As filed with the Securities and Exchange Commission on June 30, 2001

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

(Mark One)

[X]                 QUARTERLY REPORT PURSUANT TO SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended June 30, 2001

                                       OR

[ ]                 TRANSITION REPORT PURSUANT TO SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  __________  to  ______________

                        Commission File Number 000-30095

                         CTI DIVERSIFIED HOLDINGS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

      Delaware                                                  33-0921967
----------------------                                       -------------------
State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization                                Identification No.)

                    8525 COMMERCE COURT, BURNABY, BC V5A 4N3
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (604) 646-6638

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

     Title of each class               Name of each exchange on which registered
           None                                          None
     -------------------                          ------------------

           Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, par value $.0001 per share
                    ----------------------------------------
                                (Title of class)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes   X   No
                                                 ---     ---

Number of shares outstanding of the registrant's class of common stock as of
June 30, 2001: 17,808,744.

The authorized share capital:   50,000,000 common shares, par value of 0.0001


<PAGE>


                       PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                       CTI DIVERSIFIED HOLDINGS INC.
                     CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

                                JUNE 30, 2001

CONTENTS
================================================================================



Consolidated Balance Sheet

Consolidated Statement of Operations and Deficit

Consolidated Statement of Cash Flows

Consolidated Statement of Stockholders' Deficiency

Notes to Consolidated Financial Statements

<PAGE>


CTI DIVERSIFIED HOLDINGS, INC.

CONSOLIDATED BALANCE SHEET
(Unaudited)

AS AT JUNE 30, 2001
================================================================================

                              ASSETS
<TABLE>
<CAPTION>
                                            JUNE 30, 2001     JUNE 30, 2000     DECEMBER 31, 2000
                                            -------------     -------------     -----------------
<S>                                          <C>               <C>                <C>
CURRENT ASSETS
   Cash                                      $     14,426      $      1,946       $      58,871
   Accounts receivable                             25,660              -                 22,490
   Prepaid expenses and deposits                   42,453              -                527,906
   Loan receivable                                   -                 -                 12,972
                                             ------------      ------------        ------------
                                                   82,539             1,946             622,239
                                             ------------      ------------        ------------
NOTES RECEIVABLE                                  359,853              -                   -

OTHER ASSETS                                         -                6,091                 125

FIXED ASSETS                                      219,715              -                308,320
                                             ------------      ------------        ------------
                                             $    662,107      $      8,037        $    930,684
                                             =============     =============       ============

                                   LIABILITIES
CURRENT
   Accounts payable and accrued liabilities  $    318,235      $      1,100        $    233,919
   Short term loan payable                         88,274              -                200,000
   Promissory notes                                  -                 -                611,816
   Shareholder advances                           272,642              -                274,702
                                             ------------      ------------        ------------
                                                  679,151             1,100           1,320,437
                                             ------------      ------------        ------------

                            STOCKHOLDERS' DEFICIENCY

Capital stock                                       1,781               700               3,685

Contributed surplus                             3,703,132            10,391           1,724,535

Deficit accumulated during the development
      stage                                    (3,721,957)           (4,154)         (2,117,973)
                                             ------------      ------------        ------------
                                                  (17,044)           (6,937)           (389,753)
                                             ------------      ------------        ------------
                                             $    662,107      $      8,037        $    930,684
                                             =============     =============       ============
</TABLE>

APPROVED ON BEHALF OF THE BOARD:

/s/ Don Farnell          Director
------------------------

/s/ Rene Palsenbarg      Director
------------------------

<PAGE>

CTI DIVERSIFIED HOLDINGS, INC.

CONSOLIDATED STATEMENT OF OPERATION AND DEFICIT
(Unaudited)

================================================================================
<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED                 SIX MONTHS ENDED
                                             JUNE 30, 2001     JUNE 30, 2000     JUNE 30, 2001     JUNE 30, 2000
                                             -------------     -------------     -------------     -------------
<S>                                       <C>                <C>               <C>               <C>
CONSULTING REVENUE                        $    40,186        $      -          $    47,606       $      -

EXPENSES
   Advertising and promotion                    1,406               -                5,123              -
   Depreciation                                17,024               -               34,607              -
   Amortization of goodwill                      -                  -                6,887              -
   Consulting                                (111,889)              -              (35,864)             -
   Courier, delivery and freight                  830               -                2,293              -
   Insurance                                   21,014               -               21,014              -
   Interest and bank charges                   76,221               -               80,255              -
   Investor relations                          53,763               -               53,763              -
   Maintenance and utilities                    1,638               -                8,618              -
   Miscellaneous                              (65,464)              -             (113,178)             -
   Legal and accounting                        61,387              1,130            68,249             1,160
   Licenses, dues and fees                      2,525               -                2,813              -
   Office and supplies                         30,360               -               44,552              -
   Rent                                        54,595               -               96,686              -
   Telephone and communications                 4,064               -               10,257              -
   Training                                       211               -                3,083              -
   Travel and entertainment                    41,078               -              107,031              -
   Wages and benefits                          68,139               -               92,001              -
                                          ------------------------------------------------------------------
                                              256,891              1,130           511,011             1,160
                                          ------------------------------------------------------------------

LOSS FROM OPERATIONS                         (216,705)            (1,130)         (463,405)           (1,160)
                                          ------------------------------------------------------------------

OTHER ITEMS

   OTHER INCOME                                68,863               -              116,659              -

   WRITE DOWN OF LONG-TERM ASSETS            (316,377)              -             (316,377)             -

   EQUITY LOSS                               (314,622)              -             (824,201)             -

NET LOSS                                     (847,705)            (1,130)       (1,603,984)           (1,160)
                                          ------------------------------------------------------------------

DEFICIT, BEGINNING OF PERIOD               (2,874,252)            (3,024)       (2,117,973)           (2,994)

DEFICIT, END OF PERIOD                    $(3,721,957)       $    (4,154)      $(3,721,957)      $    (4,154)
                                          ------------------------------------------------------------------

EARNINGS (LOSS) PER SHARE                 $    (0.047)       $ (0.000161)      $     (0.09)      $ (0.000134)
                                          ------------------------------------------------------------------

WEIGHTED AVERAGE SHARES OUTSTANDING        17,808,744          7,000,000        17,808,744         8,666,000
                                          ------------------------------------------------------------------
</TABLE>


<PAGE>

CTI DIVERSIFIED HOLDINGS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

================================================================================
<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED                 SIX MONTHS ENDED
                                             JUNE 30, 2001     JUNE 30, 2000     JUNE 30, 2001     JUNE 30, 2000
                                             -------------     -------------     -------------     -------------
<S>                                       <C>                <C>               <C>               <C>
CASH FLOWS FROM OPERATING
   ACTIVITIES
   Net loss                               $  (847,705)       $    (1,130)      $(1,603,984)      $    (1,160)
Adjustments to reconcile net loss to
   net cash provided by operating
   activities:
   Depreciation                                17,024               -               34,607              -
   Amortization of goodwill                      -                  -                6,887              -
   Equity loss                                314,622               -              824,201              -
   Write off of goodwill                      199,713               -              199,713              -
   Write down of assets                       116,663               -              116,663              -
                                          ------------------------------------------------------------------
                                             (199,683)            (1,130)         (421,913)           (1,160)
                                          ------------------------------------------------------------------

CHANGE IN ASSETS AND LIABILITIES:
   Increase in accounts payable               179,462              1,110            84,316             1,110
   Increase in prepaid expenses                  (967)              -              (11,772)             -
   (Increase) decrease in accounts
     receivable                                 9,709               -               (3,170)             -
   Increase in loans receivable                  -                  -               12,972              -
                                          ------------------------------------------------------------------
 TOTAL ADJUSTMENTS                            188,204              1,110            82,346             1,110
                                          ------------------------------------------------------------------
Net cash provided by operating activities     (11,479)               (30)         (339,567)              (60)
CASH FLOWS FROM FINANCING ACTIVITIES
   Issuance of convertible promissory notes   517,605               -            1,364,877              -
   (Decrease) increase in short term loan
      payable                                 (19,500)              -             (111,726)             -
   Increase (decrease )in amounts due to
      related parties                         (68,407)              -               (2,060)             -
Net cash provided by financing activities     429,698               -            1,251,091              -
                                          ------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Advances to subsidiary                    (194,669)              -             (405,976)             -
   Acquisition of IT Transit                     -                  -             (206,600)             -
   Sale (purchase) of fixed assets             (1,083)              -               16,460              -
   Increase in notes receivable              (232,116)              -             (359,853)             -
Net cash used in investing activities        (427,868)              -             (955,969)             -
                                          ------------------------------------------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS      (9,649)               (30)          (44,445)              (60)
                                          ------------------------------------------------------------------
NET CASH AND CASH EQUIVALENTS,
   BEGINNING OF PERIOD                         24,075              1,976            58,871             2,006
NET CASH AND CASH EQUIVALENTS,
   END OF PERIOD                          $    14,426        $     1,946       $    14,426       $     1,946
                                          ------------------------------------------------------------------
</TABLE>

<PAGE>

CTI DIVERSIFIED HOLDINGS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIENCY
(Unaudited)

FROM AUGUST 11, 1998 (DATE OF INCEPTION) TO JUNE 30, 2001

================================================================================
<TABLE>
<CAPTION>

                                                     Common             Stock         Accumulated       Contributed
                                                     shares            Amount           Deficit           Surplus
                                               ----------------------------------------------------------------------
<S>                                            <C>                <C>               <C>               <C>
Shares issued to acquire 19% of New York
Bagel Co., Inc. and to pay organization
cost of $125 on August 11, 1998 valued at
par value of $0.0001 per share                   5,000,000        $       500       $      -          $     5,591
                                               ----------------------------------------------------------------------
Issuance of 500,000 common shares in August
1998 at $0.0001 per share                          500,000                 50              -                4,950
                                               ----------------------------------------------------------------------

Balance, December 31, 1998                       5,500,000                550              -               10,541

Two for one stock split on March 31, 1999        5,500,000                550              -                 (550)

Net loss for the year ended December 31, 1999         -                  -             (100,205)             -
                                               ----------------------------------------------------------------------

Balance, December 31, 1999                      11,000,000              1,100          (100,205)            9,991

Two for one stock split on March 17, 2000       11,000,000              1,100              -               (1,100)

Cancellation of shares in March 2000           (15,000,000)            (1,500)             -                1,500

Issuance of 20,000 common shares on August
11, 2000 in consideration of director's fees        20,000                  2              -                 -

Stock dividend on December 12, 2000,
5.25 for one                                    29,835,000              2,983              -               (2,983)

Net loss for the year ended December 31, 2000         -                  -           (2,017,768)             -
                                               ----------------------------------------------------------------------

Balance, December 31, 2000                      36,855,000              3,685        (2,117,973)            7,408

Issuance of 5,000 common shares in
consideration of legal services performed            5,000                  1              -                    1

Cancellation of 26,355,000 common shares       (26,355,000)            (2,635)             -                2,635

Issuance of 5,999,591 common shares in
exchange for 11,413,700 shares of common
stock of Cobratech Industries Inc.               5,999,591                600              -            1,686,297

Net loss for the 6 month period ended
June 30, 2001                                         -                  -           (1,603,984)             -

Conversion of promissory notes into common
stock, effective June 29, 2001, see note 6       1,304,153                130              -            2,006,791
                                               ----------------------------------------------------------------------

Balance, June 30, 2001                          17,808,744        $     1,781       $(3,721,957)      $ 3,703,132
                                               ----------------------------------------------------------------------
</TABLE>

<PAGE>

CTI DIVERSIFIED HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2001
--------------------------------------------------------------------------------

1.   BASIS OF PRESENTATION

     The accompanying unaudited combined financial statements have been prepared
     in accordance with generally accepted accounting principles for interim
     financial information and with the instructions to Form 10-Q and Article 10
     of Regulation S-X. Accordingly, they do not include all of the information
     and notes required by generally accepted accounting principles for complete
     financial statements. The preparation of financial statements in conformity
     with accounting principles generally accepted in the United States requires
     the Company's management to make estimates and assumptions that affect the
     reported amounts of assets and liabilities and disclosure of contingent
     assets and liabilities at the date of the financial statements as well as
     the reported amounts of revenues and expenses during the reporting period.
     In the opinion of management, the accompanying financial statements include
     all adjustments which are normal, recurring and necessary to present fairly
     the results for the interim periods. Operating results for interim periods
     are not necessarily indicative of the results that may be expected for the
     year.

     For further information, refer to the financial statements and notes
     thereto included in the CTI Diversified Holdings, Inc. annual report on
     Form 10-K for the fiscal year ended December 31, 2000.

     The accompanying consolidated financial statements have been prepared on a
     going concern basis, which contemplates the realization of assets and the
     discharge of liabilities in the normal course of business for the
     foreseeable future. The Company has no current source of revenue. Without
     realization of additional capital, it would be unlikely the Company will be
     able to continue as a going concern. Management plans to raise capital
     through additional share subscriptions and in the longer term, revenue from
     operations. The Company's ability to continue as a going concern is
     dependent upon raising additional capital, and ultimately, upon achieving
     profitable operations.  These factors, among others, raise substantial
     doubt about the Company's ability to continue as a going concern. The
     consolidated financial statements do not include any adjustments to the
     carrying values and classifications of recorded asset or liability amounts
     that might be necessary should the Company be unable to continue as a going
     concern.

2.   SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation

     On February 16, 2001, CTI Diversified Holdings Inc., acquired 11,413,700
     shares of common stock (100%) of Cobratech Industries Inc. ("Cobratech") in
     exchange for 6,000,000 shares of common stock of CTI Diversified Holdings
     Inc. For financial statement purposes, the company is considered to be a
     continuation of Cobratech Industries Inc. Therefore the financial
     statements for the year ended December 31, 2000 include the results of
     operations of Cobratech. The consolidated financial statements include the
     accounts of CTI Diversified Holdings, Inc. ("CTI") and its wholly owned
     subsidiaries, (collectively the "Company"), Cobratech Industries Inc,
     Cobratech Industries Limited, and IT Transit Limited. Cobratech Industries
     Japan Limited, a wholly owned subsidiary, is currently in the process of
     winding up its operations in Japan, and has been presented on the equity
     method of accounting as discussed under "Investment in Cobratech Industries
     Japan Limited". All significant intercompany balances and transactions have
     been eliminated on consolidation.

<PAGE>

CTI DIVERSIFIED HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2001
--------------------------------------------------------------------------------

2.   SIGNIFICANT ACCOUNTING POLICIES, CONT'D

     On January 31, 2001, Cobratech Industries Inc. acquired 100% of the issued
     and outstanding shares of IT Transit Limited, a Hong Kong IT and ASP
     Company, for $250,000US. The acquisition was accounted for using the
     purchase method of accounting and accordingly, the purchase price was
     allocated to the tangible and intangible net assets acquired on the basis
     of their respective fair values on the acquisition date.

     Foreign Currency Translation

     The assets and liabilities of the Company's foreign operations are
     translated into U.S. dollars at current exchange rates. Revenue and expense
     accounts of these operations are translated at average exchange rates
     prevailing during the period. These translation adjustments are accumulated
     in a separate component of stockholders' equity. Foreign currency
     transaction gains and losses are included in determining net income for the
     period in which the exchange rate changes.

     Use of Estimates

     The consolidated financial statements include the use of estimates, which
     management believes are reasonable. The process of preparing financial
     statements in conformity with generally accepted accounting principles
     requires the use of estimates and assumptions regarding certain types of
     assets, liabilities, revenues, and expenses. Such estimates primarily
     relate to unsettled transactions and events as of the date of the financial
     statements. Accordingly, upon settlement, actual results may differ from
     estimated amounts.

     Fixed Assets

     Fixed assets are recorded at cost, net of any write down for impairment in
     value. Depreciation is provided annually at rates calculated to write-off
     the assets over their estimated useful lives as follows:

        Furniture & equipment   - 20% diminishing balance
        Computer equipment      - 30% diminishing balance
        Leasehold Improvements  - 20% straight-line basis

     Impairment of Long-Term Assets

     The Company re-evaluates the recoverability of long-term assets, including
     fixed assets and intangible assets based upon estimates using factors such
     as future asset utilization, business climate and future undiscounted cash
     flows expected to result from the use of the related assets or to be
     realized on sale. The Company's policy is to write down assets to their net
     recoverable amount in the period when it is determined that the carrying
     amount of the asset is not likely to be recovered.


<PAGE>

CTI DIVERSIFIED HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2001
--------------------------------------------------------------------------------

3.   INVESTMENT IN COBRATECH INDUSTRIES JAPAN LIMITED

     In June 2001, the Company discontinued funding Cobratech Industries Japan
     Limited's ("Cobratech Japan") cash shortfalls. Cobratech Japan is a wholly
     owned subsidiary of CTI. Cobratech Japan ceased operations in July 2001,
     and is undertaking steps to wind up the operations in an orderly manner.
     The Company is determining the most effective way to wind up Cobratech
     Japan and is exploring voluntary bankruptcy as a means under which to
     accommodate the wind up.  The Company believes that its loss is limited to
     its investment in and advances made to Cobratech Japan and costs for
     winding up the operations. A provision for estimated costs on winding up
     the operations of $70,000 has been reflected in the operating results to
     June 30, 2001.

     Because of the expected loss of control, the investment in Cobratech Japan
     has been recorded on an equity basis. Prior to June 2001, the investment
     was accounted for on a consolidated basis.  The change in the accounting
     for the investment has been recorded on a retroactive basis from the
     beginning of the 2001 fiscal year. The investment has been written down to
     zero in June 2001. Summarized financial information for Cobratech
     Industries Japan Limited at June 30, 2001 is as follows:

<TABLE>
<CAPTION>
     Condensed Balance Sheet of Cobratech Industries Japan Limited            June 30, 2001
     --------------------------------------------------------------           -------------
     <S>                                                                    <C>
     Current assets                                                         $      36,303
     Fixed Assets                                                                 262,693
                                                                            -------------
     Total Assets                                                           $     298,996
                                                                            -------------

     Current liabilities                                                    $     515,608
     Payable to CTI Diversified Holdings, Inc. and affiliates                   1,217,133
                                                                            -------------
                                                                                1,732,741
                                                                            -------------
     Stockholder's deficit                                                     (1,433,745)
                                                                            -------------
                                                                            $     298,996
                                                                            -------------

     Condensed Results of Operations
     -------------------------------
     Revenues                                                               $         Nil
     Costs and expenses                                                           952,250
                                                                            -------------
     Net Loss                                                               $    (952,250)
                                                                            -------------
</TABLE>

4.   FIXED ASSETS

<TABLE>
<CAPTION>
                                                          Accumulated            Net                 Net
                                          Cost            Depreciation       June 30, 2001       June 30, 2000
                                  ==============================================================================
     <S>                          <C>                   <C>                 <C>                <C>
     Furniture & equipment        $      91,125         $      17,698       $      73,427      $        -
     Computer equipment                 112,076                16,632              95,444               -
     Leasehold improvements              97,117                46,274              50,843               -
                                  -------------         -------------       -------------      -------------
                                  $     300,318         $      80,604       $     219,714      $        -
                                  =============         =============       =============      =============
</TABLE>

<PAGE>

CTI DIVERSIFIED HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2001
--------------------------------------------------------------------------------

5.   Notes Receivable

     Notes receivable consist of advances made to Sentry Telecom Systems Inc.
     ("Sentry"), which bear interest at the Bank of Montreal prime lending rate
     plus 5% per annum. On May 15, 2001, CTI entered into a purchase and sale
     agreement with Sentry, a company incorporated under the laws of British
     Columbia. Under the terms of the agreement, CTI agreed to purchased
     4,400,000 units of Sentry for a total price of $1,100,000. Each unit
     consists of 1 share of common stock plus one warrant which entitles CTI to
     acquire one additional share of common stock of Sentry at $0.25 per share.
     The Warrants expire on January 31, 2002, or such later date as agreed to by
     the parties, provided that the later date is agreed upon prior to December
     31, 2001.

     $250,000 of the advances is a non-refundable deposit on the share purchase
     agreement noted above ("deposit"). If the purchase and sale agreement does
     not complete, CTI has the right to convert the deposit into 1,000,000
     shares of Sentry at a price of $0.25 per share, and a warrant, exercisable
     on or before March 31, 2002, to acquire 1,000,000 additional Sentry shares
     at a price of $0.25 each upon giving Sentry written notice on or before
     December 31, 2001.

6.   Goodwill

     Goodwill relating to acquired companies which are in the process of being
     wound up have been written down to their estimated net realizable value of
     $ Nil.

7.   Short Term Loan Payable

     The short-term loan payable is due to Unity Wireless Corporation ("Unity")
     and is repayable in monthly instalments of $11,111 per month commencing in
     April 2001. The loan bears interest at 1% per month, and is secured by a
     general security agreement. The Company is currently in default of the loan
     agreement as a result of non-payment of the monthly instalments for June
     and July 2001. At the present time, no formal action has been taken by
     Unity in regards to this default.

<PAGE>

CTI DIVERSIFIED HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2001
--------------------------------------------------------------------------------

8.   Promissory Notes Payable

     On June 29, 2001, Manado Development Ltd. notified the Company of its
     intent to convert the following promissory notes into common stock of the
     Company. The promissory notes have been converted into common stock of the
     Company as follows:

<TABLE>
<CAPTION>
                                                                           Promissory note     Common stock issued
                                                                           ---------------     -------------------
                                                                                amount             on conversion
                                                                                ------             -------------
     <S>                                                                    <C>                  <C>
     Manado Development Ltd, various promissory notes,
     including interest at 8% per annum, the notes are convertible
     into common stock of the Company at a price of $2.00 per share.
     Upon exercise of the option, the Company agrees to issue an equal
     number of warrants which entitle the lender to purchase one share
     of common stock of the Company at $2.20 per share.                     $ 1,405,540          $   702,770

     Manado Development Ltd, various promissory notes including interest
     at the Bank of Montreal prime lending rate plus 5% per annum, the
     notes are convertible into common stock of the Company at a price of
     $1.00 per share. Upon exercise of the option, the Company agrees to
     issue an equal number of warrants which entitle the lender to
     purchase one share of common stock of the Company at $1.50 per
     share.                                                                     601,383              601,383
                                                                            --------------------------------
                                                                            $ 2,006,923          $ 1,304,153
                                                                            ================================
</TABLE>

     The Company has the following warrants outstanding at June 30, 2001:

            Expiry Date            Number of Warrants         Exercise Price
            -----------            ------------------         --------------
            June 29, 2003                    702,770              $ 2.20
            June 29, 2003                    601,383              $ 1.50
                                         -----------
                                           1,304,153                -
                                         -----------

9.   SHAREHOLDER ADVANCES

     The shareholder advances bear interest at the Bank of Montreal prime
     lending rate plus 5% per annum, and are due on demand. The lenders have
     agreed not to demand payment for these advances within 12 months of the
     date of the advance.


<PAGE>

CTI DIVERSIFIED HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2001
--------------------------------------------------------------------------------

10.  Commitments

     As of June 30, 2001, the Company had monthly operating commitments in
     respect of leased premises of $50,000. In July 2001, the Company terminated
     various lease agreements and effective August 2001, the monthly operating
     commitment in respect of lease premises is $12,332, representing the
     commitment for the lease premises for the Hong Kong office. As of July 31,
     2001, Cobratech Hong Kong was in default of its lease agreement for their
     office space in Hong Kong. Cobratech Hong Kong expects to vacate the
     premises in Hong Kong by September 30, 2001

     The Company has entered into operating leases for certain office equipment.
     Minimum future rental payments under these leases are as follows:

                   2001     $2,600

                   2002      2,600

                   2003      1,300

11.  SUBSEQUENT EVENTS

     As noted in Note 3 above, Cobratech Japan ceased operations in July 2001,
     and is undertaking steps to wind up the operations in an orderly manner. In
     conjunction with the windup of Cobratech Japan, the office premises in
     Tokyo were vacated and the lease was terminated as of July 31, 2001. The
     Company is determining the most effective way to wind up Cobratech Japan
     and is exploring voluntary bankruptcy as a means under which to accommodate
     the wind up.

     On August 1, 2001, the Board of Directors decided to windup the operations
     of Cobratech Hong Kong and IT Transit. The Company is currently determining
     the most effective way to wind up Cobratech Hong Kong and IT Transit.


<PAGE>

Item 2.   Management's Discussion and Analysis or Plan of Operation
          Forward - Looking Statements

This quarterly report on Form 10-QSB includes forward-looking statements. All
statements, other than statements of historical fact made in this Quarterly
Report on Form 10-QSB are forward-looking. In particular, the statements herein
regarding industry prospects and future results of operation or financial
position are forward-looking statements. Forward-looking statements reflect
management's current expectations based on assumptions believed to be reasonable
and are inherently uncertain as they are subject to various known and unknown
risks, uncertainties and contingencies, many of which are beyond the control of
CTI. The Company's actual results may differ significantly from management's
expectations.

In some cases, you can identify forward-looking statements by terminology such
as "may", "will", "should," "expects," "plans," "intends," "anticipates,"
"believes," "estimates," "predicts," "potential," or "continue" or the negative
of such terms or other comparable terminology.

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, levels of
activity, performance, or achievements. We do not assume responsibility for the
accuracy and completeness of the forward-looking statements. We do not intend to
update any of the forward-looking statements after the date of this quarterly
report to conform them to actual results.

The following discussion and analysis should be read in conjunction with the
Company's financial statements and related footnotes and the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2000. The discussion of
results, causes and trends should not be construed to imply that such results,
causes or trends would necessarily continue in the future.

Overview

On May 15, 2001, the Company entered into an agreement (the "Share Purchase
Agreement") with Sentry Telecom Systems Inc., of Burnaby, British Columbia
("Sentry") and its principal shareholders, to acquire 4,400,000 units of Sentry
("Sentry Units") by way of private placement for an aggregate price of
$1,100,000. $250,000 has been paid as a non-refundable deposit (the "Deposit").
Upon closing of the private placement, scheduled to occur in August 2001, Sentry
will for no additional consideration issue to CTI a warrant (the "CTI Warrant")
to acquire 4,400,000 additional shares at US$0.25. The CTI Warrant will be
exercisable at any time up to the close of business on January 31, 2002.  If
the private placement does not close as scheduled, CTI has the right on certain
conditions to convert the Deposit into 1,000,000 Sentry Shares plus a warrant to
purchase an additional 1,000,000 Sentry Shares at $0.25 each.

The Share Purchase Agreement also provides that in the period between closing of
the private placement and the completion of a transaction, described below,
pursuant to which CTI will have the right to acquire the balance of the
outstanding Sentry Shares, it will not, without the written consent of Sentry,
not to be unreasonably withheld, issue any CTI shares or rights to acquire CTI
shares at a price per share that is less than 70 per cent of the current market
value of CTI shares; nor will it grant options, warrants or rights to employees,
directors or consultants that if exercised would result in an increase of
greater than 20% in the number of CTI shares outstanding. The latter covenant
is reciprocal.

The closing of the private placement is subject to a number of conditions
precedent, among them that all of the shareholders of Sentry have entered into a
Lock-Up Agreement. The Lock-Up Agreement provides that if CTI exercises the CTI
Warrant, it has the right (but not the obligation) to acquire all of the Sentry
Shares not held by it in exchange for common shares of CTI on an exchange basis
equal to the fair market value per Sentry Share divided by the fair market value
per CTI common share determined, in each case, by a chartered business valuator
to be agreed upon between CTI and Sentry. CTI must within 10 business days
following receipt of the determination of the exchange basis elect whether it
intends to acquire the remaining Sentry Shares. The Lock-Up Agreement will also
provide that the acquisition of the remaining Sentry Shares will be effected
through a form of transaction that results in the Sentry shareholders disposing
of their shares on a basis that ensures a deferral of tax under the provisions

<PAGE>

of the Income Tax Act (Canada). Under the Lock-Up Agreement the Sentry
shareholders will irrevocably agree that provided that as a result of the
transaction they will receive, in the aggregate, not less than 5 per cent, on a
fully diluted basis, of the CTI shares outstanding on its completion of the
transaction, they will sell their shares to CTI. The Lock-Up Agreement will
also provide in effect that in no event will the Sentry shareholders be entitled
to receive in the aggregate more than 20 per cent, on a fully diluted basis, of
the CTI shares outstanding on completion of the transaction.

Sentry is a start-up company with a limited history of operations and has not
been profitable to date. Sentry's initial product is called the PhonewallTM
-Phone firewall ("Phonewall"), which has been designed to protect data networks
from the threat of unauthorized modems and to protect voice networks from the
theft of unauthorized services. The Phonewall is a combination of hardware and
software that is installed on telephone lines between an enterprise and the
telephone service provider.

Sentry is in the start-up phase and has not yet booked sales of their new
telecommunications security products. Sentry's plan over the next twelve months
is to have the Phonewall commercially available for sale. Achievement of this
goal is dependent on the Company successfully completing its planned personnel
hires in sales and marketing, administration and product development. Retaining
key people is also of critical importance to the successful implementation of
their plan. Sentry is planning to hire up to six individuals and may increase
their development expenditures if they are successful in receiving investment
tax credits and repayable grants. During the next twelve months, Sentry will
also need to complete its testing plan, obtain regulator approvals and complete
all of their software development in order to have a saleable product.

The development of a solid marketing plan and the ongoing execution of the plan
is also critical to Sentry's success. Sentry must be in a position to develop a
solid value proposition to its prospective customers concurrently with the
commercial release of their product.

Sentry believes the funds received from the share purchase agreement with CTI
will be sufficient for their operations over the next twelve months leading up
to the commercialization of the Phonewall products, but cannot offer any
assurance that they will not require further funding. If required, Sentry will
seek additional sources of funds through additional equity financings,
commercial bank loans, equipment leasing or funds from private investors. There
can be no assurances that they will be successful in obtaining additional
funding on suitable terms, if at all.

CTI is currently seeking equity financing to complete the acquisition of Sentry.
There can be no assurances that we will be successful in obtaining the necessary
funding on suitable terms, if at all.  In the event that CTI is not able to
finance and complete the acquisition of Sentry, we will seek to acquire
additional security product companies.  Our ability to identify and raise the
required financing to complete these acquisitions is unknown at this time.  Our
current cash position is sufficient to cover our normal operations for the next
month, however, it is not sufficient to meet the companies existing financial
commitments.  The company's ability to continue operating is dependent upon the
company's ability to obtain adequate financing.

Subsequent to closing the share purchase agreement with Sentry, CTI will focus
on developing a global network of security solution distribution channel
partners and acquiring other leading edge security solution companies or
products to distribute through these channels.

Results of Operations
---------------------

During the first three months of the current fiscal year, we focused our efforts
on building our operations in Hong Kong and Japan, and completing the
acquisition of Sentry. During the quarter ended June 30, 2001, the company has
decided to wind up our operations in both Tokyo and Hong Kong. After further
detailed analysis of the potential Asian market and the estimated economic
returns from this operation, the management of CTI decided not to continue to
pursue the company's original business plan in Asia.  All employees in Japan
have been terminated, the office lease has been terminated and the office
vacated as of July 31, 2001. The company is currently determining the most
effective way to wind up Cobratech Japan and is exploring voluntary bankruptcy
under Japanese Bankruptcy Law. The company expects to complete the windup
process by November 30, 2001. In conjunction with the proposed bankruptcy, the
company has recorded their investment in Cobratech Japan on an equity basis. At
June 30, 2001, the company has written down the net investment in Cobratech
Japan to nil. The company believes that its loss is limited to its investment
in and advances made to Cobratech Japan plus estimated costs for winding up the
operations. The company has recorded a provision for estimated costs on winding
up the operations of $70,000 in the June 30, 2001 financial statements.

The company is currently in the process of winding up the operations in Hong
Kong, and expects to terminate their office lease and vacate the premises by
September 30, 2001. At the current time, the company is still determining the
most effective way of winding up the operations.  The company has re-evaluated
the estimated recovery on the fixed assets in Hong Kong and the goodwill
resulting from the acquisition of IT Transit, and have written down the goodwill
to nil, and written down the leaseholds and furniture in Hong Kong by 20%.

<PAGE>

The company currently has 8 employees or contractors. Management continues to
carefully monitor all areas of business and will seek new opportunities to
improve operational efficiency and reduce operating costs during the start up
phase while at the same time, increasing revenue.

We generated $47,606 in IT consulting and web-hosting revenue from our
operations in Hong Kong during the six months ended June 30, 2001. Interest
income earned on surplus cash balances during the period was $8,496, compared to
$ nil for the six months ended June 30, 2000.

Our total general and administrative expenses for the six months ended June 30,
2001 were $511,011 compared to $1,160 for the comparable period. $80,255 of the
total expenses was interest on shareholder advances and promissory notes issued
during the period versus $ nil in the comparable period. Salaries were $92,001
compared to $ nil for the six months ended June 30, 2000 and professional fees
were $68,249, versus $ 1,160. Rent on office premises was $96,686 for the six
months ended June 30,2001 compared to $nil for six months ended June 30, 2000.
In June 2001, consulting fees charged by affiliates of $205,000 at December 31,
2000 were forgiven resulting in a net recovery of consulting fees of $35,864 in
consulting fees for the six month period ending June 30, 2001. The balance of
our general and administrative costs consists of office expenses, investor
relations expenses and amortization of capital assets. Included in general and
administrative costs is a gain on foreign exchange translation of $104,682
compared to a $ nil for the comparable period.

During the six months ended June 30, 2001, we wrote down our investment in
Cobratech Industries Japan Limited to the approximate market value at the end of
the reporting period to reflect our decision to windup the Japan subsidiary.
This write-down amounted to $79,000 versus $ nil for the comparable period ended
June 30, 2000. We also wrote down our leasehold improvements and furniture and
equipment in Cobratech Industries Limited (Hong Kong) to reflect the decision to
wind down the operations in Hong Kong. The write down amounted to $37,663 for
the six months ended June 30, 2001. We wrote down the goodwill on the
acquisition of IT Transit in the six months ended June 30, 2001, again to
reflect our decision to close the operations in Hong Kong. The writedown of
goodwill amounted to $199,714.

As a result of these transactions noted above, we incurred a loss of $1,603,983,
or $0.09 per share, compared to $1,160 or $0.000134 per share for the six months
ended June 30, 2000.

Liquidity and Capital Resources

During the six months ended June 30, 2001, we used $339,567 of cash for
operating activities compared to $1,130 in the comparable period. Our sole
financing activity was the issuance of convertible promissory notes. The balance
of convertible promissory notes including accrued interest totalling $2,006,923
was converted into 1,304,153 shares of common stock on June 29, 2001. The
company repaid $111,726 of short term loans during the period June 30, 2001. As
of August 10, 2001, the company is currently in default of the short term loan
agreement with Unity Wireless. The company has not made the required principal
repayments in June or July 2001. The company completed its acquisition of IT
Transit at January 31, 2001 for $206,600. During the six months ended June
30,2001, the company paid $359,853 to Sentry Telecom Systems in conjunction with
the share purchase agreement dated May 15, 2001.

At June 30, 2001 our current assets totalled $82,539 compared to $622,239 at the
beginning of the fiscal year, or $ nil for the comparable period at June 30,
2000. Our current assets consisted of $14,426 in cash, $25,660 in accounts
receivable and $42,453 in prepaid expenses. Our current liabilities at June 30,
2001 were $679,151, of which $272,642 was due to related parties. Cash on hand
is currently our only source of liquidity. We do not have any lending
arrangements in place with banking or financial institutions and we do not
anticipate that we will be able to secure these funding arrangements in the near
future. The Company is currently seeking bridge and longer term equity
financing to fund the acquisition of Sentry.

We believe our existing cash balances are sufficient to carry our normal
operations for the next one month. To the extent that we require additional
funds to support our operations or the expansion of our business, we may sell
additional equity or issue debt. Any sale of additional equity securities will
result in dilution to our stockholders. There can be no assurance that
additional financing, if required, will be available to our company or on
acceptable terms.

<PAGE>

   PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

          None.

Item 2. Changes in Securities and Use of Proceeds

On June 29, 2001, Manado Development Ltd., elected to convert their $2,006,923
demand loan to CTI into Common shares of CTI effective June 29, 2001. CTI is in
the process of effecting the conversion.

The first $1,405,540, advanced by Manado between November 15, 2000 and Feb. 15,
2001, was converted into 702,770 units at $2.00 per unit. Each unit consists of
one Common share of CTI plus one warrant, entitling the holder to acquire one
additional common share of CTI for $2.20, expiring June 29, 2003. The remaining
$601,383, advanced by Manado subsequent to Feb. 15, 2001, was converted into
601,383 units at $1.00 per unit. Each unit consists of one Common share of CTI
plus one warrant, entitling the holder to acquire one additional Common share of
CTI for $1.50, expiring June 29, 2003.
After the conversion of the Manado demand loan, the outstanding common stock of
CTI will be 17,808,744.

Item 3.   Defaults Upon Senior Securities

CTI is currently in default of its loan agreement with Unity Wireless
Corporation ("Unity"). The loan is repayable in monthly principal instalments
of $11,111 per month commencing in April 2001. The loan bears interest at 1%
per month, and is secured by a general security agreement. All interest plus
any outstanding principal balance is due on December 31, 2001. As of August 10,
2001, CTI had not made the required monthly principal instalments for June 2001
or July 2001. The total arrears of principal as of August 10, 2001 is $22,222.
As of August 10, 2001, no formal action has been taken by Unity in regards to
this default.

John Anderson, a director of Cobratech Industries Inc, until June 28, 2001 was
also a director of Unity from September 29, 2000 until February 14, 2001.

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

The Company held its annual meeting of stockholders on June 29, 2001. The
following directors were elected to serve until the next annual meeting or until
there successor is elected. The following votes were cast with respect to the
election of directors:

                                       For                    Withhold
                                       ---                    --------

Don Farnell                          5,553,159                   Nil
Rene Palsenberg                      5,553,159                   Nil
Robert Kubbernus                     5,553,159                   Nil


The Company also submitted two additional proposals for shareholder
consideration:

Proposal #2.

To approve the minutes of the 2000 Annual General Meeting of Stockholders.

                  For           Against       Abstain
                  ---           -------       -------

                5,553,159          Nil           Nil

<PAGE>

Proposal #3.

Ratification of the appointment of David J. Maxwell Ltd as the independent
auditors of the Company for fiscal year ended December 31, 2001.

                  For           Against       Abstain
                  ---           -------       -------

                5,553,159          Nil           Nil


Item 5.   Other Information

In June 2001, the Company's board of Directors decided to cease operations in
Japan and Hong Kong and undertake steps to wind up the operations of Cobratech
Industries Japan Limited ("Cobratech Japan"), Cobratech Industries Limited
("Cobratech Hong Kong"), and IT Transit Limited ("IT Transit") in an orderly
manner. The Company is currently determining the most effective way to wind up
the Japan and Hong Kong operations and is exploring voluntary bankruptcy as a
means under which to accommodate the wind up in Japan and Hong Kong. The
Company anticipates completing the windup of these operations by November 30,
2001.
As of June 30, 2001, Cobratech Japan was in default of it's lease agreement for
their office space in Tokyo and vacated the premises in July 2001.
As of July 31, 2001, Cobratech Hong Kong was also in default of it's lease
agreement for their office space in Hong Kong. Cobratech Hong Kong expects to
vacate the premises in Hong Kong by September 30, 2001.
 The Company expects to complete the windup process of Cobratech Japan and
Cobratech Hong Kong by October 31, 2001.

Item 6. Exhibits and Reports on Form 8-K.

(a)   The following exhibits are filed as part of this annual report on form
      10-Q.

1.0   Share Purchase Agreement dated, for reference, May 15, 2001, between the
      CTI Diversified Holdings, Inc., and Sentry Telecom Systems, Inc.

2.0   Lock-up agreement between CTI Diversified Holdings, Inc., and Sentry
      Telecom Systems, Inc.

(b)   The following current reports on form 8-k were filed by the company
      during the last quarter of the period covered by this report:

June 5, 2001 - Appointment of Don Farnell as a member of the Board of Directors
and appointment of Don Farnell as Chief Executive Officer, President, Secretary
and Treasurer upon the resignation of Stephen Koltai as President and Director
on June 11, 2001. Incorporated by reference to the Company's Form 8-K (File No.
000-30095), filed with the SEC on June 26, 2001.

                                    SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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 20th day of
August, 2001.


                                         CTI DIVERSIFIED HOLDINGS INC.

Date: August 20, 2001

                                         By: /s/ Don Farnell
                                         --------------------------------------
                                         Donald Farnell, Chairman of the Board,
                                         Chief Executive Officer and Director


                                         By: /s/ Marlene Jensen
                                         --------------------------------------
                                         Marlene Jensen, Chief Financial Officer
                                         Principal Accounting Officer


<PAGE>
Exhibit 1.0

                             PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT is made as of the 15th day of May 2001.

AMONG

          SENTRY TELECOM SYSTEMS INC., a company incorporated under the laws of
          British Columbia ("Sentry");

          - and -

          CTI DIVERSIFIED HOLDINGS, INC., a company incorporated under the laws
          of Delaware ("CTI");

          - and -

          NEIL COX of 6158 Elgin Street, Burnaby, British Columbia ("Cox");

          - and -

          LEILA LOLUA of 6158 Elgin Street, Burnaby, British Columbia ("Lolua").

          - and -

          626820 B.C. LTD., a company incorporated under the laws of British
          Columbia ("626820")

          (Cox, Lolua and 626820 being sometimes collectively referred to herein
          as the "Founders")

     IN CONSIDERATION of the mutual agreements herein contained and of other
good and valuable consideration (the receipt and sufficiency of which are
acknowledged by each Party hereto), the Parties agree with one another as
follows:

                                    ARTICLE ONE
                                  INTERPRETATION

Definitions

1.1   Whenever used in this Agreement, the following words and terms shall
      have the respective meanings ascribed to them below:

      1.1.1   AGREEMENT" means this Purchase and Sale Agreement and all
              instruments supplemental to or in amendment or confirmation of
              this Purchase and Sale Agreement;

      1.1.2   "BUSINESS DAY" means any day, other than a Saturday, Sunday or any
              other day on which the principal chartered banks located in the
              City of Vancouver are not open for business during normal banking
              hours;

      1.1.3   "CLAIM" means any claim, demand, action, suit, litigation, charge,
              complaint, prosecution or other proceeding for which one Party can
              seek indemnification from another Party pursuant to Article Five;

      1.1.4   "CLOSING" means the completion of the purchase and sale of the
              Sentry Shares and the Sentry Warrant pursuant to this Agreement;

      1.1.5   "CLOSING DATE" means August 15, 2001, or such other date as the
              Parties may agree in writing as the date upon which the Closing
              shall take place;

      1.1.6   "CLOSING TIME" means 10:00 a.m. (Vancouver time) on the Closing
              Date or such other time on such date as the Parties may agree as
              the time at which the Closing shall take place;

      1.1.7   "CTI CLOSING DOCUMENTS" has the meaning ascribed in Section 6.1.3;

      1.1.8   "CTI SHARES" means common shares in the capital of CTI;

      1.1.9   "DEPOSIT" means an amount of US$250,000 paid by CTI to Sentry
              prior to the execution of this Agreement, by way of a non-
              refundable deposit;

      1.1.10  "ENCUMBRANCE" means any lien, pledge, hypothecation, charge,
              mortgage, security interest, encumbrance, claim, infringement,
              interference, option, right of first refusal, pre-emptive right,
              community property interest or restriction of any nature
              (including any restriction on the voting of any security, any

<PAGE>

              restriction on the transfer of any security or other asset, any
              restriction on the receipt of any income derived from any asset,
              any restriction on the use of any asset and any restriction on the
              possession, exercise or transfer of any other attribute of
              ownership of any asset);

      1.1.11  "EXPIRY DATE" means January 31, 2002, or such later date as the
              Parties may agree, provided that such later date is agreed upon
              prior to December 31, 2001;

      1.1.12  "GAAP" means generally accepted accounting principles approved
              from time to time by the Canadian Institute of Chartered
              Accountants, or any successor institute applied on a consistent
              basis;

      1.1.13  "LOCK-UP AGREEMENT" means an agreement among CTI, Sentry and the
              Sentry Shareholders in the form attached hereto as Schedule "A";

      1.1.14  "MATERIAL" means, when used as an adjective, that any breach,
              default or deficiency in the satisfaction of any covenant,
              representation or warranty so described might reasonably:

              (a) give rise to an aggregate remedial cost (including
                  consequential loss and loss of profit) of more than $10,000,
                  in any individual instance, or more than $25,000 collectively
                  in any greater number of instances, where all such instances
                  arise pursuant to multiple breaches of the same covenant,
                  representation or warranty; or
              (b) where no adequate remedy is reasonably available, result in
                  disturbance in the ordinary conduct of the relevant business
                  of an aggregate cost properly attributable to such disturbance
                  (including consequential loss and loss of profit) of more than
                  $10,000, and "MATERIALLY" shall have the corresponding
                  meaning;

      1.1.15  "MATERIAL ADVERSE CHANGE" means a change or development involving
              a prospective change which would have a Material Adverse Effect;

      1.1.16  "MATERIAL ADVERSE EFFECT" means, with respect to any Person, a
              material adverse effect on the business, prospects, results of
              operations, financial condition or assets of such Person, and its
              Subsidiaries (if such Person is itself a Subsidiary, then the
              Person's parent corporation and all of such parent corporation's
              Subsidiaries), taken as a whole. In determining whether any
              individual event would result in a Material Adverse Effect,
              notwithstanding that such event does not of itself have such
              effect, a Material Adverse Effect shall be deemed to have occurred
              if the cumulative effect of such event and all other then existing
              events would result in a Material Adverse Effect;

      1.1.17  "PARTIES" means the parties to this Agreement, collectively, and
              "PARTY" means any one of them;

      1.1.18  "PERSON" includes an individual, corporation, partnership, joint
              venture, trust, unincorporated organization, the Crown or any
              agency or instrumentality thereof or any other juridical entity;

      1.1.19  "SENTRY CLOSING DOCUMENTS" has the meaning ascribed in Section
              6.2.3;

      1.1.20  "SENTRY SHAREHOLDERS" means those shareholders of Sentry as listed
              in Schedule "B" hereto;

      1.1.21  "SENTRY SHARES" means common shares in the capital of Sentry;

      1.1.22  "SENTRY WARRANT" means a share purchase warrant in the form
              attached as Schedule "H" hereto entitling the holder thereof to
              acquire Sentry Shares for an aggregate price US $1,100,000 at any
              time prior to the Expiry Date;

      1.1.23  "SUBSIDIARY" shall have the meaning ascribed by the Company Act
              (British Columbia); and

      1.1.24  "THIRD PARTY CLAIM" means for the purposes of Section 5.4 any
              demand which has been made on, or communicated to either of CTI or
              Sentry by or on behalf of any Person other than the persons

<PAGE>

              mentioned above in this definition and which, if maintained or
              enforced, might result in a loss, liability or expense of the
              nature described in either Section 5.1 or 5.2.

Gender and Number

1.2   In this Agreement, words importing the singular include the plural and
      vice versa and words importing gender include all genders.

Entire Agreement

1.3   This Agreement, including the Schedules, together with the agreements
      and other documents to be delivered under this Agreement, constitute the
      entire agreement between the Parties pertaining to the subject matter of
      this Agreement and supersede all prior agreements, understandings,
      negotiations and discussions, whether oral or written, of the Parties,
      including but not limited to a letter of intent entered into by the
      Parties dated February 15, 2001, and there are no warranties,
      representations or other agreements between the Parties in connection with
      the subject matter of this Agreement except as specifically set forth in
      this Agreement. No supplement, modification or amendment to this Agreement
      and no waiver of any provision of this Agreement shall be binding on any
      Party unless executed by such Party in writing. No waiver of any of the
      provisions of this Agreement shall be deemed or shall constitute a waiver
      of any other provision (whether or not similar) nor shall such waiver
      constitute a continuing waiver unless otherwise expressly provided.

Article and Section Headings

1.4   Article and Section headings contained in this Agreement are included
      solely for convenience, are not intended to be full or accurate
      descriptions of the content of any Article or Section and shall not be
      considered to be part of this Agreement.

Applicable Law

1.5   This Agreement shall be governed by and construed in accordance with the
      laws of British Columbia and the federal laws of Canada applicable in
      British Columbia. Each Party to this Agreement irrevocably attorns to and
      submits to the jurisdiction of the courts of British Columbia with respect
      to any matter arising under or relating to this Agreement.

Business Days

1.6   Whenever any action or payment to be taken or made under this Agreement
      shall be stated to be required to be taken or made on a day other than a
      Business Day, any payment shall be made or such action shall be taken on
      the next succeeding Business Day.

                                     ARTICLE TWO
                             DESCRIPTION OF TRANSACTION

Purchase and Sale of Sentry Shares and the Sentry Warrant

2.1   Upon and subject to the terms and conditions of this Agreement, Sentry
      shall issue to CTI on the Closing Date 4,400,000 Sentry Shares and the
      Sentry Warrant for a total price of US$1,100,000 (the "Purchase Price") to
      be paid and satisfied as follows:

      (a) as to US$850,000 by wire transfer, bank draft or certified cheque; and
      (b) as to US$250,000 by the application thereto of the Deposit.

2.2   If the purchase and sale of the Sentry Shares and the Sentry Warrant in
      accordance with Section 2.1 does not complete, CTI shall have the right to
      convert the Deposit into 1,000,000 Sentry Shares at a price of US$0.25
      each and a warrant, exercisable on or before March 31, 2002, to acquire
      1,000,000 additional Sentry Shares at a price of US$0.25 each upon giving
      Sentry written notice on or before December 31, 2001.

<PAGE>

                                     ARTICLE THREE
                       REPRESENTATIONS, WARRANTIES AND COVENANTS

Representations, Warranties and Covenants of Sentry

3.1   Sentry hereby represents, warrants and covenants to CTI as follows and
      acknowledges that CTI is relying on these representations, warranties and
      covenants in entering into this Agreement and in completing the
      transactions described in Section 2 of this Agreement and the other
      transactions contemplated under this Agreement:

      3.1.1   Organization and Good Standing-Sentry is duly incorporated or
              organized and validly existing in good standing under the laws of
              British Columbia.
      3.1.2   Bankruptcy-No bankruptcy, insolvency or receivership proceedings
              have been instituted or are pending against Sentry.
      3.1.3   Capacity to Carry on Business-Sentry has all necessary corporate
              power, authority and capacity to own its property and assets and
              to carry on its business as presently owned and carried on by it,
              and Sentry is duly licensed, registered and qualified as a
              corporation to do business and is in good standing in each
              jurisdiction in which the nature of its business makes such
              qualification necessary.
      3.1.4   Due Authorization-Sentry has all necessary corporate power,
              authority and capacity to enter into this Agreement and to perform
              its obligations under this Agreement. The execution and delivery
              of this Agreement and the consummation of the transactions
              contemplated hereby have been duly authorized by all necessary
              action on the part of Sentry.
      3.1.5   Authorized and Issued Capital-The authorized capital of Sentry
              consists of 50,000,000 Common shares without par value. Schedule
              "B" hereto contains the names of the Sentry Shareholders and the
              number of Sentry Shares held by each of them.
      3.1.6   Rights to Acquire Shares-Except as set out in Schedule "C" hereto,
              no options, warrants or other rights for the purchase,
              subscription or issuance of shares or other securities of Sentry
              or securities convertible into or exchangeable for securities of
              Sentry have been authorized or agreed to be issued or are
              outstanding. There are no restrictions on the transfer of the
              Sentry Shares except those set out in the Articles of Sentry and
              pursuant to applicable securities laws.
      3.1.7   Absence of Conflicting Agreements-The execution and delivery of
              this Agreement and the performance by Sentry of its obligations
              hereunder do not:
              (a) violate, contravene or breach, or constitute a default under
                  the articles, constating instruments, by-laws or other
                  organizational documents of Sentry;
              (b) violate, contravene or breach, or constitute a default under
                  any agreement or commitment to which Sentry may be a party or
                  any of their respective properties may be subject, or by which
                  any of them is bound or affected;
              (c) result in or give any Person the right to seek or to cause (i)
                  the termination, cancellation, modification, amendment,
                  variation or renegotiation of any agreement or commitment to
                  which Sentry may be a party or any of its properties may be
                  subject or by which it is bound or affected; (ii) the
                  acceleration or forfeiture of any term of payment thereunder;
                  or (iii) the loss in whole or in part of any benefit
                  thereunder which would otherwise accrue to Sentry; and
              (d) to the best of Sentry's knowledge, result in the violation of
                  any applicable laws.
      3.1.8   Financial Statements -Sentry's audited financial statements as at
              October 31, 2000 (the "Sentry Financial Statement Date") have been
              prepared in accordance with Canadian GAAP applied on a basis
              consistent with that of the preceding periods and present fairly

<PAGE>

              the financial condition of Sentry and the results of its
              operations as at and for the period ended on the Sentry Financial
              Statement Date.
      3.1.9   Enforceability of Obligations-This Agreement constitutes a valid
              and binding obligation of Sentry, enforceable against it in
              accordance with its terms, provided that enforcement may be
              limited by bankruptcy, insolvency, liquidation, reorganization,
              reconstruction and other similar laws generally affecting
              enforceability of creditors' rights and that equitable remedies
              such as specific performance and injunction are in the discretion
              of the court from which they are sought.
      3.1.10  Books and Records-The books and records of Sentry are fully and
              accurately maintained and their respective books of account
              provide for all excise, sales, business and property taxes and
              other rates, charges, assessments, levies, duties, taxes,
              contributions, fees, licenses and other governmental charges of
              whatsoever kind and nature that have become due and payable or, to
              the extent such amount is material, that may become due and
              payable before the Closing Time. The minute books of Sentry are
              complete and accurate and reflect all material actions taken and
              resolutions passed by the directors and shareholders, as the case
              may be, of Sentry since the date of incorporation or organization.
      3.1.11  Subsidiaries- Sentry does not have a Subsidiary.
      3.1.12  Compliance with Applicable Laws- Sentry has conducted and is
              conducting its business in compliance in all material respects
              with all applicable laws, rules and regulations of each
              jurisdiction in which its business is carried on and is not in
              breach of any such laws, rules or regulations, except for breaches
              which are not Material.
      3.1.13  Litigation-Company-There is no suit, action, litigation,
              arbitration proceeding or governmental proceeding, including
              appeals and applications for review, in progress, pending or
              threatened against or relating to Sentry, affecting its assets or
              business which if determined adversely to Sentry might materially
              and adversely affect the properties, business, future prospects or
              financial condition of Sentry. There is not presently outstanding
              against Sentry any judgement, decree, injunction, rule or order of
              any court, governmental department, commission, agency,
              instrumentality or arbitrator. Sentry has not received any notices
              to the effect that its business or assets are not in full
              compliance with all of the requirements of applicable federal,
              provincial or local environmental, health and safety statutes and
              regulations.
      3.1.14  Litigation-Shares-There is no suit, action, litigation,
              arbitration proceeding or governmental proceeding, including
              appeals and applications for review, in progress, pending or, to
              the best knowledge of Sentry, threatened against Sentry or
              relating to the Sentry Shares. There is not presently outstanding
              against Sentry any judgement, decree, injunction, rule or order of
              any court, governmental department, commission, agency,
              instrumentality or arbitrator which would affect the ability of
              Sentry to consummate the transactions contemplated by this
              Agreement.
      3.1.15  Status of Sentry- Sentry is a "private issuer" within the meaning
              of the Securities Act (British Columbia) and the sale and issuance
              of the Sentry Shares and the Sentry Warrant will be made in
              compliance with all applicable securities legislation. Sentry is a
              "reporting company" within the meaning of the Company Act (British
              Columbia).
      3.1.16  Undisclosed Liabilities- Except as disclosed in Schedule "D"
              hereto, Sentry has incurred no liabilities since the Sentry
              Financial Statement Date (whether accrued, absolute, contingent or
              otherwise) of any kind except liabilities incurred in the ordinary
              course of business which are not inconsistent with past practice,

<PAGE>

              are not, in the aggregate, Material and adverse to the business,
              assets, financial condition or results of operations of its
              business, and do not Materially violate any covenant contained in
              this Agreement or constitute a Material misrepresentation or
              breach of warranty made in or pursuant to this Agreement.
      3.1.17  Tax Matters-Sentry has filed all tax returns and reports, if any,
              which are required to be filed with any foreign, federal, state or
              local governmental authority or agency and has paid, or has made
              adequate provision for the payment of all Taxes (as defined below)
              which have or may become due under applicable laws for the periods
              in respect of which such returns and reports were filed. For the
              purpose of this Section and Section 3.2.17, "Taxes" means all
              levies and assessments imposed by any governmental authority,
              including but not limited to all income, sales, use, ad valorem,
              value added, franchise, withholding, payroll, employment, excise
              or property taxes, together with any applicable interest or
              penalty. Sentry knows of no additional Taxes since the date of
              such returns and reports, and there will be no additional Taxes
              with respect to the periods for which such returns and reports
              were filed. No provisions for Taxes are required for any federal,
              provincial or local taxes of Sentry for the periods ending on that
              date and for all prior periods. There are no present disputes as
              to Taxes of any nature payable by Sentry.
      3.1.18  Disclosure-None of the foregoing representations, warranties and
              statements of fact contains any untrue statement of material fact
              or omits to state any material fact necessary to make any such
              representation, warranty or statement not misleading to CTI
              seeking full information concerning the matters which are the
              subject of such representations, warranties and statements.

Representations and Warranties of CTI

3.2   CTI hereby represents, warrants and covenants to Sentry as follows and
      acknowledges that Sentry is relying on these representations, warranties
      and covenants in entering into this Agreement and in completing the
      transactions contemplated under this Agreement:
      3.2.1   Organization and Good Standing- CTI is duly incorporated and
              validly existing in good standing under the laws of Delaware.
      3.2.2   Bankruptcy-No bankruptcy, insolvency or receivership proceedings
              have been instituted or are pending against CTI.
      3.2.3   Capacity to Carry on Business-CTI has all necessary corporate
              power, authority and capacity to own its property and assets and
              to carry on its business as presently owned and carried on by it,
              and CTI is duly licensed, registered and qualified as a
              corporation to do business and is in good standing in each
              jurisdiction in which the nature of its business makes such
              qualification necessary.
      3.2.4   Due Authorization-CTI has all necessary power, authority and
              capacity to enter into this Agreement and to perform its
              obligations under this Agreement. The execution and delivery of
              this Agreement and the consummation of the transactions
              contemplated hereby have been duly authorized by all necessary
              action on the part of CTI.
      3.2.5   Authorized and Issued Capital-The authorized capital of CTI
              consists of 40,000,000 shares of common stock with a par value of
              US$0.0001, of which 16,504,591 are issued and outstanding.
      3.2.6   Compliance with Securities Laws-CTI is in compliance with its
              timely disclosure obligations under applicable securities laws,
              including stock exchange regulations, and no order ceasing or
              suspending trading in securities of CTI or prohibiting the

<PAGE>

              transactions contemplated hereby has been issued and no
              proceedings for such purpose are ongoing or pending, or to the
              best knowledge of CTI, threatened.
      3.2.7   Rights to Acquire Shares- Except as contemplated by this Agreement
              and as set out in Schedule "E" hereto, no options, warrants or
              other rights for the purchase, subscription or issuance of shares
              or other securities of CTI or securities convertible into or
              exchangeable for shares of CTI have been authorized or agreed to
              be issued or are outstanding.
      3.2.8   Absence of Conflicting Agreements-The execution and delivery of
              this Agreement and the performance by CTI of its obligations
              hereunder do not:
              (a) violate, contravene or breach, or constitute a default under
                  the articles, constating instruments, by-laws or other
                  organizational documents of CTI or any of its Subsidiaries;
              (b) violate, contravene or breach, or constitute a default under
                  any agreement or commitment to which CTI or any of its
                  Subsidiaries may be a party or any of their properties may be
                  subject, or by which any of them is bound or affected;
              (c) result in or give any Person the right to seek or to cause (i)
                  the termination, cancellation, modification, amendment,
                  variation or renegotiation of any agreement or commitment to
                  which CTI or any of its Subsidiaries may be a party or any of
                  its properties may be subject or by which any of them is bound
                  or affected; (ii) the acceleration or forfeiture of any term
                  of payment thereunder; or (iii) the loss in whole or in part
                  of any benefit thereunder which would otherwise accrue to CTI
                  or any of its Subsidiaries; and
              (d) to the best of CTI's knowledge, result in the violation of any
                  applicable laws.
      3.2.9   Consents- There are no consents, authorizations, licenses,
              agreements, permits, approvals or orders of any person or
              government required to permit CTI to complete the transactions
              contemplated by this Agreement.
      3.2.10  Enforceability of Obligations-This Agreement constitutes a valid
              and binding obligation of CTI enforceable against it in accordance
              with its terms, provided that enforcement may be limited by
              bankruptcy, insolvency, liquidation, reorganization,
              reconstruction and other similar laws generally affecting
              enforceability of creditors' rights and that equitable remedies
              such as specific performance and injunction are in the discretion
              of the court from which they are sought.
      3.2.11  Books and Records-The books and records of CTI are fully and
              accurately maintained and their respective books of account
              provide for all excise, sales, business and property taxes and
              other rates, charges, assessments, levies, duties, taxes,
              contributions, fees, licenses and other governmental charges of
              whatsoever kind and nature that have become due and payable or, to
              the extent such amount is material, that may become due and
              payable before the Closing Time. The minute books of CTI are
              complete and accurate and reflect all material actions taken and
              resolutions passed by the directors and shareholders, as the case
              may be, of CTI since the date of incorporation or organization.
      3.2.12  Compliance with Applicable Laws- CTI and its Subsidiaries have
              conducted and are conducting their respective businesses in
              compliance in all material respects with all applicable laws,
              rules and regulations of each jurisdiction in which its business
              is carried on and are not in breach of any such laws, rules or
              regulations, except for breaches which are not Material.
      3.2.13  Litigation-Company-There is no suit, action, litigation,

<PAGE>

              arbitration proceeding or governmental proceeding, including
              appeals and applications for review, in progress, pending or
              threatened against or relating to CTI or any of its Subsidiaries,
              affecting their properties or business which if determined
              adversely to CTI or any of its Subsidiaries might materially and
              adversely affect the properties, business, future prospects or
              financial condition of CTI or any of its Subsidiaries. There is
              not presently outstanding against CTI or any of its Subsidiaries
              any judgement, decree, injunction, rule or order of any court,
              governmental department, commission, agency, instrumentality or
              arbitrator. CTI or any of its Subsidiaries have not received any
              notices to the effect that the operations or assets of CTI or any
              of its Subsidiaries are not in full compliance with all of the
              requirements of applicable federal, state or local environmental,
              health and safety statutes and regulations.
      3.2.14  Litigation-Shares-There is no suit, action, litigation,
              arbitration proceeding or governmental proceeding, including
              appeals and applications for review, in progress, pending or, to
              the best knowledge of CTI, threatened against CTI or any of its
              Subsidiaries or relating to the CTI Shares. There is not presently
              outstanding against CTI or any of its Subsidiaries any judgement,
              decree, injunction, rule or order of any court, governmental
              department, commission, agency, instrumentality or arbitrator
              which would affect the ability of CTI to consummate the
              transactions contemplated by this Agreement.
      3.2.15  Undisclosed Liabilities-CTI has incurred no liabilities (whether
              accrued, absolute, contingent or otherwise) since the CTI
              Financial Statement Date of any kind except liabilities incurred
              in the ordinary course of business which are not inconsistent with
              past practice, are not, in the aggregate, Material and adverse to
              the business, assets, financial condition or results of operations
              of its business, and do not Materially violate any covenant
              contained in this Agreement or constitute a Material
              misrepresentation or breach of warranty made in or pursuant to
              this Agreement.
      3.2.16  Subsidiaries- The Subsidiaries of CTI are listed in Schedule "F"
              hereto.
      3.2.17  Tax Matters-CTI and its Subsidiaries have filed all tax returns
              and reports, if any, which are required to be filed with any
              foreign, federal, state or local governmental authority or agency
              and has paid, or has made adequate provision for the payment of
              all Taxes (as defined in Section 3.1.17) which have or may become
              due under applicable laws for the periods in respect of which such
              returns and reports were filed. CTI knows of no additional Taxes
              since the date of such returns and reports, and there will be no
              additional Taxes with respect to the periods for which such
              returns and reports were filed. No provisions for Taxes are
              required for any federal, provincial or local taxes of CTI for the
              periods ending on that date and for all prior periods. There are
              no present disputes as to Taxes of any nature payable by CTI or
              any of its Subsidiaries.
      3.2.18  Financial Statements - CTI's audited financial statements as at
              December 31, 2000 and unaudited interim financial statements for
              the 3 months ended March 31, 2001 (each a "CTI Financial Statement
              Date") have been prepared in accordance with US GAAP applied on a
              basis consistent with that of the preceding periods and present
              fairly the financial condition of CTI and the results of its
              operations as at and for the period ended on each CTI Financial
              Statement Date.
      3.2.19  Disclosure-None of the foregoing representations, warranties and
              statements of fact contains any untrue statement of material fact
              or omits to state any material fact necessary to make any such
              representation, warranty or statement not misleading to Sentry
              seeking full information concerning the matters which are the
              subject of such representations, warranties and statements.

<PAGE>

Commission

3.3   Each Party represents and warrants to the other Parties that no Person
      is entitled to a brokerage commission, finder's fee or other like payment
      in connection with the transactions contemplated by this Agreement.

Non-Waiver

3.4   No waiver by any Party of any condition, in whole or in part, shall
      operate as a waiver of any other condition.

Nature and Survival of Representations and Warranties

3.5   All statements contained in any certificate or other instrument
      delivered by or on behalf of a Party pursuant to this Agreement shall be
      deemed to be made by that Party under this Agreement. All subsequently
      delivered instruments shall be deemed to correct or modify all prior
      instruments, and any instrument given at or speaking as of a date or time
      prior to the execution of this Agreement or other relevant time under this
      Agreement shall be considered as a representation made as of such time as
      the statement was made or as of which time the statement spoke. All
      representations, warranties, covenants and agreements contained in this
      Agreement on the part of each of the Parties shall survive the Closing,
      except that the representations and warranties contained in this Article
      shall survive only for three years following Closing (except for the
      representation and warranties relating to tax matters which shall survive
      for the period of time during which the taxes to which such
      representations and warranties relate may be reassessed by the relevant
      taxation authority, unless the Party in respect of which such
      representations and warranties have been given has been fraudulent in
      filing a return or supplying information to any taxation authority under
      any taxation legislation or unless a Party giving such representations and
      warranties has agreed to extend by waiver the period in which tax
      reassessments may be made, in which case the survival of those
      representations and warranties relating to tax matters shall be unlimited
      in the case of fraud, or shall continue to the expiry of the extended
      reassessment period, as the case may be), after which period, if no claim
      shall, prior to the expiry of such period, have been specifically made in
      writing under this Agreement against a Party with respect to any
      incorrectness in or breach of any representation or warranty made herein
      by such Party, such Party shall have no further liability under this
      Agreement with respect to such representation or warranty.

3.6   No investigation by or on behalf of Sentry into the business,
      operations, prospects, assets or condition (financial or otherwise) of CTI
      shall diminish in any way the effect of any representations or warranties
      made by CTI in this Agreement or shall relieve CTI of its obligations
      under this Agreement. No investigation by or on behalf of CTI into the
      business, operations, prospects, assets or condition (financial or
      otherwise) of Sentry shall diminish in any way the effect of any
      representations or warranties made by Sentry in this Agreement or shall
      relieve Sentry of any of its obligations under this Agreement.

Acknowledgements

3.7   CTI acknowledges as follows:

      (a) no securities commission or similar regulatory authority has reviewed
          or passed on the merits of the Sentry Shares and the Sentry Warrant;

      (b) there is no government or other insurance covering the Sentry Shares
          and the Sentry Warrant;

<PAGE>

      (c) there are risks associated with the purchase of the Sentry Shares and
          the Sentry Warrant; and

      (d) there are restrictions on CTI's ability to resell the Sentry Shares
          and the Sentry Warrant and it is the responsibility of CTI to find out
          what those restrictions are and to comply with them before selling the
          Sentry Shares or the Sentry Warrant.

                                         ARTICLE FOUR
                                   COVENANTS OF THE PARTIES

CTI's Covenants

4.1   During the period from the date of this Agreement to the Closing Time,
      CTI shall do the following:

      4.1.1   Conduct Business in Ordinary Course-Except as otherwise
              contemplated or permitted by this Agreement, CTI shall conduct
              its business in the ordinary course and shall not, without the
              prior written consent of Sentry, enter into any transaction which,
              if entered into before the date of this Agreement, would cause any
              representations or warranties of CTI contained in this Agreement
              to be incorrect or constitute a breach of any covenant or
              agreement of CTI contained in this Agreement.
      4.1.2   Perform Obligations-CTI shall comply with all applicable laws,
              regulations, by-laws and other governmental requirements of each
              jurisdiction in which its business is carried on.
      4.1.3   Material Changes-CTI shall not take any action which would result
              in any Material Adverse Change, in or to its business or sell,
              transfer or dispose of any of the assets of CTI, other than in the
              ordinary course of business.
      4.1.4   Reporting Issuer Status- CTI shall, as soon as practicable
              following the completion of an Exchange Offer or an Alternative
              Transaction, as each such term is defined in the Lock-Up
              Agreement, use its best efforts to file all necessary documents
              with the securities regulatory authorities of British Columbia for
              the purpose of becoming a reporting issuer under the securities
              laws of British Columbia unless the shares of CTI are listed or
              quoted for trading on a securities exchange recognized by the
              British Columbia Securities Commission.
      4.1.5   Access for Investigation-CTI shall permit Sentry and its
              employees, agents, counsel and accountants or other
              representatives, between the date of execution of this Agreement
              and the Closing Time, without interference to the ordinary conduct
              of its business, to have access during normal business hours to
              the premises and to all the books, accounts, records and other
              data of CTI and to furnish to Sentry such financial and operating
              data and other information with respect to CTI, as Sentry may from
              time to time reasonably request.
      4.1.6   Upon the completion of the transactions contemplated by the Lock-
              up Agreement, and so long as the Founders together hold not less
              than 10% of the shares of CTI, they will jointly have the right to
              nominate a director for election to the board of CTI and CTI shall
              solicit proxies for the election of such nominee as a director.

4.2   During the period from the Closing Time to the completion of an Exchange
      Offer or an Alternative Transaction, as each such term is defined in the
      Lock-Up Agreement, CTI covenants and agrees that it will not without the
      prior written consent of Sentry, not to be unreasonably withheld, issue
      any CTI Shares, or options, rights or warrants to acquire CTI Shares, or
      securities convertible into CTI Shares, in any such case at a price per
      CTI Share that is less than 70% of the Current Market Value per CTI Share.

<PAGE>

      For the purposes of this section 4.2, "Current Market Value per CTI Share"
      as of any date means the average of the closing prices of the CTI Shares
      on the principal exchange or market on which the CTI Shares may be listed
      or may trade for the 10 consecutive trading days commencing on the 12th
      trading day prior to the date as of which the Current Market Value is
      being determined. The closing price for each day shall be the closing
      price, if reported, or if the closing price is not reported, the average
      of the closing bid and asked price as reported by such principal exchange
      or market.

4.3   During the period from the date of this Agreement to the completion of
      an Exchange Offer or an Alternative Transaction, as each such term is
      defined in the Lock-Up Agreement, CTI covenants and agrees that it will
      not issue to employees, contractors or directors any options, warrants or
      rights to acquire or convert or exchange into shares of CTI that in the
      aggregate will result in the issuance of CTI Shares exceeding 20% of CTI's
      issued and outstanding share capital during this time, without the prior
      consent in writing of Sentry.  Sentry covenants that such consent will not
      be unreasonably witheld.

Covenants of Sentry and the Founders

4.3   During the period from the date of this Agreement to the Closing Time,
      Sentry shall do the following:

      4.3.1   Conduct Business in Ordinary Course-Except as otherwise
              contemplated or permitted by this Agreement, Sentry shall conduct
              its business in the ordinary course and shall not, without the
              prior written consent of CTI, enter into any transaction which, if
              entered into before the date of this Agreement, would cause any
              representations or warranties of Sentry contained in this
              Agreement to be incorrect or constitute a breach of any covenant
              or agreement of Sentry contained in this Agreement.
      4.3.2   Perform Obligations-Sentry shall comply with all applicable laws,
              regulations, by-laws and other governmental requirements of each
              jurisdiction in which its business is carried on.
      4.3.3   Material Changes-Sentry shall not take any action which would
              result in any Material Adverse Change, in or to its business or
              sell, transfer or dispose of any of the assets of Sentry, other
              than in the ordinary course of business.
      4.3.4   Access for Investigation-Sentry shall permit CTI and its
              employees, agents, counsel and accountants or other
              representatives, between the date of execution of this Agreement
              and the Closing Time, without interference to the ordinary conduct
              of its business, to have access during normal business hours to
              the premises and to all the books, accounts, records and other
              data of Sentry and to furnish to CTI such financial and operating
              data and other information with respect to Sentry, as CTI may from
              time to time reasonably request.

4.4   Except pursuant to the outstanding rights listed in Schedule "C", during
      the period between the date of this Agreement and the earlier of the
      Expiry Date and the exercise of the Sentry Warrant by CTI, Sentry
      covenants and agrees that it will not issue to employees, contractors or
      directors any options, warrants or rights to acquire or convert or
      exchange into shares of Sentry that in the aggregate will result in the
      issuance of Sentry Shares exceeding 20% of Sentry's issued and outstanding
      share capital during this time (determined after taking account of the
      conversion of Sentry's indebtedness to British Columbia Advanced Systems
      Foundation into Sentry Shares), without the prior consent in writing of
      CTI. CTI covenants that such consent will not be unreasonably witheld.

<PAGE>


Actions to Satisfy Closing Conditions

4.5   Each Party agrees to take all such actions as are within its power to
      control, and to use its reasonable best efforts to cause other actions to
      be taken which are not within its power to control, so as to ensure
      compliance with, and satisfaction of, any conditions set forth in Article
      Six which are for the benefit of another Party.

Confidentiality

4.6   Sentry shall keep confidential all confidential information obtained from
      CTI unless publicly available, required to be disclosed by law or such
      information must, in the opinion of Sentry, acting reasonably, be
      disclosed to a regulatory authority. CTI shall keep confidential all
      confidential information (unless publicly available or required to be
      disclosed by law) obtained from Sentry. If this Agreement is terminated
      without completion of the transactions contemplated herein then this
      covenant shall survive such termination and, promptly after such
      termination, all documents, work papers and other written material
      obtained by one Party from another Party in connection with the
      transactions contemplated under this Agreement shall be returned to the
      Party from whom such materials were obtained.

Representation on the Board of Directors of Sentry

4.7   During the period between the Closing Date and the earlier of the
      Expiry Date and the exercise of the Sentry Warrant by CTI, the board of
      directors of Sentry shall consist of five persons. During such period,
      Sentry covenants and agrees that its board of directors shall include two
      nominees for the board of the directors of Sentry acceptable to CTI in any
      management proxy circulars for meetings at which directors of Sentry are
      to be elected. At all such meetings, the Founders shall vote their shares
      in favour of the election of CTI's nominees to the board of directors of
      Sentry. Upon the exercise of the Sentry Warrant by CTI, the board of
      directors of Sentry shall consist of five persons. During such period,
      Sentry covenants and agrees to take all necessary steps to ensure that
      three nominees for the board of the directors of Sentry are acceptable to
      CTI.

                                      ARTICLE FIVE
                                     INDEMNIFICATION

Indemnification by CTI

5.1   Subject to this Article Five, if the transactions contemplated by this
      Agreement are consummated, CTI shall indemnify and hold Sentry harmless
      against and in respect of any loss, damage, claim, cost or expense
      whatsoever, including any and all incremental out-of-pocket costs,
      including, without limitation, all reasonable legal and accounting fees,
      which Sentry may incur, suffer or be required to pay, pursuant to any
      Claim that may be made by or asserted against or affect Sentry, provided,
      however, that the subject matter of any such Claim relates to or arises
      out of or in connection with any misrepresentation or breach of any
      warranty, agreement, covenant or obligation of CTI contained in this
      Agreement or in any agreement, schedule, certificate or other document
      required pursuant to this Agreement to be entered into or delivered by
      CTI. The obligation of CTI to indemnify Sentry as set forth in this
      Section 5.1 for any loss, damage, claim, cost or expense shall be subject
      to the limitation period referred to in Section 3.5 with respect to
      survival of representations and warranties.

Indemnification by Sentry

5.2   Subject to this Article Five, if the transactions contemplated by this
      Agreement are consummated, Sentry shall indemnify and hold CTI harmless
      against and in respect of any loss, damage, claim, cost or expense
      whatsoever, including any and all incremental out-of-pocket costs,
      including, without limitation, all reasonable legal and accounting fees,
      which CTI may incur, suffer or be required to pay, pursuant to any Claim
      that may be made by or asserted against or affect CTI, provided, however,
      that the subject matter of any such Claim relates to or arises out of or
      in connection with any misrepresentation or breach of any warranty,
      agreement, covenant or obligation of Sentry contained in this Agreement or
      in any agreement, schedule certificate or other document required pursuant
      to this Agreement to be entered into or delivered by Sentry. The
      obligation of Sentry to indemnify CTI, as set forth in this Section 5.2
      for any loss, damage, claim, cost or expense shall be subject to the
      limitation period referred to in Section 3.5 with respect to survival of
      representations and warranties.

Claims by Third Parties

5.3   Promptly upon receipt by either Sentry or CTI (herein referred to as the
      "Indemnitee") of notice of any Third Party Claim in respect of which the
      Indemnitee proposes to demand indemnification from the other party to this
      Agreement (the "Indemnitor"), the Indemnitee shall forthwith give notice
      to that effect to the Indemnitor.

5.4   The Indemnitor shall have the right, exercisable by giving notice to the
      Indemnitee not later than 30 days after receipt of the notice described in
      Section 5.3, to assume the control of the defence, compromise or
      settlement of the Third Party Claim, provided that:

      (i)   the Indemnitor shall first deliver to the Indemnitee its written
            consent to be joined as a party to any action or proceeding relating
            thereto; and,
      (ii)  the Indemnitor shall at the Indemnitee's request furnish it with
            reasonable security against any costs or other liabilities to which
            it may be or become exposed by reason of such defence, compromise or
            settlement.

5.5   Upon the assumption of control by the Indemnitor as aforesaid, the
      Indemnitor shall, at its expense, diligently proceed with the defence,
      compromise or settlement of the Third Party Claim at the Indemnitor's sole
      expense, including employment of counsel reasonably satisfactory to the
      Indemnitee, and in connection with such proceedings, the Indemnitee shall
      co-operate fully, but at the expense of the Indemnitor, to make available
      to the Indemnitor all pertinent information and witnesses under the
      Indemnitee's control and to make such assignments and take such other
      steps as in the opinion of counsel for the Indemnitor are necessary to
      enable the Indemnitor to conduct such defence, provided always that the
      Indemnitee shall be entitled to reasonable security from the Indemnitor
      for any expense, costs or other liabilities to which it may be or may
      become exposed by reason of such co-operation.

5.6   The final determination of any such Third Party Claim, including all
      related costs and expense, will be binding and conclusive upon the Parties
      as to the validity or invalidity, as the case may be, of such Third Party
      Claim against the Indemnitor.

5.7   Should the Indemnitor fail to give notice to the Indemnitee as provided
      in Section 5.4, the Indemnitee shall be entitled to make such settlement
      of the Third Party Claim as in its sole discretion may appear advisable,
      and such settlement or any other final determination of the Third Party
      Claim shall be binding upon the Indemnitor.

5.8   Where an amount is payable by Sentry or CTI as indemnification pursuant
      to the terms of this Agreement and the Excise Tax Act provides that GST is
      deemed to have been collected by the payee thereof, the amount so payable,
      as determined without reference to this paragraph (the "Indemnification
      Amount"), shall be increased by an amount equal to the rate of GST applied
      to the Indemnification Amount in accordance with the Excise Tax Act.

<PAGE>

Indemnification Sole Remedy

5.9   The provisions of this Article Five shall constitute the sole remedy to
      CTI and Sentry against the other party to this Agreement with respect to
      any and all breaches of any agreement, covenant, representation or
      warranty made by such party in this Agreement.

Details of Claims

5.10  With respect to any Claim provided for under Sections 5.1 and 5.2, no
      indemnity under this Agreement shall be sought unless written notice
      providing reasonable details of the reasons for which the indemnity is
      sought is provided to CTI or Sentry, as the case may be, before the
      expiration of the limitation dates provided for in Section 5.1 and 5.2
      respectively, as applicable.

Limit on Claims

5.11  Notwithstanding any other provision of this Agreement, no Claims with
      respect to the breach of any representation, warranty, covenant or
      agreement under this Agreement will be asserted unless asserted pursuant
      to the provisions of this Article Five and only to the extent that the
      aggregate amount of the claim or claims asserted as of that date exceeds
      $25,000.

                                     ARTICLE SIX
                                 CONDITIONS PRECEDENT

Sentry Conditions

6.1   The obligation of Sentry to complete the transactions contemplated by
      this Agreement shall be subject to the satisfaction of, or compliance
      with, at or before the Closing Time, each of the following conditions
      precedent (each of which is hereby acknowledged to be inserted for the
      exclusive benefit of Sentry and may be waived by it in whole or in part):

      6.1.1   Truth and Accuracy of Representations of CTI-All of the
              representations and warranties of CTI made in or under this
              Agreement shall be true and correct in all material respects as at
              the Closing Time and with the same effect as if made at and as of
              the Closing Time (except as such representations and warranties
              may be affected by the occurrence of events or transactions
              expressly contemplated and permitted by this Agreement) and Sentry
              shall have received a certificate from CTI confirming the truth
              and correctness in all material respects of the representations
              and warranties.
      6.1.2   Performance of Obligations-CTI shall have performed or complied
              with, in all material respects, all of its obligations, covenants
              and agreements under this Agreement.
      6.1.3   Receipt of Closing Documentation-All instruments, documentation
              and assurances relating to the purchase and sale of the the Sentry
              Shares and the Sentry Warrant (the "CTI Closing Documents") and
              all actions and proceedings taken on or prior to the Closing in
              connection with performance by CTI of its obligations under this
              Agreement shall be satisfactory to Sentry and its counsel, acting
              reasonably. Sentry shall have received copies of all such
              documentation or other evidence as it may reasonably request in
              order to establish the consummation of the transactions
              contemplated under this Agreement and the taking of all corporate
              proceedings in connection with those transactions in compliance
              with this Section 6.1, in form and substance satisfactory to
              Sentry and its counsel, acting reasonably.
      6.1.4   No Actions Taken Restricting Transactions - No action or
              proceeding by law or in equity shall be pending or threatened by
              any person, firm, corporation, government, governmental authority,
              regulatory body or agency to enjoin, restrict or prohibit the
              transactions contemplated under this Agreement.
      6.1.5   No Material Adverse Change-From the date hereof through and
              including the Closing Date, CTI or any of its Subsidiaries shall
              not have suffered any Material Adverse Change.

<PAGE>

      6.1.6   Consents, Authorizations and Registrations-All consents,
              approvals, orders and authorizations of or from governmental or
              regulatory authorities required in connection with the completion
              of the transactions contemplated in this Agreement shall have been
              obtained on or prior to the Closing Time.

CTI's Conditions

6.2   The obligations of CTI to complete the transactions contemplated by this
      Agreement shall be subject to the satisfaction of, or compliance with, at
      or before the Closing Time, each of the following conditions precedent
      (each of which is hereby acknowledged to be inserted for the exclusive
      benefit of CTI and may be waived by them in whole or in part):

      6.2.1   Truth and Accuracy of Representations of Sentry-All of the
              representations and warranties of Sentry made in or under this
              Agreement shall be true and correct in all material respects as at
              the Closing Time and with the same effect as if made at and as of
              the Closing Time (except as such representations and warranties
              may be affected by the occurrence of events or transactions
              expressly contemplated and permitted by this Agreement) and CTI
              shall have received a certificate from Sentry confirming the truth
              and correctness in all material respects of its representations
              and warranties.
      6.2.2   Performance of Obligations-Sentry shall have performed or complied
              with, in all respects, all of its obligations, covenants and
              agreements under this Agreement.
      6.2.3   Receipt of Closing Documentation-All instruments, documentation
              and assurances relating to the purchase and sale of the the Sentry
              Shares and the Sentry Warrant (the "Sentry Closing Documents") and
              all actions and proceedings taken on or prior to the Closing in
              connection with performance by Sentry of its obligations under
              this Agreement shall be satisfactory to CTI and its counsel,
              acting reasonably, and CTI shall have received copies of all such
              documentation or other evidence as it may reasonably request in
              order to establish the consummation of the transactions
              contemplated under this Agreement and the taking of all corporate
              proceedings in connection with those transactions in compliance
              with this Section 6.2, in form and substance satisfactory to CTI
              and its counsel, acting reasonably.
      6.2.4   No Actions Taken Restricting Transactions - No action or
              proceeding by law or in equity shall be pending or threatened by
              any person, firm, corporation, government, governmental authority,
              regulatory body or agency to enjoin, restrict or prohibit the
              transactions contemplated under this Agreement.
      6.2.5   No Material Adverse Change-From the date hereof through and
              including the Closing Date, Sentry shall not have suffered any
              Material Adverse Change.
      6.2.6   Consents, Authorizations and Registrations-All consents,
              approvals, orders and authorizations of or from governmental or
              regulatory authorities required in connection with the completion
              of the transactions contemplated in this Agreement shall have been
              obtained on or prior to the Closing Time.
      6.2.7   Representation on Board of Directors-Sentry shall have prepared
              and executed all necessary corporate documents to effect the
              nomination of the representatives of CTI to the board of directors
              of Sentry in accordance with Section 4.6.
      6.2.8   Lock-up Agreement- Sentry and the Sentry Shareholders shall have
              executed and delivered the Lock-up Agreement.
      6.2.9   Escrow Agreement - The Founders shall have entered into an
              agreement in the form attached as Schedule "G" hereto to execute
              an escrow agreement upon completion of the transactions
              contemplated by the Lock-up Agreement.

Non-Satisfaction of Conditions

6.3   If any condition set forth in Sections 6.1 or 6.2 is not satisfied on or
      before the Closing Time to the reasonable satisfaction of the Party

<PAGE>

      benefited by the condition, such Party (the "First Party") may, acting
      reasonably, terminate this Agreement by notice in writing to the other
      Parties and in such event the First Party shall be released from all
      obligations under this Agreement, and unless the First Party can show that
      the condition or conditions which have not been satisfied and for which
      the First Party has terminated this Agreement are reasonably capable of
      being performed or caused to be performed by the other Party or Parties
      then the other Parties shall also be released from all obligations under
      this Agreement, except that the First Party shall be entitled to waive
      compliance with any such conditions, obligations or covenants in whole or
      in part if it sees fit to do so without prejudice to any of its rights of
      termination in the event of non-performance of any other condition,
      obligation or covenant, in whole or in part.

                                      ARTICLE SEVEN
                                   CLOSING ARRANGEMENTS

Time and Place of Closing

7.1   Closing shall take place on the Closing Date at such place as the
      parties may agree.

Closing Arrangements

7.2   Upon fulfilment of all the conditions under this Agreement which have
      not been waived in writing by the party entitled to waive them, CTI shall
      deliver the CTI Closing Documents and Sentry shall deliver the Sentry
      Closing Documents at the Closing Time.

                                      ARTICLE EIGHT
                                       TERMINATION

Termination

8.1   This Agreement may be terminated at any time prior to the Closing Date:
      8.1.1   by the mutual agreement of Sentry and CTI;
      8.1.2   by Sentry if Sentry is not in material breach of its obligations
              under this Agreement, and if (A) there has been a breach by CTI of
              its representations and warranties hereunder such that Section
              6.1.1 will not be satisfied or (B) there has been a breach on the
              part of CTI of any of its covenants or agreements contained in
              this Agreement such that Section 6.1.2 will not be satisfied, and,
              in both case (A) and case (B), such breach has not been cured
              within ten days after written notice, specifying such breach, to
              CTI.
      8.1.3   by CTI if CTI is not in material breach of their respective
              obligations under this Agreement, and if (A) there has been a
              breach by Sentry of any of its representations and warranties
              hereunder such that Section 6.2.1 will not be satisfied or (B)
              there has been a breach on the part of Sentry of any of its
              covenants or agreements contained in this Agreement such that
              Section 6.2.2 will not be satisfied, and, in both case (A) and
              case (B), such breach has not been cured within ten days after
              written notice, specifying such breach, to Sentry;
      8.1.4   by Sentry if, since the date of this Agreement, there shall have
              occurred a Material Adverse Change in CTI; and
      8.1.5   by CTI if, since the date of this Agreement, there shall have
              occurred a Material Adverse Change in Sentry.

Effect of Termination

8.2   Subject to Section 8.3, in the event of termination of this Agreement as
      provided in Section 8.1, this Agreement shall, except as provided herein,
      forthwith become void, and there shall not be any liability or obligation
      with respect to the terminated provisions of the Agreement on the part of
      the Parties or their respective officers, directors, employees, agents, or
      shareholders.

Expenses

8.3   All costs and expenses (including, without limitation, the fees and
      disbursements of legal counsel) incurred in connection with this Agreement
      and the transaction contemplated under this Agreement shall be paid by the
      Party incurring such expenses.

<PAGE>

                                   ARTICLE NINE
                                      NOTICES

Delivery of Notice

9.1   Any notice, direction or other instrument required or permitted to be
      given by any Party under this Agreement shall be in writing and shall be
      sufficiently given if delivered personally:

      in the case of a notice to CTI at:

      1116 - 925 West Georgia Street
      Vancouver, BC
      V6C 3L2
      Attention: Marlene Jensen

      Fax No: 604-646-6658
      with copies to:
      Koffman Kalef
      19th floor, 885 West Georgia Street
      Vancouver, B.C. V6C 3H4
      Attention: Mr. John Fang
      Fax No.: (604) 891-3688

      in the case of a notice to Sentry or the Founders at:

      Sentry Telecom Systems Inc.
      8525 Commerce Court
      Burnaby, B.C. V5A 4N3

      Attention: Mr. Donald Farnell
      Fax No.: (604) 415-5417
      with a copy to:
      Getz Prince Wells
      Suite 1810
      1111 West Georgia Street
      Vancouver, B.C. V6E 4M3
      Attention: Mr. Leon Getz. Q.C.
      Fax No.: (604) 685-9798

      Any such notice, direction or other instrument, if delivered personally,
      shall be deemed to have been given and received on the date on which it
      was received at such address.

                                        ARTICLE TEN
                                           GENERAL

Time

10.1  Time shall be of the essence hereof.

Assignment/Successors and Assigns

10.2  Neither this Agreement nor any rights or obligations under this Agreement
      shall be assignable by any Party without the prior written consent of the
      other Party. Subject to that condition, this Agreement shall enure to the
      benefit of and be binding upon the Parties and their respective heirs,
      executors, administrators, successors (including any successor by reason
      of amalgamation of any Party) and permitted assigns.

Further Assurances

10.3  Each Party agrees that upon the written request of any other Party, it
      will do all such acts and execute all such further documents, conveyances,
      deeds, assignments, transfers and the like, and will cause the doing of

<PAGE>

      all such acts and will cause the execution of all such further documents
      as are within its power to cause the doing or execution of, as the other
      Party may from time to time reasonably request be done and/or executed as
      may be required to consummate the transactions contemplated under this
      Agreement or as may be necessary or desirable to effect the purpose of
      this Agreement or any document, agreement or instrument delivered under
      this Agreement and to carry out their provisions or to better or more
      properly or fully evidence or give effect to the transactions contemplated
      under this Agreement, whether before or after the Closing.

Public Notices

10.4  All notices to third parties and all other publicity concerning the
      transactions contemplated by this Agreement shall be jointly planned and
      co-ordinated by Sentry and CTI, and neither Sentry nor CTI shall act
      without the prior approval of the other, such approval not to be
      unreasonably withheld, except where required to do so by law or by the
      applicable regulations or policies of any provincial, federal or other
      regulatory agency of competent jurisdiction or any stock exchange.

Counterparts

10.5  This Agreement may be executed by the Parties in separate counterparts,
      all of which together constitute one and the same instrument.

      THE PARTIES, intending to be contractually bound, have executed this
Agreement as of the date and year first above written.

CTI DIVERSIFIED HOLDINGS, INC.

By:_________________________
   Authorized Signatory

SENTRY TELECOM SYSTEMS INC.

By:_____________________________
   Authorized Signatory

By:_____________________________
   Authorized Signatory

SIGNED, SEALED AND DELIVERED        )
by NEIL COX in the                  )
presence of:                        )          /s/ Neil Cox
                                    )         ----------------------------------
                                    )            NEIL COX
                                    )
                                    )
                                    )

SIGNED, SEALED AND DELIVERED        )
by LEILA LOLUA in the               )
presence of:                        )          /s/ Leila Lolua
                                    )         ----------------------------------
                                    )            LEILA LOLUA
                                    )
                                    )
                                    )

626820 B.C. LTD.
By:_____________________________
   Authorized Signatory

By:_____________________________
   Authorized Signatory


<PAGE>

                                        SCHEDULE A

                                     LOCK-UP AGREEMENT

<PAGE>

                                        SCHEDULE B

                                    SENTRY SHAREHOLDERS

<PAGE>

                                        SCHEDULE C
                             RIGHTS TO ACQUIRE SENTRY SHARES

<PAGE>

                                        SCHEDULE D

                                    SENTRY LIABILITIES

<PAGE>

                                        SCHEDULE E

                              RIGHTS TO ACQUIRE CTI SHARES

<PAGE>

                                        SCHEDULE F

                                    CTI SUBSIDIARIES


NAME                                     JURISDICTION
Cobratech Industries Inc.                British Columbia
Cobratech Industries Limited             Hong Kong
IT Transit Limited                       Hong Kong
Cobratech Industries Japan Limited       Japan

<PAGE>

                                        SCHEDULE G

                                     ESCROW COVENANT


<PAGE>

                                        AGREEMENT


TO:  CTI DIVERSIFIED HOLDINGS, INC. ("CTI")

RE: Share Purchase Agreement among CTI, Sentry Telecom Systems Inc. and the
undersigned dated as of May 15, 2001 (the "Purchase Agreement").

Pursuant to section 6.2.9 of the Purchase Agreement, each of the undersigned
hereby agrees to execute and deliver to CTI the form of Escrow Agreement
attached hereto as Appendix 1 upon completion of the transactions contemplated
by the Lock-up Agreement, as that term is defined in the Purchase Agreement.

DATED as of_____________________, 2001.


SIGNED, SEALED AND DELIVERED        )
by NEIL COX in the                  )
presence of:                        )          /s/ Neil Cox
                                    )         ----------------------------------
                                    )            NEIL COX
                                    )
                                    )
                                    )

SIGNED, SEALED AND DELIVERED        )
by LEILA LOLUA in the               )
presence of:                        )          /s/ Leila Lolua
                                    )         ----------------------------------
                                    )            LEILA LOLUA
                                    )
                                    )
                                    )

626820 B.C. LTD.

By:_____________________________
   Authorized Signatory

By:_____________________________
   Authorized Signatory


<PAGE>

                                         APPENDIX 1

                                 FORM OF ESCROW AGREEMENT

<PAGE>

                                      ESCROW AGREEMENT

THIS AGREEMENT made as of the _________day of ___________, 2001.
AMONG

CTI DIVERSIFIED HOLDINGS, INC., a company incorporated under the laws of
Delaware (the "Issuer");

- and -

PACIFIC CORPORATE TRUST COMPANY, a company incorporated under the laws of
British Columbia (the "Trustee");

- and -

NEIL COX of 6158 Elgin Street, Burnaby, British Columbia ("Cox");

- and -

LEILA LOLUA of 6158 Elgin Street, Burnaby, British Columbia ("Lolua");

- and -

626820 B.C. LTD., care of Cox, 6158 Elgin Street, Burnaby, British Columbia
("626820")

RECITAL

A.   626820, Lolua and Cox (together the "Security Holders") have agreed to
     deposit with the Trustee _____________shares in the capital of the Issuer
     (the "Escrowed Securities") to be held in accordance with this Agreement.

FOR GOOD AND VALUABLE CONSIDERATION and $10.00 now paid by the Issuer to the
Security Holders (the receipt and sufficiency of which the Security Holders
hereby acknowledge), the parties agree as follows:

1.   The Security Holders hereby place and deposit the Escrowed Securities in
     escrow with the Trustee.

2.   The Escrowed Securities and the beneficial ownership of or any interest
     in them and the certificate representing them (including any replacement
     securities or certificates) shall not be sold, assigned, hypothecated,
     alienated, transferred within escrow, or otherwise in any manner dealt with
     or, except in accordance with this Agreement, released from escrow.

3.   The Trustee shall retain the Escrowed Securities and the certificates
     (including any replacement securities or certificates) representing them
     and shall not do or cause anything to be done to allow any transfer,
     hypothecation or alienation thereof or, except in accordance with this
     Agreement, release from escrow.

4.   If during the period in which any Escrowed Securities are retained in
     escrow pursuant to this Agreement any dividend is received by the Trustee
     in respect of the Escrowed Securities, any such dividend shall be forthwith
     paid or transferred to the Security Holders.

5.   All voting rights attached to the Escrowed Securities shall at all times
     be exercised by the Security Holders.

6.   The Trustee shall effect the release from escrow of one-fourth of the
     Escrowed Securities on each of the first, second, third and fourth
     anniversaries of the date of this Agreement.

7.   This Agreement shall terminate upon release of all of the Escrowed
     Securities in accordance with this Agreement.

8.   The Issuer agrees to pay the Trustee reasonable remuneration for its
     services hereunder and to reimburse it for all disbursements, costs and
     expenses made or necessarily and properly incurred by it in the discharge
     of its duties hereunder for which it is not otherwise reimbursed, including
     the reasonable fees and disbursements of counsel retained by it in respect
     of its duties hereunder.

9.   The Security Holders and the Issuer hereby jointly and severally agree,
     except in the event of a breach of this Agreement by the Trustee, to and do
     hereby release and indemnify and save harmless the Trustee from and against
     all claims, suits, demands, costs, damages and expenses which may be
     occasioned by reason of the Trustee's compliance in good faith with the
     terms hereof.

10.  If the Trustee wishes to resign, it shall give at least one month's notice
     to the Issuer, which may appoint another Trustee in its place and such
     appointment shall be binding on the Security Holders and the new Trustee
     shall assume and be bound by the obligations of the Trustee hereunder.

<PAGE>

11.  For the purposes of this Agreement, the term "replacement securities"
     includes any security issued by the Issuer in respect or replacement for
     Escrowed Securities in connection with any reclassification, subdivision,
     conversion, consolidation or other change or alteration of the Escrowed
     Securities or any redesignation thereof, including, without limitation, any
     contractual or other right to acquire, exchange, subscribe for or convert
     into any security of the Issuer issued in respect of the Escrowed
     Securities and including any such securities acquired upon exercise of any
     such right, and such replacement securities will be dealt with mutates
     mutandis in accordance with the provisions of this Agreement, including,
     but without limitation, the provisions for deposit and release.

12.  Any notice, direction or other instrument required or permitted to be given
     by either party under this Agreement shall be in writing and shall be
     sufficiently given if delivered personally or by courier, or transmitted by
     telecopier during the transmission of which no indication of failure of
     receipt is communicated to the sender:

     in the case of notice to the Security Holders, at:
     6158 Elgin Street
     Burnaby, British Columbia
     in the case of notice to the Trustee, at:
     Pacific Corporate Trust Company
     625 Howe Street, 10th floor
     Vancouver, British Columbia
     V6C 3B8
     Attention: Stock Transfer
     Fax:     (604) 689-8144
     in the case of notice to the Issuer, at:

     1116 - 925 West Georgia Street
     Vancouver, British Columbia
     V6C 3L2
     Attention: President

     Fax No: (604) 646-6658

     If notice is sent by facsimile or is delivered, it will be deemed to have
     been given at the time if transmission or delivery. If notice is mailed,
     it will be deemed to have been received 48 hours following the date of
     mailing. If there is an interruption in normal mail service due to strike,
     labour unrest or other cause at or during the 48 hours immediately after,
     the time a notice is mailed, the notice will be sent by facsimile
     transmission or will be delivered.

13.  This Agreement constitutes the entire agreement between the parties with
     respect to its subject matter and supersedes all prior agreements,
     representations and arrangements with respect thereto. This Agreement may
     only be amended by an instrument in writing signed by all of the parties.
     Time is of the essence hereof.

14.  Each party must from time to time execute and deliver all such further
     documents and instruments and do all acts and things as the other parties
     may reasonably require to effectively carry out or better evidence or
     perfect the full intent and meaning of this Agreement.

15.  This Agreement shall be governed by and construed in accordance with the
     laws of British Columbia, and each of the parties irrevocably submits to
     the non-exclusive jurisdiction of the courts of British Columbia.

<PAGE>

16.  This Agreement may be executed in counterparts and by facsimile, all of
     which together will constitute one agreement, effective as of the date
     given above notwithstanding the actual date of execution.

CTI DIVERSIFIED HOLDINGS, INC.

By:_________________________
   Authorized Signatory

PACIFIC CORPORATE TRUST COMPANY

By:_________________________
   Authorized Signatory

SIGNED, SEALED AND DELIVERED        )
by NEIL COX in the                  )
presence of:                        )          /s/ Neil Cox
                                    )         ----------------------------------
                                    )            NEIL COX
                                    )
                                    )
                                    )

SIGNED, SEALED AND DELIVERED        )
by LEILA LOLUA in the               )
presence of:                        )          /s/ Leila Lolua
                                    )         ----------------------------------
                                    )            LEILA LOLUA
                                    )
                                    )
                                    )

626820 B.C. LTD.

By:_____________________________
   Authorized Signatory

By:_____________________________
   Authorized Signatory


<PAGE>

                                      SCHEDULE H

                                FORM OF SENTRY WARRANT

<PAGE>
Exhibit 2.0

                                  LOCK-UP AGREEMENT

Lock-Up Agreement dated for reference as of May 15, 2001 by and among CTI
Diversified Holdings, Inc., a corporation organized and existing under the laws
of the State of Delaware ("CTI"), Sentry Telecom Systems Inc., a company
organized and existing under the laws of the Province of British Columbia
("Sentry") and the undersigned holders of or Persons having a right to acquire,
common shares in the capital of Sentry (each referred to, for convenience, as a
"Shareholder").

     BACKGROUND

1.   CTI, Sentry, 626820 B.C. Ltd. ("626820), Neil Cox ("Cox") and Leila Lolua
     ("Lolua") are parties to a Purchase and Sale Agreement (the "Purchase and
     Sale Agreement") made as of the 15th day of May, 2001.

2.   Under the Purchase and Sale Agreement Sentry has agreed on certain terms
     and conditions to sell to CTI and CTI has agreed to purchase from Sentry
     4,400,000 Sentry Units for an aggregate purchase price of US$1,100,000;

3.   It is a condition of the obligations of CTI under the Purchase and Sale
     Agreement that all of the Shareholders have entered into this Agreement.

     AGREEMENT

     THEREFORE, in consideration of the foregoing, of the mutual agreements
contained herein and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, and subject to and on the terms and
conditions set out herein, the parties hereto agree as follows:

Definitions

1.1.   Whenever used in this Agreement, the following words and terms shall
       have the respective meanings ascribed to them below:

       1.1.1.   "AFFFILIATE" has the meaning ascribed to it in the Company Act
                (British Columbia);

       1.1.2.   "ALTERNATIVE TRANSACTION" means a transaction, whether by way of
                merger, amalgamation, arrangement or otherwise, between CTI and
                Sentry or their respective Affiliates, pursuant to which the
                Sentry Shares of the Shareholders are exchanged on a tax-
                deferred basis under the Income Tax Act (Canada) for CTI Shares
                on the Exchange Basis;
       1.1.3.   "CTI SHARES" means common shares in the capital of CTI;
       1.1.4.   "EXCHANGE BASIS" means the fair market value per Sentry Share
                divided by the fair market value per CTI Share, determined, in
                each case, on generally accepted valuation principles as of a
                date no earlier than 45 days prior to the date of the Exchange

<PAGE>

                Offer or Alternative Transaction, as the case may be, in
                accordance with section 3.1 of this Agreement;
       1.1.5.   "EXCHANGE OFFER" means an offer made by CTI prior to the Expiry
                Date to the Shareholders to acquire their Sentry Shares in
                consideration for CTI Shares on the Exchange Basis;
       1.1.6.   "EXPIRY DATE" means January 31, 2002 or such later date as may
                be agreed to among CTI, Sentry and the Founders pursuant to the
                provisions of the Purchase and Sale Agreement;
       1.1.7.   "MATERIAL ADVERSE CHANGE" means a change or development
                involving a prospective change which would have a Material
                Adverse Effect;
       1.1.8.   "MATERIAL ADVERSE EFFECT" means, with respect to any Person, a
                material adverse effect on the business, prospects, results of
                operations, financial condition or assets of such Person, and
                its Subsidiaries (if such Person is itself a Subsidiary, then
                the Person's parent corporation and all of such parent
                corporation's Subsidiaries), taken as a whole. In determining
                whether any individual event would result in a Material Adverse
                Effect, notwithstanding that such event does not of itself have
                such effect, a Material Adverse Effect shall be deemed to have
                occurred if the cumulative effect of such event and all other
                then existing events would result in a Material Adverse Effect;
       1.1.9.   "PARTIES" means the parties to this Agreement, collectively, and
                "PARTY" means any one of them;
       1.1.10.  "PERSON" includes an individual, corporation, partnership, joint
                venture, trust, unincorporated organization, the Crown or any
                agency or instrumentality thereof or any other juridical entity;
       1.1.11.  "SENTRY SHARES" means common shares in the capital of Sentry;
       1.1.12.  "SENTRY UNIT" means one Sentry Share and one Sentry Warrant;
       1.1.13.  "SENTRY WARRANT" means a share purchase warrant in the form
                annexed hereto as Schedule entitling the holder thereof to
                acquire a Sentry Share at a price per share of US $0.25 at any
                time prior to the Expiry Date;
       1.1.14.  "SUBSIDIARY" shall have the meaning ascribed by the Company Act
                (British Columbia);

Gender and Number

1.2   In this Agreement, words importing the singular include the plural and
      vice versa and words importing gender include all genders.

<PAGE>

Entire Agreement

1.3   This Agreement, together with the agreements and other documents to be
      delivered under this Agreement, constitute the entire agreement between
      the Parties pertaining to the subject matter of this Agreement, and there
      are no warranties, representations or other agreements between the Parties
      in connection with the subject matter of this Agreement except as
      specifically set forth in this Agreement. No supplement, modification or
      amendment to this Agreement and no waiver of any provision of this
      Agreement shall be binding on any Party unless executed by such Party in
      writing. No waiver of any of the provisions of this Agreement shall be
      deemed or shall constitute a waiver of any other provision (whether or not
      similar) nor shall such waiver constitute a continuing waiver unless
      otherwise expressly provided.

Article and Section Headings

1.4   Article and Section headings contained in this Agreement are included
      solely for convenience, are not intended to be full or accurate
      descriptions of the content of any Article or Section and shall not be
      considered to be part of this Agreement.

Applicable Law

1.5   This Agreement shall be governed by and construed in accordance with
      the laws of British Columbia and the federal laws of Canada applicable in
      British Columbia. Each Party to this Agreement irrevocably attorns to and
      submits to the jurisdiction of the courts of British Columbia with respect
      to any matter arising under or relating to this Agreement.

2.   THE EXCHANGE OFFER OR ALTERNATIVE TRANSACTION

2.1   Provided that CTI has exercised all of the Sentry Warrants acquired by
      it pursuant to the Purchase and Sale Agreement, it may at any time prior
      to the Expiry Date give Sentry not fewer than 10 business days notice in
      writing specifying its intention, subject to receipt and acceptance by it
      of the Exchange Basis Determination, either:
      2.1.1   to make the Exchange Offer; or
      2.1.2   to propose that Sentry enter into such agreements as may be
              necessary or desirable for the purpose of implementing an
              Alternative Transaction.

2.2   If CTI gives notice pursuant to section 2.1 of its intention to make the
      Exchange Offer:
      (a) Sentry and CTI shall forthwith proceed to select a Chartered Business
          Valuator in accordance with the provisions of section 3.1; and
      (b) Sentry shall have 10 business days from the date of such notice to
          give notice to CTI requiring CTI to proceed, instead, with an
          Alternative Transaction, and in that event CTI shall proceed with an
          Alternative Transaction.

2.3   If the Exchange Offer or the Alternative Transaction, as the case may
      be, would result in the Shareholders holding in the aggregate more than 20
      per cent, on a fully diluted basis, of the CTI Shares outstanding upon
      completion thereof, the Exchange Offer or Alternative Transaction, as the
      case may be shall, notwithstanding any other provision of this agreement,
      be on an exchange basis that results in the Shareholders holding, in the
      aggregate, 20 per cent, on a fully diluted basis, of the CTI Shares
      outstanding upon completion thereof.

2.4   If, within ten (10) days following delivery of the Exchange Basis
      Determination, CTI does not make the Exchange Offer or, if Sentry has

<PAGE>

      given notice to CTI pursuant to section 2.2 (b), proceed with an
      Alternative Transaction, the obligations of Sentry and the Shareholders
      under this Agreement shall terminate.

3.   DETERMINATION OF EXCHANGE BASIS

3.1   The Exchange Basis shall be determined (the "Exchange Basis
      Determination") by a Chartered Business Valuator to be agreed upon between
      Sentry and CTI, and employed by any one of KPMG LLP, Arthur Andersen or
      Deloitte & Touche. The Exchange Basis Determination shall be reported to
      each of Sentry and CTI in writing. Except to the extent required by
      applicable securities or other laws in relation to the Exchange Offer or
      an Alternative Transaction, as the case may be, each of CTI and Sentry
      shall hold the Exchange Basis Determination confidential. The costs of
      the Exchange Basis Determination shall be borne equally by CTI and Sentry
      unless CTI does not make the Exchange Offer or proceed with an Alternative
      Transaction , in which case the costs of the Exchange Basis Determination
      shall be for the sole account of CTI and Sentry shall not be liable for
      any amount in respect thereof. The determination of the Exchange Basis
      shall be binding on the Parties.

4.   AGREEMENT OF THE SHAREHOLDERS TO ACCEPT EXCHANGE OFFER AND TO TENDER
     SENTRY SHARES

4.1   Subject to the terms and conditions hereof, if CTI elects to make the
      Exchange Offer and Sentry does not give notice to CTI pursuant to section
      2.2, then provided that:
      4.1.1   the Exchange Offer is not subject to any conditions other than a
              condition with respect to the existence of a Material Adverse
              Effect in relation to Sentry subsequent to the date of the
              Exchange Basis Determination;
      4.1.2   the aggregate number of CTI Shares issuable to Shareholders
              pursuant to the Exchange Offer is not less than 5 per cent, on a
              fully diluted basis, of the CTI Shares outstanding following the
              completion thereof; and
      4.1.3   there has been no Material Adverse Effect in relation to CTI
              subsequent to the date of the Exchange Basis Determination, the
              Shareholder hereby irrevocably agrees to accept the Exchange Offer
              and to sell the Shareholder's Sentry Shares to CTI in accordance
              with the Exchange Offer.

5.   AGREEMENT OF SENTRY IN CONNECTION WITH ALTERNATIVE TRANSACTION

5.1   Subject to the terms and conditions hereof, if CTI elects or pursuant to
      section 2.2 is required to propose an Alternative Transaction, then,
      provided that:
      5.1.1   the Alternate Transaction is not subject to any conditions other
              than a condition with respect to the existence of a Material
              Adverse Effect in relation to Sentry subsequent to the date of the
              Exchange Basis Determination;
      5.1.2   the aggregate number of CTI Shares issuable to Shareholders
              pursuant to the Alternative Transaction is not less than 5 per
              cent, on a fully diluted basis, of the CTI Shares outstanding
              following the completion thereof; and
      5.1.3   there has been no Material Adverse Effect in relation to CTI
              subsequent to the date of the Exchange Basis Determination,

Sentry irrevocably agrees to execute and deliver such agreements, and to take
such other steps, including, if necessary, convening a meeting of the
Shareholders, as are reasonably required in order to implement the Alternative
Transaction and carry it into effect.

<PAGE>

6.   AGREEMENT OF SHAREHOLDER IN CONNECTION WITH ALTERNATIVE TRANSACTION

6.1   Subject to the terms and conditions hereof if, in connection with an
      Alternative Transaction, a vote of the Shareholders is required then,
      provided that the conditions set out in section 5.1.1, 5.1.2 and 5.2.3 are
      satisfied, the Shareholder hereby irrevocably covenants and agrees to vote
      or cause such Shareholder's Sentry Shares to be voted in favour of all
      such resolutions of Shareholders as may be necessary or desirable for the
      purposes of implementing an Alternative Transaction and carrying it into
      effect.

7.   PROVISIONS APPLICABLE TO THE PURCHASE AND SALE OF SENTRY SHARES PURSUANT
     TO EXCHANGE OFFER

7.1   In connection with a sale of Sentry Shares to CTI pursuant to the Exchange
      Offer, the Shareholder shall be deemed to warrant to CTI that:
      7.1.1   the Shareholder has good and marketable title to such
              Shareholder's Sentry Shares free and clear of any claim or
              encumbrance in favour of any third party;
      7.1.2   CTI will acquire the Shareholder's Sentry Shares free and clear of
              any claim or encumbrance in favour of any third party;

and to make such other representations or do such things as are necessary for
the purposes of transferring such Sentry Shares to CTI and complying with the
provisions of all applicable laws, including the Income Tax Act (Canada), in
connection with such sale.

8.   REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS

8.1   Each Party hereby represents and warrants to the other Parties that such
      Party has good and sufficient power, authority and right to enter into
      this agreement and to complete the transactions contemplated hereby and
      that upon the due execution and delivery of this agreement by all of the
      Parties, this agreement shall be a valid and binding agreement enforceable
      by each of the Parties against the other Parties in accordance with its
      terms.

8.2   The Shareholder acknowledges, and will be deemed in connection with any
      disposition of Sentry Shares pursuant to the Exchange Offer that:
      8.2.1   because the Exchange Offer will be an "exempt take-over bid"
              within the meaning of applicable securities laws in Canada, the
              Shareholder will not, in connection with the Exchange Offer,
              receive the information concerning CTI that CTI would be required
              to provide to the Shareholder if the Exchange Offer were not an
              exempt take-over bid;
      8.2.2   because CTI is not, and is under no obligation to become, a
              "reporting issuer" within the meaning of applicable securities
              laws in Canada, any CTI Shares issued to the Shareholder pursuant
              to the Exchange Offer may be subject to resale restrictions under
              those laws;
      8.2.3   CTI Shares issued to the Shareholder pursuant to the Exchange
              Offer may be subject to resale restrictions under the securities
              laws of the United States; and

<PAGE>

      8.2.4   they have been given the opportunity to seek independent legal,
              financial and tax advice and have either done so or elected not do
              so.

8.3   The acknowledgments in sections 8.2.2 and 8.2.3 apply, with the necessary
      changes and so far as applicable, to an Alternate Transaction.

9.   ADDITIONAL COVENANTS

9.1   The Shareholder covenants and agrees with CTI that prior to the Expiry
      Date it will not sell, assign, transfer or otherwise dispose of such
      Shareholder's Sentry Shares except to a Person who executes an
      acknowledgement in the form annexed hereto as Schedule "B" that such
      Sentry Shares are subject to this Agreement and agrees to be bound by this
      Agreement as if such Person had been an original party thereto.

10.  GENERAL

10.1  This agreement shall be binding upon and shall enure to the benefit of and
      be enforceable by the Parties and their respective successors and
      permitted assigns.

10.2  Time shall be of the essence of this agreement.

10.3  The Parties agree to co-operate in good faith with one other with a view
      to achieving the purpose and intent of this Agreement and, in that
      connection, to take such steps and execute such documents as may be
      necessary or desirable to this end.

10.4  Any notice or other communication required or permitted to be give
      hereunder shall be sufficiently given if delivered or sent by telecopier
      or facsimile transmission:

         (a)  in the case of CTI to:
              1116-925 West Georgia Street
              Vancouver, B.C.
              V6C 3L2
              Attention:   President
              Fax:   (604) 646-6658

         (b)  in the case of Sentry, to:
              8525 Commerce Court,
              Burnaby, British Columbia
              Attention:   President
              Fax:   (604) 415-5417

         (c)  in the case of the Shareholder, to the address of such
              Shareholder indicated below the Shareholder's name on the
              execution page of this Agreement or at such other address as the
              party to which such notice or other communication is to be given
              has last notified the party giving the same in the manner provided
              in this section and if so given shall be deemed to have been
              received on the date of such delivery or sending.

10.5  This agreement and the rights and obligations of the parties hereto shall
      be governed by and construed in accordance with the laws of the Province
      of British Columbia.

<PAGE>

10.6  References to CTI Shares and Sentry Shares in this Agreement include any
      shares into which the foregoing may be reclassified, subdivided,
      consolidated or converted.

10.7  This Agreement may be signed in as many counterparts as may be necessary
      all of which, when so signed, shall be deemed to constitute one valid and
      binding agreement dated, notwithstanding the actual date of execution
      thereof, as of the 15th day of May, 2001, and delivery of the counterparts
      may be effected by means of facsimile transmission


CTI DIVERSIFIED HOLDINGS INC.

By:
    ------------------------------------
       Authorized Signatory
    ------------------------------------

<PAGE>

SENTRY TELECOM SYSTEMS INC.

By: /s/ Neil Cox
    ------------------------------------
    Neil Cox
    6158 Elgin Avenue,
    Burnaby, B.C. V5H 3S4

By: /s/ Leila Lolua
    ------------------------------------
   Leila D. Lolua
   6158 Elgin Avenue,
   Burnaby, B.C. V5H 3S4

626820 B.C. LTD.

By:_____________________________
   Authorized Signatory

By:_____________________________
   Authorized Signatory


ASSERTIVE MARKETING SERVICES INC.

----------------------------------------
AUTHORIZED SIGNATORY
--------------------
#108 - 9-8671 NUMBER ONE RD.
----------------------------
RICHMOND, B.C. V7C 1V2
----------------------------------------



----------------------------------------
Kevin Huscroft
812 Alderside Road
Port Moody, B.C. V3H 3A5


----------------------------------------
David Valinho
5823 Mayview Circle
Burnaby, B.C. V5E 4B7



----------------------------------------
GundyCo, ITF
Lori Davenport, RRSP #552 50870 10



----------------------------------------
Pacific International Securities ITF
Donald E. Farnell, RRSP #029-4161-5


<PAGE>

----------------------------------------
_________ ITF Doug Marshall
RRSP #552 50840-17


----------------------------------------
GundyCo. ITF Dave Martin
RRSP #552 50814-19


----------------------------------------
David K. Cox
4808-138 Street
Edmonton, Alberta T6H 3Z1


----------------------------------------
Frederick R. Davenport
6379 Service Road,
RR#3, Site 354, C4
Port Alberni, B.C. V9Y 7L7


----------------------------------------
Shlomo Friedman
P.O. Box 33039
West Vancouver, B.C.
V7V 4W7


----------------------------------------
Randy Law
5554 - 183A Street
Surrey, B.C. V3S 7Z3


----------------------------------------
RBC Dominion Securities ITF
Corinne Papirnik RRSP#449 19041 13


----------------------------------------
Susan I. Wilberg

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


----------------------------------------
Neil B. Cox
6158 Elgin Avenue
Burnaby, B.C. V5H 3S4


----------------------------------------
Robert B. Wilberg

<PAGE>

----------------------------------------
Eileen Siu-Yue Fong

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



----------------------------------------
Alison Gray

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

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


----------------------------------------
Lori Davenport
#3 - 72 Jamieson Court
New Westminster, B.C.
V3L 5R6


----------------------------------------
Leila Lolua
6158 Elgin Avenue
Burnaby, B.C. V5H 3S4


----------------------------------------
Ronald Ralph Mattison

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

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


THE BRITISH COLUMBIA ADVANCED SYSTEMS FOUNDATION:
By its Agent, The British Columbia Advanced Systems Institute:

By_____________________________

Name: _________________________

Title: ________________________




<PAGE>

                           SCHEDULE "A" TO LOCK-UP AGREEMENT

FORM OF SENTRY WARRANT

<PAGE>


                           SCHEDULE "B" TO LOCK-UP AGREEMENT
                        Acknowledgment and Agreement to be Bound

The undersigned hereby acknowledges that the shares of Sentry Telecom Systems
Inc. acquired by the undersigned by way of transfer from _______________________
(Name of transferor)(the "Sentry Shares") are subject to a Lock-Up Agreement
dated ________________, 2001 (the "Lock-Up Agreement").

In consideration of $1.00 and other good and valuable consideration (the receipt
and sufficiency of which are acknowledged), the undersigned agrees to be bound
by the Lock-Up Agreement in respect of the Sentry Shares, as if the undersigned
was an original signatory thereto.


Dated at ____________________ on ______________.


________________________________     ___________________________
Address                               [transferee]





<PAGE>