Quiznos Corp – ‘10QSB’ for 6/30/96

As of:  Wednesday, 8/14/96   ·   For:  6/30/96   ·   Accession #:  949303-96-32   ·   File #:  0-23174

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Quarterly Report — Small Business   —   Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                    39±   157K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     1      6K 

10QSB   —   Quarterly Report — Small Business
Document Table of Contents

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

FORM 10-QSB                 

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF                  
THE SECURITIES EXCHANGE ACT OF 1934               
For the quarterly period ended June 30, 1996                

OR                

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)                 
OF THE SECURITIES EXCHANGE ACT OF 1934                
For the transition period from           to                         

Commission File Number 000-23174                

THE QUIZNO'S CORPORATION                

Colorado          84-1169286                

7555 East Hampden Avenue, Suite 601                 
Denver, Colorado  80231                 

Registrants' Telephone Number Is (303) 368-9424                 

Check  whether issuer (1) has 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  X    No                      

State  the  number  of shares outstanding  of  each  of  the          
issuer's  classes  of common stock, as of the latest  practicable               
date.                                                                           
                              Outstanding at
                                             Class
August 12, 1996                                                                 
Common      Stock,      $0.001      par       value 
2,864,757 shares                                                                

THE QUIZNO'S CORPORATION                

Commission File Number:  000-23174                

Quarter Ended June 30, 1996                 

FORM 10-QSB                 

Part I  FINANCIAL INFORMATION                 

Consolidated Statements of Operations                 Page 1                    

Consolidated Balance Sheets                           Page 2                    

Consolidated Statements of Cash Flows                 Page 4                    

Consolidated Statement of Stockholders' Equity        Page 7                    

Notes to Consolidated Financial Statements            Page 8                    

Management's Discussion and Analysis of Financial                               
Condition and Results of Operations                Page 10                  
THE QUIZNO'S CORPORATION

STATEMENTS OF OPERATIONS

                                                        [Enlarge/Download Table]

                                        Three Months Ended                 Six Months Ended    
                                                  June 30,                             June 30,
                                     1996       1995       1996        1995                    
                                                                                               
REVENUE:                                                                                       
   Royalty  fees                             $  395,286  $  254,152  $   714,221               
$  463,728                                                                                     
  Initial franchise fees         242,500     100,000     497,500    175,000                    
  Area director marketing fees   637,169     266,203     887,655    447,098                    
  Sales by Company owned stores  709,258     784,533   1,337,250  1,451,805                    
  Sales by stores held for resale  3,626        --        20,572       --                      
  Interest Income                 42,735      43,068      83,549     85,888                    
  Other                           60,469       61,374     115,639       98,144                 
                               2,091,043   1,509,330   3,656,386  2,721,663                    

EXPENSES:                                                                                      
  Sales and royalty commissions  225,462      54,036     359,188     80,513                    
  Franchise advertising and promotion75,213    9,706     163,786     17,157                    
  General and administrative expenses962,166 658,776   1,700,433  1,201,079                    
  Cost of sales at Company stores259,380     254,394     478,074    482,871                    
  Cost of labor at Company stores196,690     330,469     387,703    537,516                    
  Other Company store expenses   235,977     218,768     444,695    485,083                    
  Stores held for resale expenses  8,832        --        39,361       --                      
  Loss on sale of Company stores  12,538        --        72,617       --                      
  Depreciation and amortization   67,930      55,988     139,573    110,876                    
  Interest expense                21,509      31,884      38,658     64,680                    
   Provision  for  loss on stores held for resale             --          34,393               
--         85,438                                                                              
                               2,065,697   1,648,414   3,824,088  3,065,213                    

Net income (loss)                 25,346    (139,084)   (167,702)  (343,550)                   

Preferred stock dividends        (14,235)    (14,235)     (28,470)     (28,470)                

Net income (loss) applicable to                                                                
  common shareholders        $    11,111  $ (153,319) $ (196,172)$ (372,020)                   

Net  income  (loss)  per  share of common  stock$         0.00  $        (0.05)$               
(0.07)$      (0.13)                                                                            

Weighted average common shares                                                                 
    outstanding                                2,864,757   2,862,901   2,864,757               
2,862,503                                                                                      

THE QUIZNO'S CORPORATION                

CONSOLIDATED BALANCE SHEETS                 

ASSETS                

                                                                [Download Table]

                                   June 30,     December 31,      
                                    1996           1995           
                                                                  
CURRENT ASSETS:                                                   
  Cash and cash equivalents        $  791,229    $ 1,684,422      
  Notes receivable, collected subsequent                          
    to June 30, 1996                  398,017           --        
  Restricted cash                      16,339         15,927      
  Current portion of notes receivable 138,703        304,918      
  Accounts receivable, net of allowance for                       
    doubtful accounts of $15,977 in 1996 and                      
    $11,777 in 1995                   299,808        276,522      
  Other current assets                243,624        155,973      
  Assets of stores held for resale            --       144,499    
     Total current assets           1,887,720      2,582,261      

Property and equipment, at cost, net of                           
  accumulated depreciation and amortization of                    
  $159,963 in 1996 and $144,561 in 19951,334,892   1,083,476      

OTHER ASSETS:                                                     
  Intangible assets, net of accumulated                           
    amortization of $517,996 in 1996 and                          
    $414,500 in 1995                  484,783        537,149      
  Deferred assets                     516,646        588,051      
  Deposits                                            23,87031,454
  Notes receivable                    728,576        528,484      
     Total other assets             1,753,875      1,685,138      

                                  $ 4,976,487    $ 5,350,875      

(continued on next page)                
THE QUIZNO'S CORPORATION                

CONSOLIDATED BALANCE SHEETS                 

LIABILITIES AND STOCKHOLDERS' EQUITY                

                                                                [Download Table]

                                   June 30,     December 31,                    
                                    1996           1995                         
                                                                                
CURRENT LIABILITIES:                                                            
  Accounts payable             $     531,251  $     713,446                     
  Accrued liabilities                 68,230         53,168                     
  Line of credit                     110,000        160,000                     
  Current portion of long term obligations177,995   171,217                     
  Provision for loss on stores sold        12,629         58,000                
     Total current liabilities       900,105      1,155,831                     

Long term obligations                461,138        556,958                     
Other liabilities                       --           12,101                     
Deferred initial franchise fees    1,494,586      1,309,155                     
     Total liabilities             2,855,829      3,034,045                     

STOCKHOLDERS' EQUITY:                                                           
  Preferred stock, $.001 par value, liquidation                                 
    value of $6 per share plus unpaid and                                       
    accumulated dividends, 1,000,000 authorized,                                
    issued and outstanding 146,000 in 1996 and                                  
           in        1995                                                    146
146                                                                             
  Common stock, $.001 par value, 9,000,000 shares                               
    authorized, issued and outstanding 2,864,757 in                             
    1996 and 2,864,757 in 1995         2,865          2,865                     
  Capital in excess of par value   3,261,885      3,290,355                     
  Accumulated deficit             (1,144,238)      (976,536)                    
     Total stockholders' equity    2,120,658      2,316,830                     

                                 $ 4,976,487    $ 5,350,875                     
                                                                      

THE QUIZNO'S CORPORATION                

CONSOLIDATED STATEMENTS OF CASH FLOWS                 

                                                                [Download Table]

                                              Six Months Ended                  
                                                                            June
30,                                                                             
                                           1996           1995                  
                                                                                
CASH FLOWS FROM OPERATING ACTIVITIES:                                           
       Net      loss                                            $      (167,702)
$  (343,550)                                                                    
  Adjustments to reconcile net loss to net cash                                 
    used in operating activities:                                               
      Depreciation and amortization    139,573        110,876                   
         Provision    for    losses   on   accounts    receivable          4,200
2,877                                                                           
      Reserve for losses on stores sold(45,371)       (16,931)                  
         Promissory    notes   accepted   for   area   director    fees(325,712)
--                                                                              
      Changes in assets and liabilities:                                        
        Restricted cash                   (412)          (704)                  
        Accounts receivable            (91,033)      (158,040)                  
        Other current assets           (87,650)       (78,374)                  
        Accounts payable                39,610         53,985                   
        Accrued liabilities             15,061         95,714                   
        Deferred franchise costs      (150,399)       (17,371)                  
           Deferred    initial    franchise    fees         185,431          111
,772                                                                            
                 Other                                                  (12,101)
--                                                                              
     Net cash used in operations      (496,505)      (239,746)                  

CASH FLOWS FROM INVESTING ACTIVITIES:                                           
  Purchase of property and equipment  (181,735)      (233,472)                  
     Proceeds    from   sales   of   stores   held   for   resale             --
99,000                                                                          
  Acceptance of notes receivable      (135,000)      (211,515)                  
     Principal    payments    received   on   notes    receivable         92,365
--                                                                              
  Intangible assets                    (12,389)       (52,034)                  
  Change in deposits                     7,584         21,487                   
       Investment     in     stores     under     development                 --
--                                                                              
     Net    cash    used    in   investing   activities      (229,175)       (37
6,534)                                                                          

(continued on next page)                

THE QUIZNO'S CORPORATION                

CONSOLIDATED STATEMENTS OF CASH FLOWS                 
(continued from previous page)                                                  

                                                                [Download Table]

                                              Six Months Ended                  
                                                       June 30,                 
                                         1996           1995                    
                                                                                
CASH FLOWS FROM FINANCING ACTIVITIES:                                           
     Proceeds    from    issuance    of    notes    payable$         29,511    $
--                                                                              
     Principle    payments    on    long   term    obligations         (118,554)
(220,598)                                                                       
  Principle payments on lines of credit(50,000)     (50,000)                    
  Proceeds from issuance of common stock--            4,394                     
  Dividends paid                     (28,470)       (28,470)                    
     Net    cash    used    in    financing   activities       (167,513)       (
294,674)                                                                        

Net decrease in cash                (893,193)      (910,954)                    

Cash, beginning of period          1,684,422      3,112,575                     

Cash, end of period              $   791,229    $ 2,201,621                     

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                              
     Cash    paid    during    the   period   for   interest$        38,658    $
64,680                                                                          

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING                    
ACTIVITIES:                                                                     
     On    May    15,   1996,   the   Company   subleased   a   Company    owned
     restaurant    located   in   Denver   and   granted   the   sublessee    an
     option   to   purchase   the   subleased  assets   for   $95,000   at   any
     time   during   the   term  of  the  sublease.   The   rent   required   to
     be   paid   to   the   Company  under  the  sublease  is   based   on   the
     sales   of   the   restaurant.   The  net  book   value   of   the   assets
     subleased     is    $148,251,    which    amount    is    classified     as
     property   and   equipment   on  the  books   of   the   Company   and   is
     being    depreciated   over   the   estimated   useful    life    of    the
     subleased   assets.    If   the   option   is   exercised,   the    Company
     will   record   a   gain   or   loss   at   that   time   equal   to    the
     difference    between    the   purchase   price   and    the    depreciated
net book value of the subleased assets.                               

(continued on next page)                
THE QUIZNO'S CORPORATION                

CONSOLIDATED STATEMENTS OF CASH FLOWS                 

(continued from previous page)                                                  

     During   the   first   quarter   of   1996,   the   Company   subleased   a
     Company   owned   restaurant   located   in   Detroit   and   granted   the
     sublessee    an    option    to    purchase    the    restaurant    through
     December   31,   1996   for  $135,000.   During  the   first   quarter   of
     1996,    the   assets   of   the   restaurant   were   reclassified    from
     Assets   of   Stores   Held   for  Resale  to   Property   and   Equipment,
     and   written   down  to  the  amount  of  the  option  price,   with   the
     loss,   which   had   been   accrued  at   December   31,   1995,   charged
to Provision for Loss on Stores Held for Resale.                      

     During   the   first   quarter   of  1995,   the   Company   issued   2,500
     shares    of    its    $.001   par   value   common   stock    to    Berger
     Restaurant   Corporation   in   exchange   for   the   general    partner's
     interest    in   Quiz   One   Limited   Partnership   owned    by    Berger
     Restaurant     Corporation.      The     shares     and     the     general
partner's interest were valued at $10,000.                            

(Remainder of page intentionally left blank)                
THE QUIZNO'S CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                                                [Download Table]

                         Convertible                               Additional  
                      Preferred  Stock         Common  Stock            Paid-In
Accumulated                                                                    
                           Shares       Amount           Shares          Amount
Capital             Deficit                                                    
                                                                               
Balances at January 1, 1995                                                    
                   146,000 $    146 2,860,000   $ 2,860$ 3,339,495  $ (684,964)

Issuance of common stock                                                       
  in exchange for general                                                      
  partnership interest--       --       2,500         3      9,997        --   

Purchase price paid for Quiz                                                   
  One Limited Partnership                                                      
  general partner's interest                                                   
  over historical book value                                                   
  (goodwill)          --       --        --        --      (10,000)       --   

Issuance of common stock                                                       
  pursuant to employee                                                         
  benefit plan        --       --       2,257         2      7,803        --   

Preferred stock dividends--    --        --        --      (56,940)       --   

Net    loss                 --              --                --             --
(291,572)                                                                      

Balances at December 31, 1995                                                  
                   146,000        1462,864,757    2,865   3,290,355   (976,536)

Preferred stock dividends--    --        --        --      (28,470)       --   

Net    loss                 --              --                --             --
--               (167,702)                                                     

Balances at June 30, 1996146,000$      1462,864,757$ 2,865$ 3,261,885 $(1,144,2
38)                                                                            


THE QUIZNO'S CORPORATION                

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                

1.      In   the   opinion   of   management,   all   adjustments,   consisting 
only    of    normal    recurring   adjustments   necessary    for    a    fair 
statement   of   (a)   the   results  of  consolidated   operations   for   the 
three   and   six   month   periods  ended  June  30,   1996   and   June   30, 
1995,   (b)   the   consolidated  financial  position   at   June   30,   1996, 
(c)   the   statements  of  cash  flows  for  the  six  month   periods   ended 
June   30,   1996  and  June  30,  1995,  and  (d)  the  consolidated   changes 
in   stockholders'   equity  for  the  six  month   period   ended   June   30, 
1996, have been made.                                                           

2.      The    accompanying   unaudited   consolidated   financial   statements 
have     been    prepared    in    accordance    with    generally     accepted 
accounting      principles      for     interim     financial      information. 
Accordingly,    they    do    not   include    all    the    information    and 
footnotes    required    by    generally   accepted    accounting    principles 
for   financial   statements.    For  further   information,   refer   to   the 
audited    consolidated   financial   statements   and   notes   thereto    for 
the    year    ended   December   31,   1995,   included   in   the   Company's 
Annual    Report   on   Form   10-KSB   to   the   Securities   and    Exchange 
Commission filed on March 29, 1996.                                             

3.     The   results   for  the  three  and  six  month  periods   ended   June 
30,   1996   are   not   necessarily  indicative  of  the   results   for   the 
entire fiscal year of 1996.                                                     

4.   RELATED PARTY TRANSACTIONS                                                 

    In   1995,   the   Company   sold  the  Detroit   area   directorship   to
Michigan   Restaurant   Development  Corp.,  which   is   100%   owned   by   a 
director   and   major   stockholder  of  the  Company,   for   $150,000   paid 
in cash.                                                                        

    Two    directors   of   the   Company,   one   of   whom   is   a    major
stockholder,   own   more   than   50%   of   the   outstanding    shares    of 
Illinois    Food    Managers,    Inc,   which    owns    the    Chicago    area 
directorship    and   two   operating   franchises   in   Chicago,    one    of 
which was sold to an unrelated franchisee in June of 1996.                      

    Two   directors   and   major  stockholders  of  the   Company   own   55%
of   S&K   Food   Services,   Inc.,  which  was   a   franchisee   until   such 
franchise was sold in October, 1995.                                            

    Two   directors   and   major   stockholders   of   the   Company   loaned
Schaden   and   Schaden,   Inc.  (Schaden)  $99,243   in   1991   and   another 
$62,000   in   1994   under   notes  payable  agreements.    The   notes   were 
assumed by the Company when it acquired Schaden in 1994.                        

THE QUIZNO'S CORPORATION                

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)                

    Summarized    below   is   a   recap   of   related   party   transactions
included in the financial statements as of June 30:                             

                                                                [Download Table]

                                         1996          1995                    
                                                                               
     Assets                                                                    
          Accounts receivable         $24,372     $  43,591                    
          Current          portion         of         notes          receivable
13,734    5,331                                                                
          Notes receivable             74,708        25,925                    

     Liabilities                                                               
          Current portion of long                                              
            term obligations            6,076        41,810                    
          Long term obligations        13,117        27,350                    

     Revenue                                                                   
          Royalty           fees                                         14,066
26,781                                                                         
          Other           income                                          6,900
16,587                                                                         

     Expenses                                                                  
          General and administrative   36,474        28,517                    

5.   LITIGATION                                                                 

    On   May   24,   1996,   an   area  director  filed   suit   against   the
Company    seeking   damages   in   connection   with   the   termination    of 
their   area   director  agreement.   The  Company  denies   all   claims   and 
is    vigorously   defending   this   action.    The   case   has    not    yet 
reached   the   discovery  stage  and  the  Company  has  not  been   able   to 
assess   all   merits   of   the  area  director's  claims,   but,   based   on 
the   information   available   at   this   time,   Management   believes   the 
resolution   of   this  matter  will  not  have  a  material   adverse   effect 
on the financial condition of the Company.                                      

THE QUIZNO'S CORPORATION                

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                 
CONDITION AND RESULTS OF OPERATIONS                 

Overview                                                                        

The     Company's    primary    business,    and    the    focus     of     its 
organizational    structure,    continues   to    be    franchising    QUIZNO'S 
restaurants.    As   a   franchisor,  revenue  is  derived   from;   (1)   area 
director    marketing   fees,   (2)   initial   franchise   fees,    and    (3) 
royalties    paid   by   franchisees.    Area   director   fees   occur    only 
once   for   each   exclusive  area  sold.   Although  the   Company   believes 
there   are   a   substantial  number  of  markets  remaining   to   be   sold, 
eventually   such   fees   are   expected  to  decline   as   the   number   of 
available   remaining   markets   decline.    Initial   franchise   fees    are 
one   time   fees  paid  upon  the  sale  of  a  franchise  and  vary  directly 
with   the   number   of   franchises  the   Company   can   sell   and   open. 
Royalties,   on   the   other   hand,  are   ongoing   fees   paid   by   every 
franchised    restaurant    and    will   increase    as    the    number    of 
franchised    restaurants    increase.     Each    of    these    sources    of 
revenue   contributes   to  the  profitability  of   the   Company,   but   the 
relative   contribution   of   each   source   will   vary   as   the   Company 
matures.     The   Company   expects   that   over   time   initial   franchise 
fees   and   royalties   will  generate  proportionally   more   revenue   than 
area director marketing fees.                                                   

The   following   chart   reflects   the   Company's   growth   in   terms   of 
units, franchise sales, and systemwide sales.                                   

                                                                [Download Table]

                           Three Months        Six Months                      
                         Ended June 30,      Ended June 30,                    
                           1996     1995       1996     1995                   
                                                                               
     Restaurants     open,     beginning        116               72        105
66                                                                             
     New restaurants opened  13        9         26       15                   
     Restaurants     closed                   (1)              -            (3)
-                                                                              
     Restaurants open, end  128       81        128       81                   

     New     franchises     sold                 30                8         54
17                                                                             
     Initial     franchise    fees    collected$343,000    $145,000    $768,000
$325,500                                                                       

                                                                [Download Table]

                                             As of June 30,                    
                                               1996     1995                   
                                                                               
     Franchises sold, not open                   89       55                   
     Area Directors                              59       36                   
     Company Stores                               7       10                   
     Stores      held      for      resale                                    -
-                                                                              

THE QUIZNO'S CORPORATION                

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                 
CONDITION AND RESULTS OF OPERATIONS (continued)                 

Results of Operations                                                           

Comparison   of  the  First  Half  of  1966  with  the  First  Half   of   1995 
and the Second Quarter of 1996 with the Second Quarter of 1995                  

    Total   revenue  increased  39%  in  the  second  quarter   of   1996   to
$2,091,044   from  $1,509,300  for  the  same  period  last   year.    In   the 
first   half,   revenue   increased   34%   to   $3,656,387   from   $2,721,663 
in the first half of 1995.                                                      

    Franchise    related    revenue    (royalties,    franchise    and    area
director   fees)   increased   105%  in  the  second   quarter   and   93%   in 
the first half.                                                                 

    Royalty   fees   increased  56%  in  the  second  quarter   of   1996   to
$395,286   from   $254,152   in   the  same  period   last   year.    For   the 
first   half,   royalty  fees  increased  54%  compared  to  the   first   half 
of    1995.    Royalty   fees   are   a   percentage   of   each   franchisee's 
sales   paid   to  the  Company  weekly  or  monthly  and  will   increase   as 
new   franchises   open,   sales  increase,  and   as   the   average   royalty 
percentage   increases.    Company  owned  stores   do   not   pay   royalties. 
At   June   30,   1996,  there  were  121  franchises  open  as   compared   to 
71   at   June   30,   1995.   The  royalty  fee  is   between   4%   and   6%, 
depending   on   when   the   franchise  was  purchased.    The   Company   has 
no immediate plans to further increase its royalty fee.                         

    Initial   franchise   fees   increased  143%   in   the   second   quarter
of   1996   to   $242,500  from  $100,000  in  the  same  period   last   year. 
For    the    first    half,    initial   franchise   fees    increased    184% 
compared   to   the   first  half  of  1995.   Initial   franchise   fees   are 
one   time   fees   paid  by  franchisees  at  the  time   the   franchise   is 
sold,   and   are  not  recognized  as  income  until  the  period   in   which 
all   of   the   Company's  obligations  relating  to  the   sale   have   been 
substantially     performed,     which    generally     occurs     when     the 
franchise   opens.    In   the  first  half  of  1996,   the   Company   opened 
26   franchises   as   compared   to  15  franchises   opened   in   the   same 
period   in   1995.    The   Company's   initial   franchise   fee   has   been 
$20,000   since   November  1,  1994.   Some  of  the  franchises   opened   in 
the   first   quarter   of  1996  purchased  the  franchise   before   November 
1,   1994   and   paid   an   initial  franchise   fee   less   than   $20,000. 
Beginning   in   1996,  the  Company  will  sell  an  existing   franchisee   a 
second    franchise   for   $15,000,   and   a   third   for   $10,000.     For 
franchises   to   be   operated  in  non-traditional   kiosk   type   locations 
with   another   business,   the  initial  franchise   fee   is   $10,000   for 
the    first,    $7,500   for   the   second   and   $5,000   for    additional 
franchises.                                                                     

THE QUIZNO'S CORPORATION                

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                 
CONDITION AND RESULTS OF OPERATIONS (continued)                 

    From   June   1,   1996  through  August  31,  1996,  the   Company   will
sell   to   approved   franchisees   one   additional   franchise   for   every 
currently    effective   franchise   agreement   for   an   initial   franchise 
fee   of   $1,000.    Such   franchises  must  be  opened   by   December   31, 
1996.    If   the   purchaser  does  not  have  a  franchise  currently   open, 
the   first   franchise   must  be  open  by  December   31,   1996   and   the 
second   franchise,   purchased   under  this   discount   program,   must   be 
opened   by   December   31,  1997.   As  of  June  30,   1996,   the   Company 
had sold eight such franchises, none of which had opened.                       

    Area    director   marketing   fees   increased   139%   in   the   second
quarter   of   1996   to  $637,167  from  $266,203.   For   the   first   half, 
area   director   marketing  fees  increased  99%   compared   to   the   first 
half   of   1995.    Area   director  marketing  fees   are   one   time   fees 
paid   to   the   Company   for   the   right   to   sell   franchises   in   a 
designated,    non-exclusive,   geographical   area.    The   fee    is    $.03 
(increased   to   $.035   effective  July  1,   1996)   per   person   in   the 
designated   area,   plus   a   training  fee  of  $12,500.    The   population 
based   portion   of   the  fee  is  deemed  fully  earned   by   the   Company 
when    the   area   director   marketing   agreement   is   signed   and    is 
recognized   as   income   in  that  period.   During   the   second   quarter, 
15   area   directorships   were  sold  compared  to   five   in   the   second 
quarter   of  1995.   In  the  first  half  of  1996,  the  Company   sold   19 
area   directorships   as   compared   to   seven   area   directorships   sold 
in   the  first  half  of  1995.   At  June  30,  1996,  the  Company   had   a 
total    of    59    area   directors   who   owned   areas   encompassing    a 
population   base   equal   to  approximately  51%   of   the   population   of 
the United States.                                                              

    In   1995,   the   Company   began  offering  long   term   financing   to
certain   area   director   candidates   for   up   to   50%   of   the    area 
director   marketing   fee.    The  amount   financed   is   required   to   be 
paid   to   the   Company   in   installments   over   five   years   at    15% 
interest.    The   promissory  notes  are  personally  signed   by   the   area 
director    and    secured    by   collateral    unrelated    to    the    area 
directorship,   usually   a   second   mortgage   in   the   area    director's 
home.    Of   the   19   area  directorships  sold  in  the   first   half   of 
1996,   one   used   this   financings  for  $22,500.   A   portion,   $303,341 
as   of   June  30,  1996,  of  the  area  director  marketing  fees  for   the 
second   quarter   of   1996,  were  financed  for   terms   of   approximately 
30 days.                                                                        

    Sales   by   Company  owned  stores  decreased  by  10%  in   the   second
quarter   of   1996   to   $709,258  from  $784,533  in  the   second   quarter 
of    1995.    For   the   first   half,   sales   by   Company   owned   store 
decreased   by   8%   from   the  first  half   of   1995.    In   the   second 
quarter   of   1996,   the   Company  operated  six   stores   for   the   full 
three   months,  one  for  one  month  until  its  sale  to  a  franchisee   in 
May,   1996,   and   one  located  in  a  baseball  stadium   which   re-opened 
in   April,   1996   for   three  months,  a  total  of  22   store   operating 
months.    In   the   second  quarter  of  1995,  the  Company   operated   ten 
stores    for   a   total   of   25   operating   months.    For   the   second 
quarter,   Company   stores  earned  a  profit  of  $17,211   compared   to   a 
loss   of   $19,098  in  the  same  quarter  last  year.   During   the   first 
half of 1996, the                                                               

THE QUIZNO'S CORPORATION                

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                 
CONDITION AND RESULTS OF OPERATIONS (continued)                 

Company   earned   a   profit  of  $26,778  at  Company  stores   compared   to 
a   loss   of  $53,665  in  the  same  period  last  year.   The  Company   has 
entered    into    an    agreement   to   acquire   a    Quizno's    restaurant 
located    in    Denver    from   a   franchisee,    which    acquisition    is 
expected   to   be   completed   in   the   third   quarter   of   1996,    and 
operate   the   restaurant   as  a  Company  owned  store.    Management   does 
not   expect   to   acquire   or   sell  a  significant   number   of   Company 
stores in 1996.                                                                 

    The   net   loss  from  stores  held  for  resale  was  $18,789   in   the
first   half  of  1996.   There  were  no  stores  held  for  resale   in   the 
first   half   of  1995.   The  1996  loss  is  attributable   to   one   store 
taken    over    during   the   first   quarter   from   a    franchisee    and 
operated   by   the   Company  until  it  was  resold  to  a   new   franchisee 
in April, 1996.                                                                 

    Sales    and    royalty    commissions   expense   increased    317%    to
$225,462   in  the  second  quarter  of  1996  from  $54,036  in   the   second 
quarter    of    1995.     For   the   first   half,    sales    and    royalty 
commission     increased     346%.     Sales    and     royalty     commissions 
represent   amounts   paid  to  the  area  directors  of  the   Company   under 
the   area   director   program  implemented   in   March   of   1995.    Since 
this   program   was   not   implemented   until   the   end   of   the   first 
quarter   of   1995,  the  related  expenses  for  the  first  half   of   1995 
were   small.    Area   directors  receive  a   sales   commission   equal   to 
50%   of   the   initial   franchise  fees  received   by   the   Company   for 
franchises    sold    and   opened   in   the   area   director's    territory. 
Area   directors  also  are  paid  40%  of  the  royalties  received   by   the 
Company    from   franchises   open   in   the   area   director's   territory. 
In   exchange   for  these  payments,  the  area  director   is   required   to 
market      and     sell     franchises,     provide     location     selection 
assistance,     provide     on-site     opening     assistance      to      new 
franchisees,   and   perform   monthly  quality   control   reviews   at   each 
franchise    open    in   the   area   director's   territory.     Sales    and 
royalty   commission   expense  is  expected  to  continue   to   increase   in 
direct   proportion   to   the   number   of   franchise   openings   and   the 
increase in royalty fee revenue.                                                

    Franchise    advertising    and   promotion    expenses    increased    to
$75,213   in   the  second  quarter  of  1996  from  $9,706   in   the   second 
quarter   of   1995,   and   increased  to   $163,786   in   the   first   half 
compared   to   $17,157   in   the   first  half   of   1995.    The   increase 
reflects    the   Company's   commitment   to   an   aggressive    and    rapid 
franchise     sales     and     development     program,     which     includes 
consistent    and    regular   national   advertising    of    the    Company's 
franchise      opportunity      combined     with      regularly      scheduled 
orientation   and   discovery   days   for   franchise   and   area    director 
candidates.                                                                     

    General     and     administrative    expenses    increased     46%     to
$962,166   for  the  second  quarter  of  1996  from  $658,766  in   the   same 
period   last   year.    For  the  first  half,  general   and   administrative 
expenses   increased   42%   from  the  same   period   last   year.    General 
and administrative                                                              

THE QUIZNO'S CORPORATION                

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                 
CONDITION AND RESULTS OF OPERATIONS (continued)                 

expenses   include   all   of   the  operating   expenses   of   the   Company. 
The   increase   in   general   and  administrative   expenses   is   primarily 
due   to   the   addition   of  employees  to  service  the   rapidly   growing 
network    of    Quizno's    franchisees   and    area    directors.     Wages, 
indirect    labor    costs,    and   the   travel   associated    with    added 
franchise   support   and   franchise   development   personnel   represent   a 
substantial   portion   of   the   increase.    The   Company   believes    its 
general    and   administrative   expenses   are   adequate   and    are    not 
excessive in relation to the size of the Company.                               

    Loss   on   sale  of  Company  stores  was  $72,617  in  the  first   half
of   1996.    The  loss  is  primarily  related  to  a  franchised   store   in 
Missouri   that   was  taken  over  by  the  Company  from  a  franchisee   and 
sold   to   a   new  franchisee,  all  within  the  first  quarter   of   1996. 
In   addition,  the  Company  incurred  costs  related  to  the   sale   of   a 
Company   owned  store  in  Michigan  sold  in  the  first  quarter   of   1996 
that   were   over   and   above   the  amount   reserved   at   December   31, 
1995.    A  Company  owned  store  located  in  Denver  was  subleased   to   a 
franchisee   in   the   second  quarter  of  1996  for   no   gain   or   loss. 
There were no Company stores sold in the first quarter of 1995.                 

Systemwide Data                                                                 

    Systemwide   sales  for  the  second  quarter  were   up   59%   to   $8.9
million   compared   to  $5.6  million  for  the  same   quarter   last   year. 
Year   to   date   systemwide  sales  were  up  33%  to  $16.1   million   over 
$12.1   million   for  the  first  six  months  of  1995.    Systemwide   sales 
are   the   total   retail   sales  of  all  Quizno's  restaurants,   including 
Company owned restaurants.                                                      

    Same   store   sales   were   down  .9%   in   the   second   quarter   of
1996.    The   decrease  is  attributable,  in  large   part,   to   the   fact 
that   included   in   the  mix  are  the  Company's  top  volume   stores   in 
Colorado   which   are   approaching  their  maturity   after   several   years 
of   double   digit  growth.   Same  store  sales  is  based   on   38   stores 
open   all   of  the  second  quarter  of  1996  and  the  second  quarter   of 
1995.    The   Company   has   changed   its   method   of   calculating   same 
store   sales   to   exclude  nontraditional  units,  units   in   default   of 
their   franchise   agreement   for  which  such   default   is   unlikely   to 
be    cured,   units   being   sold,   and   the   first   three   months    of 
operations   for   new   units.   Because  the   Company   will   continue   to 
be   in   an   aggressive  growth  mode  for  the  next  few   years,   it   is 
anticipated    that    same    store   sales   will    fluctuate    as    units 
operating    in    evolving   markets   are   tracked.    The   Company    will 
continue   to   concentrate  on  its  overall  rapid  growth   as   a   primary 
goal   and   to   provide  interpretation  of  same  store  sales   from   year 
to year.                                                                        

THE QUIZNO'S CORPORATION                

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                 
CONDITION AND RESULTS OF OPERATIONS (continued)                 

    Average   unit   volume  for  the  1995  calendar   year   was   $321,000,
compared   to   $363,000   for  the  1994  calendar   year.    In   1994,   the 
Quizno's     restaurant    was    significantly    redesigned     to     reduce 
initial   costs,  reduce  beakeven  sales  levels,  and  to   fit   the   units 
in    spaces   50%   to   60%   smaller   than   previously   required.     The 
Company   expected   reduced   sales   at  these   smaller   locations,   along 
with    a    corresponding    reduction   in   operating    costs,    including 
rent,    labor    and   utilities.    Although   volumes   are    lower,    the 
breakeven    point   is   also   lower,   resulting   in   approximately    the 
same   return   on   sales  and  a  higher  return  on  investment   for   such 
locations.                                                                      

Liquidity and Capital Resources                                                 

    Net   cash   used   by  operating  activities  in  the   first   half   of
1996   was   $496,505   compared   to  cash  used   in   operating   activities 
of   $239,746   in   the  same  period  last  year.   Of  the   $496,505   used 
in   operations   in  the  first  half  of  1996,  $325,712   is   attributable 
to   short   term   promissory   notes  of   which   $398,017   was   collected 
subsequent to June 30, 1996.                                                    

    Net   cash   used   in  investing  activities  in  the   first   half   of
1996   was   $229,175   compared   to  cash  used   in   investing   activities 
of   $376,534   in   the  first  half  of  1995.   Cash   used   by   investing 
activities   in   the   first   half  of  1996   primarily   related   to   the 
purchase of property and equipment.                                             

    Cash   used   by   financing  activities  in  the  first  half   of   1996
was   $167,513   compared   to   cash   used   by   financing   activities   of 
$294,674   in   the   same   period  last   year.    The   amounts   for   both 
years   represent  primarily  cash  used  for  the  reduction   of   debt   and 
the payment of preferred stock dividends.                                       

    The   Company   had   cash   and   cash  equivalents   of   $791,229   and
positive    working   capital   of   $987,615   at   June   30,   1996.     The 
Company   has   a  commitment  to  build  and  finance  a  turnkey   store   in 
Florida   on   behalf   of   a   franchisee,   if   requested.    The   Company 
currently   has   no   other   commitments  to  build   turnkey   stores,   nor 
does   the   Company   any   longer   offer  a  turnkey   development   program 
to its franchises.                                                              

    The   Company   has  made  commitments  and  has  plans   under   way   in
which   it  will  provide  up  to  approximately  $360,000  in  funds   to   be 
used      for      retail     advertising     by     franchisee     advertising 
cooperatives    in    several   markets   in    1996.     Of    this    amount, 
approximately   $170,000   will   be  in   the   form   of   interest   bearing 
loans   that   will   be  repaid  in  1997.   The  balance   of   approximately 
$190,000 will be                                                                

THE QUIZNO'S CORPORATION                

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                 
CONDITION AND RESULTS OF OPERATIONS (continued)                 

grants   that   will   be   expensed  by  the   Company   in   1996.    Through 
June   30,   1996,   the   Company  has  loaned   $34,000   and   made   grants 
totalling $48,613.                                                              

    Other    than    the    above,    the   Company's    operations    as    a
franchisor   are   not   capital  intensive.   The  Company   has   been   able 
to    finance   its   operations   and   growth,   excluding   Company    owned 
stores,   through   initial   franchise   fees,   area   director   fees,   and 
royalties.                                                                      

    The    Company    does   not   expect   seasonality    to    effect    its
operations     in    a    materially    adverse    manner.     However,     the 
Company's    restaurant   sales,   and   therefore   royalties,   during    the 
months   of   November   through   February  are   generally   lower   due   to 
the location of a majority of its restaurants.                                  

(Remainder of page intentionally left blank)                

THE QUIZNO'S CORPORATION                

Commission File Number:  000-23174                

Quarter Ended June 30, 1996                 

Form 10-QSB                 

PART II  OTHER INFORMATION                

Item 1.   Legal Proceedings                                                     

Previously reported in Form 8-K of the Registrant filed     
with the SEC on June 19, 1996.                              

Item 2.   Changes in Securities                                                 

None.                                                       

Item 3.   Defaults Upon Senior Securities                                       

None.                                                       

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

The annual meeting of shareholders of the Company was       
held on June 7, 1996.  At the meeting, the shareholders     
voted on four proposals.  The results of the voting are     
as follows:                                                 

                                                                [Download Table]

          Proposal #1    Election of Directors                   
For       Withheld                                               
                                                                 
                    Richard E. Schaden             2,379,642     
8,499                                                            
                    Richard F. Schaden             2,379,642     
8,499                                                            
                    Frederick H. Schaden                2,379,642
8,499                                                            
                    Patrick E. Meyers              2,379,642     
8,499                                                            
                    Brownell M. Bailey             2,379,642     
8,499                                                            

          Proposal #2    Increase the number of shares reserved  
                    under the Company's Employee Stock Option    
                    Plan                                         

                          For  Against    Abstain    Not Voted   
                    2,302,364  31,835    3,797       50,145      
          Proposal #3    Increase the number of shares reserved  
                    under the Company's Non-Employee Directors   
                    and Advisors Stock Option Plan               

                          For  Against    Abstain    Not Voted   
                    2,295,452  37,847      4,697     50,145      

          Proposal #4    Ratify the selection by the Board of    
                    Directors of Ehrhardt Keefe Steiner &        
                    Hottman, P.C. as independent auditors of the 
                    Company for the 1996 fiscal year             

                          For  Against     Abstain               
                    2,377,535   7,009     3,597                  

Item 5.   Other Information                                                     

None.                                                       

Item 6.   Exhibits and Reports on Form 8-K                                      

(a)  Exhibits                                               

Exhibit 3(ii) - Bylaws of the Registrant as       
amended through June 30, 1996                     

(b)  Reports of Form 8-K                                    

Form 8-K of the Registrant, dated April 30, 1996, 
reporting in Item 5 the signing of three Area     
Director Marketing Agreements (filed May 2, 1996).

Form 8-K of the Registrant, dated June 18, 1996,  
reporting in Item 5 on certain litigation         
involving the Registrant and two of its officers  
(filed June 19, 1996).                            

Form 8-K of the Registrant, dated June 20, 1996,  
reporting in Item 5 the signing of three Area     
Director Marketing Agreements (filed June 24,     
1996) and the result of voting at the Registrant's
annual meeting.                                   

THE QUIZNO'S CORPORATION                

Commission File Number:  000-23174                

Quarter Ended June 1996                 

Form 10-QSB                 

SIGNATURES                

Pursuant to the requirements of the Securities and Exchange Act                 
of 1934, the registrant has duly caused this report to be signed                
on its behalf by the undersigned, thereunto duly authorized.                    

THE QUIZNO'S CORPORATION                                                        

By: Original signed by John L. Gallivan                                         
John L. Gallivan                                                    
Chief Financial Officer                                               
(Principal Financial and Accounting Officer)                          

Denver, Colorado                                                                
August 14, 1996                                                                 

219116.001(B&F)                                                                 

BYLAWS                
OF                
THE QUIZNO'S CORPORATION                
ADOPTED AUGUST 25, 1994, AS AMENDED                 

ARTICLE ii                

Offices and Agents                

            1.      Principal   Office.    The   principal   office   of   the
Corporation    may   be   located   within   or   without    the    State    of 
Colorado,    as   designated   by   the   most   recent   filing    with    the 
Secretary   of   State   of   Colorado.   The  Corporation   may   have   other 
offices   and   places   of  business  at  such  places   within   or   without 
the State of Colorado as shall be determined by the directors.                  

           2.     Registered   Office.    The   registered   office   of   the
Corporation    required    by   the   Colorado   Business    Corporation    Act 
must   be   continually   maintained  in  the  State  of   Colorado,   and   it 
may   be,   but  need  not  be,  identical  with  the  principal   office,   if 
located   in   the   State  of  Colorado.   The  address  of   the   registered 
office   of   the   Corporation  may  be  changed  from   time   to   time   as 
provided by the Colorado Business Corporation Act.                              

            3.     Registered   Agent.    The   Corporation   shall   maintain
a   registered   agent   in  the  State  of  Colorado  as   required   by   the 
Colorado   Business   Corporation  Act.    Such   registered   agent   may   be 
changed   from   time   to   time  as  provided  by   the   Colorado   Business 
Corporation Act.                                                                

ARTICLE I                 

Shareholders Meetings                 

            1.      Annual    Meetings.    The   annual   meeting    of    the
shareholders   of   the  Corporation  shall  be  held  at  a  date   and   time 
fixed   by   resolution  of  the  board  of  directors  or  by  the   president 
in   the   absence   of  action  by  the  board  of  directors.    The   annual 
meeting   of   the   shareholders  shall   be   held   for   the   purpose   of 
electing    directors   and   transacting   such   other   corporate   business 
as   may   come   before  the  meeting.   If  the  election  of  directors   is 
not    held   as   provided   herein   at   any   annual   meeting    of    the 
shareholders,    or    at    any   adjournment   thereof,    the    board    of 
directors   shall   cause   the   election   to   be   held   at   a    special 
meeting    of    the   shareholders   as   soon   thereafter    as    it    may 
conveniently be held.                                                           

            Notice    of    an   annual   meeting   need   not    include    a
description   of   the  purpose  or  purposes  of  the  meeting   except   when 
the   purpose  of  the  meeting  is  to  consider  (i)  an  amendment  to   the 
Articles   of   Incorporation   of   the  Corporation,   (ii)   a   merger   or 
share   exchange   in   which   the  Corporation   is   a   party   and,   with 
respect   to   a   share   exchange,   in  which   the   Corporation's   shares 
will    be    acquired,   (iii)   the   sale,   lease,   exchange   or    other 
disposition,    other   than   in   the   usual   and   regular    course    of 
business,   of   all   or   substantially  all   of   the   property   of   the 
Corporation   or   of   another   entity  which   the   Corporation   controls, 
in   each   case   with   or  without  goodwill,  (iv)   the   dissolution   of 
the   Corporation  or  (v)  any  other  purpose  for  which  a   statement   of 
purpose is required by the Colorado Business Corporation Act.                   

            2.     Special   Meetings.    Unless   otherwise   prescribed   by
the    Colorado   Business   Corporation   Act,   special   meetings   of   the 
shareholders  of  the  Corporation   may  be  called  at  any   time   by   the 
chairman   of   the  board  of  directors,  if  any,  by  the   president,   by 
resolution   of   the   board  of  directors  or  upon  receipt   of   one   or 
more    written   demands   for   a   meeting,   stating   the    purpose    or 
purposes   for   which   it  is  to  be  held,  signed   and   dated   by   the 
holders  of  at  least  ten  percent  (10%)  of  all  votes  entitled   to   be 
cast   on   any   issue   proposed   to   be   considered   at   the   meeting. 
Notice   of   a   special   meeting  shall  include  a   description   of   the 
purpose or purposes for which the meeting is called.                            

            3.      Place   of   Meeting.    The   annual   meeting   of   the
shareholders   of   the  Corporation  may  be  held  at   any   place,   either 
within   or   without  the  State  of  Colorado,  as  may  be   designated   by 
the    board    of   directors.    Except   as   limited   by   the   following 
sentence,   the   person   or   persons  calling   any   special   meeting   of 
the   shareholders   may   designate  any  place,   within   or   without   the 
State    of    Colorado,   as   the   place   for   the   meeting.     If    no 
designation   is  made  or  if  a  special  meeting  shall  be   called   other 
than   by   the   board   of  directors,  the  chairman   of   the   board   of 
directors   or   the   president,  the  place   of   meeting   shall   be   the 
principal   office   of   the   Corporation.   A  waiver   of   notice   signed 
by   all   shareholders   entitled  to  vote  at  a   meeting   may   designate 
any place as the place for holding such meeting.                                

            4.     Notice   of   Meeting.    Written   notice   stating    the
date,   time   and  place  of  the  meeting  shall  be  given  no  fewer   than 
ten   (10)  and  no  more  than  sixty  (60)  days  before  the  date  of   the 
meeting,   except  that  if  the  number  of  authorized  shares   is   to   be 
increased,   at   least   thirty   (30)   days'   notice   shall   be    given. 
Notice   shall   be   given   personally   or   by   mail,   private   carrier, 
telegraph,     teletype,     electronically    transmitted     facsimile     or 
other    form   of   wire   or   wireless   communication   by   or   at    the 
direction   of   the   president,   the   secretary,   or   the   officer    or 
other   person   calling   the   meeting  to   each   shareholder   of   record 
entitled   to   vote   at   such   meeting.    If   mailed   and   if   in    a 
comprehensible   form,  such  notice  shall  be  deemed   to   be   given   and 
effective   when   deposited   in  the  United  States   mail,   addressed   to 
the   shareholder   at   his   or   her  address   as   it   appears   in   the 
Corporation's     current    record    of    shareholders,     with     postage 
prepaid.    If   notice   is   given  other  than   by   mail,   and   provided 
that   the   notice   is   in  comprehensible  form,  the   notice   is   given 
and   effective   on  the  date  received  by  the  shareholder.    No   notice 
need    be    sent   to   any   shareholder   if   three   successive   notices 
mailed   to   the   last   known  address  of  such   shareholder   have   been 
returned   as   undeliverable  until  such  time   as   another   address   for 
such    shareholder    is   made   known   to   the   Corporation    by    such 
shareholder.                                                                    

           When   a   meeting   is  adjourned  to  a  different   date,   time
or   place,  notice  need  not  be  given  of  the  new  date,  time  or  place 
if   the   new  date,  time  or  place  is  announced  at  the  meeting  before 
adjournment.     At    the    adjourned   meeting,    the    Corporation    may 
transact   any   business   which   might   have   been   transacted   at   the 
original   meeting.    If  the  adjournment  is  for  more   than   120   days, 
or   if  a  new  record  date  is  fixed  for  the  adjourned  meeting,  a  new 
notice    of    the    adjourned   meeting   shall    be    given    to    each 
shareholder   of   record  entitled  to  vote  at  the  meeting   as   of   the 
new record date.                                                                

           5.     Waiver   of   Notice.    A   shareholder   may   waive   any
notice   of   a  meeting  either  before  or  after  the  time  and   date   of 
the   meeting.    The   waiver  shall  be  in  writing,  be   signed   by   the 
shareholder    entitled   to   the   notice   and   be   delivered    to    the 
Corporation   for   inclusion   in   the   minutes   or   filing    with    the 
corporate   records,   but   such   delivery   and   filing   shall   not    be 
conditions for effectiveness.                                                   

             A     shareholder's    attendance    at    a    meeting    waives
objection   to   (i)   lack   of   notice   or   defective   notice   of    the 
meeting,   unless   the   shareholder  at  the   beginning   of   the   meeting 
objects   to   holding   the   meeting   because   of   lack   of   notice   or 
defective   notice,   and   (ii)   consideration   of   a   particular   matter 
at    the    meeting   that   is   not   within   the   purpose   or   purposes 
described   in   the   meeting   notice,   unless   the   shareholder   objects 
to considering the matter when it is presented.                                 

            6.     Fixing   of   Record   Date.    In   order   to   determine
shareholders   entitled   (i)   to   be  given   notice   of   a   shareholders 
meeting   (ii)   to  demand  a  special  meeting,  (iii)  to  vote,   or   (iv) 
to   take  any  other  action,  the  board  of  directors  may  fix  a   future 
date   as   the   record  date,  such  date,  in  any  case,   shall   not   be 
more    than   seventy   (70)   days   and   in   case   of   a   meeting    of 
shareholders   not   less  than  ten  (10)  days   prior   to   the   date   on 
which    the    particular    action   requiring    such    determination    of 
shareholders   is   to   be  taken.   If  no  record   date   is   fixed,   the 
record   date   shall  be  the  date  on  which  notice  of  the   meeting   is 
mailed   or   the   date   on   which   a   resolution   of   the   board    of 
directors   providing   for   a  distribution   is   adopted,   as   the   case 
may   be.    When  a  determination  of  shareholders  entitled  to   vote   at 
any   meeting   of   shareholders  is  made  as  provided   in   this   Section 
6, such determination shall apply to any adjournment thereof.                   

            Notwithstanding    the   foregoing,   the    record    date    for
determining   the   shareholders   entitled   to   take   action   without    a 
meeting   or   entitled  to  be  given  notice  of  action   so   taken   shall 
be   the   date   a   writing  upon  which  the  action  is  taken   is   first 
received    by    the   Corporation.    The   record   date   for   determining 
shareholders   entitled   to   demand  a   special   meeting   shall   be   the 
date   of   the  earliest  of  the  demands  pursuant  to  which  the   meeting 
is called.                                                                      

           7.     Voting   List.    After  fixing  a   record   date   for   a
shareholder's   meeting,   the   Corporation   shall   prepare   a   list    of 
names   of   all  its  shareholders  who  are  entitled  to  be  given   notice 
of   the   meeting.   The  list  shall  be  arranged  by  voting   groups   and 
within   each   voting  group  by  class  or  series,  and   shall   show   the 
address   of,  and  the  number  of  shares  of  each  class  or  series   that 
are held by each shareholder.                                                   

             The     shareholders'    list    shall    be    available     for
inspection   by   any   shareholder,  beginning  the  earlier   of   ten   (10) 
days   before   the   meeting  for  which  the  list  was   prepared   or   two 
(2)    business   days   after   notice   of   the   meeting   is   given   and 
continuing   through   the   meeting,   and   any   adjournment   thereof,   at 
the   Corporation's   principal   office  or   at   a   place   identified   in 
the   notice   of  the  meeting  in  the  city  where  the  meeting   will   be 
held.                                                                           

           A   shareholder,   his  agent  or  attorney,   may   upon   written
demand,   inspect   and   copy   the  list  during   regular   business   hours 
and   during   the   period   it   is  available  for   inspection,   provided, 
(i)   the   shareholder  has  been  a  shareholder  for  at  least  three   (3) 
months   immediately   preceding   the  demand   or   holds   at   least   five 
percent   (5%)   of  all  outstanding  shares  of  any  class  of   shares   as 
the   date  of  the  demand,  (ii)  the  demand  is  made  in  good  faith  and 
for   a   purpose   reasonably   related   to   the   demanding   shareholder's 
interest   as   a   shareholder,   (iii)   the   shareholder   describes   with 
reasonable    particularity   the   purpose   and   records   the   shareholder 
desires   to   inspect,   (iv)  the  records  are   directly   connected   with 
the   described   purpose   and   (v)  the  shareholder   pays   a   reasonable 
charge   covering   the  costs  of  labor  and  material   for   such   copies, 
not to exceed the cost of production and reproduction.                          

            8.      Proxies.     At   all   meetings   of   shareholders,    a
shareholder   may   vote   by   proxy   by   signing   an   appointment    form 
either     personally     or    by    his    or     her     duly     authorized 
attorney-in-fact.    A   shareholder   may   also   appoint    a    proxy    by 
transmitting    or    authorizing    the   transmission    of    a    telegram, 
teletype,    or   other   electronic   transmission   providing    a    written 
statement   of   the   appointment  to  the  proxy,  to  a   proxy   solicitor, 
proxy     support    service    organization    or    other     person     duly 
authorized   by   the  proxy  to  receive  appointments  as   agent   for   the 
proxy,   or   to   the   Corporation.    The  transmitted   appointment   shall 
set   forth   or   be  transmitted  with  written  evidence   from   which   it 
can   be   determined   that   the  shareholder   transmitted   or   authorized 
the   transmission   of   the   appointment.   The   proxy   appointment   form 
shall   be  filed  with  the  Secretary  of  the  Corporation  by  or  at   the 
time   of   the   meeting.    The  appointment  of   a   proxy   is   effective 
when   received   by   the   Corporation  and  is   valid   for   eleven   (11) 
months   unless   a   different   period   is   expressly   provided   in   the 
appointment form.                                                               

             Any     complete     copy,    including     an     electronically
transmitted    facsimile,   of   an   appointment   of   a   proxy    may    be 
substituted   for   or   used   in  lieu  of  the  original   appointment   for 
any purpose for which the original appointment could be used.                   

           Revocation   of  a  proxy  does  not  affect  the  right   of   the
Corporation    to   accept   the   proxy's   appointment   unless    (i)    the 
Corporation   had   notice   that  the  appointment   was   coupled   with   an 
interest   and   notice   that  the  interest  is  extinguished   is   received 
by   the   Secretary  or  other  officer  or  agent  authorized   to   tabulate 
votes    before    the    proxy    exercises   his    authority    under    the 
appointment    or    (ii)   other   notice   of   the   revocation    of    the 
appointment   is   received   by   the   Secretary   or   other   officer    or 
agent   authorized   to   tabulate  votes  before  the  proxy   exercises   his 
authority   under   the   appointment.   Other  notice   of   revocation   may, 
in   the   discretion   of   the  Corporation,  be  deemed   to   include   the 
appearance    at    a    shareholders   meeting   of   the   shareholder    who 
granted   the   proxy   appointment  and  his   voting   in   person   on   any 
matter subject to a vote at such meeting.                                       

           The   death   or  incapacity  of  the  shareholder   appointing   a
proxy   does   not  affect  the  right  of  the  Corporation  to   accept   the 
proxy's   authority   unless   notice   of   the   death   or   incapacity   is 
received   by   the  Secretary  or  other  officer  or  agent   authorized   to 
tabulate   votes   before  the  proxy  exercised  his   authority   under   the 
appointment.                                                                    

           The   Corporation   shall   not  be  required   to   recognize   an
appointment    made    irrevocable   if   it    has    received    a    writing 
revoking    the    appointment    signed    by    the    shareholder     either 
personally       or       by      the      shareholder's      attorney-in-fact, 
notwithstanding   that   the   revocation   may   be    a    breach    of    an 
obligation   of   the  shareholder  to  another  person  not  to   revoke   the 
appointment.                                                                    

            A    transferee    for   value   of   shares   subject    to    an
irrevocable    appointment    may    revoke    the    appointment    if     the 
transferee   did   not   know   of  its  existence   when   he   acquired   the 
shares    and   the   irrevocable   appointment   was   not   noted   on    the 
certificate representing the shares.                                            

           Subject   to   the   provisions   of   Article   II,   Section   10
below    or    any    express    limitation   on    the    proxy's    authority 
appearing   on   the   appointment  form,  a   corporation   is   entitled   to 
accept    the    proxy's   vote   or   other   action   as    that    of    the 
shareholder making the appointment.                                             

           9.     Voting   Rights.    Each   outstanding   share,   regardless
of   class,   is   entitled  to  one  vote  and  each   fractional   share   is 
entitled   to   a   corresponding  fractional  vote,  on  each   matter   voted 
on   at   a   shareholder's   meeting   except   to   the   extent   that   the 
voting   rights   of   the  shares  of  any  class  or  classes   are   limited 
or    denied   by   the   Articles   of   Incorporation.    Only   shares   are 
entitled   to   vote.   Voting  on  any  question  or  in  any   election   may 
be   by   voice  vote  unless  the  presiding  officer  shall  order,  or   any 
shareholder shall demand, that voting be by ballot.                             

            Cumulative   voting   in   the   election   of   directors   shall
not be permitted.                                                               

           Except   as   otherwise   ordered   by   a   court   of   competent
jurisdiction   upon   a   finding  that  the  purpose   of   this   Section   9 
would    not   be   violated   in   the   circumstances   presented   to    the 
court,   the  shares  of  the  Corporation  are  not  entitled  to   be   voted 
if     they     are    owned,    directly    or    indirectly,    by    another 
corporation,    domestic    or    foreign,   and    the    Corporation    owns, 
directly   or   indirectly,  a  majority  of  the  shares  entitled   to   vote 
for   directors   of  the  other  corporation,  except  to   the   extent   the 
other corporation holds the shares in a fiduciary capacity.                     

           Redeemable   shares   are   not  entitled   to   be   voted   after
notice   of   redemption  is  mailed  to  holders  and  a  sum  sufficient   to 
redeem   the   shares   has  been  deposited  with  a  bank,   trust   company, 
or   other   financial   institution  under  an   irrevocable   obligation   to 
pay the holders the redemption price on surrender of the shares.                

            10.    Corporation's   Acceptance   of   Votes.    If   the   name
signed   on   a   vote,   consent,   waiver,  proxy   appointment,   or   proxy 
appointment   revocation   corresponds  to   the   name   of   a   shareholder, 
the   Corporation,   if   acting  in  good  faith,  is   entitled   to   accept 
the     vote,     consent,    waiver,    proxy    appointment,     or     proxy 
appointment   revocation  and  to  give  it  effect   as   the   act   of   the 
shareholder.    If   the   name   signed   on   a   vote,   consent,    waiver, 
proxy    appointment,    or    proxy   appointment    revocation    does    not 
correspond   to   the   name   of   a   shareholder,   the   Corporation,    if 
acting   in   good   faith,   is   nevertheless   entitled   to   accept    the 
vote,    consent,    waiver,   proxy   appointment,   or   proxy    appointment 
revocation   and   to   give  it  effect  as  the  act   of   the   shareholder 
if:                                                                             

           (a)    The   shareholder  is  an  entity  and   the   name   signed
purports to be that of an officer or agent of the entity;                       

            (b)     The   name   signed   purports   to   be   that   of    an
administrator,     executor,    guardian,    or    conservator     representing 
the    shareholder   and,   if   the   Corporation   requests,   evidence    of 
fiduciary   status   acceptable   to  the  Corporation   has   been   presented 
with   respect   to   the   vote,  consent,  waiver,   proxy   appointment   or 
proxy appointment revocation;                                                   

           (c)    The   name  signed  purports  to  be  that  of  a   receiver
or    trustee    in    bankruptcy   of   the   shareholder    and,    if    the 
Corporation   requests,   evidence   of   this   status   acceptable   to   the 
Corporation   has   been  presented  with  respect  to   the   vote,   consent, 
waiver, proxy appointment or proxy appointment revocation;                      

           (d)    The   name  signed  purports  to  be  that  of  a   pledgee,
beneficial   owner,   or   attorney-in-fact  of   the   shareholder   and,   if 
the    Corporation   requests,   evidence   acceptable   to   the   Corporation 
of   the   signatory's  authority  to  sign  for  the  shareholder   has   been 
presented    with    respect    to   the   vote,   consent,    waiver,    proxy 
appointment or proxy appointment revocation;                                    

            (e)     Two    or   more   persons   are   the   shareholder    as
cotenants   or   fiduciaries  and  the  name  signed   purports   to   be   the 
name   of   at   least   one   of  the  cotenants  or   fiduciaries   and   the 
person    signing   appears   to   be   acting   on   behalf   of    all    the 
cotenants or fiduciaries; or                                                    

           (f)    The   acceptance  of  the  vote,  consent,   waiver,   proxy
appointment,   or   proxy   appointment   revocation   is   otherwise    proper 
under    rules    established    by    the    Corporation    that    are    not 
inconsistent with the provisions of this Section 10.                            

           The   Corporation   is  entitled  to  reject   a   vote,   consent,
waiver,   proxy   appointment   or   proxy  appointment   revocation   if   the 
Secretary   or   other   officer  or  agent  authorized  to   tabulate   votes, 
acting   in   good   faith,  has  reasonable  basis   for   doubt   about   the 
validity    of    the    signature   on   it   or   about    the    signatory's 
authority to sign for the shareholder.                                          

           The   Corporation  and  its  officer  or  agent  who   accepts   or
rejects    a    vote,   consent,   waiver,   proxy   appointment    or    proxy 
appointment   revocation   in   good  faith  and   in   accordance   with   the 
standards   of   this   Section  10  are  not  liable  in   damages   for   the 
consequences of the acceptance or rejection.                                    

           11.    Quorum   and  Voting  Requirements.   A  majority   of   the
votes   entitled   to   be  cast  on  a  matter  by  a   voting   group   shall 
constitute   a  quorum  of  that  voting  group  for  action  on   the   matter 
unless    a    lesser    number   is   authorized   by    the    Articles    of 
Incorporation.    Once  a  share  is  represented  for   any   purpose   at   a 
meeting,    including   the   purpose   of   determining    that    a    quorum 
exists,    it    is    deemed   present   for   quorum   purposes    for    the 
remainder   of   the  meeting  and  for  any  adjournment  of   that   meeting, 
unless    otherwise   provided   in   the   Articles   of   Incorporation    or 
unless   a   new   record  date  is  or  shall  be  set  for   that   adjourned 
meeting.                                                                        

           If   a   quorum  exists,  action  on  a  matter  other   than   the
election   of   directors  by  a  voting  group  is  approved  if   the   votes 
cast   within   the  voting  group  favoring  the  action  exceed   the   votes 
cast   within   the  voting  group  opposing  the  action,  unless   the   vote 
of   a   greater  number  or  voting  by  classes  is  required   by   law   or 
the   Articles   of   Incorporation.   For   election   of   directors,   those 
candidates receiving the most votes shall be elected.                           

           12.    Adjournments.    If   less   than   a   quorum   of   shares
entitled    to    vote    is    represented   at    any    meeting    of    the 
shareholders,   a   majority  of  the  shares  so   represented   may   adjourn 
the   meeting   from   time   to   time   without   further   notice,   for   a 
period   not   to   exceed   120   days  at  any   one   adjournment.    If   a 
quorum   is   present  at  such  adjourned  meeting,  any   business   may   be 
transacted   which   might   have   been   transacted   at   the   meeting   as 
originally   noticed.    Any   meeting  of   the   shareholders   may   adjourn 
from time to time until its business is completed.                              

            13.     Action    by    Shareholders   Without    Meeting.     Any
action    required   or   permitted   to   be   taken   at   a    shareholders' 
meeting   may   be  taken  without  a  meeting  if  all  of  the   shareholders 
entitled    to   vote   thereon   consent   to   such   action   in    writing. 
Action   taken   under  this  Section  13  shall  be  effective   as   of   the 
date   the   last   writing  necessary  to  effect  the  action   is   received 
by    the   Corporation,   unless   all   of   the   writings   necessary    to 
effect   the   action   specify  a  later  date  as  the  effective   date   of 
the   action,   in  which  case  such  later  date  shall  be   the   effective 
date    of    the    action.     If   the   Corporation    receives    writings 
describing   and   consenting   to  the   action   signed   by   all   of   the 
shareholders   entitled   to   vote   with   respect   to   the   action,   the 
effective   date  of  the  action  may  be  any  date  that  is  specified   in 
all   of   the   writings  as  the  effective  date   of   the   action.    Any 
such     writings     may    be    received    by    the     Corporation     by 
electronically   transmitted   facsimile   or   other   form   of    wire    or 
wireless    communication   providing   the   Corporation   with   a   complete 
copy   thereof,   including   a   copy  of  the  signature   thereto.    Action 
taken   under   this  Section  13  has  the  same  effect   as   action   taken 
at   a   meeting  of  shareholders  and  may  be  described  as  such  in   any 
document.                                                                       

           Any   shareholder   who  has  signed  a  writing   describing   and
consenting   to   action  taken  pursuant  to  this  Section  13   may   revoke 
such   consent   by   a   writing   signed  by   the   shareholder   describing 
the    action    and   stating   that   the   shareholder's    prior    consent 
thereto    is    revoked,    if   such   writing    is    received    by    the 
Corporation before the effectiveness of the action.                             

           14.    Meetings   by  Telecommunication.   Any  or   all   of   the
shareholders     may     participate    in     an     annual     or     special 
shareholders'   meeting   by,  or  the  meeting  may   be   conducted   through 
the   use   of,   any   means   of   communication   by   which   all   persons 
participating   in   the   meeting   may   hear   each   other    during    the 
meeting.    A   shareholder  participating  in  a   meeting   by   this   means 
is deemed to be present in person at the meeting.                               

ARTICLE II                

Board of Directors                

            1.     General   Powers.    All   corporate   powers   shall    be
exercised   by   or   under   the  authority   of,   and   the   business   and 
affairs   of   the   Corporation   shall  be  managed   under   the   direction 
of,   the   board   of  directors,  except  as  otherwise   provided   in   the 
Colorado     Business     Corporation    Act     or     the     Articles     of 
Incorporation.                                                                  

            2.     Number,   Qualifications   and   Term   of   Office.    The
number   of   directors  of  the  Corporation  shall   be   fixed   from   time 
to   time   by   resolution  of  the  board  of  directors,  within   a   range 
of   no   less   than   three  (3)  or  more  than  nine   (9).    A   director 
shall   be   a   natural   person   who  is  eighteen   years   or   older.   A 
director   need   not  be  a  resident  of  the  State   of   Colorado   or   a 
shareholder of the Corporation.                                                 

           Directors   shall   be   elected  at   each   annual   meeting   of
shareholders   and   shall   hold   such   office   until   the   next   annual 
meeting   of   shareholders   and   until  his   successor   is   elected   and 
qualifies.     A   decrease   in   the   number   of   directors    does    not 
shorten an incumbent director's term.                                           

            3.      Resignation,   Vacancies.    Any   director   may   resign
at   any   time   by   giving   written   notice   to   the   Corporation.    A 
resignation    of   a   director   is   effective   when    the    notice    is 
received   by   the   Corporation  unless  the   notice   specifies   a   later 
effective   date.    Unless   otherwise   specified   in   the   notice,    the 
acceptance   of   such   resignation  by   the   Corporation   shall   not   be 
necessary   to   make   it   effective.   Any   vacancy   on   the   board   of 
directors   may   be  filled  by  the  affirmative  vote  of  a   majority   of 
the   shareholders   or   by   the   affirmative   vote   of   the   board   of 
directors   even  if  less  than  a  quorum  is  remaining   in   office.    If 
elected   by   the   directors,   the  director   shall   hold   office   until 
the    next    annual   shareholders'   meeting   at   which   directors    are 
elected.    If   elected   by  the  shareholders,  the  director   shall   hold 
office   for   the   unexpired   term   of   his   or   her   predecessor    in 
office,   except   that,  if  the  director's  predecessor   was   elected   by 
the   directors   to   fill   a   vacancy,  the   director   elected   by   the 
shareholders   shall  hold  office  for  the  unexpired  term   of   the   last 
predecessor elected by the shareholders.                                        

            4.      Removal    of    Directors   by   Shareholders.     Unless
otherwise     provided    in    the    Articles    of    Incorporation,     the 
shareholders   may   remove   one   or   more   directors   with   or   without 
cause.    A   director  may  be  removed  by  the  shareholders   only   at   a 
meeting   called   for   the  purpose  of  removing  the   director   and   the 
meeting   notice   states  that  the  purpose,  or   one   of   the   purposes, 
of the meeting is removal of the director.                                      

            5.     Removal   of   Directors   by   Judicial   Proceeding.    A
director   may   be   removed   by  the  District   Court   of   the   Colorado 
county    where    the    principal   office   is    located    or    if    the 
Corporation   has   no  principal  office  in  the  State   of   Colorado,   by 
the   District   Court  of  the  Colorado  county  in  which   its   registered 
office   is   located,  upon  a  finding  by  the  District  Court   that   the 
director    engaged   in   fraudulent   or   dishonest   conduct    or    gross 
abuse   of   authority   or  discretion  with  respect   to   the   Corporation 
and   that   removal   is   in   the  best  interests   of   the   Corporation. 
The     judicial    proceeding    may    be    commenced    either    by    the 
Corporation   or   by   shareholders  holding  at  least  ten   percent   (10%) 
of the outstanding shares of any class.                                         

            6.      Compensation.    By   resolution   of   the    board    of
directors,   any   director   may   be  paid   any   one   or   more   of   the 
following:    his   expenses,   if   any,  of   attendance   at   meetings;   a 
fixed   sum   for   attendance   at   each  meeting;   a   stated   salary   as 
director;   or   such   other   compensation  as  the   Corporation   and   the 
director    may    reasonably   agree   upon.    No    such    payment    shall 
preclude   any   director   from  serving  the   Corporation   in   any   other 
capacity and receiving compensation therefor.                                   

ARTICLE III                 

Meetings of the Board                 

            1.      Place    of    Meetings.    The   regular    or    special
meetings    of   the   board   of   directors    shall   be   held    at    the 
principal office of the Corporation unless otherwise designated.                

            2.     Regular   Meetings.    The   board   of   directors   shall
meet   each   year   after   the  annual  meeting  of  the   shareholders   for 
the    purpose   of   appointing   officers   and   transacting   such    other 
business   as   may   come  before  the  meeting.   The  board   of   directors 
may   provide,   by   resolution,  for  the  holding  of   additional   regular 
meetings without other notice than such resolution.                             

           3.     Special   Meetings.    Special   meetings   of   the   board
of   directors   may   be  called  at  any  time  by  the   chairman   of   the 
board,   if   any,  by  the  president  or  by  a  majority  of   the   members 
of the board of directors.                                                      

            4.      Notice    of    Meetings.    Notice   of    the    regular
meetings   of   the  board  of  directors  need  not  be  given.    Except   as 
otherwise   provided   by  these  Bylaws  or  the  laws   of   the   State   of 
Colorado,   written  notice  of  each  special  meeting   of   the   board   of 
directors   setting   forth   the  time  and   the   place   of   the   meeting 
shall   be   given  to  each  director  not  less  than  two  (2)  days   prior 
to   the   date   and   time   fixed   for  the   meeting.    Notice   of   any 
special   meeting   may   be   either  personally  delivered   or   mailed   to 
each   director   at   his   business  address,  or   by   notice   transmitted 
by     telegraph,    telex,    electronically    transmitted    facsimile    or 
other   form   of   wire   or   wireless  communication.    If   mailed,   such 
notice   shall   be   deemed  to  be  given  and  to  be   effective   on   the 
earlier   of   (i)   three  (3)  days  after  such  notice  is   deposited   in 
the   United   States   mail   properly  addressed,   with   postage   prepaid, 
or   (ii)   the   date   shown   on   the   return   receipt   if   mailed   by 
registered   or   certified   mail  return  receipt   requested.    If   notice 
be   given   by   telex,   electronically  transmitted   facsimile   or   other 
similar   form   of   wire  or  wireless  communication,  such   notice   shall 
be   deemed   to   be  given  and  to  be  effective  when   sent,   and   with 
respect   to   a   telegram,  such  notice  shall  be  deemed   to   be   given 
and    to   be   effective   when   the   telegram   is   delivered   to    the 
telegraph   company.    If   a   director  has  designated   in   writing   one 
or   more   reasonable  addresses  or  facsimile  numbers   for   delivery   of 
notice     to    him,    notice    sent    by    mail,    telegraph,     telex, 
electronically   transmitted   facsimile   or   other   form   of    wire    or 
wireless   communication  shall  not  be  deemed  to   have   been   given   or 
to    be    effective   unless   sent   to   such   addresses   or    facsimile 
numbers,    as   the   case   may   be.    Neither   the   business    to    be 
transacted   at,   nor  the  purpose  of,  any  regular  or   special   meeting 
of   the   board   of   directors  need  be  specified   in   the   notice   or 
waiver of notice of such meeting.                                               

           5.     Waiver   of   Notice.    A   director   may,   in   writing,
waive   notice   of   any   special  meeting  of   the   board   of   directors 
either   before,   at,   or  after  the  meeting.    Such   waiver   shall   be 
delivered    to    the    Corporation   for   filing   with    the    corporate 
records.    Attendance   or  participation  of  a   director   at   a   meeting 
waives    any    required   notice   of   that   meeting    unless    at    the 
beginning   of   the   meeting  or  promptly  upon  the   director's   arrival, 
the    director    objects    to   holding   the   meeting    or    transacting 
business   at   the   meeting  because  of  lack   of   notice   or   defective 
notice   and   does  not  thereafter  vote  for  or  assent  to  action   taken 
at the meeting.                                                                 

            6.     Quorum,   Manner   of   Acting.    At   meetings   of   the
board   of   directors  a  majority  of  the  number  of  directors  fixed   by 
resolution    of    the   board   shall   constitute   a   quorum    for    the 
transaction   of   business.    If   the   number   of   directors    is    not 
fixed,   then   a   majority  of  the  number  in  office  immediately   before 
the   meeting   begins,   shall  constitute  a  quorum.    If   a   quorum   is 
present   when   a  vote  is  taken,  the  affirmative  vote  of   a   majority 
of   directors   present  is  the  act  of  the  board  of   directors   unless 
the   vote   of   a   greater  number  is  required  by   these   Bylaws,   the 
Articles    of    Incorporation   or   the   Colorado   Business    Corporation 
Act.                                                                            

           7.     Presumption   of  Assent.   A  director   who   is   present
at   a   meeting   of  the  board  of  directors  when  corporate   action   is 
taken is deemed to have assented to the action taken unless:                    

            (a)    the   director   objects   at   the   beginning   of   such
meeting   or   promptly  upon  his  or  her  arrival,   to   the   holding   of 
the   meeting   or   the   transacting  of  business   at   the   meeting   and 
does   not  thereafter  vote  for  or  assent  to  any  action  taken  at   the 
meeting;                                                                        

            (b)    the   director   contemporaneously   requests   that    his
or   her   dissent   or  abstention  as  to  any  specific  action   taken   be 
entered in the minutes of such meeting; or                                      

           (c)    the   director  causes  written  notice  of   his   or   her
dissent   or   abstention  as  to  any  specific  action  to  be  received   by 
the   presiding   officer   of   such  meeting  before   its   adjournment   or 
by the Corporation promptly after adjournment of such meeting.                  

           The   right   of   dissent  or  abstention   as   to   a   specific
action   taken   in   a   meeting  of  a  board   is   not   available   to   a 
director who votes in favor of the action taken.                                

            8.     Committees.    The   board   of   directors   may,   by   a
resolution   adopted   by   a   majority   of   all   of   the   directors   in 
office   when   the   action  is  taken,  designate  one   of   more   of   its 
members   to   constitute   an   executive   committee,   and   one   or   more 
other   committees.    To   the  extent  provided  in  the   resolution,   each 
committee   shall  have  and  may  exercise  all  of  the  authority   of   the 
board   of   directors,  except  that  no  such  committee   shall   have   the 
authority    to:     (i)    authorize   distributions;    (ii)    approve    or 
propose   to   shareholders   action  required   by   the   Colorado   Business 
Corporation    Act    to    be   approved   by   shareholders;    (iii)    fill 
vacancies   on   the   board   of   directors   or   any   committee   thereof; 
(iv)   amend   the   Articles   of   Incorporation;   (v)   adopt,   amend   or 
repeal   these   Bylaws;   (vi)  approve  a  plan  of  merger   not   requiring 
shareholder      approval;     (vii)     authorize     or      approve      the 
reacquisition   of   shares   except  in   accordance   with   a   formula   or 
method   prescribed   by   the  board  of  directors;   or   (viii)   authorize 
or   approve  the  issuance  or  sale  of  shares,  or  a  contract   for   the 
sale    of   shares,   or   determine   the   designation,   relative   rights, 
preferences   and   limitations   of   a   class   or   series    of    shares; 
except   that   the  board  of  directors,  may  authorize   a   committee   or 
an   officer   to   do  so  within  limits  specifically  prescribed   by   the 
board    of    directors.    The   conduct   of   committee   meetings    shall 
comply   with   the   provisions  of  this  Article  IV   relating   to   board 
of director meetings.                                                           

           The   creation   of,  delegation  of  authority   to,   or   action
by   a   committee  does  not  alone  constitute  compliance  by   a   director 
with the standards of conduct set forth in Article V.                           

           9.     Informal   Action   by  Directors.   Any   action   required
or   permitted   be   taken   at  a  board  of  directors'   meeting   may   be 
taken   without   a   meeting  if  all  members  of  the   board   consent   to 
such   action   in   writing.    Action  taken  under   this   Section   9   is 
effective    at    the    time   the   last   director    signs    a    writing 
describing    the   action   taken   unless   the   directors    establish    a 
different    effective    date,   and   unless,    before    such    time,    a 
director   has   revoked  his  or  her  consent  by   a   writing   signed   by 
the   director   and   received  by  the  president   or   secretary.    Action 
taken   pursuant   to   this  Section  9  has  the  same   effect   as   action 
taken   at  a  meeting  of  the  directors  and  may  be  described   as   such 
in any document.                                                                

            10.     Telephonic   Meetings.    Members   of   the   board    of
directors   may   participate  in  a  regular  or   special   meeting   by   or 
conduct   the   meeting  through  the  use  of  any  means   of   communication 
by   which   all   directors   participating  may  hear   each   other   during 
the   meeting.    A  director  participating  in  a  meeting  by   this   means 
is deemed to be present in person at the meeting.                               

ARTICLE IV                

Standards of Conduct                

           Each   director   shall   perform  his   or   her   duties   as   a
director,    including   his   or   her   duties   as   a   member    of    any 
committee,    and    each   officer   with   discretionary   authority    shall 
discharge   his   or   her   duties  under  that   authority,   (i)   in   good 
faith,   (ii)  with  the  care  an  ordinarily  prudent  person   in   a   like 
position   would   exercise   under   similar   circumstances,   and    in    a 
manner   he   or   she  reasonably  believes  to  be  in  the   best   interest 
of the Corporation.                                                             

           In   discharging  his  or  her  duties,  a  director   or   officer
is    entitled    to    rely    on   information,   opinions,    reports,    or 
statements,    including    financial   statements    and    other    financial 
data,   if   prepared   or  presented  by  (i)  one   or   more   officers   or 
employees    of    the    Corporation   whom   the    director    or    officer 
reasonably   believes   to   be  reliable  and   competent   in   the   matters 
presented,    (ii)   legal   counsel,   a   public   accountant,    or    other 
person   as   to   matters   which   the   director   or   officer   reasonably 
believes    to    be    within   such   persons'   professional    or    expert 
competence  or  (iii)  in  the  case  of  a  director,  a  committee   of   the 
board   of   directors  of  which  the  director  is  not  a  member   if   the 
director reasonably believes the committee merits confidence.                   

           A   director  or  officer  is  not  acting  in  good  faith  if  he
or   she   has   knowledge  concerning  the  matter  in  question  that   makes 
reliance otherwise permitted under this Article V unwarranted.                  

           A   director   or   officer  is  not  liable   as   such   to   the
Corporation   or  its  shareholders  for  any  action  he  or  she   takes   or 
omits   to  take  as  a  director  or  officer,  as  the  case  may   be,   if, 
in   connection   with   such  action  or  omission,  he   or   she   performed 
the duties of the position in compliance with this Article  V.                  

ARTICLE V                 

Officers and Agents                 

            1.     General.    The   officers   of   the   Corporation   shall
consist    of    a    president,    secretary    and    treasurer,    appointed 
annually   by   the   board   of  directors.    Each   officer   shall   be   a 
natural   person   eighteen   years  of   age   or   older.    The   board   of 
directors    or    the   president   may   appoint   such    other    officers, 
assistant    officers,   committees   and   agents,   including   a    chairman 
of   the   board,   vice   chairman   of  the   board,   one   or   more   vice 
presidents,    assistant    secretaries   and    assistant    treasurers,    as 
they   may   consider  necessary.   To  the  extent  not  provided   in   these 
bylaws,   the   board  of  directors  or  the  president,  as  the   case   may 
be,   shall   from   time   to   time   determine   the   procedure   for   the 
appointment   of   officers,   their   term   of   office,   their    authority 
and   duties   and  their  compensation.   One  person  may  hold   more   than 
one   office.    In  all  cases  where  the  duties  of  any  officer,   agent, 
or   employee  are  not  prescribed  by  these  Bylaws  or  by  the  board   of 
directors,    such    officer,   agent   or   employee   shall    follow    the 
orders and instructions of the president of the Corporation.                    

           Any   officer   appointed   by  the  board   of   directors   shall
have   the   power  to  execute  and  deliver  on  behalf   of   and   in   the 
name   of   the   Corporation  any  instrument  requiring  the   signature   of 
an   officer   of   the   Corporation,  except   as   otherwise   provided   in 
these   Bylaws   or  where  the  execution  and  delivery  thereof   shall   be 
expressly    delegated   by   the   board   of   directors   to   some    other 
officer   or   agent  of  the  Corporation.   Unless  authorized   to   do   so 
by   these   Bylaws   or  by  the  board  of  directors,  no   officer,   agent 
or    employee   shall   have   any   power   or   authority   to   bind    the 
Corporation   in   any   way,  to  pledge  its   credit   or   to   render   it 
liable pecuniarily for any purpose or in any amount.                            

           2.     Appointment   and   Term  of   Office.   The   officers   of
the   Corporation   appointed   by   the   board   of   directors   shall    be 
appointed   at   each   annual   meeting  of  the   board   held   after   each 
annual    meeting    of    the   shareholders.    If   the    appointment    of 
officers   is  not  made  at  such  meeting  or  if  an  officer  or   officers 
are    to   be   appointed   by   another   officer   or   officers   of    the 
Corporation,   such   appointments   shall   be   made   as   soon   thereafter 
as    practicable.     Officers   appointed   by   the   president    may    be 
appointed for indeterminate terms.                                              

            3.      Vacancies.     A   vacancy   in   any   office,    however
occurring,   may   be   filled  by  the  board  of   directors,   or   by   the 
officer   or   officers   authorized  by  these  bylaws   or   the   board   of 
directors, for the unexpired portion of the officer's term.                     

           4.     Resignation.   An  officer  may  resign  at  any   time   by
giving    written    notice   of   resignation   to   the    Corporation.     A 
resignation    of   an   officer   is   effective   when    the    notice    is 
received   by   the   Corporation  unless  the   notice   specifies   a   later 
effective   date.    If   a   resignation  is  made  effective   at   a   later 
date,   the   board  of  directors  may  permit  the  officer  to   remain   in 
office   until   the   effective  date  and  may  fill  the   pending   vacancy 
before   the   effective  date  if  the  board  of  directors   provides   that 
the   successor   does   not  take  office  until  the   effective   date,   or 
the   board   of  directors  may  remove  the  officer  at  any   time   before 
the effective date and may fill the resulting vacancy.                          

           5.     Removal.    Any   officer  or  agent  of  this   Corporation
may   be   removed   with  or  without  cause  by  the  board   of   directors, 
an   officer   or   officers  authorized  by  the  board   of   directors,   or 
the officer that appointed such officer or agent.                               

           6.     Contract   Rights.    Appointment   of   an   officer   does
not   itself   create  contract  rights.   An  officer's   removal   does   not 
affect    the    officer's    contract    rights,    if    any,    with     the 
Corporation.     An    officer's    resignation    does    not    affect    the 
Corporation's contract rights, if any, with the officer.                        

           7.     Chairman  of  the  Board.   The  chairman  of   the   board,
if   any,   shall   preside  as  chairman  at  meetings  of  the   shareholders 
and   the   board   of  directors.   He  or  she  shall,  in   addition,   have 
such   other   duties   as   the   board  may  prescribe   that   he   or   she 
perform.    At   the   request  of  the  president,   the   chairman   of   the 
board   may,   in  the  case  of  the  president's  absence  or  inability   to 
act,   temporarily  act  in  his  or  her  place.   In  the   case   of   death 
of   the   president   or   in   the  case   of   his   or   her   absence   or 
inability   to   act   without   having  designated   the   chairman   of   the 
board   to   act  temporarily  in  his  place,  the  chairman  of   the   board 
shall   perform   the   duties  of  the  president,   unless   the   board   of 
directors,   by   resolution,  provides  otherwise.    If   the   chairman   of 
the   board   shall  be  unable  to  act  in  place  of  the   president,   the 
vice   presidents   may   exercise  such  powers  and   perform   such   duties 
as provided in Section 9 below.                                                 

           8.     Vice-Chairman   of  the  Board.   The   Vice   Chairman   of
the   Board,   if  any,  in  the  absence  of  the  Chairman  of   the   Board, 
shall   preside   at   all   meetings  of   the   shareholders   and   of   the 
Board   of   Directors.    He  shall  have  such  other   powers   and   duties 
as may from time to time be prescribed by the Board of Directors.               

             9.       President.     Subject    to    the    direction     and
supervision   of  the  board  of  directors,  the  president   shall   be   the 
chief   executive   officer  of  the  Corporation  and   shall   have   general 
and    active    control   of   its   affairs   and   business   and    general 
supervision   of   its   officer,  agents  and   employees.    In   the   event 
the   position   of   chairman  or  vice-chairman  of  the  board   shall   not 
be   occupied   or   the  chairman  or  vice-chairman  shall   be   absent   or 
otherwise   unable   to   act,  the  president  shall   preside   at   meetings 
of   the   shareholders   and  directors  and  shall   discharge   the   duties 
of    the   presiding   officer.    The   president   may   sign,   with    the 
secretary    or    any    other    proper   officer    of    the    Corporation 
thereunto   authorized   by   the   board  of   directors,   certificates   for 
shares     of     the    Corporation,    any    deeds,    mortgages,     bonds, 
contracts,   or   other   instruments  which  the  board   of   directors   has 
authorized   to   be  executed,  except  in  cases  where   the   signing   and 
execution   thereof   shall   be  expressly   delegated   by   the   board   of 
directors   or   by   these  Bylaws  to  some  other  officer   or   agent   of 
the   Corporation,   or   shall   be  required   by   law   to   be   otherwise 
signed   or   executed.    Unless  otherwise   directed   by   the   board   of 
directors,   the   president  shall  attend  in   person   or   by   substitute 
appointed   by   him,   or  shall  execute  on  behalf   of   the   Corporation 
written    instruments   appointing   a   proxy   or   proxies   to   represent 
the   Corporation  at,  all  meetings  of  the  shareholders   of   any   other 
corporation   in   which   the  Corporation  holds  any   stock.    On   behalf 
of   the   Corporation,  the  president  may  in  person   or   by   substitute 
or   by   proxy   execute  written  waivers  of  notice   and   consents   with 
respect    to    any    such   meetings.    At   all    such    meetings    and 
otherwise,   the   president,   in  person   or   by   substitute   or   proxy, 
may    vote   the   stock   held   by   the   Corporation,   execute    written 
consents   and   other   instruments   with   respect   to   such   stock   and 
exercise   any   and   all  rights  and  powers  incident  to   the   ownership 
of said stock.                                                                  

           10.    Vice   Presidents.    Each   vice   president   shall   have
such   powers   and  perform  such  duties  as  the  board  of  directors   may 
from   time  to  time  prescribe  or  as  the  president  may  from   time   to 
time   delegate   to   him.   At  the  request  of  the   president,   in   the 
case   of   the   president's   absence  or  inability   to   act,   any   vice 
president   may   temporarily  act  in  his  place.   In  the   case   of   the 
death   of   the   president,   or   in   the   case   of   his   absence    or 
inability   to   act   without   having  designated   a   vice   president   or 
vice   presidents   to   act   temporarily  in  his   place,   the   board   of 
directors,   by   resolution,  may  designate  a   vice   president   or   vice 
presidents,   to   perform  the  duties  of  the   president.    If   no   such 
designation    shall    be   made,   the   chairman    of    the    board    of 
directors,   if   any,   shall   exercise  such   powers   and   perform   such 
duties,   as   provided  in  Section  8  of  this  Article  V,   but   if   the 
Corporation   has  no  chairman  of  the  board  of  directors,   or   if   the 
chairman   is  unable  to  act  in  place  of  the  president,   any   of   the 
vice   presidents   appointed   by  the  board  of   directors   may   exercise 
such powers and perform such duties.                                            

            11.    Secretary.    The   secretary   shall   (i)   prepare,   or
cause    to   be   prepared,   and   maintain   as   permanent   records    the 
minutes   of   the   proceedings  of  the  shareholders  and   the   board   of 
directors   or   any  committee  thereof,  a  record  of  all   actions   taken 
by    the    shareholders   or   board   of   directors   or   any    committee 
thereof   without   a   meeting  and  a  record  of  all  waivers   of   notice 
of   meetings   of  shareholders  and  of  the  board  of  directors   or   any 
committee   thereof,   (ii)   see  that  all  notices   are   duly   given   in 
accordance   with  the  provisions  of  these  Bylaws  and   as   required   by 
law,   (iii)   serve  as  custodian  of  the  records  and  of  the   seal   of 
the   Corporation   and   affix  the  seal  to  all   documents,   (iv)    keep 
at   the   registered  office  or  principal  place  of  business,   a   record 
containing   the   names  and  addresses  of  all  shareholders   in   a   form 
that   permits   preparation   of   a  list   of   shareholders   arranged   by 
voting   group   and  by  class  or  series  of  shares  within   each   voting 
group,   that   is   alphabetical  within  each  class  or  series   and   that 
shows   the   address  of,  and  the  number  of  shares  of  each   class   or 
series   held   by,   each  shareholder,  unless  such  a   record   shall   be 
kept    at    the   office   of   the   Corporation's   transfer    agent    or 
registrar,   (v)   maintain   at  the  Corporation's   principal   office   the 
originals     or     copies     of     the    Corporation's     Articles     of 
Incorporation,   Bylaws,   minutes   of   all   shareholders'    meeting    and 
records   of   all   action   taken  by  shareholders   without   meeting   for 
the   past   three   years,  all  written  communications   within   the   past 
three   years   to  shareholders  as  a  group  or  to  the  holders   of   any 
class   or   series  of  shares  as  a  group,  a  list  of   the   names   and 
business   addresses   of  the  current  directors   and   officers,   a   copy 
of   the   Corporation's   most  recent  corporate  report   filed   with   the 
Secretary     of    State,    and    financial    statements     showing     in 
reasonable    detail   the   Corporation's   assets   and    liabilities    and 
results   of   operations  for  the  last  three  years,  (vi)   have   general 
charge   of   the  stock  transfer  books  of  the  Corporation,   unless   the 
Corporation   has   a   transfer   agent,   (vii)   authenticate   records   of 
the    Corporation    and    (viii)   in   general,    perform    all    duties 
incident   to  the  office  of  secretary  and  such  other  duties   as   from 
time   to   time  may  be  assigned  to  him  by  the  president  or   by   the 
board   of   directors.    Assistant   secretaries,   if   any,   shall    have 
the    same    duties   and   powers,   subject   to   supervision    by    the 
secretary.      The     directors    and/or    shareholders     may     however 
respectively    designate   a   person   other   than    the    secretary    or 
assistant    secretary    to   keep   the   minutes   of    their    respective 
meetings.                                                                       

            12.     Treasurer.    The   treasurer   shall   be    the    chief
financial   officer   of  the  Corporation,  shall  have   care   and   custody 
of   all   corporate   funds,  securities,  evidences   of   indebtedness   and 
other   personal   property  of  the  Corporation   and   shall   deposit   the 
same    in    accordance   with   the   instructions   of    the    board    of 
directors.     The   treasurer   shall   receive   and   give   receipts    and 
acquittances   for   money  paid  in  on  account  of  the   Corporation,   and 
shall   pay   out   of   the   Corporation's   funds   on   hand   all   bills, 
payrolls    and   other   just   debts   of   the   Corporation   of   whatever 
nature    upon   maturity.    Such   power   given   to   the   treasurer    to 
deposit   and   disburse  funds  shall  not,  however,   preclude   any   other 
officer   or   employee   of   the  Corporation  from   also   depositing   and 
disbursing   funds   when   authorized   to   do   so   by   the    board    of 
directors.    The   treasurer   shall,   if   required   by   the   board    of 
directors,   give   the   Corporation  a  bond  in   such   amount   and   with 
such   surety   or   sureties   as   may   be   ordered   by   the   board   of 
directors   for   the   faithful  performance  of   duties   of   his   office. 
The   treasurer   shall  have  such  other  powers  and  perform   such   other 
duties   as   may   be  from  time  to  time  prescribed  by   the   board   of 
directors   or   the   president.    The   assistant   treasurers,   if    any, 
shall   have   the   same  powers  and  duties,  subject  to  the   supervision 
of the treasurer.                                                               

            The   treasurer   shall   also   be   the   principal   accounting
officer   of   the   Corporation   and  shall  prescribe   and   maintain   the 
methods   and   systems   of   accounting  to  be   followed,   keep   complete 
books   and   records   of  account  as  required  by  the  Colorado   Business 
Corporation   Act,   prepare   and   file  all   local,   state   and   federal 
tax    returns,    prescribe   and   maintain    an    adequate    system    of 
internal   audit   and   prepare   and   furnish   the   president   and    the 
board    of   directors   statements   of   account   showing   the   financial 
position of the Corporation and the results of its operations.                  

            13.     Assistant    Secretaries   and    Assistant    Treasurers.
The      Assistant     Secretaries     and     the     Assistant     Treasurers 
respectively   (in   the   order  designated  by   the   Board   of   Directors 
or,   lacking   such   designation,  by  the   President),   in   the   absence 
of   the   Secretary  or  Treasurer,  as  the  case  may  be,   shall   perform 
the   duties   and  exercise  the  powers  of  such  Secretary   or   Treasurer 
and   shall   perform   such   other  duties  as   the   Board   of   Directors 
shall prescribe.                                                                

            14.     Delegation   of   Duties.    Whenever   an   officer    is
absent,   or   whenever,   for  any  reason,  the  board   of   directors   may 
deem   it   desirable,   the  board  may  delegate  the   powers   and   duties 
of   an   officer  to  any  other  officer  or  officers  or  to  any  director 
or directors.                                                                   

            15.    Bond   of   Officers.    The   board   of   directors   may
require   any   officer  to  give  the  Corporation  a   bond   in   such   sum 
and   with   such  surety  or  sureties  as  shall  be  satisfactory   to   the 
board   of   directors  for  such  terms  and  conditions  as  the   board   of 
directors    may    specify,   including,   without   limitation,    for    the 
faithful   performance  of  his  duties  and  for  the   restoration   to   the 
Corporation   of  all  property  in  his  or  her  possession  or   under   his 
or her control belonging to the Corporation.                                    

ARTICLE VI                

Share Certificates and the Transfer of Shares                 

            1.     Share   Certificates.    Each   share   certificate   shall
state   on  its  face  (i)  the  name  of  the  Corporation  and  that  it   is 
incorporated   under   the   laws  of  the  State   of   Colorado,   (ii)   the 
name   of   the   person  to  whom  the  certificate  is  issued,   and   (iii) 
the   number   and  class  of  shares  and  the  designation  of  the   series, 
if   any,   the   certificate   represents.   Each  share   certificate   shall 
be   signed,   either   manually  or  in  facsimile,   by   the   chairman   or 
vice-chairman   of   the   board  of  directors  or   by   the   president   or 
the   vice-president   and   by  the  treasurer  or  an   assistant   treasurer 
or   by   the   secretary   or   an  assistant   secretary,   or   such   other 
officers   as   the   board   of  directors  may  designate,   by   resolution, 
and   may   bear  the  corporate  seal  or  its  facsimile,  and   such   other 
information   as   may   be   deemed  necessary   or   appropriate.    If   the 
person   who   signed   a   share   certificate   either   manually    or    in 
facsimile,   no   longer   holds  office  when  the  certificate   is   issued, 
the    certificate   is   nevertheless   valid.    If   the   Corporation    is 
authorized    to   issue   different   classes   of   shares    or    different 
series   within   a   class,   the  certificate   shall   state   conspicuously 
on    its   front   or   back   that   the   Corporation   will   furnish   the 
shareholder    information    regarding    the    designations,    preferences, 
limitations    and   relative   rights   of   each   class   and    for    each 
series, upon written request and without charge.                                

             2.      Shares    Without    Certificates.     The    board    of
directors   may   authorize   the  issuance  by   the   Corporation   of   some 
or   all   of   the   shares  of  any  or  all  of  its   classes   or   series 
without   certificates.    Said   authorization   shall   not   affect   shares 
already   represented   by   certificates  until  they   are   surrendered   to 
the   Corporation.    Within  a  reasonable  time   after   the   issuance   or 
transfer    of    shares   without   certificates,   the   Corporation    shall 
send   to   the   shareholder   a   written  statement   of   the   information 
required by Section 1 of this Article VII.                                      

           3.     Issuance   of   Shares.    Except   as   provided   in   the
Articles   of   Incorporation,   the   board   of   directors   may   authorize 
the    issuance    of    shares   for   consideration   consisting    of    any 
tangible,    intangible    property   or   benefit    to    the    Corporation, 
including    cash,   promissory   notes,   services   performed    and    other 
securities    of    the   Corporation.    The   board   of   directors    shall 
determine   that   the   consideration  received  or   to   be   received   for 
the   shares   to   be  issued  is  adequate.   Such  determination,   in   the 
absence   of   fraud,   is  conclusive  insofar  as  the   adequacy   of   such 
consideration   relates   to   whether   the   shares   are   validly   issued, 
fully    paid    and    nonassessable.     The    promissory    note    of    a 
subscriber   or   an   affiliate  of  a  subscriber  for   shares   shall   not 
constitute    consideration   for   the   shares    unless    the    note    is 
negotiable   and   is   secured   by  collateral   other   than   the   shares, 
having   a   fair  market  value  at  least  equal  to  the  principal   amount 
of   the   note.    For   the   purposes  of  this   Section   3,   "promissory 
note"    means    a   negotiable   instrument   on   which    there    is    an 
obligation   to   pay   independent  of  collateral  and   does   not   include 
a    nonrecourse   not.    Unless   otherwise   expressly   provided   in   the 
Articles   of   Incorporation,   shares   having   a   par   value    may    be 
issued for less than the par value.                                             

            4.      Lost   Certificates.    The   board   of   directors   may
direct   a   new   certificate  to  be  issued  in  place  of   a   certificate 
alleged   to   have   been   destroyed  or  lost  if   the   owner   makes   an 
affidavit   or   affirmation   of  that  fact  and   produces   such   evidence 
of   loss   or   destruction  as  the  board  may  require.   The   board,   in 
its   discretion,  may  as  a  condition  precedent  to  the  issuance   of   a 
new   certificate   require  the  owner  to  give  the   Corporation   a   bond 
as   indemnity   against   any   claim   that   may   be   made   against   the 
Corporation    relating   to   the   certificate   allegedly    destroyed    or 
lost.                                                                           

5.   Transfer of Shares.                                    

             (a)     Shares    of    the    Corporation    shall    only    be
transferred   on   the  stock  transfer  books  of  the  Corporation   by   the 
holder   of   record  thereof  upon  the  surrender  to  the   Corporation   of 
the    share   certificates   duly   endorsed   or   accompanied   by    proper 
evidence   of   succession,   assignment   or   authority   to   transfer   and 
such   documentary   stamps   as   may   be   required   by   law.    In   that 
event,    the    surrendered    certificates   shall    be    cancelled,    new 
certificates   issued   to   the   persons   entitled   to   them,   and    the 
transaction   recorded   on   the  books  of  the  Corporation.    The   person 
in   whose   name   shares  stand  on  the  books  of  the  Corporation   shall 
be   deemed   by   the   Corporation  to  be  the   owner   thereof   for   all 
purposes.                                                                       

           (b)    The   Articles  of  Incorporation,  by  these   Bylaws,   by
an    agreement   among   shareholders,   or   among   shareholders   and   the 
Corporation,     may    impose    restriction    on     the     transfer     or 
registration    or    transfer   of   shares    of    the    Corporation.     A 
restriction   does   not   affect   shares  issued   before   the   restriction 
became   effective   unless   the  holder  of   such   shares   acquired   such 
shares   with   knowledge   of   the   restriction,   is   a   party   to   the 
agreement   containing   the   restriction,  or   voted   in   favor   of   the 
restriction or otherwise consented to the restriction.                          

           (c)    A   restriction   on  the  transfer   or   registration   of
transfer   of   shares  is  valid  and  enforceable  against  the   holder   or 
a   transferee   of   the   holder  if  the  restriction   is   authorized   by 
the   Colorado   Business   Corporation  Act  and  its   existence   is   noted 
conspicuously   on   the   front   or   back   of   the   certificate   or   is 
contained   in   the   information  statement  required   by   Section   2   of 
this   Article   VII   above.   Unless  so  noted,   a   restriction   is   not 
enforceable     against     a    person    without     knowledge     of     the 
restriction.                                                                    

           6.     Registered   Shareholders.    The   Corporation   shall   be
entitled   to   treat   the   registered  holder   of   any   shares   of   the 
Corporation    as   the   owner   thereof   for   all   purposes,    and    the 
Corporation   shall   not   be   bound   to   recognize   any   equitable    or 
other   claim   to,   or   interest  in,  such  shares   or   rights   deriving 
from   such   shares   on   the   part   of   any   person   other   than   the 
registered    holder,    including   without    limitation    any    purchaser, 
assignee   or   transferee   of   such   shares   or   rights   deriving   from 
such    shares,   unless   and   until   such   other   person   becomes    the 
registered   holder   of   such  shares,  whether  or   not   the   Corporation 
shall   have   either   actual   or  constructive   notice   of   the   claimed 
interest of such other person.                                                  

           7.     Transfer   Agent,  Registrars  and   Paying   Agents.    The
board   may   at   its   discretion  appoint  one  or  more  transfer   agents, 
registrars   and   agents  for  making  payment  upon  any  class   of   stock, 
bond,    debenture    or   other   security   of   the    Corporation.     Such 
agents   and   registrars   may   be   located   either   within   or   outside 
Colorado.    They   shall   have  such  rights  and   duties   and   shall   be 
entitled to such compensation as may be agreed.                                 

ARTICLE VII                 

Insurance                 

            By   action   of   the   board   of   directors,   notwithstanding
any   interest   of   the  directors  in  the  action,  the   Corporation   may 
purchase   and   maintain  insurance,  in  such  scope  and  amounts   as   the 
board   of   directors  deems  appropriate,  on  behalf  of  any   person   who 
is   or   was   a   director,  officer,  employee,  fiduciary   or   agent   of 
the    Corporation,   or   who,   while   a   director,   officer,    employee, 
fiduciary   or   agent  of  the  Corporation,  is  or  was   serving   at   the 
request    of    the    Corporation   as   a   director,   officer,    partner, 
trustee,   employee,   fiduciary   or   agent   of   any   other   foreign   or 
domestic   corporation   or   of  any  partnership,   joint   venture,   trust, 
profit    or    nonprofit   unincorporated   association,   limited   liability 
company   or   other   enterprise  or  employee  benefit  plan,   against   any 
liability   asserted   against,  or  incurred  by,   him   or   her   in   that 
capacity   or  arising  out  of  his  or  her  status  as  such,   whether   or 
not   the   Corporation  would  have  the  power  to  indemnify  him   or   her 
against    such    liability   under   the   provisions   of    the    Colorado 
Business    Corporation   Act.    Any   such   insurance   may   be    procured 
from   any   insurance   company  designated  by   the   board   of   directors 
of    the    Corporation,   whether   such   insurance   company   is    formed 
under    the   laws   of   Colorado   or   is   a   company   in   which    the 
Corporation   has   an   equity  interest  or  any  other   interest,   through 
stock ownership or otherwise.                                                   

ARTICLE VIII                

Miscellaneous                 

           1.     Seal.    The   Corporation's  seal,   if   any,   shall   be
circular   in   form   and   shall  contain  the  name   of   the   Corporation 
and the words, "Seal, Colorado."                                                

           2.     Fiscal   Year.    The  fiscal  year   of   the   Corporation
shall   be   December   31   of   each  year.   Said   fiscal   year   may   be 
changed   from   time   to   time   by  the   board   of   directors   in   its 
discretion.                                                                     

            3.      Amendments.    The   board   of   directors   shall   have
power   to   make,   amend  and  repeal  these  bylaws  at   any   regular   or 
special    meeting   of   the   board   unless   the   shareholders   expressly 
provide   that   the   directors  may  not  amend   or   repeal   such   bylaw. 
The   shareholders   also   shall   have  the   power   to   make,   amend   or 
repeal   these   bylaws   at   any   annual   meeting   or   at   any   special 
meeting called for that purpose.                                                

            4.      Gender.    Whenever   required   by   the   context,   the
singular   shall   include   the  plural,  the   plural   the   singular,   and 
one gender shall include all genders.                                           

              5.        Invalid     Provision.      The     invalidity      or
unenforceability    of    any   particular   provision    of    these    bylaws 
shall   not   affect   the   other  provisions   herein,   and   these   Bylaws 
shall    be    construed   in   all   respects   as   if   such   invalid    or 
unenforceable provision was omitted.                                            

           6.     Governing   Law.   These  Bylaws  shall   be   governed   by
and    construed   in   accordance   with   the   laws   of   the   State    of 
Colorado.                                                                       

            7.      Definitions.     Except    as    otherwise    specifically
provided   in   these   Bylaws,  all  terms  used   in   these   Bylaws   shall 
have   the   same   definition   as  in  the  Colorado   Business   Corporation 
Act.                                                                            

           I,   Richard   F.   Schaden,   as   Secretary   of   The   Quizno's
Corporation,    hereby    certify    that    the    foregoing    Bylaws    were 
adopted   by   the   board   of   directors  of   the   Corporation   effective 
August   25,   1994,   and   amended  from  time  to   time   by   such   board 
through January 18, 1996.                                                       

            /s/ Richard F. Schaden
                   Richard F. Schaden, Secretary

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10QSB’ Filing		Date		Other Filings
		12/31/97		10KSB,  10KSB/A,  8-K,  8-K/A
		12/31/96		10KSB,  DEF 14A
		8/31/96
Filed on:		8/14/96
		8/12/96
		7/1/96
For Period End:		6/30/96
		6/24/96		8-K
		6/20/96		8-K
		6/19/96		8-K
		6/18/96		8-K
		6/7/96
		6/1/96
		5/24/96
		5/15/96		10QSB
		5/2/96
		4/30/96
		3/29/96
		1/18/96
		12/31/95
		6/30/95
		1/1/95
		11/1/94
		8/25/94
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