IMAGIS TECHNOLOGIES INC.1999 STOCK OPTION PLAN

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PART 1INTERPRETATION
1.01     Definitions.     In this Plan the following words and phrases shallhave the following meanings, namely:

(a)     "Associate" means, whereused to indicate a relationship with any person:

(i)     a partner, other than alimited partner, of that person;

(ii)     a trust or estate in whichthat person has a substantial beneficial interest or for which that personserves as trustee or in a similar capacity;

(iii)     a company in respect ofwhich that person beneficially owns or controls, directly or indirectly, votingsecurities carrying more than 10% of the voting rights attached to alloutstanding voting securities of the company; or

(iv)     a relative, including thespouse, of that person or a relative of that person's spouse, where the relativehas the same home as that person.

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

(c)     "Committee" means acommittee of the Board appointed in accordance with this Plan or, if no suchcommittee is appointed, the Board itself.

(d)     "Company" means IMAGISTECHNOLOGIES INC.

(e)     "Director" means anydirector of the Company or of any of its subsidiaries.

(f)"Disinterested Shareholder Approval" means that the sharecompensation arrangement must be approved by a majority of the votes cast at theshareholders' meeting other than votes attaching to securities beneficiallyowned by Insiders and their Associates to whom shares may be issued pursuant tothe Plan.

(g)     "Employee" means:

(i)     an individual who isconsidered an employee of the Company or any of its subsidiaries under the*Income Tax Act*(i.e. for whom deductions (income tax, UIC and CPP) mustbe made at source);

(ii)     an individual who is afull-time (i.e. 35 - 40 hours per week) dependent contractor, that is one whoworks full-time for the Company or any of its subsidiaries providing servicesnormally provided by an employee and is subject to the same control anddirection by the Company or its subsidiary over the detail and methods of workas an employee of the 
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Company or its subsidiary, but for whom income taxdeductions are not made at source; or
(iii)     a part-time dependentcontractor, that is an individual who works for the Company or any of itssubsidiaries on a continuing and regular basis for a minimum amount of time perweek providing services normally provided by an employee and is subject to thesame control and direction by the Company or its subsidiary over the details andmethods of work as an employee of the Company or its subsidiary, but for whomincome tax deductions are not made at source;

and includes employees of management companies providingservices (other than investor relations) to the Company or any of itssubsidiaries, and consultants as defined in BOR#96/15 of the British ColumbiaSecurities Commission.

(h)     "Exchange" means theVancouver Stock Exchange and any other stock exchange on which the Shares arelisted for trading.

(i)     "Insider" means:

(i)     a director or senior officerof the Company;

(ii)     a director or seniorofficer of a person that is itself an insider or subsidiary of the Company;or

(iii)     a person that has:

(A)     direct or indirectbeneficial ownership of,(B)     control or direction over,or(C)     a combination of direct orindirect beneficial ownership of and of control or direction over

securities of the Company carrying more than 10% of thevoting rights attached to all the Company's outstanding voting securities.

(j)     "Market Price" means thegreater of $0.15 and the average closing price of the Company's Shares tradedthrough the facilities of the Exchange for the ten trading days immediatelypreceding the date on which the Company notifies the Exchange of the grant  ofan option; provided however that the average shall not include a closing pricethat occurs earlier than the trading day following the day on which a materialchange was last announced by the Company.

(k)     "Officer" means any seniorofficer of the Company or of any of its subsidiaries as defined in the*Securities Act* (British Columbia).

(l)     "Plan" means this stockoption plan as from time to time amended.

(m)     "Shares" means common shareswithout par value in the capital of the Company.

1.02     Gender.     Throughout this Plan, words importing themasculine gender shall be interpreted as including the female gender.

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**PART 2PURPOSE OF PLAN
2.01     Purpose.     The purpose of this Plan is to attract and retainEmployees, Officers and Directors and to motivate them to advance the interestsof the Company by affording them the opportunity to acquire an equity interestin the Company through options granted under this Plan to purchase Shares.  ThePlan is expected to benefit the Company's shareholders by enabling the Companyto attract and retain personnel of the highest caliber by offering to them anopportunity to share in any increase in the value of the Shares to which theyhave contributed.
**PART 3GRANTING OF OPTIONS
3.01     Administration.     This Plan shall be administered by the Board or,if the Board so elects, by a committee (consisting of not less than two (2) ofits members) appointed by the Board.  Any Committee shall administer the Plan onbehalf of the Board in accordance with such terms and conditions as the Boardmay prescribe, consistent with this Plan.  Once appointed, the Committee shallcontinue to serve until otherwise directed by the Board.  From time to time, theBoard may increase the size of the Committee and appoint additional members,remove members (with or without cause) and either appoint new members in theirplace or decrease the size of the Committee, fill vacancies however caused, orremove all members of the Committee and thereafter directly administer the Plan.A majority of the members of the Committee shall constitute a quorum, and,subject to the limitations in this Part 3, all actions of the Committee shallrequire the affirmative vote of members who constitute a majority of the suchquorum.  Members of the Committee may vote on any matters affecting theadministration of the Plan or the grant of options pursuant to the Plan, exceptthat no such member shall act upon the granting of an option to himself (but anysuch member may be counted in determining the existence of a quorum at anymeeting of the Committee during which action is taken with respect to grantingoptions to him).

3.02     Committee'sRecommendations.     The Board may accept all or any part of therecommendations of the Committee or may refer all or any part thereof back tothe Committee for further consideration and recommendation.  Suchrecommendations may include, but not be limited to, the following:

(a)     resolution of questionsarising in respect of the administration, interpretation and application of thePlan;

(b)     reconciliation of anyinconsistency or defect in the Plan in such manner and to such extent as shallreasonably be deemed necessary or advisable to carry out the purpose of thePlan;

(c)     determination of theEmployees, Officers and Directors (or their wholly-owned corporations) to whom,and when, options should be granted, as well as the number of Shares subject toeach option;

(d)     determination of the termsand conditions of the option agreement to be entered into with any optionee,consistent with this Plan; and

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(e)     determination of theduration and purpose of leaves of absence from employment which may be grantedto optionees without constituting a termination of employment for purposes ofthe Plan.

3.03     Grant by Resolution.     The Board, on its own initiative or, if aCommittee of the Board shall have been appointed for the purpose ofadministering this Plan, upon the recommendation of such Committee, may byresolution designate those Employees, Officers and Directors to whom optionsshould be granted.

3.04     Terms of Options.     The resolution of the Board shall specify thenumber of Shares that should be placed under option to each such Employee,Officer or Director, the price per Share to be paid upon exercise of theoptions, and the period during which such options may be exercised.

3.05     Written Agreements.     Every option granted under this Plan shall beevidenced by a written agreement between the Company and the optionee and, wherenot expressly set out in the agreement, the provisions of such agreement shallconform to and be governed by this Plan.  In the event of any inconsistencybetween the terms of the agreement and this Plan, the terms of this Plan shallgovern.  

3.06     RegulatoryApprovals.     The Board shall obtain all necessary regulatoryapprovals, which may be required under applicable securities laws or the rulesor policies of the Exchange.  The Board shall also take reasonable steps toensure that no options granted under the Plan, or the exercise thereof, shallviolate the securities laws of the jurisdiction in which any optioneeresides.
**PART 4CONDITIONS GOVERNING THE GRANTING AND EXERCISING OF OPTIONS
4.01     Exercise Price.     The exercise price of an option granted under thisPlan shall not be less than the Market Price.  The Market Price is subject toadjustment in the case that any of the following special circumstancesapply:

(a)     the Company is undertaking aconsolidation of its shares and notice of the grant falls within three months ofsuch consolidation;

(b)     the Company is undergoing aReverse Takeover;

(c)     the Company is suspendedfrom trading its shares on the Exchange;

(d)     the optionee is aware of animpending material change in the affairs of the Company; 

(e)     the Exchange determines thatthe Market Price is not a fair reflection of the market for the Company'sshares; or

(f)     the Company has completed apublic distribution of its securities within 6 months of the notice of thegrant.

4.02     Expiry Date.     Each option shall, unless sooner terminated,expire on a date to be determined by the Board which will not, in the case thatthe Company is a Venture Company, be later than 5 years from the day the optionis granted or, if the Company is an Advanced Company and the optionee is not aconsultant, not be later than 10 years from the date the option is granted.

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4.03     Different ExercisePeriods, Prices and Number.     The Board may, in its absolute discretion, upongranting options under this Plan, specify different time periods following thedates of granting the options during which the optionees may exercise theiroptions to purchase Shares and may designate different exercise prices andnumbers of Shares in respect of which each optionee may exercise his optionduring each respective time period.

4.04     Number of Shares.     The number of Shares reserved for issuance to anyone person pursuant to options granted under this Plan, together with anyoptions granted to that person during the previous 12 months in the case thatthe Company is a Venture Company, shall not exceed 5% of the issued andoutstanding Shares at the time of granting of the options (but 2% in the casethat the optionee is a consultant or, generally, employed in an investorrelations capacity).

4.05     Death of Optionee.     If an optionee dies prior to the expiry of hisoption, his legal representatives may, within the lesser of:

(a)     one year from the date ofthe optionee's death (or such lesser period as may be specified by the Board atthe time of granting the option), and

(b)     the expiry date of theoption, 

exercise any portion of such option.

4.06     Expiry on Termination orCessation.     If an optionee ceases to be a Director, Officer orEmployee for any reason other than death, and provided that the Company is aVenture Company, his option shall terminate 30 days after such cessation (orsuch lesser period as may be specified by the Board at the time of granting theoption) and all rights to purchase Shares under such option shall cease andexpire and be of no further force or effect.

4.07     Leave of Absence.     Employment shall be deemed to continue intactduring any sick leave or other bona fide leave of absence if the period of suchleave does not exceed 90 days or, if longer, for so long as the optionee's rightto reemployment is guaranteed either by statute or by contract.  If the periodof such leave exceeds 90 days and the optionee's reemployment is not soguaranteed, then his employment shall be deemed to have terminated on theninety-first day of such leave.

4.08     Assignment.     No option granted under this Plan or any rightthereunder or in respect thereof shall be transferable or assignable otherwisethan by will or pursuant to the laws of succession except that, if permitted bythe rules and policies of the Exchange, an optionee shall have the right toassign any option granted to him hereunder to a trust or similar legal entityestablished by such optionee.

4.09     Notice.     Options shall be exercised only in accordance withthe terms and conditions of the agreements under which they are respectivelygranted and shall be exercisable only by notice in writing to the Company at itsprincipal place of business.

4.10     Payment.     Subject to any vesting requirements described ineach individual option agreement, options may be exercised in whole or in partat any time prior to their lapse 
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or termination.  Shares purchased by anoptionee on exercise of an option shall be paid for in full at the time of theirpurchase (i.e. concurrently with the giving of the requisite notice).
4.11     Share Certificate.     As soon as practicable after due exercise of anoption, the Company shall issue a share certificate evidencing the Shares withrespect to which the option has been exercised.  Until the issuance of suchshare certificate, no right to vote or receive dividends or any other rights asa shareholder shall exist with respect to such Shares, notwithstanding theexercise of the option.  No adjustment will be made for a dividend or otherright for which the record date is prior to the date the share certificate isissued, except as provided in Part 6 hereof.

4.12     Vesting.     Subject to the approval to the contrary by theExchange, the options granted to an optionee under this Plan shall vest, and nototherwise be exercisable, in accordance with the following schedule:

(a)     33% on the date such optionsare granted under the Plan up to and including the expiry of the first year ofthe term of the option;

(b)     33% in the second year ofthe term of the option;

(c)     34% in the third year of theterm of the option.

At the time an option is granted, the board of directors ofthe Company may determine that it is desirable to grant an option for which thevesting of rights should be other than as provided above, and may fix suchvesting period for that option as it may, in its sole discretion, determine tobe appropriate. 
**PART 5RESERVE OF SHARES FOR OPTIONS
5.01     Maximum Number of SharesReserved Under Plan.     The aggregate number of Shares which may besubject to issuance pursuant to options granted under this Plan shall not exceed1,800,000 as such Shares are presently constituted.  This number is subject toadjustment in accordance with Part 6 hereof.  In addition, all options grantedoutside of this plan, which are in existence on the effective date of this Plan,shall be counted as if granted under this Plan.  The terms of this Plan shallnot otherwise govern such options.

5.02     Sufficient AuthorizedShares to be Reserved.     Whenever the Memorandum or Articles of the Companylimit the number of authorized Shares, a sufficient number of Shares shall bereserved by the Board to satisfy the exercise of options granted under this Planor otherwise.  Shares that were the subject of options that have lapsed orterminated shall thereupon no longer be in reserve and may once again be subjectto an option granted under this Plan.

5.03     Maximum Number of SharesReserved for Insiders.     Unless Disinterested Shareholder Approval isobtained, under no circumstances shall this Plan, together with all of theCompany's other previously established or proposed stock options, stock optionplans, employee stock purchase plans or any other compensation or incentivemechanisms involving the issuance or potential issuance of Shares, result, atany time, in:

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(a)     the number of Sharesreserved for issuance pursuant to options granted to Insiders exceeding 10% ofthe outstanding Shares at the time of granting the options;

(b)     the issuance to Insiders,within a one year period, of a number of Shares exceeding 10% of the outstandingShares at the time of granting the options; or

(c)     the issuance to any oneInsider and such Insider's Associates, within a one year period, of a number ofShares exceeding 5% of the outstanding Shares at the time of granting theoptions (the ability to grant in excess of 5% per year to Insiders is otherwiserestricted by the policies of the Exchange to Advanced Companies).
**PART 6CHANGES IN SHARES
6.01     Share Consolidation orSubdivision.     In the event that the Shares are at any timesubdivided or consolidated, the number of Shares reserved for option and theprice payable for any Shares that are then subject to option shall be adjustedaccordingly.

6.02     Stock Dividend.     In the event that the Shares are at any timechanged as a result of the declaration of a stock dividend thereon, the numberof Shares reserved for option and the price payable for any Shares that are thensubject to option may be adjusted by the Board to such extent as they deemproper in their absolute discretion.

6.03     Reorganization.     Subject to any required action by itsshareholders, if the Company shall be a party to an reorganization, merger,dissolution or sale or lease of all or substantially all of its assets, whetheror not the Company is the surviving entity, the option shall be adjusted so asto apply to the securities to which the holder of the number of shares ofcapital stock of the Company subject to the option would have been entitled byreason of such reorganization, merger or sale or lease of all or substantiallyall of its assets, provided however that the Company may satisfy any obligationsto an optionee hereunder by paying to the said optionee in cash the differencebetween the exercise price of all unexercised options granted hereunder and thefair market value of the securities to which the optionee would be entitled uponexercise of all unexercised options, regardless of whether all conditions ofexercise relating to continuous employment have been satisfied.  Adjustmentsunder this paragraph or any determinations as to the fair market value of anysecurities shall be made by the Board, or any committee thereof specificallydesignated by the Board to be responsible therefor, and any reasonabledetermination made by the said Board or committee thereof shall be binding andconclusive.

6.04     Rights Offering.     If at any time the Company grants to the holdersof its capital stock rights to subscribe for and purchase pro rata additionalsecurities of the Company or of any other corporation or entity, there shall beno adjustments made to the number of shares or other securities subject to theoption in consequence thereof and the said stock option of the optionee shallremain unaffected.
**PART 7EXCHANGE'S RULES AND POLICIES APPLY
7.01     Exchange's Rules andPolicies Apply.     This Plan and the granting and exercise of anyoptions hereunder are also subject to such other terms and conditions as are setout 
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from time to time in the rules and policies on stock optionsof the Exchange and any securities commission having jurisdiction and such rulesand policies shall be deemed to be incorporated into and become a part of thisPlan.  In the event of an inconsistency between the provisions of such rules andpolicies and of this Plan, the provisions of such rules and policies shallgovern.**PART 8AMENDMENT OF PLAN
8.01     Board May Amend.     The Board may, by resolution, amend or terminatethis Plan, but no such amendment or termination shall, except with the writtenconsent of the optionees concerned, affect the terms and conditions of optionspreviously granted under this Plan which have not then been exercised orterminated.

8.02     Exchange Approval.     Any amendment to this Plan or options grantedpursuant to this Plan shall not become effective until accepted for filing bythe Exchange.
**PART 9MISCELLANEOUS PROVISIONS
9.01     Other Plans NotAffected.     This Plan shall not in any way affect the policiesor decisions of the Board in relation to the remuneration of Directors, Officersand Employees.

9.02     Effective Date ofPlan.     This Plan was adopted by the Board of Directors onJune 16, 1999.  This Plan shall become effective upon the later of the date ofacceptance for filing of this Plan by the Exchange and the approval of this Planby the shareholders of the Company (i.e. by the holders of a majority of theCompany's securities present or represented, and entitled to vote at a meetingof shareholders duly held).  However, options may be granted under this Planprior to the receipt of approval of the Exchange or the shareholders.  Anyoption granted before regulatory or shareholder approval is obtained, may not beexercised until both are obtained.

9.03     Use of Proceeds.     Proceeds from the sale of Shares pursuant to theoptions granted and exercised under the Plan shall constitute general funds ofthe Company and shall be used for general corporate purposes.

9.04     Headings.     The headings used in this Plan are for convenienceof reference only and shall not in any way affect or be used in interpreting anyof the provisions of this Plan.

9.05     No Obligation toExercise.     Optionees shall be under no obligation to exerciseoptions granted under this Plan.****************