UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, D. C. 20549

                              FORM 10-KSB

(Mark One)

[ * ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
      ACT OF 1934

                For the fiscal year ended March 31, 1998	

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                    Commission file number  0-12196


                           PREMIS Corporation
   (Exact name of small business issuer as specified in its charter)


             Minnesota                            41-1424202
  (State or other jurisdiction of      (IRS Employer Identification No.) 
   incorporation or organization)	

            13220 County Road 6, Plymouth, Minnesota  55441
                (Address of principal executive office)

                             (612)550-1999
                      (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:  NONE

Securities registered under Section 12(g) of the Exchange Act:  
Common Stock, $.01 par value
(Title and class)

                             Not Applicable
          (Former name, former address and former fiscal year, 
                     if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months (or 
for such shorter period that the registrant was required to file such 
reports), and (2) has been subject to such filing requirements for the 
past 90 days. Yes [ * ] No [   ]


Check if there is no disclosure of delinquent filers in response to 
Item 405 of Regulation S-B is not contained in this form, and no 
disclosure will be contained, to the best of registrant's knowledge, 
in definitive proxy or information statements incorporated by 
reference in Part III of this Form 10KSB or any amendment to this 
Form 10-KSB. [   ]

Issuer's revenues for its most recent fiscal year.  $5,945,378

The aggregate market value of the Common Stock held by non-affiliates of 
the Registrant as of June 18, 1998 was $4,597,776, based on the closing 
sale price for the Company's Common Stock on that date as reported on 
the Nasdaq National Market. For purposes of determining this number, all 
officers and directors of the Registrant are considered to be affiliates 
of the Registrant, as well as individual shareholders holding more than 
10% of the Registrant's outstanding Common Stock. This number is 
provided only for the purpose of this report on Form 10-KSB and does 
not represent an admission by either the Registrant or any such 
person as to the status of such person.

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's 
definitive Proxy Statement for the Registrant's Annual Meeting of 
Stockholders to be held August 5, 1998 for the year ended 
March 31, 1998, a definitive copy of which the Registrant 
anticipates will be filed on or about July 9, 1998, are 
incorporated by reference in Part III.

Transitional Small Business Disclosure Format (Check one):  
Yes [   ]  No [ * ] 

PART 1

ITEM 1.  Description of Business.

PREMIS Corporation (the "Company" or "PREMIS") develops, markets and 
supports enterprise-wide retail automation systems to meet the 
information needs of multi-store specialty and general merchandise 
retailing chains. The Company's systems provide retailers with a 
variety of integrated functions and benefits such as:

* point of sale data collection

* "real time" sales analysis reporting by store, product, customer or 
  salesperson

* enterprise inventory tracking

* improved customer loyalty

* merchandise management

* gross margin improvement

* increased inventory productivity

* improved loss prevention

* store to head office communications

* electronic data interface for online ordering from and customers

* on-line communication connections between stores and main corporate 
  office

The Company has developed leading-edge, industry-specific software 
systems to collect business information, analyze the collected data and 
provide timely and meaningful reports to individuals within an 
organization.  During this fiscal year, PREMIS has continued to improve 
the functionality of its standard suite of software products - "PREMIS 
OpenEnterprise" - and has begun to evolve from a provider of single 
application specialty software into a vendor of enterprise-wide 
information management systems for the retail industry. 

PREMIS OpenEnterprise retail software combines an easy-to-use POS 
transaction processing interface with sophisticated data analysis and 
information reporting capabilities at the head office. The graphical 
user interface significantly reduces the cost of training cashier 
personnel and shortens the time required to process a sale. This 
software is designed to accelerate information access and provide a 
wide variety of management reports on a "real time" basis to
various levels of an organization. The sophisticated data 
acquisition and processing features of the products positions the 
Company's systems to satisfy the needs of the entire retail market.

INDUSTRY OVERVIEW

Over the past two decades, many businesses have significantly increased 
their use of software products and computer systems to automate tasks 
and improve the efficiency of their day-to-day operations and long-term 
strategic planning.  Historically, most businesses purchased software 
tools specifically designed to address a particular task or function of 
their operations. Most of these software tools were engineered by 
different software companies and, consequently, each tool had difficulty 
communicating data it gathered to the other systems. The need for fast 
and reliable data transfer between various business functions created 
a demand for software and hardware solutions which integrated the 
independent business functions of an organization.  

In response, firms like PREMIS have expanded the functionality of 
their software products to integrate a wide variety of independent 
tasks within a particular business. These software systems allow 
data from one business function to be available to any other function, 
thereby creating an enterprise-wide information management system. 
Company-wide portability provides critical information to a wide 
variety of personnel within an organization to more effectively and 
efficiently manage day-to-day activities, as well as long-term strategic
objectives.  However, a recent site survey conducted by PREMIS 
Associates of over 200 specialty retailers at the Mall of America in 
Minneapolis, MN found that only one of these 200 specialty retailers had 
implemented a graphical point of service system such as PREMIS 
OpenStore.  This informal survey reinforces the Company's belief that 
the market opportunity exists for its graphical, Windows-based point of 
sale applications, which are ideally suited to replace these aging DOS 
and UNIX based solutions.

MULTI-STORE SPECIALTY AND GENERAL MERCHANDISE RETAIL MARKET

This market is comprised of approximately 14,000 chain headquarters 
controlling roughly 250,000 stores. This market includes apparel and 
accessory stores, gift and novelty stores, sporting goods stores and 
department stores. Although the number of specialty retail stores has 
not shown consistent growth, there are always individual store chains 
which are expanding and new chains which are emerging. PREMIS has found 
that as retail chains expand, even those that historically developed 
their own information management systems migrate toward outside vendors 
because they lack technical expertise necessary to support rapidly 
evolving and changing information management technologies. Although
retailers historically have computerized POS data, many have not 
integrated their POS software with their "back office" store systems 
or headquarters systems. This lack of integration of the back office 
and headquarters systems has prevented effective interfacing between 
POS and management data.  Specialty and general merchandise retailers 
are increasingly seeking the full integration of these individual store 
and headquarters management functions to maximize the availability of 
data on an enterprise-wide basis. Management believes that the
Company's products are marketable to any size multi-store specialty 
retail chain.

STRATEGY

The Company's long-term objective is to achieve and maintain a 
leadership position as a provider of enterprise-wide retail automation 
systems. The Company's business strategy for attainment of its objective 
is to:

* provide innovative leading edge systems

* expand marketing and sales efforts through a variety of distribution 
  channels to penetrate its selected markets to capitalize on first to 
  market product advantages

* pursue strategic relationships with other firms having complementary 
  products and service capabilities

PROVIDE LEADING EDGE SYSTEMS.  The Company intends to leverage its 
extensive technical expertise in software development and advanced 
programming techniques with PREMIS' marketing, training and hardware 
integration to offer both standardized and customized fully-integrated, 
enterprise-wide solutions to its customers.

EXPAND MARKETING AND SALES EFFORTS.  The Company intends to expand its 
product offerings to include fully functional software systems for 
retailers of all types of goods. The Company intends to utilize the 
PREMIS sales and marketing organization to reach the expanded markets 
with its enterprise-wide products and services. Marketing and sales 
efforts will be augmented with strategic alliances and reseller 
relationships, such as the current relationships of the Company with NCR 
Corporation ("NCR"), and Microsoft Corporation ("Microsoft"). 

PURSUE STRATEGIC PARTNERSHIPS.  The Company intends to explore and 
evaluate opportunities for acquisition or partnering with complementary 
products and services as opportunities present themselves.

COMPANY OFFERINGS 
 
* MULTIPLE MARKET SOLUTIONS.  The Company offers a complete end-to-end 
  management information solution to multi-store specialty retailers
  in both hardgoods and softgoods markets.
 
* FULL RANGE OF PRODUCTS.  The products and services provided by the 
  Company offer a complete integrated enterprise-wide management 
  solution, from POS to back room to head office, for the multi-store 
  specialty retailer.
 
* INTERNATIONAL APPLICATIONS.  The graphical user interface and features 
  of the Company's products and Windows NT(tm) accommodate multiple
  languages and currencies.

* HIGH-END SALES.  The Company's expanded product line is targeted to 
  large customers whose needs support products priced at the high end
  of the range.

PRODUCTS AND SERVICES

The Company's products, while targeted to selected vertical markets, are 
broad in their functionality and flexibility and are scaleable from 
small to large business organizations. The Company strives to provide an 
enterprise-wide solution to the information needs of businesses in its 
vertical markets. These solutions include registering data at the point 
of transaction, assembling data at the point of processing, analyzing 
and summarizing data using business specific rules, warehousing data 
and converting data into meaningful information through flexible 
inquiry and reporting. The concepts and technology, while currently 
adapted to specific types of businesses, can be adapted to many 
vertical markets.

The Company's systems consist of standardized and optional applications
software offered to its target market. These software products are 
often combined with computer hardware purchased by the Company from 
various suppliers providing equipment for Windows NT(tm) operating 
systems.  The Company's current principal product is PREMIS 
OpenEnterprise. The Company also provides extensive project management, 
consulting, education, end-user training and on-site support to help 
manage the implementation process for new customers, as well as help 
desk services for existing customers.

PREMIS OpenEnterprise

PREMIS OpenEnterprise and its related components provide a complete
enterprise-wide automation solution for all specialty and general 
merchandise retail chains, including softgoods retailers, and eliminates 
the need to purchase and integrate software components from a number of 
different vendors.  The PREMIS OpenEnterprise system features SQL/ODBC 
(a formatted, standardized method for accessing information) relational 
databases and a Windows graphical user interface ("GUI") running in a 
true 32-bit Windows NT(tm) operating system environment.  All PREMIS 
OpenEnterprise products have been designed as client/server solutions 
using the processing power of a main server and a PC workstation client.
 
PREMIS OpenEnterprise includes:
 
* PREMIS OpenOffice, which automates head office functions and
  provides easy access to mission critical information for the entire 
  retail organization;

* PREMIS OpenStore, which automates the entire POS function consistent 
  with the "open system" concept; and

* PREMIS OpenNet, which provides real-time on-line communications as 
  well as periodic summary between headquarters and individual stores 
  by extending the head office LAN to the POS workstation in individual
  stores. 

Each of the system's component parts may operate independently or in
conjunction with other components.

PREMIS OpenOffice 

PREMIS OpenOffice is an integrated, client/server retail management 
system.  It has been optimized by using an open architecture which 
brings the power of Windows NT into the head office.  PREMIS OpenOffice 
was developed to be easy to use, flexible and powerful.  Designed 
completely from object oriented tools, this product offers a state of 
the art design to take an organization well into the next millennium.  
PREMIS OpenOffice operates on a Microsoft SQL Server.  PREMIS OpenOffice 
can be ported to any open relational database, such as Oracle(tm) or 
Informix(tm), built for client/server architecture using an industry 
standard SQL.
 
The primary components of PREMIS OpenOffice are modular in design to 
provide maximum benefits with a minimum investment in computing 
hardware.  The user has the option of designing a solution with modules 
they choose.  Additional software may be added at any time with no 
disruption to the existing system.  The Base System is the core of the 
PREMIS OpenOffice retail management system and is required for all other 
applications and modules. The Base System is comprised of various 
structures that enable users to create organizational, merchandise and 
time hierarchies of data that are meaningful to the user.
 
The Base System structures are designed for ease of use and maximum
flexibility. The user may, at any time, change, add or delete levels 
within structures and may move data within either structure with a 
simple click of a mouse and "drag and drop" to the new or changed level. 
All existing data is reassigned and all summary tables are re-summarized 
automatically. For example, if some stores in one region are realigned 
to another region, the click of a mouse can immediately move the data 
to the new region structure, without additional programming or loss of 
data.  PREMIS OpenOffice is currently available for sale. In addition, 
the Company is continuing to enhance its OpenOffice product with 
scheduled version releases.  For example, an upcoming OpenOffice release 
will contain enhancements in support of and related to auto 
replenishment.  This version is scheduled for release by the end of 
calendar year 1998.  OpenOffice is currently operating at Tie Rack
(Canada) and has been ordered by Cotton Ginny Limited and L.A. Weight 
Loss Centers Inc., the latter two having ordered the entire 
OpenEnterprise solution.

The specific components available with PREMIS OpenOffice include:

Base System:
* Structure Management
* Maintenance
* System Management

Optional Applications:
* Audit Management
* Funds Management
* Merchandise Management
* Price Management
* Sales Analysis
* Client Management

PREMIS OpenStore

PREMIS OpenStore is an advanced POS software system which automates the 
entire POS function consistent with the "open system" concept.  PREMIS 
OpenStore can operate on a wide variety of POS hardware and PC's 
combined with cash drawers and can be easily integrated with other 
PC-based office systems.  Particular attention has been given to the 
GUI, which can be combined with keyboard entry, touch screen, mouse or 
the NCR Dynakey cash register terminal display. Data tables that are 
maintained in PREMIS OpenStore have companion tables that are maintained 
in PREMIS OpenOffice and vice versa, resulting in quick, seamless 
transmission of data. 

PREMIS OpenStore is able to:
 
* manage multiple sales transactions types
 
* monitor extensive Item/SKU level price management, including
  special promotions
 
* support multiple currencies and languages
 
* support local, county, special, national and other taxation
 
* manage multiple tender types, such as cash, check, debit
  cards, credit cards, etc.
 
* configure cash drawer compulsion by tender type and control

* enter data by manual keystroke, scanning or special search
  screens
 
* monitor balancing and floating counts for cash paid in, paid
  out and petty cash
 
* generate reports by department sales, associate sales, tender
  totals, returns/exchanges, voids, store productivity, sales 
  discounts, store summary, layaway status and aging reports
 
* compile extensive store summary reporting, including sales and
  gross profit generated, net sales by sales type and layaway sales
 
* create "customer profiling" for tracking customer demographics, 
  preferences and purchase history
 
* manage inventory at the store level

PREMIS OpenNet

PREMIS OpenNet provides a means of communication between a retailer's
headquarters and its individual stores through a variety of different
communication standards and protocols. While competitive software 
modules typically offer either real-time on-line communications or 
nightly polling of store systems by the host, PREMIS OpenNet provides 
communications between stores, districts, regions or headquarters can 
be as frequent or as selective as desired. Updates can go to the 
central, regional or district hosts independently or simultaneously. 
Transactions can be instantaneous or summarized and periodic, depending 
on the communications network. Public networks such as the Internet can 
be used as well as private networks or dialup polling. This flexibility 
recognizes the need for faster headquarters information on product 
marketing, sales force utilization, shopping patterns and other 
marketing and product information and prepares the system to meet 
all of the possible communications demands of the modern retailer.
Development initiatives for Internet commerce as part of OpenNet include 
an application called Virtual Merchant.  This application will be 
designed during calendar 1998 and 1999 or as market demand dictates.

PREMIS OpenNet features:
 
* a file-based merchandise locator server
 
* standard E-mail messaging enhancements
 
* multiple service providers for electronic funds transfer
 
* PREMIS OpenNet network traffic and monitor extension
 
* industry standard Windows NT(tm) client interfaced to PREMIS
  OpenNet
 
* Sybase Adaptive Server integration for access to enterprise data
 
* system-wide alert messaging and logging facilities
 
FULFILLMENT AND HELP DESK SERVICES
 
The Company provides extensive project management, education, end-user 
training and on-site support to help manage the implementation process 
for new customers. In general, customers view these services as 
important discriminating factors in a purchase decision.
 
Fulfillment services are conducted from the Company's headquarters in
Minneapolis, Minnesota and from the Canadian Subsidiary offices located 
in Toronto, Canada.  The fulfillment services organization:
 
* assists sales representatives and programming staff with retail 
  industry expertise to better address customers' industry-specific 
  needs
 
* manages the business relationship between the Company and the
  customer
 
* designs custom programming specifications
 
* develops installation plans to achieve customer schedules
 
* provides education and training for customer staff
 
* provides physical product installation and setup
 
* provides regular status reporting and transition to Help Desk for 
  support on an on-going basis
 
Fulfillment services will become an increasingly important source of 
revenue as the Company's installed base of customers grows. Currently, 
approximately 25% of the initial software purchase price charged to the 
Company's customers is dedicated to installation and custom 
modifications, if required. In addition, the Company charges an annual 
fee equivalent to 15% of the initial software purchase price for 
maintenance and software support services.

Customers who purchase maintenance agreements receive Help Desk 
telephone support and product upgrades once the system has been 
installed. The Help Desk provides critical and extensive software 
support to its customers, dealers and field employees by telephone. The 
Help Desk is highly automated, with computer assisted tracking of each 
client call, high speed text search for similar problems, on-line 
manuals, interactive diagnostics and expert systems for guidance through 
special and third party supplier problems. Senior product specialists 
take referral of difficult problems which cannot be easily resolved by 
Help Desk personnel. The Company recently purchased a sophisticated 
software system which will facilitate this two-tiered approach.

MARKETING AND SALES
 
The Company believes that a comprehensive understanding of the business 
issues which are prevalent in a customer's particular market is a key 
component to successful marketing. To this end, PREMIS has compiled an 
industry-specific database, which is continually updated by the sales 
staff and fulfillment services staff based on changing market 
conditions.  This database also contributes to educating personnel in 
the marketing department and in research and development to ensure that 
customer issues, features and requirements are addressed and 
incorporated in future product releases. In addition, the Company seeks 
to provide comprehensive uninterrupted service by utilizing a 
designated team of PREMIS associates for each customer throughout the 
customer's relationship with the Company.  This team consists of 
personnel from sales and marketing, systems integration, and support and 
maintenance.  The Company intends to serve the ongoing needs of smaller 
multi-store retailers through distributor relationships.
 
The Company's sales techniques involve traditional methods, including
development of prospects through telemarketing, direct mail, seminars 
and advertising; development and distribution of marketing literature, 
such as brochures, product technical overviews, newsletters and direct 
marketing letters; direct selling efforts through sales meetings with 
prospective customers; and order fulfillment, including planning, 
training, installation and long-term customer support.  The Company's 
marketing and sales activities continue to be based principally in the 
United States and Canada.
 
The Company estimates that hardware components comprise approximately 
50% to 60% of the cost of a management information system. The Company 
often sells its software systems together with hardware components, 
which are purchased by the Company from a variety of equipment vendors. 
In certain markets, the Company also sells its software directly to 
equipment vendors for resale by the vendors to their end-user customers. 
The Company has developed strategic alliances with key hardware vendors 
of open systems, including NCR which is the primary vendor in this 
market.  To date, PREMIS and NCR have cooperated in a strategic 
alliance partner program which provides customers with turn-key 
solutions including NCR hardware and maintenance services and PREMIS 
software. However, since PREMIS is also an NCR remarketer, it can 
provide hardware as well. The Company is working to expand its hardware 
offerings and may enter into reseller relationships with other hardware 
suppliers.  In addition, PREMIS OpenEnterprise products may be marketed 
with certain Microsoft products.  This has resulted in marketing 
seminars and advertisements presented jointly by the Company and 
Microsoft.

CUSTOMERS

The following list is a sample of current retail customers that are
representative of the types of businesses served by the Company, each 
of whom has purchased products or services from PREMIS during the last 
fiscal year.
 
* U.S. Postal Service
* Cotton Ginny Ltd.
* Gymboree
* NEXCOM (U.S. Navy Exchange Commissaries) 
* Lerner New York

COMPETITION
 
The Company competes directly with other information systems software 
vendors and system integrators that market similar software. The 
Company competes indirectly with certain hardware vendors that offer 
their own proprietary management information system software.

Competition in the Company's markets is based principally upon 
functionality, quality of service and support, type of hardware (i.e., 
the compatibility and availability of desired hardware and software 
components and the ease of integration with the customer's existing 
system) and price. The Company believes that its current and 
anticipated levels of product functionality, service and support are 
generally perceived as comparable or superior to those of its 
competitors. Although the Company's products may be priced higher 
than other products marketed for the same purpose, the Company believes 
that the Company is able to justify its higher prices to customers 
based on the premium value provided by its advanced technological 
design, its integration capability, "complete solution" functionality, 
comprehensive support and maintenance services, and in-depth knowledge 
of its customers' industry requirements.

In the Company's view, its strongest competitors in the specialty 
retail distribution market are those that have the ability to design, 
develop and install enterprise-wide retail automation systems. In 
general, these competitors are highly knowledgeable about the specialty 
retailer's business and about the capabilities of their own products. 
PREMIS believes that its primary direct competitors in the specialty 
retail market are STS Systems, Inc., Datavantage, CRS Business 
Computers, Inc., JDA Software, Inc., as well as other smaller vendors.  
The Company also has several indirect competitors in hardware vendors 
such as IBM, ICL Retail Systems (a division of Fujitsu America Inc.) 
and NCR, that offer, along with their hardware, software systems that
compete with the Company's software products.

TECHNOLOGY AND PRODUCT DEVELOPMENT
 
The Company utilizes state-of-the-art technologies to gather 
relevant information from a business transaction, transport that data 
to a central database, manipulate and analyze the data and provide 
concise and comprehensive reports to the appropriate people within an 
organization to assist them with their day-to-day decisions and 
long-term strategic planning. The Company's software products are 
written in C and object-oriented C++ source code languages which 
enable a programmer to develop a user-friendly GUI and to program 
tasks more efficiently for increased speed.
 
The predominant trend in consumer software is toward a GUI, user-
friendly, menu driven interface. A GUI interface requires the use of 
object-oriented programming languages and programming techniques. PREMIS 
has been using the object-oriented programming language C++ since 1991. 
The Company believes that many of its competitors currently do not have 
GUI products or the ability to utilize this advanced programming 
technique.

The Company's products utilize client/server architecture and relational
databases. The Company utilizes several relational database 
technologies, such as Microsoft(tm) and Sybase(tm), for its software to 
reduce the information processing time required to sort data and to 
allow multiple users to simultaneously access the same information.  
While relational database products have been available since the early 
1980s, they were not considered practical for enterprise-wide 
applications until the widespread implementation of enterprise servers 
in the early 1990s. In a client/server environment, a relational
database can be addressed by the server, which then sends and receives 
data over a local area network to simultaneous multiple users (i.e., 
clients). As server processor technology speeds have increased and the 
cost of servers has decreased, the market for network systems and 
products has expanded.  A business comprising many separate locations, 
such as a retail chain, presents a natural application of client/server 
and relational database technologies.  The Company's management believes 
that client/server architecture will be the dominant networking 
technology for the foreseeable future and that the Company is uniquely 
positioned to capitalize on this trend.
 
The Company believes that it must continue to enhance its current 
products and develop new software and technologies to quickly respond 
to market opportunities. The Company is focusing its product 
development efforts on enhancing the breadth and depth of its current 
products while developing key new add-on features.
 
PROPRIETARY RIGHTS

PREMIS does not own any patents or any registered copyrights or 
trademarks; PREMIS claims trademark protection of the names and marks 
"PREMIS OpenEnterprise", "PREMIS OpenOffice", "PREMIS OpenNet", "PREMIS 
OpenStore", but does not consider such marks to be material to its 
operations.

PREMIS primarily relies on a combination of trade secret laws and
confidentiality agreements to protect its proprietary technology.
 
Although PREMIS no longer markets the IRIS product line to new 
customers, IRIS could be marketed by PREMIS pursuant to the terms of a 
software license and distribution agreement (the "IRIS License") dated 
April 15, 1994, with Commercial Systems Corporation, pursuant to which 
the Company is granted an exclusive worldwide right to license and 
sublicense and to develop, copy, distribute, remarket and maintain 
IRIS for a term ending March 31, 1999. All derivative upgrades, 
enhancements, new releases, new versions and other improvements made 
by PREMIS, and all copyrights, trademark rights, trade secret rights 
and patent rights, as well as all marketing and all other materials
developed by PREMIS with respect to IRIS, are the sole and exclusive 
property of PREMIS.

EMPLOYEES

At June 5, 1998, the Company employed 56 employees (48 full-time 
employees and 8 contract employees).  No employee of the Company is 
represented by a labor union or is subject to a collective bargaining 
agreement.  All employees are covered by agreements containing 
confidentiality provisions.  The Company believes it maintains good 
relations with its employees.  In April 1998, the Company reduced the 
number of staff at its Minneapolis office from 28 to 19 to reflect the
concentration of resources and activity in its Canadian location.

ITEM 2.  Description of Property.

The Company is headquartered in Plymouth, Minnesota.  The Company 
occupies these premises pursuant to a lease, effective 
September 1, 1996, with a limited liability partnership controlled by 
two persons who are officers, directors and principal shareholders of 
the Company. The lease provides approximately 22,000 square feet of 
space at a minimum monthly base rent of $13,477.  PREMIS has prepaid 
$105,000 in rent, which reduces the minimum monthly base rent by $2,816 
for the first 44 months of the lease (an aggregate credit of $105,000 
plus 9% interest per annum). The lease has an initial ten year term, 
ending August 31, 2006, with two successive two-year options for 
renewal.  As of May 1998 the limited liability partnership has placed 
the building up for sale.  Upon the sale of the building the 
Company's lease will be terminated and the unamortized prepaid rent 
will be paid to the Company from the building sales proceeds.  The 
Company intends to relocate its U.S. operations to another facility 
of approximately 5,000 square feet in the same geographic area.

The Company's Canadian subsidiaries currently lease facilities in 
Markham, Ontario (near Toronto) for use as its corporate offices. The 
lease provides 19,893 square feet at a minimum monthly rent of 
CDN$11,083 during calendar 1996 and 1997 pursuant to a ten-year term 
expiring in December 2005, with one option for renewal for an additional 
five-year term. The minimum monthly rent on this lease increases to 
CDN$16,577 in 1998, to CDN$17,820 in 2001, and to CDN$19,893 in 2003.  
The Company believes that this facility will be adequate to meet its
needs in Canada for the foreseeable future.

ITEM 3.  Legal Proceedings.

The Company has commenced legal proceedings against Edward W. Anderson 
and Robert E. Ferguson, the former owners of REF Retail Systems Corp. 
("REF") which the Company acquired on October 1, 1996.  Effective 
July 15, 1997, Mr. Anderson ceased to be employed by the Company as 
President and Chief Executive Officer of PREMIS Systems Canada 
Incorporated (formerly, REF).  Mr. Ferguson resigned as an officer, 
director and employee of REF on October 1, 1996.  The legal proceeding 
against Mr. Anderson was filed in the United States District Court, 
District of Minnesota, Fourth Division on September 16, 1997 
(Case No. 97-2087 MJD/AJB).  The legal proceeding against Mr. Ferguson 
was filed in the Ontario Court of Justice, General Division on 
September 22, 1997 (Case No. 97-CV-132581).  In both proceedings, the 
Company is seeking damages in an unspecified amount related to alleged 
breaches of the agreement for the purchase of REF, and related matters.  
Additionally, the Anderson claim seeks to annul and declare void an 
employment agreement with Mr. Anderson dated October 1, 1996.  Under 
the employment agreement with Mr. Anderson the Company would be required 
to pay Mr. Anderson an amount equal to his base salary that would have 
been payable for the balance of the initial five year term which 
commenced October 1, 1996.  Mr. Anderson's annual base salary at the 
time of termination was CND$150,000.  Mr. Anderson was also granted 
650,000 common stock options under the terms of the employment
agreement.  Effective June 3, 1998 the suit against Anderson and 
the corresponding counterclaim were settled.  Under the settlement 
arrangement with Mr. Anderson the grant of 650,000 common stock options 
has been cancelled along with all other rights afforded to Mr. Anderson 
under his employment agreement. 

The settlement requires the Company to pay Anderson $50,000 within 
thirty days after receipt by the Company of at least $2,000,000 from 
NCR Corporation, the United States Postal Service, or other person, in 
connection with the United States Postal Services' POS ONE software, 
but the Company does not guarantee when or if this payment will be 
received.  Further, the Company releases Anderson of any past and 
future obligations. The Ferguson suit has not been settled as of 
June 28, 1998. The Ferguson suit is scheduled for mediation in
July 1998.

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

No matters were submitted to a vote of security holders during the 
fourth quarter ended March 31, 1998.


PART II

ITEM 5.  Market for Common Equity and Related Stockholder Matters.

MARKET INFORMATION

Since September 26, 1996, the Company's Common Stock has traded on the 
Nasdaq National Market under the symbol PMIS. The following table sets 
forth, for the fiscal quarters indicated, a summary of the high and low 
closing prices of the Common Stock as reported by the Nasdaq National 
Market.  Information for the periods prior to September 26, 1996 
represents high and low bid information as reported on the NASD's 
Electronic Bulletin Board system.  Such bid information reflects 
inter-dealer prices, without retail mark-up, mark-down, or commissions
and does not necessarily reflect actual transactions.


                                   Common Stock
                                 Low         High
 
Fiscal 1997
First Quarter                   $2.125       $4.50
Second Quarter                   3.00         5.125
Third Quarter                    4.938        6.875        
Fourth Quarter                   2.625        6.25

Fiscal 1998
First Quarter                   $1.625       $3.25
Second Quarter                   1.813        2.875
Third Quarter                    1.438        2.25
Fourth Quarter                    .813        1.75

As of June 17, 1998, the Company had 105 stockholders of record and
approximately 1,252 beneficial holders of its Common Stock.

The Company has never declared or paid any dividends on its Common 
Stock.  The Company currently intends to retain any earnings for use 
in its business and therefore does not anticipate paying any dividends 
in the foreseeable future.

Effective August 22, 1997, the NASDAQ Stock Market received approval 
from the Securities and Exchange Commission to implement changes to its 
initial and continued listing requirements.  The new listing 
requirements became effective on February 23, 1998.  On 
December 2, 1997, the Company received notice from the NASDAQ Stock 
Market indicating possible non-compliance with these new requirements. 
On February 26, 1998 the Company received formal notice that it was not 
in compliance with these new requirements.  Under the new continued 
listing requirements the Company does not meet the net tangible assets
requisite of $4 million and the market value of public float requisite 
of $5 million, as defined.  The Company's net tangible assets were 
approximately $2.8 million and $1.9 million at December 31, 1997 and
 March 31, 1998, respectively.  The Company's market value of public 
float calculated by using the Company's reported closing price on 
June 4, 1998 was approximately $4 million.  The Company provided the 
NASDAQ Stock Market a detailed plan of compliance on March 27, 1998 
which was denied on May 5, 1998.  The Company has formally appealed 
the ruling and will be submitting further information for review by a 
new NASDAQ Listing Panel on Thursday, July 2, 1998.  However, there 
can be no assurance that any such plan provided to the NASDAQ Stock 
Market would be approved.  In the event the Company does not meet the 
new continued listing requirements and a plan for compliance is not 
accepted, the Company will be delisted from the National Market System.  
If the Company is delisted the Company will be considered for listing 
on the NASDAQ Small Cap Market under its continued listing requirements. 
As of March 31, 1998 the Company meets all continued listing 
requirements for the NASDAQ Small Cap Market except for the net tangible 
assets requisite of $2 million, as defined.  If the Company fails to 
meet the continued listing requirements for the NASDAQ Small Cap Market 
it will be included on the NASD's Electronic Bulletin Board system.

ITEM 6.  Management Discussion and Analysis.

Results of Operations

REVENUE.  The Company's revenues are divided into two categories: 
systems revenues and maintenance fees and other revenues.  Systems 
revenues are comprised principally of software license, hardware, 
long-term system development contracts and U.S. Postal Service site 
installation revenues.  Maintenance and other services revenues are 
comprised principally of system maintenance contracts.  The Company 
records revenues from software licenses, hardware and site installations 
upon the completion of services and customer acceptance.  Revenues under 
long-term system development contracts are recognized over the period 
the Company satisfies its obligation using the percentage-of-completion 
method of accounting.  Progress on the contracts is measured by the 
percentage of cost incurred to date to the total estimated cost of each 
contract.  Revenues derived from system maintenance contracts are
deferred and recognized ratably over the contract period, which is 
typically twelve months.

Total revenues decreased by 32 percent to $5,945,000 during fiscal 1998, 
down from $8,750,000 in fiscal 1997.  Total revenues were generated 
primarily from long-term system development contracts, maintenance 
contracts and U.S. Postal Service site installations.  As anticipated, 
these revenue sources continue to decline during the transition from 
providing custom system development solutions to the OpenEnterprise 
suite of products.  The decrease was further impacted by lower revenues 
generated from the U.S. Postal Service "Store of the Future" contract.  
In May 1997, the Company completed its final installation under the 
"Store of the Future" program while transitioning to POS ONE
installations.  Under the POS ONE contract, the Company as a 
subcontractor to NCR Corp. no longer provides the hardware for U.S. 
Postal site installations.  As a result the revenue generated per 
site under POS ONE installations is approximately 70% less than 
comparable "Store of the Future" sites.  Additionally, under the 
POS ONE program the Company is developing point-of-sale software as 
a subcontractor to NCR Corp.  POS ONE will be deployed in three phases. 
Phase One is expected to generate revenues of approximately $2,200,000 
upon roll-out which is expected to commence during the first half of 
fiscal 1999.  Phases Two and Three have not yet been awarded by the 
USPS.  As mentioned in Item 1 above, the changes to the framework of
OpenStore have resulted in a delay in its commercial release.  The 
delay of OpenStore significantly impacted the Company's ability to 
generate revenues from its OpenEnterprise suite of products in fiscal 
1998.  The Company expects the first live pilot of OpenEnterprise to 
be successfully implemented during the second quarter of fiscal 1999.

The Company derives a substantial amount of its revenues from a small 
number of customers. Accordingly, the timing of product deliverables, 
the amount of services performed for these customers, and the timing 
of payments by these customers may cause the Company's systems revenues 
to fluctuate.  The Company expects continued volatility in systems 
revenues throughout fiscal 1999 and beyond.

GROSS PROFIT.  Gross profit decreased to $2,484,000 in fiscal 1998 down 
from $4,134,000 in fiscal 1997.  Gross profit as a percentage of revenue 
decreased slightly to 42% in fiscal 1998 from 47% in fiscal 1997.  The 
decline in margin as a percentage of revenue is primarily attributable 
to lower margin custom system development contracts and the continued 
support of previously installed custom development software systems.  
The Company expects gross profit to fluctuate based on the level and 
composition of systems revenues.  

SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and 
administrative expenses increased by 13 percent to $3,145,000 in fiscal
1998 up from $2,788,000 in fiscal 1997.  As a percentage of revenue,
expenses were 53 and 32 for fiscal 1998 and 1997, respectively.  The
increase in absolute dollars reflects the investment in selling,
general and administrative infrastructure during fiscal 1998.

RESEARCH AND DEVELOPMENT.  Research and development expense for fiscal 
1998 and 1997 was $1,780,000 and $736,000, respectively.  The increased 
research and development expenditures are related to the PREMIS 
OpenEnterprise suite of products which include PREMIS OpenStore, PREMIS 
OpenOffice and PREMIS OpenNet.  At the time of the acquisition of REF, 
the Company in conjunction with NCR Corporation decided to make 
significant changes to the underlying framework architecture of
OpenStore.  The changes were initiated as part of a sub-contractor 
arrangement with NCR Corp. in support of the United States Postal 
Service ("USPS") POS ONE project.  Correspondingly, these changes
resulted in a delay of the commercial release of OpenStore.  The changes 
to the framework are expected to significantly enhance the marketability 
of the commercial release of OpenStore.  The Company currently 
anticipates that the first pilot release will be completed and 
commercial introduction will proceed during the second quarter of fiscal 
1999.  In addition, the Company is continuing to enhance its OpenOffice 
and OpenNet products.

PURCHASED RESEARCH AND DEVELOPMENT. The one-time charge in fiscal 1997 
of $6,510,000 relates to purchased research and development in progress, 
expensed in accordance with purchase accounting rules, in connection 
with the acquisition of REF Retail Systems Corp. on October 1, 1996.

INTEREST AND OTHER INCOME.  The difference in interest and other income 
between periods reflects interest earned on investments, as well as 
interest earned on the 5 year 12% note receivable in the original amount 
of $651,000 related to the licensing in fiscal 1997 of ADVANTAGE, the 
Company's Food Brokerage Technology.  Such note is due and payable in 
monthly installments of $14,481.  The interest income is off-set by 
interest expense on various debt instruments, including the Company's 
building capital lease obligation.  Other income was generated from a 
sub-leasing arrangement for a portion of the Company's current U.S. 
office facility.  The sub-leasing arrangement expired on June 30, 1997.

INCOME TAX EXPENSE.  The Company recognized income tax expense of 
$84,000 during fiscal 1998 compared to $319,000 in fiscal 1997.  Income 
tax expense related to fiscal 1998 resulted from the increase in the 
valuation allowance for previously recorded deferred tax assets.  
Income tax expense was partially off-set by tax refunds received in 
fiscal 1998 related to fiscal 1997 tax filings.  The Company had no 
deferred tax asset balance at March 31, 1998 compared to $134,000 at 
March 31, 1997.  The one-time charge related to purchased research 
and development in progress in fiscal 1997 does not result in a tax 
benefit due to differences between financial and tax reporting
requirements.

Liquidity and Capital Resources

The Company's cash and cash equivalents decreased by approximately 
$1,074,000 from March 31, 1997 to March 31, 1998.  The decrease resulted 
primarily from an operating loss of $2,426,000, purchase of capital 
equipment, repayment of notes payable and reduction in the bank line of 
credit.  Cash used in operations was partially off-set by the reduction 
in accounts receivable.  As of March 31, 1998, the Company had working 
capital of $929,000.  The Company's Canadian subsidiary's line of credit 
of $289,000 ($400,000 CAN) bearing interest at the Canadian prime rate 
plus 1% was not renewed as of June 1, 1998.  The line of credit was 
uncommitted and payable upon demand.  Borrowings were limited to 75% 
of eligible accounts receivable, as defined.  There was no outstanding 
balance at March 31, 1998.  The line of credit was collateralized
by substantially all the assets of the Canadian subsidiary (PREMIS 
Systems Canada Incorporated).

Capital expenditures for property and equipment in fiscal 1998 were  
$180,000.  These expenditures primarily consisted of sales promotional 
equipment, computers and related equipment.

On April 15, 1997, the Company authorized the open market repurchase of 
its common stock at times and prices to be determined by management for 
a period of 90 days.  The Company repurchased 28,600 shares at a cost 
of $61,000.  As of June 28, 1998, the Company has no definitive plans 
to acquire additional shares.

Effective July 15, 1997, Edward W. Anderson ceased to be employed by 
the Company as President and Chief Executive Officer of PREMIS Systems 
Canada Incorporated (formerly, REF Retail Systems Corp. Incorporated).  
Under certain circumstances, the Company would have been required to 
pay Mr. Anderson an amount equal to his base salary that would have 
been payable for the balance of the initial 5 year term which commenced 
October 1, 1996.  Mr. Anderson's annual base salary at the time of 
termination was CND$150,000.  The Company's obligation to make such 
payments, if any, arise under its Employment Agreement with 
Mr. Anderson.  Under a settlement agreement with Mr. Anderson 
effective June 3, 1998 the Company is obligated to pay Mr. Anderson 
$50,000 within thirty days after receipt by the Company of at least 
$2,000,000 from NCR Corporation, the United States Postal Service, or 
other person, in connection with the United States Postal Services' 
POS ONE software but the Company does not guarantee when or if this 
payment will be received.  See Part 2, Item 1 herein for information 
on legal proceedings against Mr. Anderson.

The Company experienced a significant loss from operations in fiscal 
1998 which has resulted in a significant reduction in its working 
capital.  As a result of this loss and the reduction of available 
funds, the Company has reduced and expects to continue to reduce its 
expense structure through certain reductions in personnel, facilities 
cost and research and development.  Although the Company believes 
that its current working capital and anticipated operating cash flows 
will be sufficient to fund its operations through March 31, 1999, this 
belief is contingent upon the Company receiving a payment of 
approximately $2.2 million under its United States Postal Service 
POS ONE software development sub-contract with NCR Corp. prior to 
September 30, 1998.  If such payment is not received when anticipated, 
the Company's ability to fund its operations and generate cash flows 
will be significantly and adversely affected.  There is no assurance 
that the POS ONE payment of $2.2 million will be received prior to 
September 30, 1998.  If future circumstances indicate that the Company
will not receive the POS ONE payment prior to September 30, 1998 it 
will require the Company to seek additional equity or debt financing.  
There is no assurance that equity or debt financing will be available 
or, if available, on acceptable terms.

The Company's ability to raise additional capital and/or raise capital 
on acceptable terms could be adversely affected in the event it no 
longer meets the Nasdaq's requirements for continued listing on the 
Nasdaq National Market.  For continued listing on the Nasdaq National 
Market, a company must satisfy a number of requirements, which in the 
Company's instance includes: (1) Net tangible assets in excess of 
$4.0 million and (2) market value of public float in excess of 
$5 million.  The Company's net tangible assets at March 31, 1998
were $1.9 million. The Company's market value of public float 
calculated by using the Company's reported closing price on 
June 4, 1998 was approximately $4 million.  See Part 2, Item 5 
herein for information regarding the Company's position regarding 
compliance with Nasdaq Listing Requirements.

The independent auditors report included in this report on Form 10KSB 
states that the Company's accumulated deficit and working capital as of 
March 31, 1998 raise substantial doubt about the Company's ability to 
continue as a going concern.

Year 2000 Compliance

Many currently installed computer systems and software products are 
coded to accept only two digit entries in the date code field.  These 
date code fields will need to accept four digit entries to distinguish 
21st century dates.  As a result, in less than two years, computer 
systems and software used by many companies may need to be upgraded to 
comply with such "Year 2000" requirements.  The Company believes that 
its OpenEnterprise suite of products and internal systems are Year 2000 
compliant.  The Company has previously installed custom software point 
of sale solutions for retail customers which are not Year 2000
compliant.  The Company has or continues to be in discussions with 
customers regarding options to modify these previously installed systems 
to comply with Year 2000 requirements.  To date these customers have 
decided to either purchase the source code or contract with the 
Company directly to perform work related to Year 2000 issues.  The 
Company does not consider the Year 2000 obligation with respect to 
these previously installed systems to be material to its business 
operations.

Inflation and Seasonality

To date, the Company has not been significantly impacted by inflation.  
The Company's sales and revenues are not seasonal, except that the 
Company's target customer, specialty retailers, will not generally 
install new critical software applications like OpenEnterprise between 
Thanksgiving and New Years.

Forward Looking Statements

The forward looking statements included in Management's Discussion and 
Analysis of Financial Condition and Results of Operations, except for 
the historical information contained herein, contains forward-looking 
statements within the meaning of Section 21E of the Securities Exchange 
Act of 1934, as amended, and is subject to the safe harbor created by 
that statute. Such statements are subject to certain risks and 
uncertainties. In addition to the factors discussed below, other 
factors that could cause actual results to differ materially from 
those described in the forward-looking statements include: 
volatility in the demand and price for retail software systems; the risk 
of delay or deferral of delivery dates and payments for system orders; 
the risk of order cancellations; the risk of delays in introducing new 
software products, including the OpenEnterprise suite of products, 
specifically OpenStore, and the market's acceptance of such products.  
The reader is urged to consider the more comprehensive summary of 
such risks found in the Company's Registration Statement on Form S-2 
(SEC File No. 333-10917) which was declared effective September 26, 
1996.  Readers are cautioned not to place undue reliance on those 
forward looking statements which speak as to matters only as of the 
date hereof. The Company has no obligation to publicly release the 
results of any revisions to these forward-looking statements which 
may be made to reflect events or circumstances after the date hereof 
or to reflect the occurrence of unanticipated events.

ITEM 7.  Financial Statements.

The information required by Item 7 is included in the PREMIS 
Corporation Audited Financial Statements for the year ended 
March 31, 1998, which are included as Exhibit 99.1.

ITEM 8.  Changes in or disagreements with Accountants on Accounting 
and Financial Disclosure.

Not Applicable

PART III

ITEM 9.  Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.

Incorporated by reference to the Company's Proxy Statement for Annual 
Meeting of Shareholders to be filed with the Securities and Exchange 
Commission within 120 days after the close of the fiscal year ended 
March 31, 1998.

ITEM 10.  Executive Compensation.

Incorporated by reference to the Company's Proxy Statement for Annual 
Meeting of Shareholders to be filed with the Securities and Exchange 
Commission within 120 days after the close of the fiscal year ended 
March 31, 1998.

ITEM 11.  Security Ownership of Certain Beneficial Owners and 
Management.

Incorporated by reference to the Company's Proxy Statement for Annual 
Meeting of Shareholders to be filed with the Securities and Exchange 
Commission within 120 days after the close of the fiscal year ended 
March 31, 1998.

ITEM 12.  Certain Relationships and Related Transactions.

Incorporated by reference to the Company's Proxy Statement for Annual 
Meeting of Shareholders to be filed with the Securities and Exchange 
Commission within 120 days after the close of the fiscal year ended 
March 31, 1998.

ITEM 13.  Exhibits and Reports on Form 8-K.

(a)  Exhibits

The following exhibits are filed as part of this Annual Report on 
Form 10-KSB for the fiscal year ended March 31, 1998:

 2.1  REF Stock Purchase Agreement dated July 9, 1996 (2)
 2.2  Amalgamation Agreement dated as of June 30, 1997
 3.1  Articles of Incorporation, as amended through June 1996 (1)
 3.2  Amendment of Articles of Incorporation, dated July 17, 1996 (2)
 3.3  Bylaws (1)
 4.1  Form of certificate representing the Common Stock (2)
10.1  Form of Employment Agreement with Edward A. Anderson (2)
10.2  Form of R. Ferguson Noncompete Agreement (2)
10.3  Form of E. Anderson Noncompete Agreement (2)
10.4  Form of E. Anderson Stock Option Agreement (2)
10.5  Software License and Distribution Agreement between PREMIS 
      Corporation and Information Access Incorporated (exhibits 3.1, 
      3.2 and 3.4, comprising customer names and locations, omitted)(3)
21.1  Subsidiaries of the Registrant
23.1  Consent of Price Waterhouse LLP, independent accountants
99.1  PREMIS Corporation Audited Financial Statements for March 31, 
      1998 and March 31, 1997.

(1)  Incorporated by reference to exhibit filed as a part of Form S-18, 
     SEC File No. 2-85498-C.
(2)  Incorporated by reference to exhibit filed as part of
     registration statement on Form S-2, (SEC File No. 333-10917), 
     effective on September 26, 1996.
(3)  The registrant hereby undertakes to furnish supplementally a copy 
     of any omitted schedule or other attachment to the Securities and 
     Exchange Commission upon request

(b)  REPORTS ON FORM 8K - None

SIGNATURES

Pursuant to the requirements of section 13 or 15(d) of the Securities  
Exchange Act of 1934, as amended, the Registrant has duly caused this 
report to be signed on its behalf by the undersigned, thereunto duly 
authorized.

                            PREMIS Corporation

                            /S/ F. T. Biermeier
                            F. T. Biermeier 
                            (Principal Executive Officer)

                            Dated:  June 29, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf 
of the registrant, and in the capacities on the dates indicated.
        
Signature                                     Date
---------                                     ----


/S/ F. T. Biermeier                       June 29, 1998
F. T. Biermeier 
Chairman and Chief Executive Officer


/S/ Richard R. Peterson                   June 29, 1998
Richard R. Peterson
Chief Financial Officer
(Principal Financial and Accounting Officer)


/S/ Mary Ann Calhoun                      June 29, 1998
Mary Ann Calhoun
Vice President and Director


/S/ Gerald F. Schmidt                     June 29, 1998
Gerald F. Schmidt
Director


/S/ S. Albert D. Hanser                   June 29, 1998
S. Albert D. Hanser
Director


/S/ Terrence W. Glarner                   June 29, 1998
Terrence W. Glarner
Director


                              EXHIBIT 21.1

PREMIS Systems Canada Incorporated, a Nova Scotia, Canada Corporation. 
Principal offices located in Toronto, Canada and amalgamated effective 
June 30, 1997 (1).

REF Retail Systems Corp. Incorporated, a Nova Scotia, Canada 
Corporation.  Principal offices located in Toronto, Canada (1).

The Softworks Group, Inc., an Ontario, Canada Corporation.  Principal 
offices located in Toronto, Canada (2).


(1)  By Order of Amalgamation dated July 15, 1997 PREMIS Systems Canada
     Incorporated and REF Retail Systems Corp. Incorporated were 
     amalgamated effective June 30, 1997.
(2)  The Registrant expects to wind down The Softworks Group, Inc. on 
     September 30, 1998.


                              EXHIBIT 23.1

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-03161) of PREMIS Corporation, of our 
report dated [May 22, 1998] appearing in this Form 10-KSB.


PRICE WATERHOUSE LLP

Minneapolis, Minnesota
[May 22, 1998]


                              EXHIBIT 99.1

PREMIS Corporation
Consolidated Financial Statements
March 31, 1998 and 1997


                       Report of Independent Accountants


To the Stockholders and
  Board of Directors of
  PREMIS Corporation

In our opinion, the accompanying consolidated balance sheet and the 
related consolidated statements of operations, of stockholders' 
equity and of cash flows present fairly, in all material respects, 
the financial position of PREMIS Corporation and its subsidiaries 
at March 31, 1998 and 1997, and the results of their operations and 
their cash flows for the years then ended, in conformity with 
generally accepted accounting principles.  These consolidated financial 
statements are the responsibility of the Company's management; our 
responsibility is to express an opinion on these financial statements 
based on our audits.  We conducted our audits of these statements 
in accordance with generally accepted auditing standards which 
require that we plan and perform the audit to obtain reasonable 
assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the 
financial statements, assessing the accounting principles used and 
significant estimates made by management, and evaluating the overall 
financial statement presentation.  We believe that our audits provide 
a reasonable basis for the opinion expressed above.

The accompanying financial statements have been prepared assuming 
that the Company will continue as a going concern.  As discussed in 
Note 1 to the financial statements, the Company requires additional 
financing and has accumulated a deficit.  These matters raise 
substantial doubt about the Company's ability to continue as a going 
concern.  Management's plans in regard to these matters are also 
described in Note 1.  The financial statements do not include any 
adjustments that might result from the outcome of this uncertainty.


PRICE WATERHOUSE LLP
Minneapolis, Minnesota
May 22, 1998



Premis Corporation
Consolidated Balance Sheet



                                                           March 31,
ASSETS                                               1998            1997

Current assets:
Cash and cash equivalents                         $1,359,773     $2,433,439
Trade accounts receivable, net of 
 allowance for doubtful 
 accounts of $148,183 and $240,581, respectively     610,244      2,136,680
Refundable income taxes                              149,453        246,846
Inventory                                             12,591        396,295
Cost and estimated earning in excess of billings      90,097        164,537
Prepaids and other assets                            200,450        367,466
Deferred taxes                                             -        133,921
Current portion of note receivable                   117,367        104,158

Total current assets                               2,539,975      5,983,342

Property and equipment, net                        1,316,201      1,395,445
Note receivable                                      405,322        522,689
Software distribution rights, net of 
 accumulated amortization
 of $325,211 and $242,763, respectively               82,865        165,314

Total assets                                      $4,344,363     $8,066,790

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable                              $234,043       $587,349
Accrued liabilities                                  369,198        684,297
Accrued income taxes                                   4,550              -
Unearned income                                      858,412        787,065
Bank line of credit                                        -        245,820
Current portion of notes payable - banks              32,403         29,194
Current portion of other notes payable                49,438        144,803
Current portion of capital lease obligation           62,731         55,684

Total current liabilities                          1,610,775      2,534,212

Long-term liabilities:
Unearned income                                            -        186,750
Notes payable - banks                                 53,311         84,256
Other notes payable                                   24,792         68,125
Capital lease obligation                             792,649        855,386

Total long-term liabilities                          870,752      1,194,517

Commitment and contingencies (Note 15)

Stockholders' equity:
Common stock, 10,000,000 shares authorized, 
 4,714,177 and 4,734,027 shares issued and 
 outstanding, $.01 par value                          47,142         47,340
Additional paid-in capital                         9,644,109      9,702,940
Accumulated deficit                               (7,832,909)    (5,406,695)
Cumulative translation adjustment                      4,494         (5,524)

Total stockholders' equity                         1,862,836      4,338,061

Total liabilities and stockholders' equity        $4,344,363     $8,066,790


See accompanying notes to the consolidated financial statements.



Premis Corporation
Consolidated Statement of Operations



                                                   Year Ended March 31,
                                                  1998             1997
Revenue:
System sales                                   $4,215,767     $7,224,948
Maintenance fees and other revenue              1,729,611      1,525,530
Total revenue                                   5,945,378      8,750,478

Cost of sales:
Systems                                         2,853,046      4,400,622
Maintenance and other                             608,706        216,029
Total cost of sales                             3,461,752      4,616,651

Gross profit                                    2,483,626      4,133,827

Operating expenses:
Selling, general, and administrative expenses   3,145,476      2,787,943
Research and development expenses               1,779,802        736,040
Purchased research and development                      -      6,509,981
Total operating expenses                        4,925,278     10,033,964

Loss from operations                           (2,441,652)    (5,900,137)
Interest income, net                               72,744         24,427
Other income                                       26,595         32,613

Loss before income taxes                       (2,342,313)    (5,843,097)

Income tax expense                                 83,901        318,778

Net loss                                      $(2,426,214)   $(6,161,875)

Loss per share - basic and diluted                  $(.51)        $(1.67)

Weighted average shares of common stock and 
common stock equivalents                        4,717,053      3,691,622


See accompanying notes to the consolidated financial statements.


Premis Corporation
Consolidated Statements of Cash Flows


                                                Year Ended March 31,        
                                              1998               1997

Cash flows from operating activities:
Net loss                                    $(2,426,214)   $(6,161,875)
Adjustments to reconcile net loss to 
 net cash provided (used) 
 by operating activities:
Depreciation and amortization                   342,166        206,028
Purchased research and development                    -      6,509,981
Proceeds from note receivable                   104,158         24,153
Changes in assets and liabilities, 
 net of effect from acquisition:
Accounts receivable                           1,526,436       (498,346)
Refundable income taxes                          97,393       (130,190)
Cost and estimated earnings in 
 excess of billings                              74,440        (61,275)
Inventory                                       383,704       (113,575)
Prepaids and other assets                       177,034       (326,573)
Deferred taxes                                  133,921        (77,760)
Accounts payable                               (353,306)        79,508
Accrued liabilities                            (310,549)       (82,342)
Unearned income                                (115,403)      (199,918)

Net cash used by operating activities          (366,220)      (832,184)

Cash flows from investing activities:
Short-term investments                                -        300,000
Purchase of property and equipment             (180,473)      (224,573)
Cash paid in purchase of REF Retail
 Systems                                              -     (6,572,935)
Cash acquired in purchase of REF Retail Systems       -        173,911

Net cash used by investing activities          (180,473)    (6,323,597)

Cash flows from financing activities:
Proceeds from common stock offering                   -      8,729,675
(Repayments) borrowing under line of credit    (245,820)       245,820
Repurchase of common stock                      (60,779)             -
Proceeds from notes payable                      47,500              -
Exercise of common stock options                  1,750        137,320
Repayment of debt                              (213,934)      (152,748)
Capital lease obligations                       (55,690)       (38,930)

Net cash (used) provided by financing act.     (526,973)     8,921,137

Net (decrease) increase in cash              (1,073,666)     1,765,356
Cash and cash equivalents at beg of year      2,433,439        668,083
Cash and cash equivalents at end of year     $1,359,773     $2,433,439


See accompanying notes to the consolidated financial statements.



Premis Corporation
Consolidated Statement of Stockholders' Equity
For the Years Ended March 31, 1998 and 1997



                                            Retained
                               Additional   Earnings   Cumulative
               Common Stock     Paid-in   (Accumulated Translation
              Shares    Amount  Capital     Deficit)   Adjustments  Total

Balance at 
March 31, 1996 2,609,444 $26,094   $731,181    $755,180 $-        $1,512,455

Stock issued 
 through the exercise
 of stock
 options         112,083   1,121    262,209                          263,330

Sale of common stock, 
 net of offering 
 cost of      $2,012,500  20,125  8,709,550                       8,729,675

Currency translation 
 adjustment                                              (5,524)     (5,524)

Net Loss                                      (6,161,875)        (6,161,875)

Balance at 
 March 31,1997 4,734,027  47,340  9,702,940   (5,406,695)(5,524)  4,338,061

Stock issued 
 through the 
 exercise of stock 
 options           8,750      88      1,662                           1,750

Repurchase of 
 common stock    (28,600)   (286)   (60,493)                        (60,779)

Currency translation 
  adjustment                                             10,018      10,018

Net Loss                                      (2,426,214)        (2,426,214)

Balance at 
March 31,1998 4,714,177  $47,142  $9,644,109 $(7,832,909)$4,494  $1,862,836


See accompanying notes to the consolidated financial statements.


Premis Corporation
Notes to Consolidated Financial Statements
March 31, 1998 and 1997


1.  Organization

PREMIS Corporation (the "Company") develops, markets and supports a 
line of enterprise-wide solutions to meet the information needs of 
multi-store specialty and general merchandise retailing chains.  
The Company's information management software systems are designed 
to assist businesses with the day-to-day management of their operations 
and long-term strategic planning.

The accompanying consolidated financial statements are prepared 
assuming the Company will continue as a going concern.  The Company 
incurred an operating loss of $2,426,214 and a decrease in cash and cash 
equivalents of $1,073,666 during the year ended March 31, 1998.  As of 
March 31, 1998, the Company had an accumulated deficit of $7,832,909 
and working capital of $929,200.  The Company's continued existence is 
dependent upon management's ability to return to profitable operations 
and resolve its liquidity problems.  Management anticipates 
profitability will return and that liquidity problems will be resolved 
as a result of the actions described below.  

Management has adopted the following plans for the upcoming year:

-Receive payment of approximately $2,200,000 under the Company's 
United States Postal Service POS ONE software development sub-contract 
by September 30, 1998.

-Continue to develop, market and support its line of enterprise-wide
solutions to the information needs of multi-store specialty and 
general merchandise retailing chains.

-Continue to strengthen its strategic partnering relationships with 
key hardware vendors of open systems.

-Reduce operating costs and ensure the effectiveness of future
expenditures.

If operations and cash flows can be improved through these efforts, 
management believes that the Company can continue to operate.  


2.  Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the 
Company and its subsidiaries.  All intercompany balances and 
transactions have been eliminated in consolidation.

Supplemental Cash Flow Information
                                                     Year Ended March 31,
                                                      1998          1997

Cash paid during the year for interest              $142,425       $83,022
Cash paid during the year for income taxes                 -       944,610
Capital lease obligation                                   -       950,000


Cash and Cash Equivalents

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


Inventories

Inventories are stated at the lower of cost (first-in, first-out) 
or market. Inventories consist primarily of computer equipment held for 
resale.

Property and Equipment

Property and equipment are stated at cost and depreciated for financial
statement purposes on a straight-line basis over the estimated useful 
life of the assets.  Depreciation expense for the years ended 
March 31, 1998 and 1997 was $259,717 and $122,041, respectively.  
A summary of property and equipment is as follows:

                             Depreciation
                                Lives               1998         1997

Building capital lease         10 years           $950,000     $950,000
Furniture and equipment     5 - 7 years            837,126      662,683
Leasehold improvements          7 years             76,994       70,964
Less accumulated depreciation 
 and amortization                                 (547,919)    (288,202)

                                                $1,316,201   $1,395,445


Software Distribution Rights

The Company has acquired certain software marketing licenses and 
distribution rights.  The costs are capitalized and amortized 
using the straight-line method over the term of the agreements 
which range from three to five years.

Foreign Currency Translation and Transactions

Foreign assets and liabilities are translated using the fiscal 
year-end rates of exchange.  Results of operations are translated 
using the average exchange rates throughout the period.  Translation 
gains or losses, net of applicable deferred taxes, are accumulated 
as a separate component of stockholders' equity.

Research and Development Costs

Research and development expenditures are charged to operations 
as incurred.  Statement of Financial Accounting Standards No. 86, 
"Accounting for the Costs of Computer Software to be Sold, Leased 
or Otherwise Marketed," requires capitalization of certain software 
development costs subsequent to the establishment of technological 
feasibility of the products in development.  Costs have not been 
capitalized because post-technological feasibility costs are 
immaterial to both total assets and pre-tax results of operation.

Revenue Recognition

System sales include software license, hardware and long-term system
installation contract revenue.  The Company records revenues from 
softwarelicenses and hardware upon installation and customer acceptance.
Customers are provided with a warranty period which provides customer 
support for a 90-day period.  No reserve has been provided, since 
warranty costs have been insignificant.  After the 90-day warranty 
period, support is provided only if a maintenance contract is in place.
Revenues derived from system maintenance contracts are deferred 
and recognized ratably over the contract period.

Revenues under long-term system installation contracts are recognized 
over the period the Company satisfies its obligation using the 
percentage-of-completion method.  Progress on the contracts is 
measured by the percentage of project hours incurred to date to the 
total estimated number of project hours for each contract.  Management
considers project hours to be the best available measure of progress 
on these contracts.  Changes in conditions and estimated earnings may 
result in review of estimated costs and earnings during the course 
of the contract and are reflected in the accounting period in 
which the facts which require the revisions become known.
In the normal course of business, the Company may also be subject 
to a risk of loss by incurring costs to complete a contract in 
excess of the fixed bid price.

Net Loss Per Share

In 1997, the Financial Accounting Standards Board issued Statement 
No. 128, Earnings Per Share, (Statement 128).  Statement 128 replaced 
the calculation of primary and fully diluted earnings per share with 
basic and diluted earnings per share.  Unlike primary earnings per 
share, basic earnings per share excludes any dilutive effects of 
options, warrants and convertible securities.  Diluted earnings per 
share is very similar to fully diluted earnings per share under the 
previous rules.  All earnings per share amounts for all periods have 
been presented, and where necessary, restated to conform to the 
Statement 128 requirements.  Diluted earnings per share is not 
presented as the effect ofoutstanding options, warrants and 
preferred stock are antidilutive.

Income Taxes

The Company accounts for income taxes under the liability method of 
accounting. Deferred tax assets and liabilities are determined 
based on the difference between the financial statement and tax 
basis of assets and liabilities, reduced by valuation allowances as 
necessary.

Fair Value of Financial Instruments

The Company's financial instruments consist of cash and cash equivalents,
short-term trade receivables and payables for which current carrying amounts
approximate fair market value.  Additionally, interest rates on outstanding
debt are at rates which approximate market rates for debt with similar terms
and average maturities.

Use of Estimates

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

Stock Options

The Company has adopted the disclosure only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," regarding disclosure of pro forma information for stock
compensation.  As is allowed by Statement No. 123, the Company will 
continue to measure compensation cost using the methods described 
in Accounting Principles Board Opinion No. 25, "Accounting for 
Stock Issued to Employees."

Reclassifications

Certain amounts presented in the fiscal 1997 consolidated financial 
statementshave been reclassified to conform with the fiscal 1998 
presentation.


Recently Issued Accounting Standards

In June 1997, the FASB issued No. 130, "Reporting Comprehensive Income." 
Statement No. 130 is effective for fiscal years beginning after December 15,
1997.  This standard defines comprehensive income as the changes in equity of
an enterprise income are required to be reported in a new financial statement. 
Management believes the adoption of Statement No. 130 will not have a material
effect on the Company's financial statements.

Also in June 1997, the FASB issued Statement No. 131, "Disclosures about
Segments of an Enterprise and Related Information."  Statement No. 131 is
effective for years beginning after December 15, 1997.  Statement No. 131
establishes standards for disclosures about operating segments, products and
services, geographic areas and major customers.  Management has not completed
its review of Statement No. 131, but does not anticipate that the adoption will
have a significant effect on the Company's reported segments.

In October 1997, the American Institute of Certified Public Accountants issued
Statement of Position 97-2 ("SOP 97-2"), "Software Revenue Recognition."  This
Statement establishes revenue recognition requirements for companies that sell
software for fiscal years beginning after December 15, 1997.  Management is
currently evaluating the impact of SOP 97-2 and has not determined the result,
if any, on the Company's financial position, results of operations or cash
flows.


3.  Acquisition of REF Retail Systems Corporation

In October 1996, the Company acquired REF Retail Systems Corporation ("REF"), a
Toronto based provider of Windows NT(r)-based specialty retailing management
software, for $6,572,000 cash, which includes expenses of $72,000, in exchange
for all outstanding common stock of REF.  The acquisition has been accounted
for using the purchase method.  Subsequent to the acquisition, the Company
expensed all purchased research and development in process of $6,510,000 based
upon an independent appraisal.

Operating results for the acquisition are included in the accompanying
consolidated statements of operations from October 1, 1996.  Assuming the above
described company had been acquired on April 1, 1996, unaudited pro forma
consolidated revenues, net income (loss) and net income (loss) per share would
have been as follows:

                                                     Year Ended
                                                      March 31,
                                                        1997

Net revenues                                         $10,166,000
Net income (loss)                                    $(7,448,000)
Net income (loss) per share                               $(2.02)


The pro forma information provided above does not purport to be indicative of
the results of operations that would actually have resulted if the acquisition
were made as of those dates or of results which may occur in the future.



4.  Completion of Common Stock Offering

On October 1, 1996, the Company successfully completed a secondary offering of
common stock.  The Company sold 2,012,500 shares of common stock in the
offering for $8,729,675 net of issuance costs of $1,332,825.


5.  Costs, Estimated Earnings and Billings on Uncompleted Contracts in
Progress

Costs, estimated earnings and billings on uncompleted contracts are 
summarized as follows:

                                                   1998           1997
Costs incurred on uncompleted contracts          $184,640       $543,731
Estimated earnings                                133,705        507,292
                                                  318,345      1,051,023
Billings to date                                  228,248        886,486
Costs and estimated earnings in excess of
 billings                                         $90,097       $164,537


The amount is included in current assets as all contracts in progress 
are expected to be completed within one year.

Billings in excess of costs and earnings of $388,288 and $29,745 are
included in unearned income at March 31, 1998 and 1997, respectively.


6.  Lease Commitments

The Company is obligated under various capital and operating leases for
equipment and office facilities.  These leases expire over the next ten years.

The present value of the future minimum capital lease payments for the office
facilities described in Note 15 and future payments due under noncancelable
operating leases, excluding executory costs such as management and maintenance
fees, are as follows:

                                                 Capital       Operating
Fiscal Year Ending March 31,                     Leases          Leases

1999                                            $161,724        $159,255
2000                                             161,724         150,043
2001                                             161,724         148,456
2002                                             161,724         149,988
2003                                             161,724         154,041
Thereafter                                       552,557         459,528

Total future minimum lease payments            1,361,177      $1,221,311

Less:  Amount representing interest             (505,797)
Present value of future minimum capital 
 lease payments                                 $855,380



The cost of the facilities under capital lease was $950,000 and the 
related accumulated deprecation was $150,423 and $55,419 as of 
March 31, 1998 and 1997, respectively.

Total rent expense under operating leases was approximately 
$235,000 and$188,000 for the years ended March 31, 1998 
and 1997, respectively.


7.  Line of Credit

At March 31, 1998, the Company has a $289,200 ($400,000 Canadian dollars)
line of credit, bearing interest at the Canadian prime rate plus 1%.
The Canadian prime rate was 6.5% at March 31, 1998.  The line of 
credit is uncommitted and payable upon demand.  Borrowings are 
limited to 75% of eligible accounts receivable, as defined.  There 
was no balance outstanding at March 31, 1998. The line of credit 
is collateralized by substantially all the assets of PREMIS Systems 
Canada Incorporated (formerly REF Retail Systems Corporation).  The 
Company has guaranteed the payment of the line of credit.  
The line of creditwas terminated subsequent to March 31, 1998.


8.  Stock Options

The PREMIS Corporation 1994 Employee Stock Option Plan (the "Plan") was adopted
to provide incentives to selected eligible officers and key employees of the
Company.  As adopted, the Plan authorizes qualified options for up to 500,000
shares of common stock.  In addition, the Board of Directors has reserved
600,000 shares of common stock for non-qualified stock options.  Options
granted typically have five-year terms and vest annually over four years.
A summary of changes in outstanding options and common shares reserved under
the Plan are as follows:

                                                                     Weighted-
                                            Shares                    Average
                                           Available     Options      Exercise
                                           for Grant   Outstanding     Price

Balance at March 31, 1996                  350,000       731,250       $0.72

Shares authorized                          650,000        	        	
Granted                                 (1,013,158)     1,013,158       5.19
Exercised                                                (112,083)      1.22
Canceled                                   270,417       (270,417)      1.70

Balance at March 31, 1997                  257,259       1,361,908     $3.82

Granted                                   (277,000)        277,000      2.93
Exercised                                                   (8,750)     0.20
Canceled                                   166,500        (166,500)     5.69

Balance at March 31, 1998                  146,759       1,463,658     $3.45



The following table summarizes information about the stock options outstanding
at March 31, 1998:
                                Options Outstanding       Options Exercisable
                                     Weighted-
                                      Average    Weighted-          Weighted-
                                     Remaining    Average            Average
Range of                    Number   Contractual  Exercise   Number   Exercise
Exercise Price           Outstanding    Life       Price   Exercisable Price

$0.15 - $0.50             357,500     5.7 years    $0.17      265,000   $0.17
$1.125 - $3.00            291,579     4.5 years     2.85        6,770    1.69
$5.00 - $6.25             814,579     7.5 years     5.11      691,145    5.03
                        1,463,658     6.5 years    $3.45      962,915   $3.67


Effective April 2, 1998, all stock options for full-time employees priced at
more than $1.31 were canceled and reissued at the then current stock price of
$1.31.  346,000 total options were reissued. In addition, 650,000 options
priced at $5.00 were canceled (see Note 18).

Options outstanding under the Plan expire at various dates from 1999 to 2001. 
The number of options exercisable as of March 31, 1998 and 1997 were 962,915
and 981,250, respectively.  The weighted-average fair value of options granted
during 1998 and 1997 are $2.69 and $2.32, respectively.

Pro forma information regarding net loss and loss per share is required by
Statement No. 123, and has been determined as if the Company had accounted for
its employee stock options under the fair value method of that Statement.  The
fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for 1998 and 1997, respectively; risk-free interest rates of 6.2%;
volatility factors of the expected market price of the Company's Common Stock
of 150% and 40%; and a weighted-average expected life of the option of five
years.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period.  The pro forma effect
on the net loss for 1998 and 1997 does not take into consideration pro forma
compensation expense related to grants made prior to fiscal 1996.  The
Company's pro forma information is as follows:

                                                     Year Ended March 31,
                                                    1998              1997

Pro forma net loss                                $(2,663,598)   $(7,758,000)
Pro forma loss per share                               $(0.56)        $(2.10)



Stock Warrants

Stock warrants for the right to purchase shares of the Company's common stock
have been issued in connection with a common stock offering and other
transactions.  A summary of the Company's warrant activity is as follows:

                                                 Exercise
                                       Number     Price       Expiration

Warrants issued in equity
financing                              175,000    $6.00     September 26, 2001
Warrants issued to consultants          13,968     6.25     December 31, 2001
Outstanding at March 31, 1997          188,968

No activity during 1998        	

Outstanding at March 31, 1998          188,968


The warrant issued in the equity financing vest 100% on September 26, 1997. 
The warrants issued to consultants vested immediately.


9.  Notes Payable

The Company's notes payable - bank at March 31, 1998 and 1997 consist of the
following Small Business Development Loans ("SBDL") and installment note which
are secured by substantially all assets of the Company.

                                                     1998            1997
Note payable - bank (SBDL), monthly 
 principal payments of $936 through 
 December 2000, interest at 3% above the 
 Canadian prime rate (9.5% at March 31,1998)        $29,898         $42,109
Note payable - bank (SBDL), monthly principal 
 payments of $1,170 through February 2001, 
 interest at 3% above the Canadian prime rate 
 (9.5% at March 31, 1998)                            39,663          55,012
Note payable - bank (SBDL), monthly principal 
 payments of $327 through May 2001, interest at 
 3% above the Canadian prime rate 
 (9.5% at March 31, 1998)                            12,015          16,329
Note payable - bank (installment note), 
 monthly payments of $4,143 through April 1998, 
 interest fixed at 8.5%                               4,138 
                                                     85,714         113,450

Less:  Current portion                               32,403          29,194

                                                    $53,311         $84,256



The Company has other notes payable as follows:

                                                     1998            1997
Note payable to an individual
 (assumed with REF acquisition), 
monthly principal payments of $1,506 
 through August 2000, interest at 7%              $42,292          $61,755
Note payable for purchase of software 
 license, monthly payments of $8,342 through 
 April 1998 (see Note 11)                           8,272          102,376
Inventory note payable, monthly 
 payments of $2,384 through February 1999, 
 interest at 9.7%                                  23,666           48,797

                                                   74,230          212,928
Less:  Current portion                             49,438          144,803

                                                  $24,792          $68,125


10.  Income Taxes

Income tax expense is comprised of the following:

                                                    1998            1997
Current income tax provision (benefit):
Federal                                          $(50,020)        $406,000
State                                                   -          (10,000)
Foreign                                                 -         (371,301)
Total current taxes                               (50,020)          24,699

Deferred income taxes:
Federal                                           (61,000)         (59,000)
State                                              (6,000)          (9,000)
Foreign                                        (1,167,270)         (32,921)
Total deferred taxes                           (1,234,270)        (100,921)

Valuation allowance                             1,368,191          395,000
Income tax expense                                $83,901         $318,778


A reconciliation of the expected federal statutory rate for the years ended
March 31, 1998 and 1997 is as follows:

                                                         1998          1997

Expected tax provision (benefit) at statutory
rate                                                 $(106,000)   $(1,987,000)
State income tax provision, net of federal tax
effect                                                 (10,000)        50,000
Non-deductible acquisition costs                             -      2,213,000
Foreign tax benefit                                   (923,000)      (134,000)
Foreign research and development credit               (184,000)      (187,000)
Valuation allowance                                  1,368,191        395,000
Other                                                  (61,290)       (31,222)
                                                       $83,901       $318,778


Deferred tax assets (liabilities) are comprised of the following at March 31:

                                                        1998           1997

Allowance for doubtful accounts                        $39,000        $64,000
Net operating loss carryforwards                     1,277,000        134,000
Business credit carryforwards, net                     393,000        209,000
Deferred facility costs                                 43,000         88,000
Other                                                   11,191         33,921
Gross deferred tax assets                            1,763,191        528,921
Less valuation allowance                            (1,763,191)      (395,000)
        Net deferred tax asset                              $-       $133,921


11.  Purchase of Software License and Distribution Rights

During fiscal year 1995, PREMIS purchased a software license and distribution
rights for a period of five years for $403,910.  In addition to the purchase
price, the Company must make contingent royalty payments based on a percentage
of the net cash receipts from related sales.  The Company capitalized the
purchase price as software distribution rights and is amortizing the amount
over the term of the agreement.  Amortization of $80,782 and $83,987 is
included in cost of sales for the years ended March 31, 1998 and 1997,
respectively.


12.  Employee Benefits

The Company has a retirement savings plan which qualifies under the 
Internal Revenue Code Section 401(k) which covers substantially all 
U.S. employees of the Company.  All employees with at least 90 days
of employment are eligible to participate in the Plan.  The
Company's contributions to the Plan are based on 15% of employee
contributions which are subject to salary limitations.  Company 
contributions to the Plan were approximately $3,312 and $6,500 
for the year ended March 31, 1998 and 1997, respectively.  
There was no discretionary Company contribution in fiscal 1998.

The Company has a defined contribution employee retirement plan 
covering substantially all Canadian employees of the Company.
All employees with at least one year of employment are eligible 
to participate.  The Company's contributions to the plan range 
from 1% to 2% of the employee's compensation depending upon 
length of service.  The Company recognized expense of $5,357 
and $10,147 for contributions to the plan for the year ended 
March 31, 1998 and 1997, respectively.


13.  Significant Customers

Sales to one customer represented 24% and 43% of total revenues 
during 1998 and 1997, respectively.  Additionally, this customer 
represented 16% and 46% of trade accounts receivable at 
March 31, 1998 and 1997, respectively.  Another customer 
accounted for 43% and 15% of total revenues during 1998 and 
1997, respectively and 30% and 25% of year-end trade accounts 
receivable at March 31, 1998 and 1997, respectively.  
A third customer accounted for 10% of year-end trade accounts 
receivable at March 31, 1998.


14.  Software License and Distribution Agreement

On January 1, 1997, the Company and an unaffiliated corporation entered into a
software license and distribution agreement.  The Company, in exchange for the
granting of exclusive worldwide rights to the Advantage System and providing
training and other contract work over a limited time period, received a note
receivable for $651,000.  The note receivable is payable in 60 equal monthly
installments of $14,481 and bears interest at 12%  At March 31, 1998, the
outstanding balance of the note receivable was $522,689 of which $117,367 is
included in current assets.  Licensing revenue is being recognized ratably 
over two years and all training and contract revenue is recognized as 
services are performed.  Unearned revenue at March 31, 1998 and 1997 
was $186,750 and $480,750, respectively.


15.  Related Party Transaction and Commitment

Effective September 1, 1996, the Company entered into a lease agreement which
was recorded as a capital lease.  The Company's executive offices and
operations currently occupy this facility.  The facility is owned by a limited
liability partnership controlled by two officers, directors and principal
stockholders of the Company.  The lease has an initial ten-year term with
monthly base rent of $13,477 and two successive two-year options for renewal. 
On June 30, 1996, the Company prepaid $105,000 in base rent, which reduces the
minimum monthly base rent by $2,816 for the first 44 months of the lease (an
aggregate credit of $105,000 plus 9% interest per annum).  The prepaid rent
balance at March 31, 1998 was $63,879.  The Company has guaranteed the 
mortgage loan obligation of the limited liability partnership with respect 
to this property in the principal amount of $950,000.  This loan carries 
interest at 2.75% over the rate on five-year treasury notes.


16.  Contingencies

As of March 31, 1998 the Company had commenced legal proceedings against 
the two former owners of their Canadian subsidiary.  One of the claims 
was settled subsequent to year-end resulting in a payment by the 
Company of $50,000 in exchange for cancellation of the related 
employment agreement and the cancellation of the individual's 
650,000 stock options.



17.  Segment Information and Foreign Operations

The Company conducts its business within one industry segment: 
software and services for point of sale customers.  Canadian operations 
include the wholly owned subsidiary, Premis Systems Canada Incorporated.

        Revenues, net income and identifiable assets by geographic area 
are summarized as follows:

                                           As or For the Years Ended
                                                   March 31
                                            1998               1997

Revenues from unaffiliated customers:
Domestic operations                       $3,440,191        $6,315,849
Canadian operations                        2,505,187         2,434,629
Consolidated                              $5,945,378        $8,750,478

Net income (loss):
Domestic operations                        $(312,645)         $691,161
Canadian operations                       (2,113,569        (6,853,036)

Consolidated                             $(2,426,214)      $(6,161,875)


                                          As or For the Years Ended
                                                  March 31
                                             1998           1997

Identified assets:
Domestic operations                         $3,561,894    $6,468,027
Canadian operations                            782,469     1,598,763

Consolidated                                $4,344,363    $8,066,790

Transaction gains and losses recorded in income in 1998 and 1997
were immaterial.  There were no intercompany revenues in fiscal
years 1998 and 1997.


18.  Subsequent Event

On June 3, 1998 the Company's legal proceeding with a former employee and
owner of REF Retail Systems Corp. acquired on October 1, 1996 was settled.
Under the terms of the settlement agreement a previous grant of 650,000 
common stock options at an exercise price of $5.00 was canceled along 
with all other rights afforded under an employment agreement dated 
October 1, 1996.  Additionally, the Company is obligated to pay 
$50,000 within thirty days after receipt by the Company of at least 
$2,000,000 in connection with the United States Postal Service 
POS ONE software project.


                              EXHIBIT 2.2

THIS AGREEMENT OF AMALGAMATION dated June 30, 1997

BETWEEN:
                   PREMIS SYSTEMS CANADA INCORPORATED, 
                   a body corporate ("Premis")

                                                 OF THE FIRST PART

                                 - and -

                   REF RETAIL SYSTEMS CORP. INCORPORATED, 
                   a body corporate ("REF")

                                                 OF THE SECOND PART

WHEREAS Premis was incorporated under the laws of Nova Scotia on  
September 25, 1996, and has an authorized capital consisting of  
10,000,000 common shares without nominal or par value;

AND WHEREAS REF was continued under the laws of Nova Scotia on 
November 21, 1996, and has an authorized capital consisting of:

     (a)     5,000 Class A Preferred Shares without par value;
     (b)     925,000 Class B Special Shares without par value;
     (c)     5,000 Class C Special Shares without par value; and
     (d)     5,000 common shares without par value.

AND WHEREAS the shareholders of Premis and REF deem it desirable and in 
the best interests of each of them that they be amalgamated pursuant 
to the provisions of Section 134 of the Companies Act of Nova Scotia;

NOW THEREFORE THIS INDENTURE WITNESSETH that in consideration of the 
premises the parties hereto agree as follows:
1.  Premis and REF shall be amalgamated and continue as one company 
    (the "Amalgamated Company") pursuant to Section 134 of the Companies 
    Act of Nova Scotia.

2.  The attributes and characteristics of the Amalgamated Company shall
    be as follows:

    (a)  The name of the Amalgamated Company shall be "Premis Systems 
         Canada Incorporated".

    (b)  The registered office of the Amalgamated Company shall be 
         situated at Suite 800, 1959 Upper Water Street, Halifax, 
         Nova Scotia, B3J 2X2.

    (c)  The authorized capital of the Amalgamated Company shall consist 
         of 10,000,000 Common Shares without nominal or par value.

    (d)  The liability of the members of the Amalgamated Company shall 
         be limited.

    (e)  The objects of the Amalgamated Company shall be those set out 
         in Schedule "A" attached hereto.

    (f)  The names, occupations and places of residence of the first
         directors of the Amalgamated Company are as follows:

         Name                 Occupation          Place of Residence
         ----                 ----------          ------------------
         Fritz T. Biermeier   Executive           3370 Sycamore Lane
                                                  Plymouth, MINN
                                                  53447
         Such directors are to hold office until the first annual 
         meeting of the shareholders of the Amalgamated Company.

    (g)  Subsequent directors are to be elected at the first annual 
         general meeting of the shareholders of the Amalgamated Company 
         and are to hold office while qualified until their successors 
         are from time to time elected in the manner provided for in the 
         Articles of Association of the Amalgamated Company.

    (h)  The manner of converting the authorized and issued capital of 
         Premis and REF into that of the Amalgamated Company shall be as 
         follows:

          (i) each registered holder of common shares without nominal or 
              par value in the capital stock of Premis shall be entitled 
              to one fully paid and non-assessable common share without 
              nominal or par value in the capital stock of the 
              Amalgamated Company for each common share in the capital 
              stock of Premis held by such registered shareholder on the 
              date of the Order of the Judge of the Supreme Court of 
              Nova Scotia, in Chambers, approving the amalgamation of
              Premis and REF so there will be a total of 100 common 
              shares without nominal or par value of the Amalgamated 
              Company issued to the registered holders of common
              shares in the capital stock of Premis.

         (ii) the capital of REF shall be cancelled.

3.  The Articles of Association of the Amalgamated Company shall be 
    those attached and marked Schedule "B" to this Agreement until 
    repealed, amended, altered or added to.

4.  The Amalgamated Company shall possess all the property, rights,
    privileges and franchises, and shall be subject to all the 
    liabilities, contracts and debts of Premis and REF.

5.  All rights of creditors against the property, rights and assets 
    of Premis and REF respectively and all mortgages, liens or claims 
    upon their respective properties, rights and assets shall be 
    unimpaired by the proposed amalgamation and all debts, contracts, 
    liabilities and duties of Premis and REF respectively shall 
    thenceforth attach to the Amalgamated Company and may be
    enforced against it to the same extent as if the said debts, 
    contracts, liabilities and duties had been incurred or contracted 
    by it.

6.  No action or proceeding by or against Premis or REF shall abate or 
    be affected by the proposed amalgamation but for all purposes of 
    such action or proceeding by or against Premis or REF as the case 
    may be, they shall be deemed still to exist and the Amalgamated 
    Company may be substituted in such action or proceeding in the place 
    thereof.

7.  Neither Premis or REF shall, subsequent to the date hereof, unless
    this Agreement shall fail of confirmation by the shareholders of 
    either Premis or REF or not be approved by a Judge of the Trial 
    Division of the Supreme Court of Nova Scotia, in Chambers:

    (a)  issue any unissued shares of its capital stock, redeem or 
         reduce any shares of its capital stock now outstanding or 
         otherwise alter its existing capital structure; or

    (b)  declare or pay any dividends or make any other distribution 
         in respect of any shares of its outstanding capital stock.

8.  Premis and REF may by resolution of their Boards of Directors assent
    to such alterations or modifications of this Agreement which the 
    shareholders of the respective companies at meetings duly called to 
    consider the same approve or as a Justice of the Supreme Court of 
    Nova Scotia may require, and the expression "this Agreement" as 
    used herein shall be read and construed to mean and include this 
    Agreement as so altered or modified.

IN WITNESS WHEREOF the parties hereto have caused the same to be 
executed in their names and on their behalf and their corporate seals 
to be thereunto affixed by their proper officers duly authorized in that 
behalf.

SIGNED, SEALED AND DELIVERED )          PREMIS SYSTEMS CANADA
    in the presence of:        	    )      INCORPORATED
                                        )
                                        )
                                        )   By:
___________________________  )
        Witness        	                )
                                        )   And:
                                        )
                                        )   REF RETAIL SYSTEMS CORP.
                                        )   INCORPORATED
                                        )
                                        )
                                        )   By:
 __________________________  )
        Witness        	                )
                                        )   And:



                              SCHEDULE "A"

                       MEMORANDUM OF ASSOCIATION
                                   OF
                   PREMIS SYSTEMS CANADA INCORPORATED


1.  The name of the Company is Premis Systems Canada Incorporated.

2.  The restrictions, if any, on the objects and powers of the 
    Company are:   none.

Notwithstanding any restrictions set forth above the Company shall 
expressly have the following powers:

    (a)  To sell or dispose of its undertaking, or a substantial part
         thereof;

    (b)  To distribute any of its property in specie among its members; 
         and

    (c)  To amalgamate with any company or other body of persons.


                              SCHEDULE "B"

                        ARTICLES OF ASSOCIATION
                                   OF

                   PREMIS SYSTEMS CANADA INCORPORATED
                     __________________________________
                                  

                             INTERPRETATION

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

    (1)  "Act" means the Companies Act (Nova Scotia);

    (2)  "Articles" means these Articles of Association of the Company 
         and all amendments hereto;

    (3)  "Company" means the company named above;

    (4)  "director" means a director of the Company;

    (5)  "Memorandum" means the Memorandum of Association of the Company 
         and all amendments thereto;

    (6)  "month" means calendar month;

    (7)  "Office" means the registered office of the Company;

    (8)  "person" includes a body corporate;

    (9)  "proxyholder" includes an alternate proxyholder;

   (10)  "Register" means the register of members kept pursuant to the 
         Act, and where the context permits includes a branch register 
         of members;

   (11)  "Registrar" means the Registrar as defined in the Act;

   (12)  "Secretary" includes any person appointed to perform the duties 
         of the Secretary temporarily;

   (13)  "shareholder" means member as that term is used in the Act 
         in connection with a company limited by shares;

   (14)  "special resolution" has the meaning assigned by the Act;

   (15)  "in writing" and "written" includes printing, lithography 
         and other modes of representing or reproducing words in visible 
         form;

   (16)  words importing number or gender include all numbers and 
         genders unless the context otherwise requires;

2.  The regulations in Table A in the First Schedule to the Act shall 
    not apply to the Company.

3.  The directors may enter into and carry into effect or adopt and 
    carry into effect any agreement made by the promoters of the Company 
    on behalf of the Company and may agree to any modification in the 
    terms of any such agreement, either before or after its execution.

4.  The directors may, out of the funds of the Company, pay all 
    expenses incurred for the incorporation and organization of the 
    Company.

5.  The Company may commence business as soon after incorporation as 
    the directors think fit, notwithstanding that part only of the 
    shares has been allotted.

                                 SHARES

6.  The directors shall control the shares and, subject to the 
    provisions of these Articles, may allot or otherwise dispose of 
    them to such person, at such times, on such terms and conditions 
    and, if the shares have a par value, either at a premium or at par, 
    as they think fit.

7.  The directors may pay on behalf of the Company a reasonable
    commission to any person in consideration of subscribing or agreeing 
    to subscribe (whether absolutely or conditionally) for any shares in 
    the Company, or procuring or agreeing to procure subscriptions 
    (whether absolute or conditional) for any shares in the Company.  
    Subject to the Act, the commission may be paid or satisfied in 
    shares of the Company.

8.  On the issue of shares the Company may arrange among the holders
    thereof differences in the calls to be paid and in the times for 
    their payment.

9.  If the whole or part of the allotment price of any shares is, by 
    the conditions of their allotment, payable in installments, every 
    such installment shall, when due, be payable to the Company by the 
    person who is at such time the registered holder of the shares.

10. Shares may be registered in the names of joint holders not 
    exceeding three in number.

11. Joint holders of a share shall be jointly and severally liable 
    for the payment of all installments and calls due in respect of 
    such share.  On the death of one or more joint holders of shares 
    the survivor or survivors of them shall alone be recognized by the 
    Company as the registered holder or holders of the shares.

12. Save as herein otherwise provided, the Company may treat the
    registered holder of any share as the absolute owner thereof and 
    accordingly shall not, except as ordered by a court of competent 
    jurisdiction or required by statute, be bound to recognize any 
    equitable or other claim to or interest in such share on the part 
    of any other person.

13. The Company is a private company, and:

   (1)  no transfer of any share or prescribed security of the  
        Company shall be effective unless or until approved by the 
        directors;

   (2)  the number of holders of issued and outstanding prescribed
        securities or shares of the Company, exclusive of persons who 
        are in the employment of the Company or in the employment of 
        an affiliate of the Company and exclusive of persons who, 
        having been formerly in the employment of the Company or the 
        employment of an affiliate of the Company, were, while in that
        employment, and have continued after termination of that 
        employment, to own at least one prescribed security or share of 
        the Company, shall not exceed 50 in number, two or more persons 
        or companies who are the joint registered owners of one or more 
        prescribed securities or shares being counted as one holder; 
        and

   (3)  the Company shall not invite the public to subscribe for any of 
        its securities.

In this Article, "private company" and "securities" have the meanings 
ascribed to those terms in the Securities Act (Nova Scotia), and 
"prescribed security" means any of the securities prescribed by the 
Nova Scotia Securities Commission from time to time for the purpose 
of the definition of "private company" in the Securities Act 
(Nova Scotia).

                              CERTIFICATES

14. Certificates of title to shares shall comply with the Act and may 
    otherwise be in such form as the directors may from time to time 
    determine.  Unless the directors otherwise determine, every 
    certificate of title to shares shall be signed manually by at least 
    one of the Chairman, President, Secretary, Treasurer, a 
    vice-president, an assistant secretary, any other officer of the
    Company or any director of the Company or by or on behalf of a share 
    registrar transfer agent or branch transfer agent appointed by the 
    Company or by any other person whom the directors may designate.  
    When signatures of more than one person appear on a certificate all 
    but one may be printed or otherwise mechanically reproduced.  All 
    such certificates when signed as provided in this Article shall be 
    valid and binding upon the Company.  If a certificate contains
    a printed or mechanically reproduced signature of a person, the 
    Company may issue the certificate, notwithstanding that the person 
    has ceased to be a director or an officer of the Company and the 
    certificate is as valid as if such person were a director or an 
    officer at the date of its issue.  Any certificate representing 
    shares of a class publicly traded on any stock exchange shall be 
    valid and binding on the Company if it complies with the rules of 
    such exchange whether or not it otherwise complies with this 
    Article.

15. Except as the directors may determine, each shareholder's shares 
    may be evidenced by any number of certificates so long as the 
    aggregate of the shares stipulated in such certificates equals the 
    aggregate registered in the name of the shareholder.

16. Where shares are registered in the names of two or more persons, 
    the Company shall not be bound to issue more than one certificate 
    or set of certificates, and such certificate or set of certificates 
    shall be delivered to the person first named on the Register.

17. Any certificate that has become worn, damaged or defaced may, upon
    its surrender to the directors, be cancelled and replaced by a new 
    certificate.  Any certificate that has become lost or destroyed may
    be replaced by a new certificate upon proof of such loss or 
    destruction to the satisfaction of the directors and the furnishing 
    to the Company of such undertakings of indemnity as the directors 
    deem adequate.

18. The sum of one dollar or such other sum as the directors from time
    to time determine shall be paid to the Company for every certificate 
    other than the first certificate issued to any holder in respect of 
    any share or shares.

19. The directors may cause one or more branch Registers of shareholders
    to be kept in any place or places, whether inside or outside of 
    Nova Scotia.

                                 CALLS

20. The directors may make such calls upon the shareholders in respect
    of all amounts unpaid on the shares held by them respectively and 
    not made payable at fixed times by the conditions on which such 
    shares were allotted, and each shareholder shall pay the amount of 
    every call so made to the person and at the times and places 
    appointed by the directors.  A call may be made  payable by 
    installments.

21. A call shall be deemed to have been made at the time when the
    resolution of the directors authorizing such call was passed.

22. At least 14 days' notice of any call shall be given, and such 
    notice shall specify the time and place at which and the person 
    to whom such call shall be paid.

23. If the sum payable in respect of any call or installment is not 
    paid on or before the day appointed for the payment thereof, the 
    holder for the time being of the share in respect of which the 
    call has been made or the installment is due shall pay interest 
    on such call or installment at the rate of 9% per year or such 
    other rate of interest as the directors may determine from the 
    day appointed for the payment thereof up to the time of actual 
    payment.

24. At the trial or hearing of any action for the recovery of any 
    amount due for any call, it shall be sufficient to prove that the 
    name of the shareholder sued is entered on the Register as the 
    holder or one of the holders of the share or shares in respect of 
    which such debt accrued, that the resolution making the call is 
    duly recorded in the minute book and that such notice of such call 
    was duly given to the shareholder sued in pursuance of these 
    Articles.  It shall not be necessary to prove the appointment of 
    the directors who made such call or any other matters whatsoever 
    and the proof of the matters stipulated shall be conclusive evidence 
    of the debt.

25. The directors may receive from any shareholder willing to advance 
    it all or any part of the amount due upon shares held by such 
    shareholder beyond the sums called for; and upon the amount so paid 
    or satisfied in advance or so much thereof as from time to time 
    exceeds the amount of the calls then made upon the shares in respect 
    of which such advance has been made, the Company may pay interest at 
    such rate or permit such participation in profits upon the amount so 
    paid or satisfied in advance as the shareholder paying such sum in
    advance and the directors agree.

                          FORFEITURE OF SHARES

26. If any shareholder fails to pay any call or installment on or before
    the day appointed for payment, the directors may at any time 
    thereafter while the call or installment remains unpaid serve a 
    notice on such shareholder requiring payment thereof together with 
    any interest that may have accrued and all expenses that may have 
    been incurred by the Company by reason of such non-payment.

27. The notice shall name a day (not being less than 14 days after the
    date of the notice) and a place or places on and at which such call 
    or installment and such interest and expenses are to be paid.  The 
    notice shall also state that, in the event of non-payment on or 
    before the day and at the place or one of the places so named, the 
    shares in respect of which the call was made or installment is 
    payable will be liable to be forfeited.

28. If the requirements of any such notice are not complied with, any
    shares in respect of which such notice has been given may at any 
    time thereafter, before payment of all calls or installments, 
    interest and expenses due in respect thereof, be forfeited by a 
    resolution of the directors to that effect.  Such forfeiture shall 
    include all dividends declared in respect of the forfeited shares 
    and not actually paid before the forfeiture.

29. When any share has been so forfeited, notice of the resolution 
    shall be given to the shareholder in whose name it stood immediately 
    prior to the forfeiture and an entry of the forfeiture shall be made 
    in the Register.

30. Any share so forfeited shall be deemed the property of the Company
    and the directors may sell, re-allot or otherwise dispose of it in 
    such manner as they think fit.

31. The directors may at any time before any share so forfeited has 
    been sold, re-allotted or otherwise disposed of, annul the 
    forfeiture thereof upon such conditions as they think fit.

32. Any shareholder whose shares have been forfeited shall 
    nevertheless be liable to pay and shall forthwith pay to the Company 
    all calls, installments, interest and expenses owing upon or in 
    respect of such shares at the time of the forfeiture together with
    interest thereon at the rate of 9% per year or such other rate of 
    interest as the directors may determine from the time of forfeiture 
    until payment.  The directors may enforce such payment if they 
    think fit, but are under no obligation to do so.

33. A certificate signed by the Secretary stating that a share has 
    been duly forfeited on a specified date in pursuance of these 
    Articles and the time when it was forfeited shall be conclusive 
    evidence of the facts therein stated as against any person who would 
    have been entitled to the share but for such forfeiture.

                             LIEN ON SHARES

34. The Company shall have a first and paramount lien upon all shares
    (other than fully paid-up shares) registered in the name of a 
    shareholder (whether solely or jointly with others) and upon the 
    proceeds from the sale thereof for debts, liabilities and other 
    engagements of the shareholder, solely or jointly with any other 
    person, to or with the Company, whether or not the period for the 
    payment, fulfilment or discharge thereof has actually arrived,
    and such lien shall extend to all dividends declared in respect of 
    such shares.  Unless otherwise agreed, the registration of a 
    transfer of shares shall operate as a waiver of any lien of the 
    Company on such shares.

35. For the purpose of enforcing such lien the directors may sell the
    shares subject to it in such manner as they think fit, but no sale 
    shall be made until the period for the payment, fulfillment or 
    discharge of such debts, liabilities or other engagements has 
    arrived, and until notice in writing of the intention to sell has 
    been given to such shareholder or the shareholder's executors or 
    administrators and default has been made by them in such payment,
    fulfillment or discharge for seven days after such notice.

36. The net proceeds of any such sale after the payment of all costs
    shall be applied in or towards the satisfaction of such debts, 
    liabilities or engagements and the residue, if any, paid to such 
    shareholder.

                            VALIDITY OF SALES

37. Upon any sale after forfeiture or to enforce a lien in purported
    exercise of the powers given by these Articles the directors may 
    cause the purchaser's name to be entered in the Register in respect 
    of the shares sold, and the purchaser shall not be bound to see to 
    the regularity of the proceedings or to the application of the 
    purchase money, and after the purchaser's name has been entered in 
    the Register in respect of such shares the validity of the sale 
    shall not be impeached by any person and the remedy of any person 
    aggrieved by the sale shall be in damages only and against the 
    Company exclusively.

                           TRANSFER OF SHARES

38. The instrument of transfer of any share in the Company shall be
    signed by the transferor.  The transferor shall be deemed to remain 
    the holder of such share until the name of the transferee is 
    entered in the Register in respect thereof and shall be entitled to 
    receive any dividend declared thereon before the registration of 
    the transfer.

39. The instrument of transfer of any share shall be in writing in the
    following form or to the following effect:

For value received,_______________________ hereby sell, assign, and 
transfer unto__________________________________ shares in the capital 
of the Company represented by the within certificate, and do hereby 
irrevocably constitute and appoint_____________________________ attorney
to transfer such shares on the books of the Company with full power of 
substitution in the premises.

Dated the _______ day of ______________________, 19____.

Witness:

40. The directors may, without assigning any reason therefor, decline 
    to register any transfer of shares

    (1)  not fully paid-up or upon which the Company has a lien, or

    (2)  the transfer of which is restricted by any agreement to which 
         the Company is a party.

41. Every instrument of transfer shall be left for registration at the
    Office of the Company, or at any office of its transfer agent where 
    a Register is maintained, together with the certificate of the 
    shares to be transferred and such other evidence as the Company may 
    require to prove title to or the right to transfer the shares.

42. The directors may require that a fee determined by them be paid
    before or after registration of any transfer.

43. Every instrument of transfer shall, after its registration, remain
    in the custody of the Company.  Any instrument of transfer that 
    the directors decline to register shall, except in case of fraud, 
    be returned to the person who deposited it.

                         TRANSMISSION OF SHARES

44. The executors or administrators of a deceased shareholder (not 
    being one of several joint holders) shall be the only persons 
    recognized by the Company as having any title to the shares 
    registered in the name of such shareholder.  When a share is 
    registered in the names of two or more joint holders, the survivor 
    or survivors or the executors or administrators of the deceased 
    survivor, shall be the only persons recognized by the Company as
    having any title to, or interest in, such share.

45. Notwithstanding anything in these Articles, if the Company has 
    only one shareholder (not being one of several joint holders) and 
    that shareholder dies, the executors or administrators of the 
    deceased shareholder shall be entitled to register themselves in the 
    Register as the holders of the shares registered in the name of the 
    deceased shareholder whereupon they shall have all the rights given 
    by these Articles and by law to shareholders.

46. Any person entitled to shares upon the death or bankruptcy of any
    shareholder or in any way other than by allotment or transfer may, 
    upon producing such evidence of entitlement as the directors 
    require, may be registered as a shareholder in respect of such 
    shares, or may, without being registered, transfer such shares 
    subject to the provisions of these Articles respecting the transfer 
    of shares.  The directors shall have the same right to refuse 
    registration as if the transferee were named in an ordinary transfer 
    presented for registration.

                          SURRENDER OF SHARES

47. The directors may accept the surrender of any share by way of
    compromise of any question as to the holder being properly 
    registered in respect thereof.  Any share so surrendered may be 
    disposed of in the same manner as a forfeited share.

                             SHARE WARRANT

48. The Company, with respect to any fully paid-up shares, may issue
    warrants ("Share Warrants") stating that the bearer is entitled to 
    the shares therein specified, and may provide, by coupons or 
    otherwise, for the payment of future dividends on the shares 
    included in the Share Warrants.

49. The directors may determine and vary the conditions upon which 
    Share Warrants will be issued and, without limiting the generality 
    of the foregoing, may determine the conditions upon which

   (1)  a new Share Warrant or coupon will be issued in the place of 
        one worn out, defaced, lost or destroyed, or

   (2)  the bearer of a Share Warrant will be entitled to attend and
        vote at general meetings, or

   (3)  a Share Warrant may be surrendered and the name of the bearer
        entered in the Register in respect of the shares therein 
        specified.  Subject to such conditions and to these Articles 
        the bearer of a Share Warrant shall be a shareholder to the full 
        extent.  The bearer of a Share Warrant shall be subject to the 
        conditions for the time being in force, whether made before or 
        after the issue of the Share Warrant.

                   INCREASE AND REDUCTION OF CAPITAL

50. Subject to the Act, the Company may by resolution of its
    shareholders increase its share capital by the creation of new 
    shares of such amount as it thinks expedient.

51. Subject to the Act, the new shares may be issued upon such terms 
    and conditions and with such rights, privileges, limitations, 
    restrictions and conditions attached thereto as the Company by 
    resolution of its shareholders determines or, if no direction is 
    given, as the directors determine.

52. The Company by resolution of its shareholders may, before the 
    issue of any new shares, determine that such shares or any of them 
    shall be offered in the first instance to all the then shareholders 
    or to the holders of any class or series of shares in proportion to 
    the amount of the capital held by them, or make any other provisions 
    as to the issue and allotment of such shares.  In default of any 
   such determination or to the extent that it does not apply, the 
    directors shall control the new shares.

53. Except as otherwise provided by the conditions of issue, or by these
    Articles, any capital raised by the creation of new shares shall be 
    considered part of the original capital and shall be subject to the 
    provisions herein contained with reference to payment of calls and 
    installments, transfer and transmission, forfeiture, lien and 
    otherwise.

54. The Company may, by special resolution where required, reduce its
    share capital in any way and with and subject to any incident 
    authorized and consent required by law.

                         ALTERATION OF CAPITAL
 
55. Subject to the Act, the Company may by resolution of its
    shareholders:

    (1)  consolidate and divide all or any of its share capital into 
         shares of larger amount than its existing shares;

    (2)  convert all or any of its paid-up shares into stock and 
         reconvert that stock into paid-up shares of any denomination;

    (3)  exchange shares of one denomination for another; or

    (4)  cancel shares which, at the date of the passing of the 
         resolution in that behalf, have not been taken or agreed to be 
         taken by any person, and diminish the amount of its share 
         capital by the amount of the share so cancelled.

56. Subject to the Act, the Company may by special resolution:

    (1)  subdivide its shares, or any of them, into shares of smaller 
         amount than is fixed by the Memorandum, so, however, that in 
         the subdivision the proportion between the amount paid and the 
         amount, if any, unpaid on each reduced share shall be the same 
         as it was in the case of the share from which the reduced share 
         is derived and the special resolution whereby any share is
         subdivided may determine that as between the holders of the 
         shares resulting from such subdivision, one or more of such 
         shares shall have some preference or special advantage as 
         regards dividend, capital, voting or otherwise, over, or
         as compared with, the others or other;

    (2)  convert any part of its issued or unissued share capital into
         preference shares redeemable or purchasable by the Company;

    (3)  provide for the issue of shares without any nominal or par 
         value provided that, upon any such issue, a declaration 
         executed by the Secretary must be filed with the Registrar 
         stating the number of shares issued and the amount received 
         therefor;

    (4) convert all or any of its previously authorized, unissued or 
        issued, fully paid-up shares, other than preferred shares, with 
        nominal or par value into the same number of shares without any 
        nominal or par value, and reduce, maintain or increase 
        accordingly its liability on any of its shares so converted; 
        provided that the power to reduce its liability on any of its 
        shares so converted may, where it results in a reduction of 
        capital, only be exercised subject to confirmation by the court 
        as provided by the Act; or

    (5) convert all or any of its previously authorized, unissued or 
        issued,fully paid-up shares without nominal or par value into 
        the same or a different number of shares with nominal or par 
        value, and for such purpose the shares issued without nominal 
        or par value and replaced by shares with a nominal or par value 
        shall be considered as fully paid, but their aggregate par value 
        shall not exceed the value of the net assets of the Company as 
        represented by the shares without par value issued before the 
        conversion.

57. Subject to the Act and any provisions attached to such shares, the
    Company may redeem, purchase or acquire any of its shares and the 
    directors may determine the manner and the terms for redeeming, 
    purchasing or acquiring such shares and may provide a sinking fund 
    on such terms as they think fit for the redemption, purchase or 
    acquisition of shares of any class or series.

                       INTEREST ON SHARE CAPITAL

58. The Company may pay interest at a rate not exceeding 6% per year 
    on share capital issued and paid-up for the purpose of raising funds 
    to defray the expenses of the construction of any works or buildings 
    or the provision of any plant which cannot be operated profitably
    for a lengthy period of time.  Such interest may be paid for such 
    period and may be charged to capital as part of the cost of 
    construction of the work or building or of the provision of the
    plant.  The payment of the interest shall not operate to reduce 
    the amount paid-up on the shares in respect of which it is paid.  
    The accounts of the Company shall show full particulars of the 
    payment during the period to which the accounts relate.

                      CLASSES AND SERIES OF SHARES

59. Subject to the Act and the Memorandum, and without prejudice to 
    any special rights previously conferred on the holders of existing 
    shares, any share may be issued with such preferred, deferred or 
    other special rights, or with such restrictions, whether in regard 
    to dividends, voting, return of share capital or otherwise, as the 
    Company may from time to time determine by special resolution.

                 MEETINGS AND VOTING BY CLASS OR SERIES

60. Where the holders of shares of a class or series have, under the
    Act, the Memorandum, the terms or conditions attaching to such 
    shares or otherwise, the right to vote separately as a class in 
    respect of any matter then, except as provided in the Act, the 
    Memorandum, these Articles or such terms or conditions, all the 
    provisions in these Articles concerning general meetings 
    (including, without limitation, provisions respecting notice, 
    quorum and procedure) shall, mutatis mutandis, apply to every 
    meeting of holders of such class or series of shares convened for 
    the purpose of such vote.

61. Unless the rights, privileges, terms or conditions attached to a
    class or series of shares provide otherwise, such class or series 
    of shares shall not have the right to vote separately as a class 
    or series upon an amendment to the Memorandum or Articles to:

   (1) increase or decrease any maximum number of authorized shares 
       of such class or series, or increase any maximum number of 
       authorized shares of a class or series having rights or 
       privileges equal or superior to the shares of such class or 
       series;

   (2) effect an exchange, reclassification or cancellation of all or 
       part of the shares of such class or series; or

   (3) create a new class or series of shares equal or superior to the
       shares of such class or series.

                            BORROWING POWERS

62. The directors on behalf of the Company may:

    (1)  raise or borrow money for the purposes of the Company or any 
         of them;

    (2)  secure, subject to the sanction of a special resolution where
         required by the Act, the repayment of funds so raised or 
         borrowed in such manner and upon such terms and conditions in 
         all respects as they think fit, and in particular by the 
         execution and delivery of mortgages of the Company's real or 
         personal property, or by the issue of bonds, debentures or 
         other securities of the Company secured by mortgage or other 
         charge upon all or any part of the property of the Company, 
         both present and future, including its uncalled capital for 
         the time being;

    (3)  sign or endorse bills, notes, acceptances, cheques, contracts, 
         and other evidence of or securities for funds borrowed or to be 
         borrowed for the purposes aforesaid;

    (4)  pledge debentures as security for loans;

    (5)  guarantee obligations of any person.

63. Bonds, debentures and other securities may be made assignable, free
    from any equities between the Company and the person to whom such 
    securities were issued.

64. Any bonds, debentures and other securities may be issued at a
    discount, premium or otherwise and with special privileges as to 
    redemption, surrender, drawings, allotment of shares, attending and 
    voting at general meetings of the Company, appointment of directors 
    and other matters.

                            GENERAL MEETINGS

65. Ordinary general meetings of the Company shall be held at least 
    once in every calendar year at such time and place as may be 
    determined by the directors and not later than 15 months after the 
    preceding ordinary general meeting.  All other meetings of the 
    Company shall be called special general meetings.  Ordinary or 
    special general meetings may be held either within or without the 
    Province of Nova Scotia.

66. The President, a vice-president or the directors may at any time
    convene a special general meeting, and the directors, upon the 
    requisition of shareholders in accordance with the Act shall 
    forthwith proceed to convene such meeting or meetings to be held at 
    such time and place or times and places as the directors determine.

67. The requisition shall state the objects of the meeting requested, be
    signed by the requisitionists and deposited at the Office of the 
    Company.  It may consist of several documents in like form each 
    signed by one or more of the requisitionists.

68. At least seven clear days' notice, or such longer period of notice
    as may be required by the Act, of every general meeting, specifying 
    the place, day and hour of the meeting and, when special business is 
    to be considered, the general nature of such business, shall be 
    given to the shareholders entitled to be present at such meeting by 
    notice given as permitted by these Articles.  With the consent in 
    writing of all the shareholders entitled to vote at such meeting, 
    a meeting may be convened by a shorter notice and in any manner 
    they think fit, or notice of the time, place and purpose of the 
    meeting may be waived by all of the shareholders.

69. When it is proposed to pass a special resolution, the two meetings
    may be convened by the same notice, and it shall be no objection to 
    such notice that it only convenes the second meeting contingently 
    upon the resolution being passed by the requisite majority at the 
    first meeting.

70. The accidental omission to give notice to a shareholder, or
    non-receipt of notice by a shareholder, shall not invalidate any 
    resolution passed at any general meeting.

                              RECORD DATES

71. (1)  The directors may fix in advance a date as the record date 
         for the determination of shareholders

         (a)  entitled to receive payment of a dividend or entitled to 
              receive any distribution;

         (b)  entitled to receive notice of a meeting; or

         (c)  for any other purpose.

    (2)  If no record date is fixed, the record date for the 
         determination of shareholders

         (a)  entitled to receive notice of a meeting shall be the day 
              immediately preceding the day on which the notice is 
              given, or, if no notice is given, the day on which the 
              meeting is held; and

         (b)  for any other purpose shall be the day on which the 
              directors pass the resolution relating to the particular 
              purpose.

                    PROCEEDINGS AT GENERAL MEETINGS

72. The business of an ordinary general meeting shall be to receive and
    consider the financial statements of the Company and the report of 
    the directors and the report, if any, of the auditors, to elect 
    directors in the place of those retiring and to transact any other 
    business which under these Articles ought to be transacted at an 
    ordinary general meeting.

73. No business shall be transacted at any general meeting unless the
    requisite quorum is present at the commencement of the business.  
    A corporate shareholder of the Company that has a duly authorized 
    agent or representative present at any such meeting shall for the 
    purpose of this Article be deemed to be personally present at such 
    meeting.

74. One person, being a shareholder, proxyholder or representative of 
    a corporate shareholder, present and entitled to vote shall 
    constitute a quorum for a general meeting, and may hold a meeting.

75. The Chairman shall be entitled to take the chair at every general
    meeting or, if there be no Chairman, or if the Chairman is not 
    present within fifteen 15 minutes after the time appointed for 
    holding the meeting, the President or, failing the President, 
    a vice-president shall be entitled to take the chair.  If the 
    Chairman, the President or a vice-president is not present
    within 15 minutes after the time appointed for holding the meeting 
    or if all such persons present decline to take the chair, the 
    shareholders present entitled to vote at the meeting shall choose 
    another director as chairman and if no director is present or if 
    all the directors present decline to take the chair, then such 
    shareholders shall choose one of their number to be chairman.

76. If within half an hour from the time appointed for a general 
    meeting a quorum is not present, the meeting, if it was convened 
    pursuant to a requisition of shareholders, shall be dissolved; if 
    it was convened in any other way, it shall stand adjourned to the 
    same day, in the next week, at the same time and place.  If at 
    the adjourned meeting a quorum is not present within half an hour 
    from the time appointed for the meeting, the shareholders present 
    shall be a quorum and may hold the meeting.

77. Subject to the Act, at any general meeting a resolution put to the
    meeting shall be decided by a show of hands unless, either before 
    or on the declaration of the result of the show of hands, a poll is 
    demanded by the chairman, a shareholder or a proxyholder; and unless 
    a poll is so demanded, a declaration by the chairman that the 
    resolution has been carried, carried by a particular majority, lost 
    or not carried by a particular majority and an entry to that effect 
    in the Company's book of proceedings shall be conclusive evidence 
    of the fact without proof of the number or proportion of the votes
    recorded in favour or against such resolution.

78. When a poll is demanded, it shall be taken in such manner and at
    such time and place as the chairman directs, and either at once or 
    after an interval or adjournment or otherwise.  The result of the 
    poll shall be the resolution of the meeting at which the poll was 
    demanded.  The demand of a poll may be withdrawn.  When any dispute 
    occurs over the admission or rejection of a vote, it shall be 
    resolved by the chairman and such determination made in good
    faith shall be final and conclusive.

79. The chairman shall not have a casting vote in addition to any 
    vote or votes that the Chairman has as a shareholder.

80. The chairman of a general meeting may with the consent of the
    meeting adjourn the meeting from time to time and from place to 
    place, but no business shall be transacted at any adjourned 
    meeting other than the business left unfinished at the meeting 
    that was adjourned.

81. Any poll demanded on the election of a chairman or on a question 
    of adjournment shall be taken forthwith without adjournment.

82. The demand of a poll shall not prevent the continuance of a 
    meeting for the transaction of any business other than the 
    question on which a poll has been demanded.

                         VOTES OF SHAREHOLDERS

83. Subject to the Act and to any provisions attached to any class or
    series of shares concerning voting rights

    (1)  on a show of hands every shareholder present in person, every 
         duly authorized representative of a corporate shareholder, and, 
         if not prevented from voting by the Act, every proxyholder, 
         shall have one vote; and

    (2)  on a poll every shareholder present in person, every duly 
         authorized representative of a corporate shareholder, and 
         every proxyholder, shall have one vote for every share held; 
         whether or not such representative or proxyholder is a 
         shareholder.

84. Any person entitled to transfer shares upon the death or bankruptcy
    of any shareholder or in any way other than by allotment or transfer 
    may vote at any general meeting in respect thereof in the same 
    manner as if such person were the registered holder of such shares 
    so long as the directors are satisfied at least 48 hours before the 
    time of holding the meeting of such person's right to transfer such 
    shares.

85. Where there are joint registered holders of any share, any of such
    holders may vote such share at any meeting, either personally or by 
    proxy, as if solely entitled to it.  If more than one joint holder 
    is present at any meeting, personally or by proxy, the one whose 
    name stands first on the Register in respect of such share shall 
    alone be entitled to vote it.  Several executors or administrators 
    of a deceased shareholder in whose name any share stands shall for 
    the purpose of this Article be deemed joint holders thereof.

86. Votes may be cast either personally or by proxy or, in the case of 
    a corporate shareholder by a representative duly authorized under 
    the Act.

87. A proxy shall be in writing and executed in the manner provided in
    the Act.  A proxy or other authority of a corporate shareholder does 
    not require its seal.  Holders of Share Warrants shall not be 
    entitled to vote by proxy in respect of the shares included in such 
    warrants unless otherwise expressed in such warrants.

88. A shareholder of unsound mind in respect of whom an order has been
    made by any court of competent jurisdiction may vote by guardian or 
    other person in the nature of a guardian appointed by that court, 
    and any such guardian or other person may vote by proxy.

89. A proxy and the power of attorney or other authority, if any, 
    under which it is signed or a notarially certified copy of that 
    power or authority shall be deposited at the Office of the Company 
    or at such other place as the directors may direct.  The directors 
    may, by resolution, fix a time not exceeding 48 hours excluding 
    Saturdays and holidays preceding any meeting or adjourned meeting 
    before which time proxies to be used at that meeting must be
    deposited with the Company at its Office or with an agent of the 
    Company.  Notice of the requirement for depositing proxies shall 
    be given in the notice calling the meeting.  The chairman of the 
    meeting shall determine all questions as to validity of proxies and 
    other instruments of authority.

90. A vote given in accordance with the terms of a proxy shall be valid
    notwithstanding the previous death of the principal, the revocation 
    of the proxy, or the transfer of the share in respect of which the 
    vote is given, provided no intimation in writing of the death, 
    revocation or transfer is received at the Office of the Company 
    before the meeting or by the chairman of the meeting before the 
    vote is given.

91. Every form of proxy shall comply with the Act and its regulations
    and subject thereto may be in the following form:

    I, _________________________ of _________________________ being a 
    shareholder of _______________________ hereby appoint 
    ________________________ of ______________________ (or failing 
    him/her ___________________________ of ________________________) as 
    proxyholder to attend and to vote for me and on my behalf at the 
    ordinary/special general meeting of the Company, to be held on the      
    ____ day of __________ and at any adjournment thereof, or at any
    meeting of the Company which may be held prior to [insert specified 
    date or event].

[If the proxy is solicited by or behalf of the management of the 
Company, insert a statement to that effect.]

Dated this ______ day of __________________.

_______________
Shareholder

92. Subject to the Act, no shareholder shall be entitled to be present
    or to vote on any question, either personally or by proxy, at any 
    general meeting or be reckoned in a quorum while any call is due 
    and payable to the Company in respect of any of the shares of such 
    shareholder.

93. Any resolution passed by the directors, notice of which has been
    given to the shareholders in the manner in which notices are 
    hereinafter directed to be given and which is, within one month 
    after it has been passed, ratified and confirmed in writing by 
    shareholders entitled on a poll to three-fifths of the votes, shall 
    be as valid and effectual as a resolution of a general meeting.  
    This Article shall not apply to a resolution for winding up the 
    Company or to a resolution dealing with any matter that by statute 
    or these Articles ought to be dealt with by a special resolution or 
    other method prescribed by statute.

94. A resolution, including a special resolution, in writing and signed
    by every shareholder who would be entitled to vote on the resolution 
    at a meeting is as valid as if it were passed by such shareholders 
    at a meeting and satisfies all of the requirements of the Act 
    respecting meetings of shareholders.

                               DIRECTORS

95. Unless otherwise determined by resolution of shareholders, the 
    number of directors shall not be less than one or more than seven.

96. Notwithstanding anything herein contained the subscribers to the
    Memorandum shall be the first directors of the Company.

97. The directors may be paid out of the funds of the Company as
    remuneration for their service such sums, if any, as the Company 
    may by resolution of its shareholders determine, and such 
    remuneration shall be divided among them in such proportions and 
    manner as the directors determine.  The directors may also be paid 
    their reasonable travelling, hotel and other expenses incurred in 
    attending meetings of directors and otherwise in the execution of 
    their duties as directors.

98.  The continuing directors may act notwithstanding any vacancy in
     their body, but if their number falls below the minimum permitted, 
     the directors shall not, except in emergencies or for the purpose 
     of filling vacancies, act so long as their number is below the 
     minimum.

99. A director may, in conjunction with the office of director, and 
     on such terms as to remuneration and otherwise as the directors 
     arrange or determine, hold any other office or place of profit 
     under the Company or under any company in which the Company is 
     a shareholder or is otherwise interested.

100. The office of a director shall ipso facto be vacated if the
     director:

     (1)  becomes bankrupt or makes an assignment for the benefit of
          creditors;

     (2)  is, or is found by a court of competent jurisdiction to be, 
          of unsound mind;

     (3)  by notice in writing to the Company, resigns the office of 
          director; or

     (4)  is removed in the manner provided by these Articles. 

101. No director shall be disqualified by holding the office of director 
     from contracting with the Company, either as vendor, purchaser, or 
     otherwise, nor shall any such contract, or any contract or 
     arrangement entered into or proposed to be entered into by or on 
     behalf of the Company in which any director is in any way 
     interested, either directly or indirectly, be avoided, nor shall 
     any director so contracting or being so interested be liable to
     account to the Company for any profit realized by any such contract 
     or arrangement by reason only of such director holding that office 
     or of the fiduciary relations thereby established, provided the 
     director makes a declaration or gives a general notice in 
     accordance with the Act.  No director shall, as a director, vote 
     in respect of any contract or arrangement in which the director is 
     so interested, and if the director does so vote, such vote shall 
     not be counted.  This prohibition may at any time or times be 
     suspended or relaxed to any extent by a resolution of the 
     shareholders and shall not apply to any contract by or on behalf 
     of the Company to give to the directors or any of them any 
     security for advances or by way of indemnity.

                         ELECTION OF DIRECTORS       

102. At the dissolution of every ordinary general meeting at which 
     their successors are elected, all the directors shall retire from 
     office and be succeeded by the directors elected at such meeting.  
     Retiring directors shall be eligible for re-election.

103. If at any ordinary general meeting at which an election of
     directors ought to take place no such election takes place, or if 
     no ordinary general meeting is held in any year or period of years, 
     the retiring directors shall continue in office until their 
     successors are elected.

104. The Company may by resolution of its shareholders elect any number
     of directors permitted by these Articles and may determine or alter 
     their qualification.

105. The Company may, by special resolution or in any other manner
     permitted by statute, remove any director before the expiration of 
     such director's period of office and may, if desired, appoint a 
     replacement to hold office during such time only as the director so 
     removed would have held office.

106. The directors may appoint any other person as a director so long 
     as the total number of directors does not at any time exceed the 
     maximum number permitted.  No such appointment, except to fill a 
     casual vacancy, shall be effective unless two-thirds of the 
     directors concur in it.  Any casual vacancy occurring among the 
     directors may be filled by the directors, but any person so
     chosen shall retain office only so long as the vacating director 
     would have retained it if the vacating director had continued as 
     director.

                           MANAGING DIRECTORS

107. The directors may appoint one or more of their body to be managing
     directors of the Company, either for a fixed term or otherwise , 
     and may remove or dismiss them from office and appoint 
     replacements.

108. Subject to the provisions of any contract between a managing
     director and the Company, a managing director shall be subject to 
     the same provisions as to resignation and removal as the other 
     directors of the Company.  A managing director who for any reason 
     ceases to hold the office of director shall ipso facto immediately 
     cease to be a managing director.

109. The remuneration of a managing director shall from time to time be
     fixed by the directors and may be by way of any or all of salary, 
     commission and participation in profits.

110. The directors may from time to time entrust to and confer upon a
     managing director such of the powers exercisable under these 
     Articles by the directors as they think fit, and may confer such 
     powers for such time, and to be exercised for such objects and 
     purposes and upon such terms and conditions, and with such 
     restrictions as they think expedient; and they may confer such
     powers either collaterally with, or to the exclusion of, and in 
     substitution for, all or any of the powers of the directors in 
     that behalf; and may from time to time revoke, withdraw, alter 
     or vary all or any of such powers.

                         CHAIRMAN OF THE BOARD

111. The directors may elect one of their number to be Chairman and 
     may determine the period during which the Chairman is to hold 
     office.  The Chairman shall perform such duties and receive such 
     special remuneration as the directors may provide.

                     PRESIDENT AND VICE-PRESIDENTS

112. The directors shall elect the President of the Company, who need
     not be a director, and may determine the period for which the 
     President is to hold office.  The President shall have general 
     supervision of the business of the Company and shall perform such 
     duties as may be assigned from time to time by the directors.

113. The directors may also elect vice-presidents, who need not be
     directors, and may determine the periods for which they are to hold 
     office.  A vice-president shall, at the request of the President or 
     the directors and subject to the directions of the directors, 
     perform the duties of the President during the absence, illness 
     or incapacity of the President, and shall also perform such duties 
     as may be assigned by the President or the directors.

                        SECRETARY AND TREASURER

114. The directors shall appoint a Secretary of the Company to keep
     minutes of shareholders' and directors' meetings and perform such 
     other duties as may be assigned by the directors.  The directors 
     may also appoint a temporary substitute for the Secretary who 
     shall, for the purposes of these Articles, be deemed to be the 
     Secretary.

115. The directors may appoint a treasurer of the Company to carry out
     such duties as the directors may assign.

                                OFFICERS

116. The directors may elect or appoint such other officers of the
     Company, having such powers and duties, as they think fit.

117. If the directors so decide the same person may hold more than 
     one of the offices provided for in these Articles.

                        PROCEEDINGS OF DIRECTORS

118. The directors may meet together for the dispatch of business,
     adjourn and otherwise regulate their meetings and proceedings, as 
     they think fit, and may determine the quorum necessary for the 
     transaction of business.  Until otherwise determined, one 
     director shall constitute a quorum and may hold a meeting.

119. If all directors of the Company entitled to attend a meeting 
     either generally or specifically consent, a director may 
     participate in a meeting of directors or of a committee of 
     directors by means of such telephone or other communications 
     facilities as permit all persons participating in the meeting 
     to hear each other, and a director participating in such a 
     meeting by such means is deemed to be present at that meeting 
     for purposes of these Articles.

120. Meetings of directors may be held either within or without the
     Province of Nova Scotia and the directors may from time to time
     make arrangements relating to the time and place of holding 
     directors' meetings, the notices to be given for such meetings and 
     what meetings may be held without notice.  Unless otherwise 
     provided by such arrangements:

     (1)  a meeting of directors may be held at the close of every 
          ordinary general meeting of the Company without notice;

     (2)  notice of every other directors' meeting may be given as 
          permitted by these Articles to each director at least 48 
          hours before the time fixed for the meeting; and

     (3)  a meeting of directors may be held without formal notice if 
          all the directors are present or if those absent have 
          signified their assent to such meeting or their consent to 
          the business transacted at such meeting.

121. The President or any director may at any time, and the Secretary,
     upon the request of the President or any director, shall summon a 
     meeting of the directors to be held at the Office of the Company.  
     The President, the Chairman or a majority of the directors may at 
     any time, and the Secretary, upon the request of the President, 
     the Chairman or a majority of the directors, shall summon a meeting 
     to be held elsewhere.

122. (1)  Questions arising at any meeting of directors shall be decided 
          by a majority of votes.  The chairman of the meeting may vote 
          as a director but shall not have a second or casting vote.

     (2)  At any meeting of directors the chairman shall receive and 
          count the vote of any director not present in person at such 
          meeting on any question or matter arising at such meeting 
          whenever such absent director has indicated by telegram, 
          letter or other writing lodged with the chairman of such 
          meeting the manner in which the absent director desires to 
          vote on such question or matter and such question or matter 
          has been specifically mentioned in the notice calling the 
          meeting as a question or matter to be discussed or decided
          thereat.  In respect of any such question or matter so 
          mentioned in such notice any director may give to any other 
          director a proxy authorizing such other director to vote for 
          such first named director at such meeting, and the chairman 
          of such meeting, after such proxy has been so lodged, shall 
          receive and count any vote given in pursuance thereof 
          notwithstanding the absence of the director giving such 
          proxy.

123.  If no Chairman is elected, or if at any meeting of directors the
      Chairman is not present within five minutes after the time 
      appointed for holding the meeting, or declines to take the chair, 
      the President, if a director, shall preside.  If the President is 
      not a director, is not present at such time or declines to take 
      the chair, a vice-president who is also a director shall preside.  
      If no person described above is present at such time and willing 
      to take the chair, the directors present shall choose some one of
      their number to be chairman of the meeting.

124.  A meeting of the directors at which a quorum is present shall be
      competent to exercise all or any of the authorities, powers and 
      discretions for the time being vested in or exercisable by the 
      directors generally.

125.  The directors may delegate any of their powers to committees
      consisting of such number of directors as they think fit.  Any 
      committee so formed shall in the exercise of the powers so 
      delegated conform to any regulations that may be imposed on them 
      by the directors.

126.  The meetings and proceedings of any committee of directors shall 
      be governed by the provisions contained in these Articles for 
      regulating the meetings and proceedings of the directors insofar
      as they are applicable and are not superseded by any regulations
      made by the directors.

127.  All acts done at any meeting of the directors or of a committee 
      of directors or by any person acting as a director shall, 
      notwithstanding that it is afterwards discovered that there was 
      some defect in the appointment of the director or person so 
      acting, or that they or any of them were disqualified, be as 
      valid if every such person had been duly appointed and was 
      qualified to be a director.

128.  A resolution in writing and signed by every director who would 
      be entitled to vote on the resolution at a meeting is as valid as 
      if it were passed by such directors at a meeting.

129.  If any one or more of the directors is called upon to perform 
      extra services or to make any special exertions in going or 
      residing abroad or otherwise for any of the purposes of the 
      Company or the business thereof, the Company may remunerate 
      the director or directors so doing, either by a fixed sum or 
      by a percentage of profits or otherwise.  Such remuneration 
      shall be determined by the directors and may be either in 
      addition to or in substitution for remuneration otherwise 
      authorized by these Articles.

                               REGISTERS

130. The directors shall cause to be kept at the Company's Office in
     accordance with the provisions of the Act a Register of the 
     shareholders of the Company, a register of the holders of bonds, 
     debentures and other securities of the Company and a register of 
     its directors.  Branch registers of the shareholders and of the 
     holders of bonds, debentures and other securities may be kept 
     elsewhere, either within or without the Province of Nova Scotia, 
     in accordance with the Act.

                                MINUTES

131. The directors shall cause minutes to be entered in books 
     designated for the purpose:

     (1)  of all appointments of officers;

     (2)  of the names of directors present at each meeting of directors 
          and of any committees of directors;

     (3)  of all orders made by the directors and committees of 
          directors; and

     (4)  of all resolutions and proceedings of meetings of shareholders 
          and of directors.

Any such minutes of any meeting of directors or of any committee of 
directors or of shareholders, if purporting to be signed by the chairman 
of such meeting or by the chairman of the next succeeding meeting, shall 
be receivable as prima facie evidence of the matters stated in such 
minutes.

                          POWERS OF DIRECTORS

132. The management of the business of the Company is vested in the
     directors who, in addition to the powers and authorities by 
     these Articles or otherwise expressly conferred upon them, may 
     exercise all such powers and do all such acts and things as may 
     be exercised or done by the Company and are not hereby or by 
     statute expressly directed or required to be exercised or done 
     by the shareholders, but subject nevertheless to the provisions 
     of any statute, the Memorandum or these Articles. No modification 
     of the Memorandum or these Articles shall invalidate any prior 
     act of the directors that would have been valid if such 
     modification had not been made.

133. Without restricting the generality of the terms of any of these
     Articles and without prejudice to the powers conferred thereby, 
     the directors may:

     (1)  take such steps as they think fit to carry out any agreement 
          or contract made by or on behalf of the Company;

     (2)  pay costs, charges and expenses preliminary and incidental 
          to the promotion, formation, establishment, and registration 
          of the Company;

     (3)  purchase or otherwise acquire for the Company any property, 
          rights or privileges that the Company is authorized to 
          acquire, at such price and generally on such terms and 
          conditions as they think fit;

     (4)  pay for any property, rights or privileges acquired by, or 
          services rendered to the Company either wholly or partially 
          in cash or in shares (fully paid-up or otherwise), bonds, 
          debentures or other securities of the Company;

     (5)  subject to the Act, secure the fulfilment of any contracts 
          or engagements entered into by the Company by mortgaging or 
          charging all or any of the property of the Company and its 
          unpaid capital for the time being, or in such other manner 
          as they think fit;

     (6)  appoint, remove or suspend at their discretion such experts,
          managers, secretaries, treasurers, officers, clerks, agents 
          and servants for permanent, temporary or special services, as 
          they from time to time think fit, and determine their powers 
          and duties and fix their salaries or emoluments and require
          security in such instances and to such amounts as they think 
          fit;

     (7)  accept a surrender of shares from any shareholder insofar as 
          the law permits and on such terms and conditions as may be 
          agreed;

     (8)  appoint any person or persons to accept and hold in trust for 
          the Company any property belonging to the Company, or in which 
          it is interested, execute and do all such deeds and things as 
          may be required in relation to such trust, and provide for 
          the remuneration of such trustee or trustees;

     (9)  institute, conduct, defend, compound or abandon any legal
          proceedings by and against the Company, its directors or its 
          officers or otherwise concerning the affairs of the Company, 
          and also compound and allow time for payment or satisfaction 
          of any debts due and of any claims or demands by or against 
          the Company;

    (10)  refer any claims or demands by or against the Company to
          arbitration and observe and perform the awards;

    (11)  make and give receipts, releases and other discharges for 
          amounts payable to the Company and for claims and demands 
          of the Company;

    (12)  determine who may exercise the borrowing powers of the Company 
          and sign on the Company's behalf bonds, debentures or other 
          securities, bills, notes, receipts, acceptances, assignments, 
          transfers, hypothecations, pledges, endorsements, cheques, 
          drafts, releases, contracts, agreements and all other 
          instruments and documents;

    (13)  provide for the management of the affairs of the Company 
          abroad in such manner as they think fit, and in particular 
          appoint any person to be the attorney or agent of the Company 
          with such powers (including power to sub-delegate) and upon 
          such terms as may be thought fit;

    (14)  invest and deal with any funds of the Company in such 
          securities and in such manner as they think fit; and vary 
          or realize such investments;

    (15)  subject to the Act, execute in the name and on behalf of the
          Company in favour of any director or other person who may 
          incur or be about to incur any personal liability for the
          benefit of the Company such mortgages of the Company's
          property, present and future, as they think fit;

   (16)   give any officer or employee of the Company a commission on 
          the profits of any particular business or transaction or a 
          share in the general profits of the Company;

   (17)   set aside out of the profits of the Company before declaring 
          any dividend such amounts as they think proper as a reserve 
          fund to meet contingencies or provide for dividends, 
          depreciation, repairing, improving and maintaining any of 
          the property of the Company and such other purposes as the
          directors may in their absolute discretion think in the 
          interests of the Company; and invest such amounts in such 
          investments as they think fit, and deal with and vary such 
          investments, and dispose of all or any part of them for the 
          benefit of the Company, and divide the reserve fund into such 
          special funds as they think fit, with full power to employ 
          the assets constituting the reserve fund in the business of 
          the Company without being bound to keep them separate from the 
          other assets;

    (18)  make, vary and repeal rules respecting the business of the 
          Company, its officers and employees, the shareholders of the 
          Company or any section or class of them;

    (19)  enter into all such negotiations and contracts, rescind and 
          vary all such contracts, and execute and do all such acts, 
          deeds and things in the name and on behalf of the Company as 
          they consider expedient for or in relation to any of the 
          matters aforesaid or otherwise for the purposes of the 
          Company;

    (20)  provide for the management of the affairs of the Company in 
          such manner as they think fit.

                               SOLICITORS

134. The Company may employ or retain solicitors any of whom may, at 
     the request or on the instruction of the directors, the Chairman, 
     the President or a managing director, attend meetings of the 
     directors or shareholders, whether or not the solicitor is a 
     shareholder or a director of the Company.  A solicitor who is 
     also a director may nevertheless charge for services rendered
     to the Company as a solicitor.

                                THE SEAL

135. The directors shall arrange for the safe custody of the common 
     seal of the Company (the "Seal").  The Seal may be affixed to 
     any instrument in the presence of and contemporaneously with the 
     attesting signature of (i) any director or officer acting within 
     such person's authority or (ii) any person under the authority 
     of a resolution of the directors or a committee thereof.  For the 
     purpose of certifying documents or proceedings the Seal may be 
     affixed by any director or the President, a vice-president, the 
     Secretary, an assistant secretary or any other officer of the 
     Company without the authorization of a resolution of the directors.

136. The Company may have facsimiles of the Seal which may be used
     interchangeably with the Seal.

137. The Company may have for use at any place outside the Province of
     Nova Scotia, as to all matters to which the corporate existence and 
     capacity of the Company extends, an official seal that is a 
     facsimile of the Seal of the Company with the addition on its face 
     of the name of the place where it is to be used; and the Company 
     may by writing under its Seal authorize any person to affix such 
     official seal at such place to any document to which the Company is
     a party.

                               DIVIDENDS

138. The directors may from time to time declare such dividend as they
     deem proper upon shares of the Company according to the rights and 
     restrictions attached to any class or series of shares, and may 
     determine the date upon which such dividend will be payable and 
     that it will be payable to the persons registered as the holders 
     of the shares on which it is declared at the close of business 
     upon a record date.  No transfer of such shares registered after 
     the record date shall pass any right to the dividend so declared.

139. No dividends shall be payable except out of the profits, retained
     earnings or contributed surplus of the Company and no interest 
     shall be payable on any dividend except insofar as the rights 
     attached to any class or series of shares provide otherwise.

140. The declaration of the directors as to the amount of the profits,
     retained earnings or contributed surplus of the Company shall be 
     conclusive.

141. The directors may from time to time pay to the shareholders such
     interim dividends as in their judgment the position of the Company 
     justifies.

142. Subject to the Memorandum, these Articles and the rights and
     restrictions attached to any class or series of shares, dividends 
     may be declared and paid to the shareholders in proportion to the 
     amount of capital paid-up on the shares (not including any capital 
     paid-up bearing interest) held by them respectively.

143. The directors may deduct from the dividends payable to any
     shareholder amounts due and payable by the shareholder to the 
     Company on account of calls, instalments or otherwise, and may 
     apply the same in or towards satisfaction of such amounts so 
     due and payable.

144. The directors may retain any dividends on which the Company has 
     a lien, and may apply the same in or towards satisfaction of the 
     debts, liabilities or engagements in respect of which the lien 
     exists.

145. The directors may retain the dividends payable upon shares to 
     which a person is entitled or entitled to transfer upon the death 
     or bankruptcy of a shareholder or in any way other than by 
     allotment or transfer, until such person has become registered as 
     the holder of such shares or has duly transferred such shares.

146. When the directors declare a dividend on a class or series of
     shares and also make a call on such shares payable on or before the 
     date on which the dividend is payable, the directors may retain all 
     or part of the dividend and set off the amount retained against the 
     call.

147. The directors may declare that a dividend be paid by the 
     distribution of cash, paid-up shares (at par or at a premium), 
     debentures, bonds or other securities of the Company or of any 
     other company or any other specific assets held or to be acquired 
     by the Company or in any one or more of such ways.

148. The directors may settle any difficulty that may arise in regard 
     to the distribution of a dividend as they think expedient, and in 
     particular without restricting the generality of the foregoing may 
     issue fractional certificates, may fix the value for distribution 
     of any specific assets, may determine that cash payments will be 
     made to any shareholders upon the footing of the value so fixed or 
     that fractions may be disregarded in order to adjust the rights of 
     all parties, and may vest cash or specific assets in trustees upon 
     such trusts for the persons entitled to the dividend as may seem 
     expedient to the directors.

149. Any person registered as a joint holder of any share may give
     effectual receipts for all dividends and payments on account of 
     dividends in respect of such share.

150. Unless otherwise determined by the Directors, any dividend may be 
     paid by a cheque or warrant delivered to or sent through the post 
     to the registered address of the member entitled, or, when there 
     are joint holders, to the registered address of that one whose 
     name stands first on the register for the shares jointly held.  
     Every cheque or warrant so delivered or sent shall be made payable 
     to the order of the person to whom it is delivered or sent.  The
     mailing or other transmission to a shareholder at the shareholder's 
     registered address (or, in the case of joint shareholders at the 
     address of the holder whose name stands first on the register) 
     of a cheque payable to the order of the person to whom it is 
     addressed for the amount of any dividend payable in cash after 
     the deduction of any tax which the Company has properly withheld,
     shall discharge the Company's liability for the dividend unless 
     the cheque is not paid on due presentation.  If any cheque for a 
     dividend payable in cash is not received, the Company shall issue 
     to the shareholder a replacement cheque for the same amount on 
     such terms as to indemnity and evidence of non-receipt as the 
     directors may impose.  No shareholder may recover by action or 
     other legal process against the Company any dividend represented 
     by a cheque that has not been duly presented to a banker of the 
     Company for payment or that otherwise remains unclaimed for 6 
     years from the date on which it was payable.

                                ACCOUNTS

151. The directors shall cause proper books of account to be kept of the
     amounts received and expended by the Company, the matters in 
     respect of which such receipts and expenditures take place, all 
     sales and purchases of goods by the Company, and the assets, 
     credits and liabilities of the Company.

152. The books of account shall be kept at the head office of the
     Company or at such other place or places as the directors may 
     direct.

153. The directors shall from time to time determine whether and to what
     extent and at what times and places and under what conditions the 
     accounts and books of the Company or any of them shall be open to 
     inspection of the shareholders, and no shareholder shall have any 
     right to inspect any account or book or document of the Company 
     except as conferred by statute or authorized by the directors or 
     a resolution of the  shareholders.

154. At the ordinary general meeting in every year the directors shall
     lay before the Company such financial statements and reports in 
     connection therewith as may be required by the Act or other 
     applicable statute or regulation thereunder and shall distribute 
     copies thereof at such times and to such persons as may be required 
     by statute or regulation.

                           AUDITORS AND AUDIT

155. The Company shall at each ordinary general meeting appoint an
     auditor or auditors to hold office until the next ordinary general
     meeting.  If at any general meeting at which the appointment of an 
     auditor or auditors is to take place and no such appointment takes 
     place, or if no ordinary general meeting is held in any year or 
     period of years, the directors shall appoint an auditor or auditors 
     to hold office until the next ordinary general meeting.

156. The first auditors of the Company may be appointed by the directors
     at any time before the first ordinary general meeting and the 
     auditors so appointed shall hold office until such meeting unless 
     previously removed by a resolution of the shareholders, in which 
     event the shareholders may appoint auditors.

157. The directors may fill any casual vacancy in the office of the
     auditor but while any such vacancy continues the surviving or 
     continuing auditor or auditors, if any, may act.

158. The Company may appoint as auditor any person, including a
     shareholder, not disqualified by statute.

159. An auditor may be removed or replaced in the circumstances and in
     the manner specified in the Act.

160. The remuneration of the auditors shall be fixed by the 
     shareholders, or by the directors pursuant to authorization given 
     by the shareholders, except that the remuneration of an auditor 
     appointed to fill a casual vacancy may be fixed by the directors.

161. The auditors shall conduct such audit as may be required by the 
     Act and their report, if any, shall be dealt with by the Company 
     as required by the Act.

                                NOTICES

162. A notice (including any communication or document) shall be
     sufficiently given, delivered or served by the Company upon a 
     shareholder, director, officer or auditor by personal delivery at 
     such person's registered address (or, in the case of a director, 
     officer or auditor, last known address) or by prepaid mail, 
     telegraph, telex, facsimile machine or other electronic means of 
     communication addressed to such person at such address.

163. Shareholders having no registered address shall not be entitled 
     to receive notice.

164. The holder of a Share Warrant shall not, unless otherwise expressed
     therein, be entitled in respect thereof to notice of any general 
     meeting of the Company.

165. All notices with respect to registered shares to which persons are
     jointly entitled may be sufficiently given to all joint holders 
     thereof by notice given to whichever of such persons is named first 
     in the Register for such shares.

166. Any notice sent by mail shall be deemed to be given, delivered or
     served on the earlier of actual receipt and the third business day 
     following that upon which it is mailed, and in proving such service 
     it shall be sufficient to prove that the notice was properly 
     addressed and mailed with the postage prepaid thereon.  Any notice 
     given by electronic means of communication shall be deemed to be 
     given when entered into the appropriate transmitting device for 
     transmission.  A certificate in writing signed on behalf of the
     Company that the notice was so addressed and mailed or transmitted 
     shall be conclusive evidence thereof.

167. Every person who by operation of law, transfer or other means
     whatsoever becomes entitled to any share shall be bound by every 
     notice in respect of such share that prior to such person's name 
     and address being entered on the Register was duly served in the 
     manner hereinbefore provided upon the person from whom such person 
     derived title to such share.

168. Any notice delivered, sent or transmitted to the registered address
     of any shareholder pursuant to these Articles, shall, 
     notwithstanding that such shareholder is then deceased and that the 
     Company has notice thereof, be deemed to have been served in 
     respect of any registered shares, whether held by such deceased 
     shareholder solely or jointly with other persons, until some other 
     person is registered as the holder or joint holder thereof, and 
     such service shall for all purposes of these Articles be deemed a 
     sufficient service of such notice on the heirs, executors or 
     administrators of the deceased shareholder and all joint holders 
     of such shares.

169. Any notice may bear the name or signature, manual or reproduced, 
     of the person giving the notice.

170. When a given number of days' notice or notice extending over any
     other period is required to be given, the day of service and the 
     day upon which such notice expires shall not, unless it is 
     otherwise provided, be counted in such number of days or other 
     period.

                               INDEMNITY

171. Every director or officer, former director or officer, or person 
     who acts or acted at the Company's request, as a director or 
     officer of the Company, a body corporate, partnership or other 
     association of which the Company is or was a shareholder, partner, 
     member or creditor, and the heirs and legal representatives of such 
     person, in the absence of any dishonesty on the part of such 
     person, shall be indemnified by the Company against, and it shall 
     be the duty of the directors out of the funds of the Company to 
     pay, all costs, losses and expenses, including an amount paid to 
     settle an action or claim or satisfy a judgment, that such 
     director, officer or person may incur or become liable to pay in 
     respect of any claim made against such person or civil, criminal or 
     administrative action or proceeding to which such person is made a 
     party by reason of being or having been a director or officer of 
     the Company or such body corporate, partnership or other 
     association, whether the Company is a claimant or party to such 
     action or proceeding or otherwise; and the amount for which such 
     indemnity is proved shall immediately attach as a lien on the 
     property of the Company and have priority as against the 
     shareholders over all other claims.

172. No director or officer, former director or officer, or person who
     acts or acted at the Company's request, as a director or officer 
     of the Company, a body corporate, partnership or other association 
     of which the Company is or was a shareholder, partner, member or 
     creditor, in the absence of any dishonesty on such person's part, 
     shall be liable for the acts, receipts, neglects or defaults of 
     any other director, officer or such person, or for joining in any 
     receipt or other act for conformity, or for any loss, damage or
     expense happening to the Company through the insufficiency or 
     deficiency of title to any property acquired for or on behalf of 
     the Company, or through the insufficiency or deficiency of any 
     security in or upon which any of the funds of the Company are 
     invested, or for any loss or damage arising from the bankruptcy, 
     insolvency or tortious acts of any person with whom any funds,
     securities or effects are deposited, or for any loss occasioned 
     by error of judgment or oversight on the part of such person, or
     for any other loss, damage or misfortune whatsoever which happens
     in the execution of the duties of such person or in relation
     thereto.

                               REMINDERS

173. The directors shall comply with the following provisions of the 
     Act or the Corporations Registration Act (Nova Scotia) where 
     indicated:

     (1)  Keep a current register of shareholders (Section 42).

     (2)  Keep a current register of directors, officers and managers, 
          send to the Registrar a copy thereof and notice of all changes 
          therein (Section 98).

     (3)  Keep a current register of holders of bonds, debentures and 
          other securities (Section 111 and Third Schedule).

     (4)  Send notice to the Registrar of any redemption or purchase 
          of preference shares (Section 50).

     (5)  Send notice to the Registrar of any consolidation, division,
          conversion or reconversion of the share capital or stock of 
          the Company (Section 53).

     (6)  Send notice to the Registrar of any increase of capital 
          (Section 55).

     (7)  Call a general meeting every year within the proper time 
          (Section 83).  Meetings must be held not later than 15 months 
          after the preceding general meeting.

     (8)  Send to the Registrar copies of all special resolutions 
          (Section 88).

     (9)  When shares are issued for a consideration other than cash, 
          file a copy of the contract with the Registrar on or before 
          the date on which the shares are issued (Section 109).

    (10)  Send to the Registrar notice of the address of the Company's 
          Office and of all changes in such address (Section 79).

    (11)  Keep proper minutes of all shareholders' meetings and 
          directors' meetings in the Company's minute book kept at the 
          Company's Office (Sections 89 and 90).

    (12)  Obtain a certificate under the Corporations Registration Act 
          (Nova Scotia) as soon as business is commenced.

    (13)  Send notice of recognized agent to the Registrar under the
           Corporations Registration Act (Nova Scotia).

              TABLE OF CONTENTS TO ARTICLES OF ASSOCIATION

Article        Description                                         Page
-------        -----------                                         ----

  1.       Interpretation        	                                 1
  2.       Table A not to apply                                      1
  3.       Pre-Incorporation Agreement        	                     1
  
                                 SHARES

  4.       Payment of expenses of Incorporation, etc.                2
  5.       May commence business at once        	               2
  6.       Shares under control of directors        	               2
  7.       Commission on subscription        	                     2
  8.       Amount and timing of calls, etc.        	               2
  9.       Installments payable by registered holder        	   2
 10.       Joint registration of shares                              2
 11.       Liability of joint holders - survivor only recognized     2
 12.       Registered holder treated as absolute owner               2
 13.       Private company                                           2

                              CERTIFICATES

 14.       Share certificates                                        3
 15.       Entitlement to share certificate                          3
 16.       Certificate issued to joint holders                       3
 17.       Worn out, defaced or lost certificates                    3
 18.       Fee for certificate                                       3
 19.       Branch registers                                          3

                                 CALLS

 20.       Directors may make calls                                  4
 21.       When calls deemed made                                    4
 22.       Notice of call - timing and contents                      4
 23.       Interest on unpaid call                                   4
 24.       Resolution making call conclusive evidence                4
 25.       Shareholders advances on unpaid shares                    4

                          FORFEITURE OF SHARES

 26.       Notice before forfeiture                                  4
 27.       Contents of notice        	                           4
 28.       Forfeiture when notice not complied with                  4
 29.       Notice of forfeiture resolution, register entry           5
 30.       Forfeited share becomes property of Company               5
 31.       Annulment of forfeiture, etc.                             5
 32.       Liability of shareholders to pay call after forfeiture    5
 33.       Certificate of forfeiture conclusive evidence             5

                             LIEN ON SHARES

 34.       Lien on shares for debts of shareholder                   5
 35.       Sale of shares not paid up to enforce lien                5
 36.       Application of proceeds of shares by Company              5

                           VALIDITY OF SALES

 37.       Validity of sale on forfeiture or to enforce lien         6 

                           TRANSFER OF SHARES

 38.       How transfer effected                                     6
 39.       Form of transfer instrument                               6
 40.       Directors may decline to register transfer                6
 41.       Delivery of transfer for registration                     6
 42.       Fee on transfer        	                                 6
 43.       Transfer instrument to remain with Company        	   6

                         TRANSMISSION OF SHARES

 44.       Executors of deceased recognized as holder                7
 45.       Right of executor of sole shareholder                     7
 46.       Transmission of shares on death, bankruptcy               7

                          SURRENDER OF SHARES

 47.       Surrender of shares in compromise                         7

                            SHARE WARRANTS

 48.       Issue of Share Warrants                                   7
 49.       Conditions under which Share Warrants issued        	   7

                   INCREASE AND REDUCTION OF CAPITAL

 50.       Increase of capital                                       8
 51.       Terms of issue of new shares        	                     8
 52.       New shares may be offered to existing shareholders        8
 53.       New capital within control of directors                   8
 54.       Reduction of capital        	                           8

                         ALTERATION OF CAPITAL

 55.       Altering capital by ordinary resolution                   8
 56.       Altering capital by special resolution        	         8
 57.       Redemption and purchase of shares        	               9

                       INTEREST ON SHARE CAPITAL

 58.       When share capital may bear interest                      9

                      CLASSES AND SERIES OF SHARES

 59.       Shares with preferred, deferred or special rights         9

                 MEETINGS AND VOTING BY CLASS OR SERIES

 60.       Procedure, etc. for class vote                           10
 61.       Restrictions on separate class and series votes          10

                            BORROWING POWERS

 62.       Directors' authority to borrow, give security, guarantee 10
 63.       Securities assignable free from equities                 10
 64.       Securities at discount, premium, with preference         10

                            GENERAL MEETINGS

 65.       Ordinary general meetings        	                    11
 66.       Special general meetings - how called                    11
 67.       Contents of requisition        	                    11
 68.       Notice of meeting - Waiver of notice        	        11
 69.       Notice of two meetings for special resolution        	  11
 70.       Accidental omission of notice        	              11

                              RECORD DATES

 71.       Setting record dates - when no record date set           11

                    PROCEEDINGS AT GENERAL MEETINGS

 72.       Business of ordinary general meeting                     12
 73.       Quorum prerequisite to holding meeting        	        12
 74.       Requirements for quorum        	                    12
 75.       Chairman of meeting        	                          12
 76.       If quorum not present - dissolution or adjournment       12
 77.       Resolution by show of hands - demand of poll        	  12
 78.       Conduct of poll        	                                12
 79.       Casting vote        	                                12
 80.       Adjournment of meeting        	                          12
 81.       Poll on question of adjournment, election of chairman    13
 82.       Effect of demand of poll on continuance of meeting       13

                         VOTES OF SHAREHOLDERS

 83.       Voting generally                                         13
 84.       Votes on transmission by death, bankruptcy, etc.         13
 85.       Votes of joint registered shareholders        	        13
 86.       Voting in person, by proxy, by corporate representative  13
 87.       Proxy requirements generally        	                    13
 88.       Votes of shareholders of unsound mind        	        13
 89.       Depositing proxies before meeting        	              13
 90.       Votes by proxy after authority revoked        	        14
 91.       Form of proxy        	                                14
 92.       Votes when call due on shares        	              14
 93.       Resolution of directors ratified by shareholders         14
 94.       Resolution in writing without meeting        	        14

                               DIRECTORS

 95.       Number of directors                                      14
 96.       First directors        	                                14
 97.       Remuneration of directors        	                    15
 98.       Directors may act notwithstanding        	              15
 99.       Directors may also be officers        	              15
100.       Vacation of office on bankruptcy, etc.        	        15
101.       Directors' conflicts of interest        	              15

                         ELECTION OF DIRECTORS

102.       Election of directors at general meeting                 15
103.       Retiring directors remain in office until succeeded      15
104.       Number of directors elected, qualification        	  16
105.       Removal of director        	                          16
106.       When directors may be appointed by other directors       16

                            MANAGING DIRECTOR

107.       Authority to appoint managing director                   16
108.       Resignation and removal of managing director        	  16
109.       Remuneration of managing director        	              16
110.       Powers and duties of managing director        	        16

                         CHAIRMAN OF THE BOARD

111.       Chairman of the Board                                    16

                     PRESIDENT AND VICE-PRESIDENTS
 
112.       President        	                                      16
113.       Vice-Presidents        	                                16

                        SECRETARY AND TREASURER

114.       Secretary                                                17
115.       Treasurer        	                                      17

                                OFFICERS        

116.       Other officers        	                                17
117.       Same person may hold more than one office                17

                        PROCEEDINGS OF DIRECTORS

118.       Meetings of directors - quorum requirement               17
119.       Participation at meeting by telephone        	        17
120.       Place of meetings - When notice required        	        17
121.       Summoning of meetings        	                          17
122.       Questions decided by majority - casting vote - proxies   18
123.       Chairman of directors' meeting                           18
124.       Authority of meeting when quorum present        	        18
125.       Committees of directors        	                    18
126.       Proceedings of committees of directors        	        18
127.       Effect on meeting of defectively appointed director      18
128.       Resolution of directors in writing without meeting       18
129.       Remuneration of directors for extra services        	  18 

                               REGISTERS

130.       Registers and branch registers                           19

                                MINUTES

131.       Minutes and Minute books - minutes prima facie evidence  19

                          POWERS OF DIRECTORS

132.       General powers of directors        	                    19
133.       Specifically enumerated powers of directors              19

                               SOLICITORS

134.       Solicitors                                               21

                                THE SEAL

135.       Use of common seal                                       21
136.       Facsimiles of common seal        	                    21
137.       Facsimile seal for use outside Nova Scotia        	  21

                               DIVIDENDS

138.       Declaration of dividends                                 22
139.       Dividends payable from profits, etc.        	        22
140.       Declaration of amount of profits, etc., conclusive       22
141.       Interim dividends        	                          22
142.       Dividends differentiated by paid-up capital        	  22
143.       Right to set off debts against dividends                 22
144.       Where lien on dividends        	                    22
145.       Dividends on shares of deceased, etc.        	        22
146.       Setting off calls and dividends        	              22
147.       Cash dividend, dividend in kind, stock dividend, etc.    22
148.       Power of directors to settle issues re dividends         22
149.       Dividends on jointly registered shares        	        23
150.       Satisfaction of dividend        	                    23

                                ACCOUNTS

151.       Directors' duty to keep accounts        	              23
152.       Where books to be kept        	                          23
153.       Inspection of books by shareholders        	        23
154.       Reports on accounts to general meeting        	        23

                           AUDITORS AND AUDIT

155.       Appointment of auditors at ordinary general meeting      23
156.       First auditors        	                                23
157.       Directors may fill casual vacancy        	              24
158.       Persons qualified for appointment as auditors        	  24
159.       Removal of auditor        	                          24
160.       Remuneration        	                                24
161.       Duties of auditors        	                          24

                                NOTICES

162.       How notice given                                         24
163.       Notice to shareholder without registered address         24
164.       Holders of share warrants not entitled to notice         24
165.       Notice to joint holders        	                    24
166.       When notice deemed given - proof of notice        	  24
167.       Transferees bound by prior notice        	              24
168.       Notice valid through shareholder deceased        	  24
169.       How notice to be signed        	                    25
170.       How time to be counted        	                          25

                               INDEMNITY

171.       Indemnity of directors, officers, etc.                   25
172.       Individual liability of directors, officers, etc.        25

                               REMINDERS

173.       Reminders of directors of obligations under Act          25