentive Stock Option, a
Stock Appreciation Right may be granted only at the time of the grant of such
Incentive Stock Option.

7.2 Terms and Conditions. Stock Appreciation Rights shall be subject to the
following terms and conditions:

(a) Exercisability. Stock Appreciation Rights shall be exercisable as
shall be determined by the Committee and set forth in the Agreement, subject to
the limitations, if any, imposed by the Code, with respect to related Incentive
Stock Options.

(b) Termination. A Stock Appreciation Right shall terminate and shall
no longer be exercisable upon the termination or exercise of the related Stock
Option.

(c) Method of Exercise. Stock Appreciation Rights shall be exercisable
upon such terms and conditions as shall be determined by the Committee and set
forth in the Agreement and by surrendering the applicable portion of the related
Stock Option. Upon such exercise and surrender, the Holder shall be entitled to
receive a number of Option Shares equal to the SAR Value divided by the exercise
price of the Option.

(d) Shares Affected Upon Plan. The granting of a Stock Appreciation
Right shall not affect the number of shares of Stock available under for awards
under the Plan. The number of shares available for awards under the Plan will,
however, be reduced by the number of shares of Stock acquirable upon exercise of
the Stock Option to which such Stock Appreciation Right relates.

Section 8 Restricted Stock.

8.1 Grant. Shares of Restricted Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such awards
may be subject to forfeiture (the "Restriction Period"), the vesting schedule
and rights to acceleration thereof, and all other terms and conditions of the
awards.

8.2 Terms and Conditions. Each Restricted Stock award shall be subject to
the following terms and conditions:

(a) Certificates. Restricted Stock, when issued, will be represented
by a stock certificate or certificates registered in the name of the Holder to
whom such Restricted Stock shall have been awarded. During the Restriction
Period, certificates representing the Restricted Stock and any securities
constituting Retained Distributions (as defined below) shall bear a legend to
the effect that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.

(b) Rights of Holder. Restricted Stock shall constitute issued and
outstanding shares of Common Stock for all corporate purposes. The Holder will
have the right to vote such Restricted Stock, to receive and retain all regular
cash dividends and other cash equivalent distributions as the Board may in its
sole discretion designate, pay or distribute on such Restricted Stock and to
exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Stock during the
Restriction Period; (iii) other than regular cash dividends and other cash
equivalent distributions as the Board may in its sole discretion designate, pay
or distribute, the Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and with respect to
which the Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.

(c) Vesting; Forfeiture. Upon the expiration of the Restriction Period
with respect to each award of Restricted Stock and the satisfaction of any other
applicable restrictions, terms and conditions (i) all or part of such Restricted
Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 11, below, and (ii) any Retained Distributions with respect to such
Restricted Stock shall become vested to the extent that the Restricted Stock
related thereto shall have become vested, subject to Section 11, below. Any such
Restricted Stock and Retained Distributions that do not vest shall be forfeited
to the Company and the Holder shall not thereafter have any rights with respect
to such Restricted Stock and Retained Distributions that shall have been so
forfeited.

Section 9 Deferred Stock.

9.1 Grant. Shares of Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time or times at which grants of Deferred
Stock will be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period (the "Deferral Period") during which, and
the conditions under which, receipt of the shares will be deferred, and all the
other terms and conditions of the awards.

9.2 Terms and Conditions. Each Deferred Stock award shall be subject to the
following terms and conditions:

(a) Certificates. At the expiration of the Deferral Period (or the
Additional Deferral Period referred to in Section 9.2 (d) below, where
applicable), share certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.

(b) Rights of Holder. A person entitled to receive Deferred Stock
shall not have any rights of a stockholder by virtue of such award until the
expiration of the applicable Deferral Period and the issuance and delivery of
the certificates representing such Stock. The shares of Stock issuable upon
expiration of the Deferral Period shall not be deemed outstanding by the Company
until the expiration of such Deferral Period and the issuance and delivery of
such Stock to the Holder.

(c) Vesting; Forfeiture. Upon the expiration of the Deferral Period
with respect to each award of Deferred Stock and the satisfaction of any other
applicable restrictions, terms and conditions all or part of such Deferred Stock
shall become vested in accordance with the terms of the Agreement, subject to
Section 11, below. Any such Deferred Stock that does not vest shall be forfeited
to the Company and the Holder shall not thereafter have any rights with respect
to such Deferred Stock.

(d) Additional Deferral Period. A Holder may request to, and the
Committee may at any time, defer the receipt of an award (or an installment of
an award) for an additional specified period or until a specified event (the
"Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock award (or such
installment).

Section 10 Other Stock-Based Awards.

10.1 Grant and Exercise. Other Stock-Based Awards may be awarded, subject
to limitations under applicable law, that are denominated or payable in, valued
in whole or in part by reference to, or otherwise based on, or related to,
shares of Common Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, purchase rights, shares of
Common Stock awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debentures, or other rights convertible into shares
of Common Stock and awards valued by reference to the value of securities of or the performance of specified Subsidiaries. Other Stock-Based Awards may be
awarded either alone or in addition to or in tandem with any other awards under
this Plan or any other plan of the Company.

10.2 Eligibility for Other Stock-Based Awards. The Committee shall
determine the eligible persons to whom and the time or times at which grants of
such other stock-based awards shall be made, the number of shares of Common
Stock to be awarded pursuant to such awards, and all other terms and conditions
of the awards.

10.3 Terms and Conditions. Each Other Stock-Based Award shall be subject to
such terms and conditions as may be determined by the Committee and to Section
11, below.

Section 11 Accelerated Vesting and Exercisability.

If (i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"), is or becomes the
"beneficial owner" (as referred in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities in one or
more transactions, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the board of
directors cease for any reason to constitute at least a majority thereof, unless
the election of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the beginning
of the periods, then, the vesting periods of any and all Options and other
awards granted and outstanding under the Plan shall be accelerated and all such
Options and awards will immediately and entirely vest, and the respective
holders thereof will have the immediate right to purchase and/or receive any and
all Stock subject to such Options and awards on the terms set forth in this Plan
and the respective agreements respecting such Options and awards.

Section 12 Amendment and Termination.

The Board may at any time, and from time to time, amend alter, suspend
or discontinue any of the provisions of the Plan, but no amendment, alteration,
suspension or discontinuance shall be made which would impair the rights of a
Holder under any Agreement theretofore entered into hereunder, without the
Holder's consent.

Section 13 Term of Plan.

13.1 Effective Date. The Plan shall be effective as of _________, 1998
("Effective Date"), subject to the approval of the Plan by the Company's
stockholders within one year after the Effective Date. Any awards granted under
the Plan prior to such approval shall be effective when made (unless otherwise
specified by the Committee at the time of grant), but shall be conditioned upon,
and subject to, such approval of the Plan by the Company's stockholders and no
awards shall vest or otherwise become free of restrictions prior to such
approval.

13.2 Termination Date. Unless terminated by the Board, this Plan shall
continue to remain effective until such time no further awards may be granted
and all awards granted under the Plan are no longer outstanding. Notwithstanding
the foregoing, grants of Incentive Stock Options may only be made during the ten
year period following the Effective Date.

Section 14 General Provisions.

14.1 Written Agreements. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of the Agreement executed by the
Company and the Holder. The Committee may terminate any award made under the
Plan if the Agreement relating thereto is not executed and returned to the
Company within 10 days after the Agreement has been delivered to the Holder for
his or her execution.


14.2 Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.

14.3 Employees.

(a) Engaging in Competition With the Company. In the event a Holder's
employment with the Company or a Subsidiary is terminated for any reason
whatsoever, and within eighteen months after the date thereof such Holder
accepts employment with any competitor of, or otherwise engages in competition
with, the Company, the Committee, in its sole discretion, may require such
Holder to return to the Company the economic value of any award which was
realized or obtained by such Holder at any time during the period beginning on
that date which is six months prior to the date of such Holder's termination of
employment with the Company.

(b) Termination for Cause. The Committee may, in the event a Holder's
employment with the Company or a Subsidiary is terminated for cause, annul any
award granted under this Plan to such employee and, in such event, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any award which was realized or obtained by such
Holder at any time during the period beginning on that date which is six months
prior to the date of such Holder's termination of employment with the Company.

(c) No Right of Employment. Nothing contained in the Plan or in any
award hereunder shall be deemed to confer upon any Holder who is an employee of
the Company or any Subsidiary any right to continued employment with the Company
or any Subsidiary, nor shall it interfere in any way with the right of the
Company or any Subsidiary to terminate the employment of any Holder who is an
employee at any time.

14.4 Investment Representations. The Committee may require each person
acquiring shares of Stock pursuant to a Stock Option or other award under the
Plan to represent to and agree with the Company in writing that the Holder is
acquiring the shares for investment without a view to distribution thereof.

14.5 Additional Incentive Arrangements. Nothing contained in the Plan shall
prevent the Board from adopting such other or additional incentive arrangements
as it may deem desirable, including, but not limited to, the granting of Stock
Options and the awarding of stock and cash otherwise than under the Plan; and
such arrangements may be either generally applicable or applicable only in
specific cases.

14.6 Withholding Taxes. Not later than the date as of which an amount must
first be included in the gross income of the Holder for Federal income tax
purposes with respect to any option or other award under the Plan, the Holder
shall pay to the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any Federal, state and local taxes of any kind
required by law to be withheld or paid with respect to such amount. If permitted
by the Committee, tax withholding or payment obligations may be settled with
Common Stock, including Common Stock that is part of the award that gives rise
to the withholding requirement. The obligations of the Company under the Plan
shall be conditioned upon such payment or arrangements and the Company or the
Holder's employer (if not the Company) shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the Holder from the Company or any Subsidiary.

14.7 Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of New York (without regard to choice of law provisions).

14.8 Other Benefit Plans. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any other benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).

14.9 Non-Transferability. Except as otherwise expressly provided in the
Plan or the Agreement, no right or benefit under the Plan may be alienated,
sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void.

14.10 Applicable Laws. The obligations of the Company with respect to all
Stock Options and awards under the Plan shall be subject to (i) all applicable
laws, rules and regulations and such approvals by any governmental agencies as
may be required, including, without limitation, the Securities Act of 1933, as
amended, and (ii) the rules and regulations of any securities exchange on which
the Stock may be listed.

14.11 Conflicts. If any of the terms or provisions of the Plan or an
Agreement (with respect to Incentive Stock Options) conflict with the
requirements of Section 422 of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of said
Section 422 of the Code. Additionally, if this Plan or any Agreement does not
contain any provision required to be included herein under Section 422 of the
Code, such provision shall be deemed to be incorporated herein and therein with
the same force and effect as if such provision had been set out at length herein
and therein. If any of the terms or provisions of any Agreement conflict with
any terms or provision of the Plan, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of the
Plan. Additionally, if any Agreement does not contain any provision required to
be included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.

14.12 Non-Registered Stock. The shares of Stock to be distributed under
this Plan have not been, as of the Effective Date, registered under the
Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Stock on a national securities
exchange.

SUBSIDIARIES OF CYBER MARK INTERNATIONAL CORP.

Name Jurisdiction
---- -------------

CM300 Corporation Ontario


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