EXHIBIT 10.2

Lease Agreememt

1

THIS INDENTURE

made this 23rd day of August A.D. 1994

BETWEEN:

MOTT ELECTRIC MOTOR REPAIR LTD.,

a company duly incorporated under the laws of the province of British Columbia
hereinafter called the Landlord of the FIRST PART,

AND:

Pure Life International Products Inc., a company duly incorporated under the
laws of the province of British Columbia (incorporation number: 79942967)
hereinafter called the Tenant of the SECOND PART,

AND:

Royal Bodycare Inc. (operating as Royal Bodycare) a company duly incorporated
under the laws of the state of Texas, U.S.A.

(incorporation number:01182746) hereinafter called the Guarantor of the THIRD
PART,

WITNESSETH

that in consideration of the Rents, Covenants and Agreements hereinafter
respectively reserved and contained, the Landlord doth demise and lease unto the
Tenant that portion of the building at 7541 Conway Avenue, Burnaby, British
Columbia, shown on the attached plan (Schedule "A"), being 10,722 square feet in
Building A and B Unit Numbers 3, 13, 14, and 15 hereinafter called the Premises,

FROM

the first day of January 1995

FOR THE TERM OF

six years thence ensuing,

YIELDING

therefore during the said term the RENT shown in Schedule "B" payable at the
office of the Landlord on the First day of each and every month in equal
consecutive monthly instalments as shown in Schedule "B" commencing January 1,
1995. On the First day of each and every month of the term, the Tenant shall
pay, commencing December 1, 1994, the Additional Rent, plus GST, as defined in
this lease. In accordance with clauses 4 and 6 of the executed offer to lease,
attached to this lease as Schedule "D", the Tenant shall be permitted early
occupation of the premises as of December 1, 1994.

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1. DEFINITIONS

In this Lease, unless there is something in the context inconsistent therewith,
the parties agree that:

1.01

"Additional Rent" means all payments other than minimum rent required by any
provision of this lease to be paid by the Tenant to the Landlord or any other
parties.

1.02

"Assignment" includes the extended meaning given in paragraph 14.05.

1.03

"Building A" means the northern building on the land at 7541 Conway Avenue,
Burnaby, British Columbia. "Building B" means the southern building on the land
at 7541 Conway Avenue, Burnaby, British Columbia. The word "building" and/or
"buildings" may be used in this document to mean Building A and/or Building B.

1.04

"Common Areas" means those parts of the lands and building not normally rented
to tenants but available for use by the Tenant, its employees, agents, customers
and invitees in common with all tenants, their employees, agents, customers and
invitees for the purpose of access to and egress from the leased premises,
including but not restricted to entrances to and exits from the building,
parking, driveways and landscaping areas.

1.05

"Insurable Hazards" means fire and such other perils for which insurance is
available, which perils are covered by insurance policies taken out by the
Landlord and in force on the date of any incident in relation thereto.

1.06

"Lands" means the land and buildings at 7541 Conway Avenue, Burnaby, British
Columbia, more particularly known and described as: Lot 1 District Lot 96 Group
1 3330-6467 Plan LMP 450..

1.07

"Lease" means this Agreement, all Schedules attached hereto, and the Rules and
Regulations made from time to time by the Landlord under the provisions of
paragraph 2.06.

1.08

"Leased Premises" means the described portion of the building at 7541 Conway
Avenue, Burnaby, British Columbia.

1.09

"Maintenance Costs" means the total amount paid or payable whether by the
Landlord or others on behalf of the Landlord for complete maintenance,
management and operation of and repairs to the lands, the buildings and the
improvements thereon such as are in keeping with maintaining the standard of a
first class industrial/warehousing building complex; all repairs and
replacements required for such maintenance.

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1.10

"Property Taxes" means all taxes, rates, duties, levies, fees, charges and
assessments whatsoever imposed, assessed, levied or charged on or against the
lands and/or building and on or against the Landlord on account of the lands
and/or building or immovable accessories thereto, by any federal, provincial,
municipal or school taxing authority, including the costs of all appeals made by
the Landlord in respect thereof and including any amounts imposed, assessed,
levied or charged in substitution for or in lieu of any such taxes, rates,
duties, levies, fees, charges or assessments, and excluding only such taxes as
capital gains, profits or excess profit taxes assessed upon the income of the
Landlord.

1.11

"Rent" includes minimum rent and additional rent.

1.12

"Service Areas" means all those parts of the building not included in the total
leasable area of the building or the common areas of the building, as designated
from time to time by the Landlord and used for the purpose of building
maintenance, management, operation and repair, including without restriction
space for building systems, machinery, equipment, utilities connections and
storage of supplies.

1.13

"Sublet" includes the extended meaning given in paragraph 15.06.

1.14

"GST" means the Goods and Services Tax. The rate charged for GST is subject to
change with any change in the laws and/or acts governing the GST.

2. TENANT'S COVENANTS

The Tenant covenants with the Landlord:

2.01

To pay rent.

2.02

To make all payments required hereunder as and when due without any deduction or
set-off whatsoever.

2.03

To pay as they become due all rates and charges for services and utilities,
including but not restricted to water, telephone, gas and electrical power, used
upon or in respect of the leased premises, and for fittings, machines,
apparatus, meters or other things leased in respect thereof, and for all work or
services performed by any corporation or commission in connection with such
utilities. The Landlord will, if applicable, forward to the Tenant the
appropriate invoices from third parties (eg: BC Gas) with sufficient time for
the Tenant to pay such invoices by the due date stated on the invoice.

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2.04(A)

To pay to the Landlord as Additional Rent on the first day of each and every
month during the term an amount estimated by the Landlord to be one-twelfth of
the Tenant's proportionate share of the following total costs incurred by the
Landlord:

1) Repairs and Maintenance expenses with respect to the operation (including
refuse removal), management, maintenance and repair of the Lands.

2) Property Taxes next becoming due and payable on the Lands; and to pay all
income tax, capital tax, sales tax, business taxes, business licence fees and
other charges levied or assessed in respect of the use and occupancy of the
leased premises by the Tenant only as such relate to the day-to-day business
operations of the Tenant, the business or businesses carried on therein, or the
improvements, equipment, machinery or fixtures brought thereon or belonging to
the Tenant, or to anyone occupying the leased premises with the Tenant's
consent.

3) Insurance coverage placed by the Landlord on the land, building and anything
therein, including, without limiting the foregoing, public liability and
property damage insurance, insurance for loss of rent income, and any other
insurance reasonably required by the Landlord or its mortgagees, or which may be
or become customary for the owner of a building such as the building leased
herein to carry for loss or damage to the building or liability arising
therefrom.

(a) The Tenant shall during any rent free period and the entire term hereof, at
its sole costs and expense, take out and keep in full force and effect and in
the names of the Tenant and the Landlord as their respective interests may
appear, the following insurance:

i) All risks property insurance covering all property of every description
brought onto the leased premises by the Tenant or installed by or on behalf of
the Tenant within the leased premises, including without limitation, furniture,
fittings, installations, alterations, additions, partitions and fixtures in the
nature of a leasehold improvement, in an amount equal to the full insurable
value thereof and in any event in an amount sufficient to prevent the Landlord
from being deemed a co-insurer.

ii) Public liability and property damage insurance including personal injury
liability, contractual liability, non-owner automobile liability and owners' and
contractors' protective insurance coverage with respect to the leased premises
and the Tenant's use of any part thereof, which coverage shall include the
activities and operations conducted by the Tenant and any other person on the
leased premises. Such policies shall be written on a comprehensive basis with
limits of not less than $2,000,000.00 for bodily injury to any one or more
persons, or property damage, and such policies shall contain a cross liability
clause.

iii) Tenant's legal liability insurance for the full replacement cost of the
Tenant's leased premises, such coverage to include the activities and operation
conducted by the Tenant and any other persons on the leased premises.

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iv) Plate glass insurance, for the benefit of the Landlord and Tenant, covering
all plate glass in the Premises, including plate glass windows and doors, in an
amount equal to the full insurable value thereof.

v) In the event that the Premises contain a boiler installation, or in the event
that the same shall at any time during the Term be installed on the Premises,
then boiler insurance for the benefit of the Landlord and the Tenant, in amounts
satisfactory to the Landlord in respect of injury or death to one or more
persons or property damage.

(b) The Tenant shall also take out and keep in force during the term business
interruption insurance in an amount adequate to cover rent payable by the Tenant
hereunder during the term. Each such policy shall be in a form and with insurers
acceptable to the Landlord and shall name the Landlord as the first loss
payable.

(c) All policies required to be written on behalf of the Tenant pursuant to the
subsections above shall contain a waiver of any subrogation against the
Landlord. All policies shall be taken out with insurers acceptable to the
Landlord and in a form satisfactory from time to time to the Landlord. The
Tenant agrees that certificates of insurance, or if required by the Landlord or
the mortgagees of the Landlord, certified copies of each such insurance policy
will be delivered to the Landlord as soon as practicable after the placing of
the required insurance. All policies shall contain an undertaking by the
insurers to notify the Landlord and the mortgagees of the Landlord in writing
not less than 30 days prior to any material change, cancellation or other
termination thereof. The Tenant shall provide the Landlord with written evidence
of the continuation of all such policies not less than 10 days prior to their
respective expiry dates.

(d) The cost or premium for all policies required to be written on behalf of the
Tenant pursuant to the subsections above shall be paid by the Tenant. The Tenant
agrees that if the Tenant fails to take out or keep in force such insurance, the
Landlord will have the right to do so, without imposing any liability upon the
Landlord, and to pay the premium therefor, and in such event the Tenant shall
repay to the Landlord the amount so paid forthwith upon demand.

(e) In the event that both the Landlord and the Tenant have claims to be
indemnified under any such insurance, the indemnity shall be applied first to
the settlement of the claim of the Landlord and the balance, if any, to the
settlement of the claim of the Tenant.

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2.04(B)

The period for determining the estimated total costs on which the Tenant's
proportionate share will be calculated shall be determined by the Landlord from
time to time. However, such period will not exceed twelve months.

The Tenant will also pay to the Landlord on demand at the end of each such
period the amount, if any, by which the actual costs exceed the estimate.

If at the end of such period the Tenant has overpaid its proportionate share of
the costs, the Landlord will credit such overpayment amount to the Tenant's
proportionate share of the costs for the ensuing period.

The Tenant's proportionate share shall be calculated by multiplying the total
expense by a fraction, the numerator of which is the area of the leased premises
and the denominator of which is the total leasable area of the Lands. For the
purpose of this Lease, the Tenant's proportionate share, expressed as a
percentage, is 26.41%.

2.05

To comply promptly with all provisions of law including, without limiting the
generality of the foregoing, federal and provincial legislative enactments,
building by-laws, and any other governmental or municipal regulations which
relate to the partitioning, equipment, condition, maintenance, operation or use
of the leased premises, and to the making of any repairs, replacements,
alterations, additions, changes, substitutions or improvements of or to the
leased premises, and to comply with all police, fire and sanitary regulations
imposed by any federal, provincial or municipal authority or made by fire
insurance underwriters, and to observe and obey all governmental and municipal
regulations and other requirements governing the conduct of any business
conducted in the leased premises.

2.06

The Tenant and its employees and all persons visiting or doing business with it
on the leased premises shall be bound by and shall observe the rules and
regulations attached as Schedule "C" to this Lease and any further and other
reasonable rules and regulations made from time to time by the Landlord of which
notice in writing has been given to the Tenant, and all such rules and
regulations shall be deemed to be incorporated into and form part of this Lease.

2.07

(a) Not to do or suffer any waste or damage, disfiguration or injury to the
leased premises or the fixtures and equipment therein or permit or suffer any
overloading of the floors mezzanine floors or roof thereof; and not to place
therein any safe, heavy business machine or other heavy object without first
obtaining the consent in writing of the Landlord such consent shall not be
unreasonably withheld; and not to use or permit to be used any part of the
leased premises for any dangerous, noxious, toxic or

 

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offensive trade or business and not to cause or permit any nuisance in, at or on
the leased premises, and not to carry on or do, or allow to be carried on or
done any work, business, occupation, act or thing which may cause or result in
excessive use or waste of water or increase the water rates payable in respect
thereof of the leased premises.

(b) Not to overload electrical circuits and not to increase the capacity of
electrical outlets or make any alterations to electrical outlets or circuits
except with the prior written consent of the Landlord and at the Tenant's
expense. The Landlord may perform any such alterations itself, in which case the
cost shall be paid by the Tenant to the Landlord forthwith on demand, or the
Landlord may require the Tenant to use the Landlord's contractors or other
contractors approved by the Landlord. All electrical work is to be done by Mott
Electric Limited, or an electrical contractor as approved by the Landlord. The
Tenant will be charged for such electrical work at net cost to Mott Electric
Limited plus fifteen percent (15%) plus GST.

2.08

The Leased Premises shall be used only for the purpose for which they are hereby
leased, namely: research and development of health products including
warehousing, distribution and ancillary administration offices.

The Tenant will not carry on nor do, nor allow to be carried on or done on the
premises any sales by auction, nor any work, business, occupation, act or thing
whatever which may be or become a nuisance or annoyance to the Landlord, the
public or any other occupant of the said building or which may increase the
hazard of fire or liability of any kind or which may increase the premium rate
of insurance against loss by fire or liability upon the said building or the
premises or invalidate any policy of insurance of any kind upon or in respect of
same or which may cause or result in excessive use or waste of water or increase
the amount of water rates payable in respect of the said building or the
premises; The cost of any such increase(s) will be due and payable by the Tenant
upon demand. The Tenant shall promptly comply with all reasonable requirements
of the insurance authorities or of any insurer now or hereafter in effect
relating to the leased premises. The Landlord, its servants or agents may at any
time and from time to time enter the leased premises to remove any article or
remedy any condition which, in the opinion of the Landlord reasonably arrived
at, would be likely to lead to cancellation of any such policy of insurance, and
such entry by the Landlord shall not be deemed to be a re-entry.

2.09

The Tenant is to repair, except for reasonable wear and tear and damage by fire,
lightning, tempest and earthquake; AND to give to the Landlord or his agent
immediate notice of any defect in water, gas or other pipes or fixtures, heating
apparatus, hoist, machinery or telephone, electric or other wires or fixtures;
AND that the Landlord may enter and view state of repair and that the

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Tenant will repair according to notice, except for reasonable wear and tear and
damage by fire, lightning, tempest and earthquake; AND that the Tenant will
leave the premises in good repair, reasonable wear and tear and damage by fire,
lightning, tempest and earthquake excepted; AND will keep and leave whole and in
good order all water, gas and electric fixtures, glass, dock levellers,
bollards, pipes, faucets, locks, fastenings, hinges, window shades, sash cords,
heating and cooling apparatus under the control of and used by the Tenant and
will keep and leave all brass, copper or other metals and all windows, in on or
attached to the premises, cleaned and polished.

2.10

If the Tenant should fail to repair in accordance with the provisions hereof,
the Landlord, its agents or employees may forthwith enter the leased premises
and make the required repairs, and for that purpose the Landlord may bring and
leave upon the leased premises all necessary tools, materials and equipment, and
the Landlord will not be liable to the Tenant for any inconvenience, annoyance
or loss of business or any injury or damage suffered by the Tenant by reason of
the Landlord effecting such repairs unless caused by the negligence of the
Landlord, its agents or employees. The expense of such repairs shall be borne by
the Tenant and shall be paid to the Landlord forthwith upon demand. Any entry by
the Landlord hereunder shall not be deemed to be a re-entry.

2.11

(a) To install in the leased premises only such floor coverings and to apply
only such wall coverings and paints as are first approved in writing by the
Landlord. The Landlord's approval shall not be unreasonably withheld.

(b) The Tenant will not drive nails or screws into nor drill into nor cut, mark
nor in any way deface any part of the premises except that which is reasonable
to carry on the day-to-day business of the Tenant. Prior to vacating the
premises, the Tenant will, if requested to do so by the Landlord, repair and
make good any such marks, holes, etc.

(c) The Tenant will not make any alterations in the structure, plan or
partitioning of the premises nor install any plumbing, piping, wiring or heating
apparatus without the written permission of the Landlord or his agents first had
and obtained and at the end or sooner determination of the said term will
restore the premises to their present condition if called upon to do so by the
Landlord but otherwise all repairs, alterations, installations and additions
made by the Tenant upon the premises, except gas and electric fixtures and
movable business fixtures, shall be the property of the Landlord and shall be
considered in all respects as part of the premises. Such work may be performed
by contractors engaged by the Tenant, but in each case only under written
contract approved in writing by the Landlord and subject to all conditions which
the Landlord may impose; and the Tenant covenants to prosecute such work to
completion with reasonable diligence. The Landlord's consent for the foregoing
shall not be unreasonably withheld.

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(d) The Tenant will indemnify and save harmless the Landlord from and against
all and all manner of claims for liens for wages or materials, or for damage to
persons or property caused during the making of or in connection with any
repairs, alterations, installations and additions which the Tenant shall make or
cause to be made on the premises, and that whenever and so often as any such
liens shall attach or claims therefor shall be filed, and whenever and so often
as any such conditional sales agreements or chattel mortgages shall be
registered, the Tenant shall, with 20 days after the Tenant has notice of the
claim of lien or of registration of the conditional sales agreement or chattel
mortgage, procure the discharge thereof by payment or by giving security or in
such other manner as is or may be required or permitted by law.

(e) The Tenant will allow the Landlord from time to time to post and will keep
posted on the leased premises any notice that the Landlord may desire to post
under the provisions of the Builders Lien Act.

2.12

To permit the Landlord or its agents to fix or place in the immediate vicinity
of the exterior portion of the leased premises a notice or notices stating that
the leased premises are for rent, and to permit the Landlord or its agents to
exhibit the leased premises to prospective tenants during normal business hours
of the last 6 months of the term. To permit the Landlord or its agents to show
the leased premises for the purposes of the Landlord's own financing and
re-financing during normal business hours, and to exhibit the leased premises to
any prospective purchaser of the Landlord's interest in the lands and building.

2.13

To replace forthwith any glass in or about the leased premises that is broken or
damaged with glass of equal kind and quality except where the broken glass is a
result of a defect due to the structural integrity of the building or as a
result of the actions of the Landlord, its agents or employees.

2.14

Not to erect, install or display any exterior signs or interior window or door
signs or advertising media or window or door lettering or placards without the
previous written consent of the Landlord other than a suitable sign of a kind,
size and design and in a location first approved by the Landlord. Such approval
shall not be unreasonably withheld. Upon expiration or determination of this
lease the Tenant will remove any and all such advertising if required to do so
by the Landlord and to make good any damage caused to the leased premises by
such installation or removal.

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2.15

To notify the Landlord promptly of any waste or damage to the leased premises,
by whatever cause.

2.16

The Tenant will not cover nor obstruct the glass doors, partitions, transoms,
windows, lights and skylights which reflect or admit light into any passageway
or other place in the said building, except as stated in the executed offer to
lease which is attached hereto as Schedule "D".

2.17

The Tenant and its business operations will comply with all present and future
environmental laws and regulations. Any costs assessed or charged against the
Landlord as a result of the Tenant not complying with any environmental law will
be charged to the Tenant and such costs will be payable by the Tenant upon
demand.

2.18

On the expiration or sooner determination of this lease, to peaceably surrender
and give up possession of the leased premises without notice from the Landlord,
and in a good and proper state of repair, any right or notice to quit or vacate
being hereby expressly waived by the Tenant, any law, usage or custom to the
contrary notwithstanding.

2.19

The Sole and exclusive right to use or to lease to others for their use the roof
or exterior side and rear walls of the said building is reserved to and retained
by the Landlord. The Tenant shall be given the opportunity to approve of any
such use; such approval will not be unreasonably withheld.

2.20

To promptly and fully observe and carry out all other covenants contained in
this lease.

3. PAYMENTS TO THE LANDLORD

The Tenant shall make the following payments, plus GST, to the Landlord promptly
as and when due and each and every payment must be received at the Landlord's
office on or before the due date:

3.01

The Minimum Rent reserved in Schedule "B" to this lease and all Additional Rent
as defined in paragraph 2.04 and all payments as defined in paragraph 2.03.

3.02

All rent reserved herein shall be deemed to accrue from day to day, and if for
any reason it shall become necessary to calculate rent for irregular periods of
less than one year, an appropriate pro rata adjustment shall be made on a daily
basis in order to compute rent for such irregular periods.

3.03

Any amounts for increased insurance pursuant to paragraph 2.08 and, upon demand,
any amount paid by the Landlord in respect of insurance of the Landlord's
interest in the leased premises.

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3.04

(a) If the building, pipes and other apparatus (or any of them) used for the
purpose of heating, cooling or ventilating the building, or if the water pipes,
drainage pipes, electric lighting, plumbing or other equipment of the building
get out of repair or become damaged or destroyed through the negligence,
carelessness or misuse of the Tenant, its servants, agents, employees or anyone
permitted by it to be in the building, or through it or them in any way stopping
up or injuring the heating, cooling and ventilating apparatus, water pipes,
drainage pipes, electric lighting, plumbing or other equipment or part of the
building, the expense of the necessary repairs, replacements or alterations
shall be borne by the Tenant and shall be paid to the Landlord forthwith on
demand.

(b) Any amounts for repairs pursuant to paragraph 2.10.

(c) Any amounts paid by the Landlord pursuant to paragraph 9.02 to cure default
by the Tenant.

(d) Any amounts paid by the Landlord for insurance pursuant to paragraph 2.04(A)
(3) shall be paid forthwith on demand.

3.05

Any amounts by way of indemnity pursuant to paragraph 13.02 shall be paid
forthwith on demand.

3.06

Any legal costs incurred pursuant to paragraph 9.10 or paragraph 15.

3.07

Any interest accruing pursuant to paragraph 9.01.

4. LANDLORD'S COVENANTS

Subject always to paragraph 3, and provided that the Tenant pays the rent, plus
GST, hereby reserved when due and performs the Tenant's covenants herein, the
Landlord agrees:

To allow the Tenant to peaceably hold the leased premises during the term
without interruption by the Landlord or any person rightfully claiming through
or in trust for it.

5. FIXTURES

The Tenant may remove its fixtures; PROVIDED HOWEVER that all installations,
alterations, additions, partitions and fixtures other than trade or tenant's
fixtures in or upon the leased premises, whether placed there by the Tenant or
the Landlord, shall immediately upon such placement be the Landlord's property
without compensation therefor to the Tenant and, except as hereinafter
mentioned, shall not be removed from the leased premises by the Tenant at any
time either during or after the term. Notwithstanding anything contained herein,
the Landlord shall be under no obligation to repair or maintain or insure the
Tenant's installations, alterations, additions, partitions and fixtures or
anything in the nature of a leasehold improvement made or

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installed by the Tenant and, further notwithstanding anything contained herein,
the Landlord shall have the right upon the termination of this Lease by
affluxion of time or otherwise to require the Tenant to remove its
installations, alterations, additions, partitions and fixtures or anything in
the nature of a leasehold improvement made or installed by the Tenant and to
make good any damage caused to the leased premises by such installation or
removal.

6. FIRE

In the event that the building is destroyed or so damaged by fire, lightning,
tempest or other casualty against which the Landlord is insured so as to render
the same unfit for the purpose of the Tenant, the rent hereby reserved or a
proportionate part thereof according to the nature and extent of the damage
sustained, shall be suspended and abated until the premises shall have been
rebuilt or made fit for the purpose of the Tenant or at the option of the
Landlord the said term shall in such case forthwith come to an end, and the
Tenant shall cease to be held liable for payment of rent except such rent as
shall have already accrued due, and shall be entitled to be repaid any rent paid
in advance for the balance of the period so paid for in advance.

7. DAMAGE TO PROPERTY

The Landlord shall not be liable or responsible in any way for any loss, damage
or injury to any property belonging to the Tenant or for which the Tenant may be
responsible, or to employees of the Tenant, or to any other person while such
property is on the leased premises or in the building or in or on the
surrounding lands owned by the Landlord, whether or not such property has been
entrusted to employees of the Landlord, and without limiting the generality of
the foregoing, the Landlord shall not be liable for any damage to such property
caused by steam, water, rain or snow which may leak into, issue or flow from any
part of the building or from the water, steam or drainage pipes or plumbing
works of the building, or from any other place or quarter, or for any damage
caused by or attributable to the condition or arrangement of any electric or
other wiring, or for any damage caused by anything done or omitted by any other
tenant.

8. IMPOSSIBILITY OF PERFORMANCE

a) Whenever and to the extent that the Landlord shall be unable to fulfil, or
shall be delayed or restricted in the fulfilment of any obligation hereunder in
respect of the supply or provision of any service or utility, or the doing of
any work, or the making of any repairs, by reason of being unable to obtain the
materials, goods, equipment, service, utility or labour required to enable it to
fulfil such obligation, or by reason of any statute, law or order-in-council or
any regulation or

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order passed or made pursuant thereto, or by reason of the order or direction of
any administrator, controller or board, or any governmental department, or
officer, or other authority, or by reason of not being able to obtain any
permission or authority required thereby, or by reason of any other cause beyond
its control, whether of the foregoing character or not, the Landlord shall be
entitled to extend the time for fulfilment of such obligation by the time equal
to the duration of such delay or restriction, and the Tenant shall not be
entitled to compensation for any inconvenience, nuisance or discomfort thereby
occasioned, or to cancel this lease.

b) If such delay as contemplated under clause 8a) relates to the Landlord's
improvement work as outlined in the executed offer to lease, attached hereto as
Schedule "D", renders the premises unfit on December 1, 1994 for the Tenant's
normal business operations then there shall be an abatement of additional rent
and rent, plus GST, until the premises are substantially complete.

9. DEFAULT

9.01

Each and every payment of rent and every other payment payable by the Tenant to
the Landlord hereunder shall bear interest at the rate of five percent (5%) per
annum greater than the prime rate of interest set by the Landlord's bank, from
the date when the same became payable under the terms of this lease until the
same has been paid, and such interest shall accrue and be payable without the
necessity of any demand therefore being made.

9.02

(a) It is hereby expressly understood and agreed that if, at any time and so
often as the same shall happen, the Tenant makes default in the observance or
performance of any covenant contained herein to be observed or performed by it,
or fails to make payment of any money hereby undertaken to be paid by it, then
the Landlord may, but shall not be obligated so to do, without waiving or
releasing the Tenant from its obligations under this lease, itself observe and
perform the covenant or covenants in respect of which the Tenant has made
default or make payment of the moneys the Tenant has failed to pay.

(b) All costs and expenses incurred by the Landlord in the observance or
performance of such covenant or covenants, including, without limitation, legal
costs and any moneys so paid by the Landlord, will, with interest thereon, be a
charge on the leased premises in favour of the Landlord in priority to the
interest of the Tenant hereunder and of any person claiming through or under the
Tenant, and all such costs, expenses and moneys and interest thereon shall be
payable forthwith by the Tenant to the Landlord, and the Tenant covenants to pay
the same forthwith on demand by the Landlord, and the Landlord shall have the
same rights and remedies and may take the same steps for the recovery thereof as
for the recovery of rent in arrears.

 

 

 

 

 

14

 

(c) PROVIDED, and it is expressly understood and agreed, that if the Tenant
fails to make payment of any money demanded of the Tenant by a person other than
the Landlord, and if the Tenant in good faith disputes the amount or propriety
of any such claim made upon it, and if forfeiture of the building or lands or
the registration of a lien against the building or lands will not result from
nonpayment, then the Landlord shall not pay the same until such dispute has been
resolved either by agreement of the Tenant or by the decision of a competent
authority, and then only in the event that the Tenant has failed for a period of
10 days or more to make payment of the same.

9.03

Whenever the Landlord has the right under this lease to enter the leased
premises, whether to inspect, repair, exhibit, re-enter or otherwise, and the
Tenant neglects or refuses or is unavailable to allow such entry, the Landlord
may enter by use of a master key or by such force as may be reasonably
necessary, and the Landlord shall not be liable for any loss, damage or
inconvenience suffered by the Tenant thereby.

9.04

(a) The Tenant waives and renounces the benefit of any present or future law
taking away or limiting the Landlord's rights against the property of the Tenant
and, notwithstanding any such law, the Landlord may seize and sell all the
Tenant's goods and property whether within the leased premises or not, and apply
the proceeds of such sale to rent and all other amounts outstanding and to the
costs of the seizure and sale in the same manner as might have been done if such
law had not been passed. This clause shall only apply in the event that the
Tenant is in default under this lease.

(b) The Tenant further agrees that if it leaves the leased premises, leaving any
rent or other amounts required to be paid under this lease unpaid, the Landlord,
in addition to any remedy otherwise provided by law, may seize the goods and
chattels of the Tenant at any place to which the Tenant or any other person may
have removed them, and may sell such goods and chattels in the same manner as if
such goods and chattels had remained upon the leased premises.

9.05

If and whenever the rent hereby reserved or any part thereof shall not be paid
on the day appointed for payment thereof, whether lawfully demanded or not, or
in case of breach or non-observance or non-performance of any of the covenants,
agreements, provisos, conditions or rules and regulations to be kept, observed
or performed by the Tenant, or in case the leased premises shall be vacated or
remain unoccupied for 10 days, or in case the term shall be taken in execution
or attachment for any cause whatsoever, THEN and in every such case, and
notwithstanding anything contained in this lease to the contrary, it shall be
lawful for the Landlord thereafter to enter into and upon the leased premises or
any part thereof in the name of the whole and to have again, repossess and enjoy
the same as of its former estate, PROVIDED

 

15

 

ONLY that the Landlord shall not at any time have the right to re-enter and
forfeit this lease by reason of the Tenant's default in payment of rent reserved
by this lease, unless and until the Landlord shall have given to the Tenant at
least 5 business days' written notice of its intention so to do and setting
forth the amount of rent in arrears, and the Tenant shall have failed within
such period to have paid the arrears.

9.06

The Tenant covenants and agrees that on the Landlord's becoming entitled to
re-enter the leased premises under any of the provisions of this lease, the
Landlord, in addition to all other rights, shall have the right to enter the
leased premises as the agent of the Tenant, either by force or otherwise,
without being liable for any prosecution therefor, and to relet the leased
premises as the agent of the Tenant, and to receive the rent therefor, and as
the agent of the Tenant to take possession of any furniture or other property on
the leased premises and to sell the same at public or private sale without
notice, and to apply the proceeds of such sale and any rent derived from
re-letting the leased premises upon account of the rent under this lease, and
the Tenant shall be liable to the Landlord for any deficiency.

9.07

The Tenant covenants and agrees that on the Landlord's becoming entitled to
re-enter the leased premises under any of the provisions of this lease, the
Landlord, in addition to all other rights, shall have the right to terminate
forthwith this lease and the term by leaving upon the leased premises notice in
writing of its intention to do so, and thereupon rent and additional rent shall
be computed, apportioned and paid in full to the date of such termination of
this lease, and any other payments for which the Tenant is liable under this
lease shall be paid, and the Tenant shall immediately and peaceably deliver up
possession of the leased premises to the Landlord, and the Landlord may re-enter
and take possession of the same.

9.08

No condoning, excusing or overlooking by the Landlord of any default, breach or
non-observance by the Tenant at any time in respect of any covenant, proviso or
condition contained herein shall operate as a waiver of the Landlord's rights
hereunder in respect of any continuing or subsequent default, breach or
non-observance, or so as to defeat or affect in any way the rights of the
Landlord herein in respect of any such continuing or subsequent default or
breach, and no waiver shall be inferred from or implied by anything done or
omitted by the Landlord, save only express waiver in writing.

9.09

All rights and remedies of the Landlord contained in this lease shall be
cumulative and not alternative.

9.10

In the event of any breach by the Tenant of any covenant or proviso herein, the
Landlord shall have the right to retain counsel to enforce the Landlord's rights
hereunder or to advise

16

thereon, and any solicitor-client costs incurred by the Landlord shall be paid
by the Tenant to the Landlord forthwith on demand.

10. BANKRUPTCY

In case, without the written consent of the Landlord, the leased premises or any
part thereof shall be used by any person other than the Tenant or for any
purpose other than that for which the same were let, or in case the term or any
of the goods and chattels of the Tenant shall be at any time seized in execution
or attachment by a creditor of the Tenant, or the Tenant shall make any
assignment for the benefit of creditors, or any bulk sale, or become bankrupt or
insolvent, or take the benefit of any Act now or hereafter in force for bankrupt
or insolvent debtors, or, if the Tenant is a corporation or a society and any
order shall be made for the winding-up of the Tenant or other termination of the
corporate or societal existence of the Tenant, then, in any such case, this
lease shall at the option of the Landlord cease and terminate, and the term
shall immediately become forfeited and void, and the then current month's rent,
if not paid, together with the next ensuing three months' rent and all
additional rent shall immediately become due and be paid, and the Landlord may
re-enter and take possession of the leased premises as though the Tenant or
other occupant or occupants of the leased premises was or were holding over
after the expiration of the term without any right whatever, and in such event
paragraph 11 shall not apply; PROVIDED HOWEVER that no action by the Landlord in
so doing shall be deemed to relieve the Tenant of its obligations for the
payment of rent or other moneys payable hereunder.

11. OVERHOLDING

If the Tenant shall continue to occupy the leased premises after the expiration
of this lease, with or without the consent of the Landlord, and without any
further written agreement, the Tenant shall be deemed to be a monthly tenant on
the terms and conditions set out herein, except as to length of tenancy, at such
rent as may be agreed upon between the parties hereto, or, failing such
agreement, at a rental per month equal to one-tenth of the rental payable for
the year immediately preceding such expiration, payable monthly in advance on
the first day of each rental month.

12. RIGHT OF LANDLORD TO TERMINATE

12.01

If during the term of this lease or any renewal thereof the Landlord elects to
completely demolish the building or to take down the building for the purpose of
rebuilding the Landlord and Tenant hereby agree that the Landlord shall have the
right, notwithstanding anything herein contained, to terminate this lease by
giving notice in writing to the Tenant as provided for in paragraph 20. The
Tenant hereby agrees to vacate the Demised Premises within one hundred and
eighty (180) days after receipt of

17

 

the said notice, and the Landlord hereby agrees that Minimum Rent payable for
the Demised Premises after the said notice has been given shall be reduced by
fifty percent (50%)

12.02

In the event of the said building or the premises being condemned or
expropriated in whole or in part because of unsafe condition thereof or other
reason, this lease shall cease and determine upon the date of such condemnation
or expropriation, and the Landlord shall not be responsible for any loss,
damages or expenses which the Tenant may suffer or incur by reason of the same.

13. EXCLUSION OF LIABILITY AND INDEMNITY

13.01

It is agreed between the Landlord and Tenant that:

(a) The Landlord, its agents, servants and employees shall not be liable for
damage or injury to any property of the Tenant which is entrusted to the care or
control of the Landlord, its agents, servants or employees.

(b) The Landlord, its agents, servants and employees shall not be liable nor
responsible in any way for any personal or consequential injury of any nature
whatsoever that may be suffered or sustained by the Tenant or any employee,
agent, customer, invitee or licensee of the Tenant or any other person who may
be upon the leased premises, or for any loss of or damage or injury to any
property belonging to the Tenant or its employees or to any other person while
such property is on the leased premises and, in particular but without limiting
the generality of the foregoing, the Landlord shall not be liable for any damage
of any nature whatsoever to any such property caused:

i) by the failure, by reason of a breakdown or other cause, to supply adequate
drainage, or snow or ice removal;

ii) by reason of the interruption of any public utility;

iii) by steam, water, rain or snow which may leak into, issue or flow from any
part of the building or adjoining lands;

iv) from the water, steam, sprinkler or drainage pipes or plumbing works of the
building;

v) by or arising from the use or operation of machinery, an elevator, heating or
cooling or ventilation apparatus, electrical wiring, gas pipes or appliances of
any nature; or

vi) by anything done or omitted by any tenant of the building;

but the Landlord shall use reasonable diligence to remedy such condition,
failure or interruption of service when not directly or indirectly attributable
to the Tenant, after notice of same, when it is within its power to do so. The
Tenant shall not be entitled to any abatement of rent in respect of any such
condition, failure or interruption of service unless the Landlord, its agents,
servants, contractors or employees are negligent in its actions.

18

 

(c) The Landlord, its agents, servants, employees or contractors shall not be
liable for any damage suffered to or by the leased premises or the contents
thereof by reason of the Landlord, its agents, servants, employees or
contractors entering upon the leased premises to undertake any reasonable
examination thereof or any work therein or in the event of an emergency.

13.02

The Tenant shall indemnify and save the Landlord harmless from and against any
and all manner of claims, actions, causes of action, damages, costs, losses and
expenses of whatever kind which the Landlord may sustain, incur or be put to by
reason of or arising out of this lease, or from the use or occupation of the
leased premises in whole or in part, and without limiting the generality of the
foregoing, from the non-observance or non-performance by the Tenant, its
servants or agents, of any of the obligations imposed under the provisions of
any law, ordinance, regulation or requirement of any federal, provincial,
municipal or other government authority, or any of the covenants and agreements
in this lease to be observed and performed by the Tenant, and such liability to
indemnify and save harmless shall include all costs, counsel fees and other
legal expenses incurred in respect of any claim, action or proceeding brought
thereon, and shall survive the termination of this lease, anything in this lease
to the contrary notwithstanding. Notwithstanding the Tenant's obligation to
repair and the existence of insurance placed by the Landlord, the Tenant shall
be liable for its own negligence and that of its servants and agents and shall
compensate the Landlord for all direct and consequential damage caused to it by
such negligence.

14. TITLE

14.01

The rights of the Landlord under this lease may be mortgaged, charged,
transferred or assigned to a purchaser or to a mortgagee or trustee for bond
holders, and in the event of a sale or of default by the Landlord under any
mortgage, trust deed or trust indenture and the purchaser, mortgagee or trustee,
as the case may be, duly entering into possession of the building or the leased
premises, the Tenant agrees to attorn to and become the tenant of such
purchaser, mortgagee or trustee under the terms of this lease, and to execute
promptly upon request by the Landlord any certificate, instrument or
postponement or attornment or other instrument which may from time to time be
requested to give effect thereto, PROVIDED HOWEVER that any postponement or
attornment or other instrument given hereunder shall reserve to the Tenant the
right to continue in possession of the leased premises under the terms of this
lease so long as the Tenant shall not be in default under such terms. The Tenant
hereby irrevocably appoints the Landlord the attorney for the Tenant with full
power and authority to execute and deliver such instruments for and in the name
of the Tenant.

 

19

14.02

This lease shall, upon the written request of the Landlord, be made subject and
subordinate to all mortgages, trust deeds or trust indentures which may now or
at any time hereafter affect in whole or in part the leased premises, and
whether or not any such mortgage, trust deed or trust indenture shall affect
only the building or shall be a blanket mortgage, trust deed or trust indenture
affecting other premises as well. This lease shall also be subject and
subordinate to all renewals, modifications, consolidations, replacements and
extensions of any such mortgage, trust deed or trust indenture.

14.03

In the event that, upon any proposed sale, assignment, hypothecation or
mortgaging of the leased premises by the Landlord, an off-set statement is
required from the Tenant, the Tenant covenants and agrees with the Landlord to
deliver within 10 days after request therefor by the Landlord, in such form as
the Landlord may reasonably require, a certificate to any proposed mortgagee or
purchaser, or to the Landlord, certifying that this lease is in full force and
effect (or, if modified, stating the modifications and that the same is in full
force and effect as modified) and that there are no defences, set-off s or
prepayments in relation thereto.

14.04

The Tenant shall, from time to time at the request of the Landlord and within 10
days of such request, certify or acknowledge to any mortgagee, purchaser, lessee
or assignee or proposed mortgagee, purchaser, lessee or assignee, the status and
validity of this lease, and the state of the Landlord's and Tenant's account
hereunder.

14.05

In the event of the sale or lease by the Landlord of the building or the lands
or a portion thereof, or the assignment by the Landlord of this lease or any
interest of the Landlord hereunder, and to the extent that any purchaser, lessee
under such lease, or assignee has assumed the covenants and obligations of the
Landlord hereunder, the Landlord shall, without further written agreement, be
freed and relieved of liability upon its covenants and obligations hereunder.

15. ASSIGNING OR SUBLETTING

15.01

The Tenant shall not assign without leave; and shall not sublet without leave;
which leave shall not be unreasonably withheld in either case; PROVIDED that the
Landlord's consent to any assignment shall be conditional upon the assignee
entering into a covenant in form satisfactory to the Landlord to perform,
observe and keep each and every covenant, proviso, condition and agreement in
this lease to be performed, observed and kept by the Tenant, including payment
of minimum rent and additional rent and all other sums and payments agreed to be
paid or payable under this lease on the days and at the times and in the manner
specified herein.

20

 

15.02

If the Tenant requests the Landlord's consent to an assignment of this lease or
to a subletting of the whole or any part of the leased premises, the Tenant
shall submit to the Landlord the name of the proposed assignee or subtenant, the
most recent financial statements of the proposed assignee or subtenant and such
further information as to the nature of its business and its financial
responsibility and standing as the Landlord may reasonably require.

15.03

The Landlord may refuse its consent if, in its opinion reasonably held, the
proposed assignee or subtenant does not meet the requirements of the Landlord as
to financial resources or stability, general commercial reputation or
compatibility with the Landlord or other tenants in the building or on the
lands.

15.04

In no event shall any assignment or subletting to which the Landlord may have
consented, release or relieve the Tenant from its obligations fully to perform
all the terms, covenants and conditions of this lease to be performed by it, and
no consent by the Landlord to any assignment or subletting shall be construed to
mean that the Landlord has consented or will consent to any further assignment
or subletting.

15.05

If the Tenant herein is a private or non-reporting corporation or a society, a
change in the control or beneficial ownership of the corporation or society,
whether by sale or other disposition of its securities or by operation of law or
otherwise, shall be deemed to be an assignment of the leasehold interest for the
purposes of this lease.

15.06

The granting of a licence by the Tenant to another person or persons other than
employees, and amounting to a right of exclusive possession of all or any part
of the leased premises, shall be deemed to be a subletting for the purposes of
this lease.

16. RENEWAL

If the Tenant punctually pays the rent and additional rent, plus GST, reserved
hereunder and observes and performs all the covenants, agreements and
obligations contained herein to be paid, observed and performed by the Tenant,
the Landlord shall, upon written request by the Tenant delivered not less than
six (6) months before the expiration of the term, grant to the Tenant a renewal
of this lease for a further term to be negotiated upon the same terms, covenants
and conditions as are contained herein except as to minimum rent (and except
there shall be no further right of renewal) . The rent for such renewal term
shall be determined by agreement, or failing agreement within not less than
three (3) months before the expiration of the term, by arbitration in accordance
with the provisions of the Commercial Arbitration Act of British Columbia then
in force, but in any event shall not be less than the minimum rent payable for
the

21

 

preceding the expiration of the term of this lease or any renewal thereof. The
Tenant and year immediately Landlord shall each pay all of their own
solicitor-client legal costs incurred in effecting either renewal of this lease
or an agreement as to rent, such costs to be paid forthwith on demand. The
Tenant shall pay fifty (50) percent of any and all costs associated with
arbitration, other than the Landlord or Tenant's own solicitor-client legal
costs, forthwith upon demand.

17. SECURITY DEPOSIT

17.01

The Tenant shall, contemporaneously with the execution of this lease or when the
Tenant takes possession of the premises, whichever occurs first, deposit with
the Landlord the sum of $19,144.62, including GST of $1,252.45.

This deposit shall be held by the Landlord, without liability for interest, as
security for the faithful performance of the Tenant of all the terms, covenants
and conditions of this lease to be kept and performed by the Tenant during the
term. If at any time during the term, any of the rent reserved shall be overdue
and unpaid, or any other sum payable by the Tenant to the Landlord shall be
overdue and unpaid, then the Landlord may, at its option (but it shall not be
required to), appropriate and apply any portion of the said deposit to the
payment of any such overdue rent or other sum.

17.02

In the event of the Tenant's failure to keep and perform any of the terms,
covenants and conditions of this lease to be kept and performed by the Tenant,
then the Landlord, at its option, may appropriate and apply the entire deposit,
or so much thereof as may be necessary, to compensate the Landlord for loss or
damage sustained or suffered due to such breach on the part of the Tenant.

17.03

Should the entire deposit, or any portion thereof, be appropriated and applied
by the Landlord as aforesaid, then the Tenant shall, upon the written demand of
the Landlord, forthwith remit in cash to the Landlord a sum sufficient to
restore the deposit to the original sum deposited, and the Tenant's failure to
do so shall constitute a further breach of this lease and the Landlord shall
then be entitled to re-enter the leased premises.

17.04

The Landlord may deliver the funds deposited hereunder by the Tenant to the
purchaser of the Landlord's interest in the leased premises in the event that
such interest be sold, and thereupon the Landlord shall be discharged from any
further liability with respect to such deposit, but the purchaser of the
Landlord's interest shall not be so discharged.

22

 

18. GUARANTOR

The Guarantor for valuable consideration and in consideration for and as an
inducement to the Landlord agreeing to enter into this lease, does join as party
to this lease for the purpose of guaranteeing the full performance and
observance of all of the covenants, conditions and agreements herein provided to
be performed and observed by the Tenant without requiring any notice of
non-payment, non-performance or non-observance or proof or notice or demand
whereby to charge the Guarantor thereof, all of which the Guarantor hereby
expressly waives. The Guarantor agrees that the validity of this guarantee and
the obligations of the Guarantor hereunder shall in no way be terminated,
affected or impaired by reason of the assertion by the Landlord against the
Tenant of any of the rights or remedies reserved to the Landlord pursuant to the
provisions of this lease. The Guarantor further covenants and agrees that this
guarantee shall remain in full force and effect as to any renewal, modification
or extension of this lease and during any period when the Tenant is occupying
the demised premises as an overholding tenant. Nothing whatsoever except the
performance in full of all of the obligations of the Tenant under this lease
throughout the term of this lease and any extension thereof or overholding
thereunder shall discharge the Guarantor of this guarantee. The liability of the
Guarantor to the Landlord shall be for all purposes as if the Guarantor was
primary obligor hereunder and not merely as surety for the obligations of the
Tenant and the Landlord shall not be obliged to resort to or exhaust any
recourse which it may have against the Tenant or any other person before being
entitled to claim against the Guarantor.

19. PAYMENTS

Any and all payments to be made by the Tenant under this lease shall be payable
at the office of the Landlord, 7008 - 14th Avenue, Burnaby, British Columbia V3N
1Z2 or such other address as provided by the Landlord. (The Landlord's current
mailing address is: P.O. Box 140, New Westminster, BC V3L 4Y4).

Payments for rent and additional rents shall be made by the Tenant providing the
Landlord with post-dated cheques in the amounts so stipulated under this Lease
and shall be dated the first day of each month beginning with the commencement
of the term of this Lease.

20. NOTICE

Any notice to be served hereunder shall be deemed to be sufficiently served on
the Tenant if addressed to the Tenant and left on the premises or on the fourth
business day after mailing from within British Columbia, registered and prepaid
to the Tenant's registered office(s) such address(es) to be provided by the
Tenant. Either party may, by written notice to the other, from time to time
designate another address in Canada to which notices, mailed more than five (5)
days thereafter, shall be addressed.

 

 

23

21. DELIVERY

If the Landlord shall be unable to deliver possession of the premises at the
time of the commencement of the said term, neither the Landlord nor his agents
shall be liable for any damage or loss caused thereby, nor shall this lease be
void or voidable, nor the date of the expiration of same be changed by reason
thereof, but in such event the Tenant shall only be liable for rent at the rate
hereby reserved from such time as the Landlord shall be able to deliver
possession of the premises.

22. INTERPRETATION

22.01

It is the intent of this lease and agreed by the parties thereto that this is an
absolute net lease and that all and every cost, expense, rate, tax or charge in
any way related to the leased premises will be borne by the Tenant without
variation, set-off or deduction whatsoever excepting only any income tax and/or
capital tax by whatever authority imposed or levied, on the income of the
Landlord from the building and land.

22.02

Time shall be of the essence of this Lease with respect to the covenants of the
Tenant.

22.03

This indenture and everything contained herein shall enure to the benefit of and
be binding upon the respective heirs, executors, administrators, successors,
permitted assigns and other legal representatives, as the case may be, of each
of the parties hereto, subject to the granting of consent by the Landlord as
provided in paragraph 15 to any assignment or sublease, and every reference
herein to any party hereto shall include the heirs, executors, administrators,
successors and assigns and other legal representatives of such a party, and
where there is more than one tenant all covenants shall be deemed joint and
several.

22.04

If any provision of this lease is invalid, illegal or incapable of being
enforced, by reason of any rule of law or public policy, all other provisions of
this lease shall nevertheless remain in full force, and no provision shall be
deemed dependent upon any other provision unless so expressed herein.

22.05

This lease contains the entire agreement of the parties. Any representations,
inducements, promises or agreements, oral or otherwise, which are not embodied
or referred to herein, shall be deemed to have merged herein and shall be of no
validity or force. Except as provided by paragraph 2.06, this lease may not be
modified or amended except by a writing executed by the Tenant and the Landlord.

22.06

All terms and words used in this lease, regardless of the number and gender in
which they are used, shall be deemed and construed to include any other number,
singular and plural, and any other gender, masculine, feminine and neuter as the
context or sense of this lease or any paragraph or clause herein may require.

24

 

22.07

The titles or captions to portions of this lease are for the purpose of
identification and guidance only, are not a part of this lease, and shall in no
way be deemed to limit the effect of any language to which they relate.

22.08

This lease shall be governed by and construed and interpreted under and in
accordance with the laws of British Columbia, notwithstanding the forum or
jurisdiction in which its enforcement or construction may arise, and the parties
shall attorn and be deemed to attorn to any court of competent jurisdiction
within the Province of British Columbia.

23. CHANGE IN TAXES

Any change(s) to federal, provincial, or municipal tax legislation and/or rates
of such taxes shall be applicable to this lease effective when the said tax
change(s) become law and any payments required under this lease for which taxes
are a component shall include the changed tax and/or tax rates. Where an
exemption or recovery of taxes or duties is applicable to the lease, the
procedure for obtaining such exemption or recovery shall be determined by the
governing agency responsible. Any and all costs associated with processing an
exemption or recovery shall be the responsibility of the Tenant.

24. EMERGENCY RE-ENTRY

In the event of a physical emergency, it shall be lawful for the Landlord to
have the right to re-enter the premises and take the actions it deems necessary
and reasonable in the circumstances to prevent further damage or injury to the
premises or any occupants without facing any legal liability, lawsuit, etc. from
the Tenant, it employees, agents, servants, any other person for whom it is
responsible, or any other occupants of the premises. If the Tenant, it
employees, agents, servants, any other person for whom it is responsible is
subsequently determined to be at fault or negligent with respect to the
underlying cause(s) of the physical emergency, all costs incurred by the
Landlord related to the physical emergency shall be the responsibility of the
Tenant and such costs shall be paid by the Tenant to the Landlord upon demand.

25. OFFER TO LEASE

The Offer to Lease executed on July 6, 1994, some terms of which have been
incorporated into clauses of this lease, is attached to this lease as Schedule
"D" and forms an integral part hereof. In the event of contradiction between the
clauses of this lease and the terms of the Offer to Lease, the clauses of this
lease shall prevail.

25

 

IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals,
the day and year first above written.

 

SIGNED, SEALED AND DELIVERED

BY THE LANDLORD IN THE PRESENCE OF

 

Signature of Witness

[Illegible]

 

/s/Rob Brett

Street Address

8606 Armstrong Avenue

   

City

Burnaby

 

Seal

Occupation

Businessman

   

 

 

 

 

SIGNED, SEALED AND DELIVERED

BY THE TENANT IN THE PRESENCE OF

 

Signature of Witness

/s/Candace Choi

 

/s/Trevor Scofield

Street Address

6993 Autrim Avenue

   

City

Burnaby, BC

 

Seal

Occupation

Controller

   

 

 

 

 

SIGNED, SEALED AND DELIVERED

BY THE GUARANTOR IN THE PRESENCE OF

 

Signature of Witness

/s/Carol Olt

 

/s/Steven E. Brown

Street Address

10575 Newkirk,

Suite 780

   

City

Dallas, Texas 75062

 

Seal

Occupation

Asst.

Corporate Secretary

   

 

SCHEDULE "B"

Annual Rent Per Square Foot Excluding GST:

Unit 3 Units 13/14/15

Year 1 $6.50 $10.17

Year 2 $6.50 $10.52

Year 3 $6.50 $11.03

Year 4 $6.50 $11.42

Year 5 $6.50 $11.72

Year 6 $6.50 $12.06

Equal Consecutive Monthly Rent Installments (excludes Additional Rent) for Units
#3, 13, 14 & 15:

 

   

 

Per Month

7%

GST

Total Monthly

Payment

         

Year

1

$8,304.42

$581.30

$8,885.72

         

Year

2

$8,537.75

$597.64

$9,135.39

         

Year

3

$8,887.75

$622.14

$9,509.89

         

Year

4

$9,154.42

$640.80

$9,795.22

         

Year

5

$9,354.42

$654.80

$10,009.22

         

Year

6

$9,587.75

$671.14

$10,258.89

 

SCHEDULE "C"

RULES AND REGULATIONS REFERRED TO IN ANNEXED LEASE

1. The sidewalks, entrances, stairways and corridors of the building shall not
be obstructed by any of the tenants or used for any other purpose than for
access to or egress from their respective premises; and no tenant shall place or
allow to be placed in the hallways, stairways or entrances any waste materials,
refuse or anything that shall tend to make them appear unclean or untidy.

2. Doors and windows or other apertures that reflect or admit light or air into
the building will not be covered or obstructed by tenants except as stated in
the executed offer to lease which is attached hereto as Schedule "D".

3. Floors shall not exceed engineered load capacity.

4. No admittance permitted to the roof or equipment rooms by any unauthorized
personnel.

5. The Tenant, its agents, servants, contractors, invitees or employees shall
not bring in or take out, position, construct, install or move any safe,
business machine or other heavy office equipment without first obtaining the
consent in writing of the Landlord; such consent shall not be unreasonably
withheld. In giving such consent, the Landlord shall have the right, in its sole
discretion, to prescribe the weight permitted and the position thereof, and the
use and design of planks, skids or platforms to distribute the weight thereof,
and any cost incurred by the Landlord for consultation with its architects or
engineers shall be borne by the Tenant and shall be paid to the Landlord
forthwith upon demand. All damage done to the building by moving or using any
such heavy equipment or other office equipment or furniture shall be repaired at
the expense of the Tenant.

6. The Tenant shall not alter the locks on any doors of the leased premises, nor
shall additional locks be placed upon any doors of the leased premises. When a
change of locks is reasonably required, the Tenant shall first obtain the
consent of the Landlord and the work will be done by the Landlord's locksmith at
the expense of the Tenant.

7. The leased premises shall not be used as overnight sleeping accommodation or
for residential purposes, or for the storing of personal effects, or for
entertaining purposes except those entertaining purposes that would be in
keeping with the Tenant's normal day-to-day business activities; and the Tenant
shall not permit any cooking in the leased premises without the prior written
consent of the Landlord.

8. No vehicles, animals or birds of any kind shall be brought into or kept in or
about the leased premises. No tenant shall at any time while on any part of the
building, feed or leave any foodstuffs for any birds or animals.

9. No Tenant shall cause or permit any unusual or objectionable odours or sounds
or noises to be produced upon or emanate from the leased premises.

10. No Tenant shall at any time bring or keep upon, or allow to be brought onto
the premises any inflammable, combustible or explosive fluid, chemical or other
substance except by written consent of the Landlord.

11. The Tenant shall from time to time upon request supply the Landlord with a
list of all electrical appliances and equipment and business machines used in
the leased premises.

12. The Tenant shall at all times keep the leased premises in a clean and
sanitary condition. For reasons of building security each tenant shall use in
its leased premises, at its own expense, only the janitor service approved and
used by the Landlord.

13. The driveway, landscape area, yard, passage, alley or area connected with
the said building is for the use of all the occupants of the said building and
the Tenant will not obstruct nor hinder the use of same by other occupants of
the said building and their employees, agents and customers and the Tenant will
keep clean and sanitary the portion of same situated in the rear of or adjacent
to the premises.