Lease No: 035700


                          KNIGHTSBRIDGE BUSINESS PARK

                                 Richmond, B.C.





LEASE

Between -           BENTALL PROPERTIES LTD. and
                    WESTMINSTER MANAGEMENT CORPORATION

                                                                     as Landlord

and -               APPLIED VASCULAR ENGINEERING CANADA, INC.
                                                                       as Tenant



<PAGE>


                          KNIGHTSBRIDGE BUSINESS PARK
                                 Richmond, B.C.

                               Table of Contents
                         ------------------------------
                                                                            Page

Basic Terms: ...............................................................  1

    .01    Area of Leased Premises .........................................  1
    .02    Basic Rent ......................................................  1
    .03    Permitted Use ...................................................  1
    .04    Term ............................................................  1

Article 1 - Demise and Term: ...............................................  2

   1.01    Demise and Term .................................................  2
   1.02    Surrender of Leased Premises ....................................  2

Article 2 - Rent: ..........................................................  2

   2.01    Basic Rent ......................................................  2
   2.02    Additional Rent .................................................  3
   2.03    Adjustment of Additional Rent ...................................  3
   2.04    Manner and Place of Payment .....................................  3
   2.05    Irregular Calculation of Basic Rent .............................  3
   2.06    Disproportionate Allocation .....................................  3
   2.07    Net Lease Intent ................................................  3

Article 3 - Construction and Fixturing of Leased Premises: .................  4

   3.01    Landlord's and Tenant's Work ....................................  4
   3.02    Commencement of the Construction ................................  4
   3.03    Payment for Landlord's Work .....................................  4
   3.04    Acceptance of Lease Premises ....................................  4

Article 4 - Conduct of Business: ...........................................  4

   4.01    Use of Premises .................................................  4
   4.02    Prohibited Uses .................................................  4
   4.03    Operations During the Term ......................................  4
   4.04    Signs and Advertising Displays ..................................  5
   4.05    Nuisance and Annoyance ..........................................  5
   4.06    Coin Operated Machines ..........................................  5
   4.07    Loud Speakers and Other Advertising Apparatus ...................  5
   4.08    Delivery of Supplies and Materials ..............................  5
   4.09    Ordinances and Regulations ......................................  5
   4.10    Rules and Regulations ...........................................  5

Article 5 - Repairs: .......................................................  6

   5.01    Tenant's Repairs ................................................  6
   5.02    Perimeter Walls and Glass .......................................  6
   5.03    Landlord's Examination of Leased Premises .......................  6
   5.04    Landlord's Right to Repair ......................................  6
   5.05    Landlord's Right to Enter for Other Repairs .....................  6
   5.O6    Landlord's Repairs ..............................................  6
   5.07    Landlord's Obligation to Maintain ...............................  7
   5.08    Damage and Destruction ..........................................  7
   5.09    Qualifications ..................................................  8
   5.10    Condition of Expiration .........................................  8

Article 6 - Common Areas and Common Facilities: ............................  8

   6.01    Tenant's Use of Parking Areas ...................................  8
   6.02    Landlord's Right to Remove Vehicles .............................  8
   6.03    Control of Common Areas and Common Facilities ...................  9
   6.04    Merchandise on Common Area ......................................  9

                                      - 1 -

<PAGE>


   6.05    Customer Parking ................................................  9

Article 7 - Assignment and Sub-letting: ....................................  9

   7.01    Prohibitions ....................................................  9
   7.02    Control of Corporation .......................................... 10
   7.03    Assignment by Landlord .......................................... 10

Article 8 - Insurance: ..................................................... 10

   8.01    Tenant to Insure ................................................ 10
   8.02    Not to Affect Landlord's Insurance .............................. 10
   8.03    Landlord to Insure .............................................. 10


Article 9 - Tenant Alterations: ............................................ 11

   9.01    Painting, Decorating and Alterations ............................ 11
   9.02    Landlord's Property ............................................. 11
   9.03    Prohibitions .................................................... 11
   9.04    No Liens ........................................................ 11

Article 10 - Public Utilities and Taxes: ................................... 12

  10.01    Public Utilities, Business Tax and Machinery Tax ................ 12
  10.02    Payment of Real Property Taxes by Landlord ...................... 12
  10.03    Increase in Real Property Taxes Attributable to Tenant .......... 12
  10.04    Goods and Services Tax .......................................... 12

Article 11 - Exclusion of Liability and Indemnity: ......................... 12

  11.01    Exclusion of Liability .......................................... 12
  11.02    Indemnification ................................................. 13

Article 12 - Landlord's Rights and Remedies: ............................... 13

  12.01    Default ......................................................... 13
  12.02    Consequences of Default ......................................... 14
  12.03    Non-Waiver ...................................................... 15
  12.04    Right of Landlord to Perform Tenant's Covenants ................. 15
  12.05    Time for Payment and Legal Costs ................................ 15
  12.06    Remedies Cumulative ............................................. 15

Article 13 - Mortgages and Assignment by Landlord: ......................... 16

  13.01    Sale or Financing of Development ................................ 16
  13.02    Subordination and Acknowledgement ............................... 16
  13.03    Offset Statement ................................................ 16
  13.04    Registration .................................................... 16

Article 14 - Overholding Tenant: ........................................... 16

  14.01    No Tacit Renewal ................................................ 16

Article 15 - Quiet Possession: ............................................. 17

  15.01    Quiet Possession ................................................ 17

Article 16 - Legal Relationships: .......................................... 17

  16.01    No Partnership .................................................. 17
  16.02    Joint and Several Liability ..................................... 17
  16.03    Successors and Assigns .......................................... 17

Article 17 - Notices: ...................................................... 17

  17.01    Notices ......................................................... 17

                                      - 2 -

<PAGE>


Article 18 - General: ...................................................... 18

  18.01    Collateral Representations and Agreements ....................... 18
  18.02    Management of Development ....................................... 18
  18.03    Time of the Essence ............................................. 18
  18.04    Unavoidable Delays .............................................. 18
  18.05    Accord and Satisfaction ......................................... 18
  18.06    Competition Act ................................................. 18
  18.07    Covenants ....................................................... 18
  18.08    Consent or Approval of Landlord ................................. 19
  18.09    For Lease Signs ................................................. 19
  18.10    The Commercial Tenancy Act ...................................... 19
  18.11    No Exclusivity .................................................. 19
  18.12    Schedules ....................................................... 19
  18.13    Applicable Law .................................................. 19
  18.14    Headings ........................................................ 19
  18.15    Tenant's Acceptance ............................................. 19
  18.16    Arbitration ..................................................... 19
  18.17    Severability .................................................... 19

Article 19 - Definitions: .................................................. 19

  19.01    Additional Rent ................................................. 19
  19.02    Area of Leased Premises ......................................... 20
  19.03    Basic Rent ...................................................... 20
  19.04    Basic Term ...................................................... 20
  19.05    Building ........................................................ 20
  19.06    Building Operation and Maintenance Costs ........................ 20
  19.07    Commencement Date ............................................... 21
  19.08    Common Areas .................................................... 21
  19.09    Common Facilities ............................................... 21
  19.10    Development ..................................................... 21
  19.11    Development Operation and Maintenance Costs ..................... 21
  19.12    Force Majeure ................................................... 21
  19.13    Gross Leaseable Area ............................................ 21
  19.14    HVAC Costs ...................................................... 22
  19.15    Landlord's Architect ............................................ 22
  19.16    Landlord's Work ................................................. 22
  19.17    Lands ........................................................... 22
  19.18    Lease ........................................................... 22
  19.19    Lease Year ...................................................... 22
  19.20    Leased Premises ................................................. 22
  19.21    Other Buildings ................................................. 22
  19.22    Permitted Use ................................................... 22
  19.23    Prime Rate ...................................................... 22
  19.24    Real Property Taxes ............................................. 22
  19.25    Rent ............................................................ 22
  19.26    Tax Cost ........................................................ 22
  19.27    Tenant's Proportionate Share .................................... 22
  19.28    Tenant's Work ................................................... 23
  19.29    Term ............................................................ 23
  19.30    Year of the Term ................................................ 23

Article 20 - Special Clauses: .............................................. 23

  20.01    Early Occupancy ................................................. 23
  20.02    Delayed Occupancy ............................................... 23
  20.03    Tenant Improvement Allowance .................................... 23
  20.04    Deposit ......................................................... 24

SCHEDULES: ................................................................. 25

  Schedule A  Plan of the Premises ......................................... 25
  Schedule B  Landlord's Work .............................................. 26
  Schedule C  Signage ...................................................... 27
  Schedule D  Omitted ......................................................
  Schedule E  Environmental Covenants ...................................... 29

                                     - 3 -

<PAGE>


THIS LEASE made the 10TH day of AUGUST, 1994.

BETWEEN:

                               BENTALL PROPERTIES LTD.,
                               a body corporate, having its head office at Suite
                               3100,  Three  Bentall  Centre,  in  the  City  of
                               Vancouver,  in the  Province of British  Columbia
                               and

                               WESTMINSTER   MANAGEMENT   CORPORATION,   a  body
                               corporate, having a business office at Suite 600,
                               355 Burrard Street, in the City of Vancouver,  in
                               the Province of British Columbia

                               (collectively the "Landlord")

                                                               OF THE FIRST PART

AND:

                               APPLIED VASCULAR ENGINEERING CANADA, INC., a body
                               corporate,  having a busineas office at Suite No.
                               260 13155 Delf  Avenue,  in the City of Richmond,
                               in the Province of British Columbia, V6V 2A2 (the
                               "Tenant")

                                                              OF THE SECOND PART

WHEREAS:


(A) by  agreement  dated July 7, 1994 (the  "Agreement")  the  Landlord  and the
Tenant agreed to enter into a lease with respect to the Leased Premises; and

(B) the  Landlord  has  represented  to the  Tenant  that  the  Landlord  is the
registered  owner of the Lands,  subject  however  to such  liens,  charges  and
encumbrances as are registered  against the title thereto as at the date hereof,
and has constructed, or is in the process of constructing, improvements thereon,
including  the  Building  generally  in  accordance  with the plans set forth in
Schedule "A";

<TABLE>
     NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the rents,
covenants and agreements  hereinafter reserved and contained,  the parties agree
to this  Lease of the  Leased  Premises  on the terms and  conditions  set forth
herein:

                                           BASIC TERMS

 .01  Area of Leased Premises:                   approximately 8,000 square feet

<CAPTION>
 .02  Basic Pent:                                Term    Per Annum    Per Month   Per Square Foot
                                                ----    ---------    ---------   ---------------
<S>                                             <C>     <C>          <C>              <C>
                                                Yr. 1-5 $50,000.00   $4,166.67        $6.25

 .03  Permitted Use:                             The  Premises  shall be used for the  purposes of
                                                conducting   the   business   of   research   and
                                                development,  assembly,  service and distribution
                                                of    medical     devices,     plus    associated
                                                administrative offices.

 .04  Term:                                      Five (5) years

</TABLE>

     The foregoing  Basic Terms are agreed to by the Landlord and the Tenant and
any reference in this Lease to any one of the same shall include the  provisions
set  forth  above  with  respect  thereto  and in  addition  any  more  specific
definition or reference hereinafter provided.

                                      - 1 -

<PAGE>


                                   ARTICLE 1
                                Demise and Term

1.01     Demise and Term

         The  Landlord  does hereby  demise and lease unto the Tenant the Leased
Premises to have and to hold for and during the Term.  For so long as the Tenant
duly and  punctually  pays the Rent,  and performs  and  observes its  covenants
herein  undertaken,  the Tenant  shall be entitled for the benefit of the Leased
Premises to enjoy, upon the terms and conditions established or altered pursuant
to this  Lease,  the use in common with  others  entitled  thereto of the Common
Areas and the Common Facilities.

1.02     Surrender of Leased Premises

(A) Upon the expiration or sooner  termination  of this Lease,  the Tenant shall
vacate and surrender to the Landlord the Leased  Premises in accordance with the
provisions of this Lease.  Except to the extent as otherwise expressly agreed by
the Landlord in writing; no leasehold improvements, trade fixtures, furniture or
equipment  shall be removed by the Tenant from the Leased Premises either during
or at the expiration or sooner termination of the Term except that the Tenant:

         (a)      may at the end of the Term, if it is not in default hereunder,
                  remove its trade fixtures;

         (b)      shall  at  the  end  of  the  Term   remove   such   leasehold
                  improvements,  trade  fixtures,  furnishings,   equipment  and
                  inventory as the Landlord shall require to be removed;

         (c)      may,   if  it  is  not  in  default   hereunder,   remove  its
                  furnishings,  equipment  and inventory at the end of the Term,
                  and also during the Term in the usual and normal course of its
                  business  where such  furnishings  or  equipment  have  become
                  excess for the Tenant's purposes or the Tenant is substituting
                  therefor new furnishings and equipment.

The Tenant shall,  in the case of every  removal  either during or at the end of
the Term,  make good any damage caused to the Leased  Premises and any leasehold
improvements therein by the installation and removal.

(B)  Notwithstanding  the  provisions  of Article  1.02(A),  the Tenant shall be
permitted  to  remove  its  trade  fixtures  from  the  Leased  Premises  at the
expiration or sooner  termination of this Lease,  provided the Tenant shall make
good any damage or injury  caused to the  Leased  Premises  resulting  from such
removal, reasonable wear and tear excepted.


                                   ARTICLE 2
                                      Rent

2.01     Basic Rent

         The  Tenant  shall pay to the  Landlord  for each and every Year of the
Term, the Basic Rent specified in Basic Term .02, by equal monthly  instalments,
each in advance on the first day of each and every  month  during the Term,  the
first of such monthly  instalments to be paid on the  Commencement  Date. If the
Term  commences on a day which is not the first day of a calendar month then the
instalment  of Basic Rent payable on the broken  portion of a calendar  month at
the  beginning of the Term shall be  calculated  at a rate per day of 1/365th of
the annual Basic Rent.

         Notwithstanding  anything to the contrary  contained in this Lease, the
Tenant  shall not be  obligated  to pay any Basic  Rent for the first  three (3)
months of the Term only.  For greater  certainty,  the Tenant  acknowledges  and
agrees  that  notwithstanding  the  period  of  free  Basic  Rent  it  shall  be
responsible for payments of all other amounts owing under this Lease.

                                      - 2 -

<PAGE>
2.02     Additional Rent

         The Tenant  shall pay to the  Landlord for each and every Lease Year or
portion thereof, the Additional Rent for such Lease Year or portion thereof. The
amount of  Additional  Rent  which the  Tenant is to pay in each  Lease  Year or
portion  thereof  shall be  estimated  by the Landlord in advance and the Tenant
shall pay to the Landlord  such amount in equal monthly  instalments  in advance
during  such  Lease Year or the  portion  thereof.  The amount of the  estimated
Additional Rent may be adjusted,  from time to time,  during a Lease Year by the
Landlord giving notice to the Tenant,  in which event the remaining  payments to
be made by the  Tenant  as  aforesaid  in such  Lease  Year  shall  be  adjusted
accordingly.  All  remedies  of the  Landlord  on  non-payment  of rent shall be
applicable to the  Additional  Rent and the  obligation of the Tenant to pay any
monies pursuant to this Lease shall survive the expiration or sooner termination
of this Lease.

2.03     Adjustment of Additional Rent

         Within ninety (90) days after the end of each Lease Year,  the Landlord
shall furnish to the Tenant a statement of the actual amount of Additional  Rent
payable by the Tenant for such  preceding  Lease Year and showing in  reasonable
detail the information relevant and necessary to the calculation thereof. If the
amount payable by the Tenant as shown on such statement is more or less than the
Additional  Rent paid by the Tenant to the Landlord for such Lease Year pursuant
to Article  2.02,  the  appropriate  adjustment  as between the Landlord and the
Tenant shall be made within  fourteen  (14) days of delivery of such  statement.
Any  payment  made by the  Landlord  or made by the Tenant and  accepted  by the
Landlord in respect of any  adjustment  made pursuant to this Article 2.03 shall
be  without  prejudice  to the right of the  Landlord  or the  Tenant to claim a
re-adjustment  provided  such claim if made by the Tenant is made within  ninety
(90) days after,  or if made by the  Landlord is made within one hundred  twenty
(120) days  after,  the date of delivery  of the  statement  referred to in this
Article  2.03.  The Tenant shall have the right for a period of ninety (90) days
following  receipt of the aforesaid  statement to, at its sole expense,  inspect
during the Landlord's  normal  business hours,  subject to the inspection  being
reasonable in all the circumstances,  any record kept or held by the Landlord of
the costs or  expenses  claimed  by the  Landlord  for such  Lease  Year and the
Landlord shall make its said records available accordingly.

2.04     Manner and Place of Payment

         All Rent and all other  sums  payable  by the  Tenant  to the  Landlord
hereunder  shall  be  paid  to the  Landlord  at  the  office  of  the  Landlord
hereinafter  set forth,  or at such other place as the  Landlord may in writing,
from time to time,  direct,  without  notice  or  demand,  except  as  otherwise
specifically  provided herein, and without  deduction,  set off or abatement for
any reason  whatsoever.  The  Landlord  may at its option  apply all or any sums
received from or due to the Tenant against amounts due and payable by the Tenant
hereunder in such manner as the Landlord sees fit, regardless of any designation
or  instructions  by the Tenant to the  contrary.  The  Tenant  shall pay to the
Landlord interest at a rate equal to the lesser of the maximum rate permitted by
law or the rate that is three (3%) percent per annum above the Prime Rate on all
arrears of Rent or other sums payable by the Tenant to the Landlord  pursuant to
the terms hereof,  from, except as otherwise  specifically  provided herein, the
date of default in payment, until payment is received by the Landlord.

2.05     Irregular Calculation of Basic Rent

         If for any reason it is necessary to calculate  Basic Rent for a period
of one or more  months,  but less  than a Year of the  Term,  the same  shall be
calculated  on the basis of 1/12 of the Basic Rent being payable for each month.
If for any reason it becomes  necessary to calculate  Basic Rent for a period of
less than one month the same  shall be  calculated  on the basis of 1/365 of the
Basic Rent being payable for each day in such period.  Without  restricting  the
generality of the  foregoing,  in the event the  Commencement  Date occurs other
than on the first day of a month, the first instalment of Basic Rent paid by the
Tenant in  accordance  with  Article  2.01 shall be based on the period from the
Commencement  Date to and  including  the  last day of the  month  in which  the
Commencement Date occurs.

2.06     Disproportionate Allocation

         Notwithstanding anything else herein otherwise contained, to the extent
that the  Landlord,  acting  reasonably,  determines  that an item  included  in
Additional  Rent properly  related to only a portion of the  Development or to a
portion of the Building,  the Landlord may allocate such item to such portion of
the  Development  or  Building,  as the case may be, in which event the Tenant's
Proportionate  Share, if the Leased  Premises are within such portion,  shall be
calculated in relation to the Gross Leaseable Area of all leaseable  premises in
such portion.

2.07     Net Lease Intent

         Except to that extent otherwise specifically provided herein this Lease
shall be a net lease to the Landlord  such that the Basic Rent shall be received
by the Landlord free of all outgoings whatsoever,  the Tenant to pay for its own
account all amounts,  charges,  costs,  duties, fees, rates and taxes in any way
relating to the Leased Premises as well as the Additional Rent herein provided.

                                     - 3 -

<PAGE>


                                   ARTICLE 3
                 Construction and Fixturing of Leased Premises

3.01     Landlord's and Tenant's Work

         The  parties  agree that the work to be done by the  Landlord is as set
out in Schedule "B" hereto and that any  additional  work shall be Tenant's Work
hereunder,  and the Tenant  agrees to accept the Leased  Premises  in an "as is,
where is" condition.

         The Tenant shall be responsible for its own  improvements to the Leased
Premises,  subject to the Landlord's prior reasonable  approval of the design of
the Leased Premises.

         The Landlord shall provide a space plan to assist in the parties mutual
agreement of the  improvements to the Leased  Premises,  which mutual  agreement
shall be given within five (5) business days from receipt of tbe space plan.

3.02     Commencement of the Construction

         If, at any time prior to the  commencement  of the Tenant's  Work,  the
Landlord  is in its  opinion  unable  to  obtain  satisfactory  zoning  or other
government  approvals   including,   without  limiting  the  generality  of  the
foregoing,  development  permits,  building permits,  occupancy  permits,  lease
commitments from other tenants, construction and permanent mortgage financing or
favourable  economic  projections  with  respect  to the  Development  or if the
Landlord's  mortgagee  does not consent to this Lease,  then the Landlord  shall
have the right and  option at any time  thereafter  to cancel  this Lease and in
such event, any money or security  deposited  hereunder shall be returned to the
Tenant  without  interest,  this  Lease  shall  thereafter  be null and void and
neither party shall have any further claim, the one against the other.

3.03     Payment for Landlord's Work

         All work done at the  Tenant's  request  (including  the  supplying  of
materials or equipment) by the Landlord or its contractors or sub-contractors in
or relating to the Leased  Premises,  over and above  Landlord's  Work, shall be
paid for by the Tenant forthwith on demand.

3.04     Acceptance of Leased Premises

         The  taking of  possession  of the  Leased  Premises  by the  Tenant to
construct the Tenant's  Work shall be deemed to be conclusive  proof that except
for items noted in a list  prepared by the Tenant  during a joint  inspection by
the Tenant and the  Landlord at the time of the taking of such  possession,  the
Leased Premises are in the condition called for by this Lease to the extent that
the Landlord is responsible  therefor and that the Landlord has performed all of
the Landlord's Work with respect thereto in a good and workmanlike  manner.  The
itemizing  of any  matter in such list by the  Tenant  shall  not  preclude  the
Landlord from disputing the categorization of such matter as a deficiency.


                                   ARTICLE 4
                              Conduct of Business

4.01     Use of Leased Premises

         The  Tenant  shall not use or occupy the  Leased  Premises  or any part
thereof for any purpose other than the  Permitted  Use,  without  consent of the
Landlord first had and obtained.

4.02     Prohibited Uses

         The Tenant shall not, at any time, carry on nor suffer, permit or allow
to be carried on in the Leased Premises any fire sale, distress sale, bankruptcy
sale,  going-out-of-business sale, or any other business sale designed to convey
to the public that business  operations are to be  discontinued,  an auction,  a
pawn business,  a mail order business or any other business which because of the
merchandise  likely to be sold or the merchandising or pricing methods likely to
be used would,  in the  reasonable  opinion of the  Landlord,  tend to lower the
character of the Development, or any other business or occupation which shall be
deemed by the Landlord to be a nuisance.

4.03     Operations During the Term

         The Tenant  acknowledges  that its  continued  occupancy  of the Leased
Premises  and the  regular  conduct of its  business  therein  are of the utmost
importance to the Landlord in avoiding the appearance  and impression  generally
created by vacant space in a development,  in facilitating the leasing of vacant
space,  and in the renewal of other  leases,  and that the Landlord  will suffer
substantial  damage if the Leased Premises are vacated or left vacant during the
Term even if Basic Rent is paid.

                                     - 4 -


<PAGE>

         The Tenant  shall on the  Commencement  Date  commence  and  thereafter
during the Term,  actively and  diligently  carry on in the Leased  Premises the
business  specified  as the  Permitted  Use,  and  shall  without  limiting  the
generality of the foregoing:

         (a)      conduct its business in the entire Leased Premises; and

         (b)      remain open for business at least during normal  business days
                  and hours for the type of business  being  conducted  from the
                  Leased Premises.

         The  Tenant  will not  during  the Term  vacate or  abandon  the Leased
Premises either in full or in part.

4.04     Signs and Advertising Displays

         The Tenant,  after first obtaining the written approval of the Landlord
to,  or  at  the  request  of  the  Landlord   with   instructions   as  to  the
specifications,  design,  location  and  method  of  installation,  shall at the
expense of the Tenant install, maintain and operate during such reasonable hours
as the Landlord may determine a sign in accordance with the sign criteria of the
Landlord as such  criteria are set out in Schedule "C" hereto.  The Tenant shall
not erect or place,  or suffer to be  erected  or placed or  maintain  any other
signs of any  nature  or kind  whatsoever  either on the  exterior  walls of the
Leased  Premises or  elsewhere  in the  Development  without the approval of the
Landlord.  The Tenant shall not erect or place or suffer to be erected or placed
in the display windows of the Leased Premises, any signs, decoration,  lettering
or advertising matter of any kind (including signs placed in the interior of the
Leased  Premises for exterior  view)  without  first  obtaining  the  Landlord's
written approval,  which approval may not be unreasonably withheld. All signs or
other  materials,  referred to in this Article 4.04 shall remain the property of
the Tenant and the Tenant shall remove the same at the expiration of the Term or
such shorter period to which the approval relates and shall make good any damage
caused by such installation or removal.

4.05     Nuisance and Annoyance

         The Tenant  shall not use or occupy the  Leased  Premises  or suffer or
permit the same to be used or  occupied  for any  unlawful  purpose,  or for any
dangerous,  noxious or offensive trade or business, or for any purpose likely to
cause a  nuisance  or  annoyance  to the  Landlord  or any other  tenants of the
Development nor undertake any operation  likely to cause the same, nor commit or
suffer  to be  done  any  waste,  damage  or  disfigurement  or  injury  to  the
Development  or any part  thereof  nor permit or suffer the  overloading  of any
floors therein.

4.06     Coin Operated Machines

         The  Tenant  shall not have or  permit  or  suffer to be on the  Leased
Premises   any   machines   selling   merchandise   or  services  or   providing
entertainment,  whether by coins,  credit cards or otherwise,  unless  expressly
approved by the Landlord in writing.

4.07     Loud Speakers and Other Advertising Apparatus

         The Tenant shall not have or permit any public address, music broadcast
or other  sound  system  which may be heard  beyond  the  limits  of the  Leased
Premises.

4.08     Delivery of Supplies and Materials

         The delivery and shipping of merchandise,  supplies, fixtures and other
materials or goods of whatsoever  nature to or from the Leased  Premises and all
loading,  unloading and handling thereof shall be done through such entrances as
designated  by the  Landlord  and at such times and by such means as approved by
the Landlord.

4.09     Ordinances and Regulations

         The Tenant shall observe and fulfil the provisions and  requirements of
all  statutes,  orders in  council,  by-laws,  rules and  regulations,  relating
directly or indirectly  to the use of the Leased  Premises and shall comply with
all  reasonable  requirements  of any  insurer  under any  policy  of  insurance
affecting the Development.

4.10     Rules and Regulations

         The Tenant  shall  observe and comply with and use its best  efforts to
cause its employees,  agents,  licensees and invitees to observe and comply with
any and all rules and  regulations  communicated  by the Landlord to the Tenant,
from time to time,  which in the  judgment  of the  Landlord  are  necessary  or
desirable  in relation to all aspects of the use and  occupancy by the Tenant of
the Leased Premises,  the Building,  the Common Areas and the Common  Facilities
including for the reputation,  care,  safety and appearance of the  Development,
the  preservation  of good  order  therein  and the  operation  and  maintenance
thereof,  provided  that such rules and  regulations  do not  conflict  with any
express provisions of this Lease and are not discriminatory  against the Tenant.
The Tenant

                                     - 5 -

<PAGE>


specifically acknowledges that the Landlord has and shall have the right to make
rules and regulations as aforesaid

                                   ARTICLE 5
                                      Rent

5.01     Tenant's Repairs

         The  Tenant  shall at all times  during  the Term.  at its own cost and
expense, repair, maintain,  operate and keep the Leased Premises, all equipment,
fixtures  and   mechanical   systems   (including   heating,   ventilating   and
air-conditioning  systems)  within the Leased  Premises  or  elsewhere  (if such
equipment, fixtures or systems are provided for the use or benefit of the Leased
Premises) and any  improvements  now or hereafter made to the Leased Premises in
good  order,  firstclass  condition  and  repair  (reasonable  wear and tear and
repairs which are the Landlord's  responsibility pursuant to Article 5.06 hereof
only  excepted) in accordance  with the  statutory  building  scheme  registered
against title to the Lands and without limiting the generality of the foregoing,
the Tenant shall,  during the Term,  cause such good  management  and care to be
taken of the Leased  Premises  and various  parts  thereof that no injury to the
same shall occur and all water closets,  sinks, heating and air-conditioning and
ventilating  apparatus  located in the Leased  Premises shall be maintained in a
state of efficient and good working order.  The Tenant shall decorate the Leased
Premises  in a manner  and to a  standard  acceptable  to or  determined  by the
Landlord and shall  maintain such  decorating to such  standards  throughout the
Term.  The  Tenant  shall  be  responsible  for all such  maintenance,  repairs,
replacements  and such decorating and shall promptly with due diligence,  at its
sole  expense,  carry  out any and all of the  foregoing.  The  Tenant  shall be
responsible  for  all  janitorial   services   respecting  the  Leased  Premises
(including  the washing of windows  therein,  both inside and  outside) so as to
keep the Leased Premises in a clean and tidy condition.

5.02     Perimeter Walls and Glass

         The Tenant shall promptly repair or make whole all damaged glass, plate
glass,  doors and  windows in the Leased  Premises as and  whenever  the same is
required.

5.03     Landlord's Examination of Leased Premises

         The Landlord and any  employee,  servant,  agent or  contractor  of the
Landlord shall be entitled,  at any time during normal business hours and at any
time  in  the  event  of an  emergency,  to  enter  and  examine  the  state  of
maintenance,  repair,  decoration and  cleanliness of the Leased  Premises,  all
equipment and fixtures  within the Leased Premises and any  improvements  now or
hereafter  made to the Leased  Premises  and the Landlord may give notice to the
Tenant  requiring  that the  Tenant  perform  such  maintenance  or effect  such
repairs,  replacements or decoration or cleaning as is the responsibility of the
Tenant and as may be found necessary from such examination.

5.04     Landlord's Right to Repair

         In the event that the Tenant fails  forthwith  after receipt of written
notice  thereof,  or within such  reasonable  time  thereafter  if for any cause
beyond the control of the Tenant it is not reasonable in the  circumstances  (it
being  agreed  that  lack of  finances  on the part of the  Tenant  shall not be
treated as a cause beyond the  Tenant's  control),  to commence  and  diligently
proceed  to perform  such  maintenance  or effect  such  repairs,  replacements,
decorations or cleaning as so specified in any notice given by the Landlord, the
landlord, its employees,  servants,  agents or contractors may, but shall not be
obligated to, enter the Leased Premises and at the Tenant's expense, perform and
carry  out the same  and the  Landlord  in so  doing  shall  not be  liable  for
inconvenience, disturbance, loss of business or other damage resulting therefrom
and in the event the Landlord  expends any monies  pursuant to the provisions of
this Article 5.04,  the Tenant shall pay the same to the Landlord on demand with
a fee of twenty  (20%)  percent of such  amount for the  Landlord's  supervisory
function and in addition shall pay interest on the aggregate of the foregoing at
the rate provided in this Lease from the date of the  expenditure  of such first
mentioned monies by the Landlord.

5.05     Landlord's Right to Enter for Other Repairs

         The  Landlord,  and any employee,  servant,  agent or contractor of the
Landlord  shall have the right to enter the Leased  Premises at all times during
business  hours  and at any  time in the  case  of an  emergency  to  make  such
alterations or repairs as the Landlord is required to make pursuant to the terms
of this Lease or shall  deem  necessary  for the  safety,  preservation,  proper
administration  or improvement of the Development or any portion thereof and the
Landlord in so doing, shall not be liable for inconvenience,  disturbance,  loss
of business or other damage resulting therefrom.

5.06     Landlord's  Repairs

         The Landlord shall, from time to time, throughout the Term:

                                      - 6 -

<PAGE>


         (a)      at its  sole  cost,  carry  out as  soon  as  possible  in the
                  circumstances  after receipt of notice thereof in writing from
                  the Tenant,  structural  repairs to the foundations,  exterior
                  walls   (excluding   store-fronts   and   glass),   structural
                  subfloors,  the  structural  portions  of  bearing  walls  and
                  structural  columns and beams which  interfere  with or impair
                  the use, occupancy or safety of the Leased Premise;

         (b)      carry out repairs or  replacements to the Common Areas and the
                  Common  Facilities,  including  the heating,  ventilating  and
                  air-conditioning   systems   forming   part   of  the   Common
                  Facilities; and

         (c)      repair all damage to the Leased  Premises  which is covered by
                  any insurance  effected by the Landlord in accordance with the
                  provisions  of  Article  8.03  hereof  to  the  extent  of the
                  proceeds of such insurance applicable thereto;

         PROVIDED  HOWEVER  that if any such  repairs  are  necessitated  by the
negligence  or  misconduct of the Tenant,  its  servants,  agents,  contractors,
licensees,  employees or others for whom in law the Tenant is  responsible,  the
Tenant shall pay to the Landlord on demand the cost of such repairs and a fee of
twenty (20%) percent for the Landlord's supervisory function and interest on the
aggregate  amount of both of the foregoing  from the date of  expenditure of the
first mentioned monies by the Landlord.

         PROVIDED   FURTHER  that  in  any  event  the  Landlord  shall  not  be
responsible  for any  damages,  loss or injury  substained  by the Tenant or any
person or persons claiming through or under it, by reason of defects giving rise
to  the  need  for  such  repairs  or the  consequence  thereof,  including  the
inconvenience  occasioned  to the  Tenant  by the  entry  of the  Landlord,  its
employees, servants, agents or contractors on the Leased Premises to effect such
repairs.

5.07                  Landlord's Obligation to Maintain

                  The Landlord  shall maintain and keep the Common Areas and the
Common  Facilities  in a state of repair  and  cleanliness  consistent  with the
standard of a firstclass development of a similar nature.

5.08                  Damage and Destruction

                   In the event of damage or destruction of the Leased  Premises
of the Building by fire,  lightning,  earthquake,  tempest or other  casualty so
that:

         (a)      the same is damaged or  destroyed  to the extent that the samc
                  cannot  with  reasonable  diligence  be  rebuilt,  repaired or
                  restored  within one hundred and twenty (120) days of the date
                  of damage or  destruction  (as  determined  in the  opinion in
                  writing of the  Landlord's  Architect,  which written  opinion
                  shall be  delivered to the Tenant  within  thirty (30) days of
                  the occurrence of such damage or destruction) or the estimated
                  cost of  rebuilding,  repairing  or  restoring  such damage or
                  destruction  will exceed by $75,000 or more,  the  anticipated
                  proceeds  of  insurance  available  to the  Landlord  for that
                  purpose, then,  notwithstanding any other term or condition of
                  this Lease to the contrary,  the Landlord may  terminate  this
                  Lease by notice in writing to the Tenant  given  within  sixty
                  (60) days of the  occurrence  of such  damage or  destruction,
                  such  notice to be  effective  as at the date of the damage or
                  destruction  if the Leased  Premises  are not capable of being
                  utilized  by  the  Tenant  as  determined  by  the  Landlord's
                  Architect and otherwise to be effective at the date  specified
                  in such  notice of  termination  which  shall not be less than
                  thirty  (30)  days  following  receipt  of such  notice by the
                  Tenant and in either of such events,  the Rent hereby reserved
                  shall be forthwith payable by the Tenant to the effective date
                  of the termination, the Term hereby granted shall terminate as
                  at that date and the Landlord may as at the effective  date of
                  termination   re-enter  and  take  possession  of  the  Leased
                  Premises and deal with the same as fully and effectively as if
                  these  presents had not been entered  into.  But if within the
                  said period of sixty (60) days,  the  Landlord  shall not give
                  notice  terminating  this  Lease,  then as soon as  reasonably
                  practicable  thereafter,   the  Landlord  shall  undertake  or
                  continue  the  rebuilding,  repair  or  restoration  with  all
                  reasonable diligence and the Basic Rent hereby reserved,  or a
                  proportionate  part thereof  depending  upon the proportion of
                  the Leased Premises that are not fit for use by the Tenant for
                  the  intended  purpose of this  Lease,  shall  abate until the
                  Leased  Premises  have  been  rebuilt  and  made  fit  for the
                  intended purposes of this Lease;

         (b)      the same is damaged or  destroyed  to the extent that the same
                  can with reasonable diligence be rebuilt, repaired or restored
                  within one hundred  and twenty  (120) days of the date of such
                  damage or destruction (as determined in the opinion in writing
                  of the Landlord's  Architect,  which written  opinion shall be
                  delivered  to  the  Tenant  within  thirty  (30)  days  of the
                  occurrence of such damage or destruction)  and the Landlord is
                  not  otherwise  entitled to terminate  this Lease  pursuant to
                  Article  5.08(a)  the  Landlord  shall  as soon as  reasonably
                  practicable  after such  determination,  undertake or continue
                  the repair of the same with all reasonable diligence provided,
                  however, that nothing herein

                                      - 7 -

<PAGE>


                  contained  shall  impose any  obligation  upon the Landlord to
                  complete such repair within the said period of one hundred and
                  twenty  (120) days and the Basic Rent  hereby  reserved,  or a
                  proportionate  part thereof  depending  upon the proportion of
                  the Leased Premises that are not fit for use by the Tenant for
                  the  intended  purposes of this  Lease,  shall abate until the
                  Leased  Premises  have  been  rebuilt  and  made  fit  for the
                  intended purposes of this Lease.

5.09     Qualifications

         (a)      For the purposes of Article 5.08 the terms  "Leased  Premises"
                  and  "Building"  shall be deemed not to include  the  Tenant's
                  trade  fixtures,  merchandise  stockin-trade  furniture or any
                  other  improvements  installed in the Leased Premises by or on
                  behalf of the Tenant including the Tenant's Work.

         (b)      If the Landlord rebuilds, repairs, or restores the Building or
                  the Leased  Premises as  contemplated  in Article 5.08 it will
                  not be required to  reproduce  exactly the Leased  Premises or
                  the Building or restore the same to the exact  condition  that
                  existed  before the  damage or  destruction  provided  that it
                  reproduces  or restores or rebuilds  the same to a  comparable
                  condition and configuration.

         (c)      The  certificate of the Landlord's  Architect in charge of the
                  rebuilding,  repair or restoration shall bind the Landlord and
                  the Tenant as to the state and  proportion of the  suitability
                  for  occupancy of the Leased  Premises and as to the date upon
                  which the Landlord's work of  reconstruction or restoration is
                  completed and the Leased  Premises fit for the purposes of the
                  Tenant.

         (d)      Notwithstanding  any of the  provisions of Article 5.08 to the
                  contrary,  in the event the damage or destruction  referred to
                  therein  is  caused by the  negligence  or  misconduct  of the
                  Tenant,   its  servants,   agents,   employees,   contractors,
                  licensees  or  other  persons  for whom in law the  Tenant  is
                  responsible:

                  (i)  and this  Lease  is not  terminated  as a result  of such
                       damage or  destruction  there  shall be no  abatement  of
                       Basic Rent as contemplated in Article 5.08; and

                  (ii) the Tenant shall indemnify and hold harmless the Landlord
                       from and against any liabilities, damages, costs, claims,
                       suits or actions of any nature whatsoever  suffered by or
                       incurred  by the  Landlord  as a result of such damage or
                       destruction and this indemnity and hold harmless covenant
                       shall survive the expiration of the Term.

5.10     Condition of Expiration

         Upon the expiration of the Term the Tenant shall  surrender and deliver
up to the  Landlord  vacant  possession  of the Leased  Premises,  which  Leased
Premises at such time,  unless the expiration of the Term has occurred  pursuant
to  Article  5.08(a),  shall  be in the  condition  in which  the  same  must be
maintained  during the Term  pursuant to Articles  5.01 and 5.02 and as the same
must otherwise be restored pursuant to Article 9.02.


                                   ARTICLE 6
                       Common Areas and Common Facilities

6.01     Tenant's Use of Parking Areas

         The Tenant, its employees, suppliers and other persons not licensees or
invitees and having  business with the Tenant shall be prohibited from using for
parking  of  vehicles  and  loading or  unloading  of  vehicles  any part of the
customer  parking areas as such may be designed and changed from time to time by
the Landlord.  Tenant and employee  parking shall be limited to specified  times
and places,  arranged so as to cause minimal interference to business within the
Development. If requested by the Landlord the Tenant shall supply its employees'
automobile license numbers to the Landlord.

6.02     Landlord's Right to Remove Vehicles

         Should the  Tenant,  its  employees,  suppliers  or other  persons  not
licensees  or invitees of the Tenant park  vehicles in areas not  allocated  for
that purpose,  the Landlord shall have the right to remove the said  trespassing
vehicles and the Tenant will save harmless the Landlord from any and all damages
arising therefrom and the Tenant will pay the costs of such removal.

                                     - 8 -

<PAGE>


6.03     Control of Common Areas and Common Facilities

         The Landlord shall at all times have  exclusive  control and management
of the Common Areas and the Common  Facilities.  Such control  applies to signs,
use of show windows,  and the Tenant's  publicity visible from the Common Areas,
as well as to the use made by the Tenant  and/or the public of the Common Areas.
The Landlord shall have the right to alter, vary,  designate and redesignate the
Common Areas and the Common  Facilities  from time to time and to interfere with
the use of the Common Areas and the Common Facilities to the extent necessary to
make such  alterations or variations or any other repairs  required or permitted
to be made by the Landlord under this Lease.

6.04     Merchandise on Common Area

         In  particular,  but without in any way limiting the  generality of the
provisions  of Article  6.03,  the Tenant shall not keep,  display,  or sell any
merchandise on or otherwise  obstruct or use any part of the Common Areas on the
Common  Facilities,  except as permitted by the Landlord and except for displays
included  in  Development  promotions  when  recognized  and  permitted  by  the
Landlord.

6.05     Customer Parking

         The  Landlord  shall at all  times  during  the Term  maintain  for the
benefit of licensees and invitees of the Tenant parking facilities.


                                   ARTICLE 7
                           Assignment and Sub-Letting

7.01     Prohibitions

         The Tenant  shall not assign or transfer  this Lease or the Term or any
portion  thereof or let or sub-let  all or any part of the  Leased  Premises  or
grant any license with respect thereto (any of the foregoing  being  hereinafter
called a "Transfer")  without the written  consent of the Landlord first had and
obtained,  which consent shall not be  unreasonably  withheld,  provided that it
shall not be  unreasonable  for the Landlord to withhold  its consent  where the
Tenant is assigning or subletting at a profit to the Tenant.

         All requests to the Landlord for consent to any Transfer  shall be made
to the Landlord in writing  together with payment to the Landlord of one hundred
dollars  ($100.00) as a deposit on account of all costs incurred by the Landlord
in considering  and  processing the request for consent and such  information in
writing  as the  Landlord  might  reasonably  require  respecting  a  transferee
including,  without limiting the generality of the foregoing, the name, address,
business  experience,  financial position and banking and personal references of
such  transferee,  and in the event the  transferee  is a  corporation,  similar
information  respecting  the  corporporation  and  its  principal  shareholders,
officers and directors.  In addition,  the request shall contain a comprehensive
summary of the terms and conditions upon which the Transfer is to occur.

         Notwithstanding  any  provisions  of this Article 7.01 to the contrary,
after the Landlord  receives such request and  information in writing,  it shall
have the option, to be exercised by written notice within thirty (30) days after
the receipt of such request and  information,  to  terminate  this Lease and the
Term hereof on not less than thirty (30) days and not more than ninety (90) days
notice  to the  Tenant.  If the  Landlord  elects  to  terminate  this  Lease as
aforesaid, the Tenant shall have the right, to be exercised by written notice to
the landlord  within ten (10) days after receipt of such notice of  termination,
to withdraw the request for consent to the proposed Transfer,  in which case the
Tenant shall not proceed with such Transfer,  the notice of termination shall be
null  and void and this  Lease  shall  continue  in full  force  and  effect  in
accordance with its terms.

         If the Landlord  consents to a Transfer,  the  Landlord  shall have the
following rights:

         (a)      to require  the Tenant to enter into an  agreement  in writing
                  and under seal to  implement  all  amendments  to the Lease to
                  give  effect  to the  Landlord's  exercise  of  its  foregoing
                  rights; and

         (b)      to require the Transferee to enter into an agreement  directly
                  with the  Landlord  to perform  and  observe all the terms and
                  conditions of the Tenant pursuant to this Lease.

         Whether or not the Landlord  consents to any request to  Transfer,  the
Tenant shall pay reasonable  costs  incurred by the Landlord in considering  any
request for  consent to  Transfer  and in  completing  any of the  documentation
involved in implementing such Transfer.

         PROVIDED  FURTHER that,  notwithstanding  any other  provisions of this
Article  7.01 to the  contrary,  neither  the  Transfer  nor the  taking  of any
documentation  in relation  thereto shall affect the obligation of the Tenant to
perform and observe all of the terms and conditions in this Lease to be observed
and performed by the Tenant.

                                      - 9 -
<PAGE>


7.02     Control of Corporation

         If the Tenant is a corporation,  other than a corporation the shares of
which are listed on any  recognized  stock  exchange,  effective  control of the
corporation  shall not be changed directly or indirectly by a sale,  encumbrance
or other  disposition of shares or otherwise  howsoever  without first obtaining
the written consent of the Landlord;  provided that the Landlord's consent shall
not be  required  for  any  sale or  other  disposition  of  shares  by  present
shareholders  to and between  themselves or in the event of any  transmission of
shares on death and provided  further that the  Landlord's  consent shall not be
unreasonably  withheld where control of the Tenant is to pass to a subsidiary or
parent of the Tenant.

7.03     Assignment by Landlord

         The  Landlord  may  assign  all or part of its  interest  in this Lease
without the Tenant's knowledge or consent.


                                   ARTICLE 8
                                   Insurance

8.01     Tenant to Insure

         The Tenant,  at its sole cost and  expense,  shall take out and keep in
force during the Term, standard fire and extended coverage, and malicious damage
insurance on the stock-in-trade,  furniture,  fixtures,  glass, improvements and
all other contents of the Leased Premises to their full  replacement  value, and
comprehensive  general  liability  insurance  in an amount of not less than five
million dollars  ($5,000,000) and tenant's fire legal liability insurance all in
amounts and with policies in a form  satisfactory  to the Landlord with insurers
acceptable  to the  Landlord.  Each such  policy  shall name the  Landlord as an
additional  insured as its  interest  may appear and such  comprehensive  public
liability insurance shall contain a provision for cross liability as between the
Landlord and the Tenant.  Each policy other than public liability policies shall
provide  that the insurer  shall not have any right of  subrogation  against the
Landlord,  its  servants,  agents or  employees on account of any loss or damage
covered by such  insurance or on account of payments  made to  discharge  claims
against or liabilities of the Landlord or Tenant covered by such insurance.  The
cost or premium for each and every such policy shall be paid by the Tenant.  The
Tenant shall  obtain from the  insurers  under such  policies,  undertakings  to
notify  the  Landlord  in  writing  at  least  thirty  (30)  days  prior  to any
cancellation or reduction in coverage  thereof.  If the Tenant fails to take out
or keep in force, or provide to the Landlord  proof, as hereafter  contemplated,
of such insurance,  the Landlord shall have the right to place such insurance on
behalf of the Tenant and to pay the  premium  therefor  and in such  event,  the
Tenant  shall repay to the Landlord the amount paid  therefor,  which  repayment
shall be deemed to be Additional Rent payable on the first day of the next month
following  the said payment by the  Landlord.  The Tenant  agrees to provide the
Landlord  with  current  copies of the  insurance  policies or  certificates  of
insurance as described herein.

8.02     Not to Affect Landlord's Insurance

         The Tenant  will not upon the Leased  Premises do or permit to be done,
or omit to do  anything  which  causes or has the effect of causing  the rate of
insurance  upon the  Development  or any part thereof to be increased and if the
insurance  rate shall be thereby  increased  by any  action of the  Tenant,  the
Tenant  shall pay to the  Landlord  on demand as  Additional  Rent the amount by
which the insurance premiums shall be so increased. The Tenant will not store or
permit to be stored  upon or in the Leased  Premises  anything  of a  dangerous,
inflammable  or  explosive  nature nor  anything  which would have the effect of
increasing the Landlord's  insurance costs or of leading to the  cancellation of
such  insurance.  It is agreed  that if any  insurance  policy  upon the  Leased
Premises  shall be cancelled by the insurer by reason of the use and  occupation
of the Leased  Premises  or any part  thereof by the Tenant or by any  assignee,
sub-tenant,  concessionaire or licensee of the Tenant, or by anyone permitted by
the Tenant to be upon the Leased  Premises,  the  Landlord  may,  at its option,
forthwith enter upon the Leased Premises and rectify the situation  causing such
cancellation  or rate increase,  and the Tenant shall forthwith on demand pay to
the Landlord the costs of the Landlord  related to such  rectification  together
with a supervisory fee of twenty (20%) percent of such cost and with interest on
the  aggregate  of the  foregoing  from  the date  funds  were  expended  by the
Landlord.

8.03     Landlord to Insure

         The Landlord  shall  throughout  the Term,  carry fire  insurance  with
normal  coverage  endorsements  in respect  of the  buildings  and  improvements
forming part of the  Development  (but  excluding the Tenant's  trade  fixtures,
merchandise,  stock-in-trade,  furniture or any other improvements  installed in
the Leased  Premises by or on behalf of the Tenant  including the Tenant's Work)
in an amount not less than  ninety  (90)  percent of the full  replacement  cost
(excluding  the  cost  of  foundations,   footings,  underground  utilities  and
architects and other fees  associated  with these items) from time to time, on a
stated amount basis,  provided that such  insurance,  without further consent or
notice to the Tenant, may not have  a  deductible  amount,  provided  that  such
deductible  amount  shall not exceed  three (3%)  percent of the amount  insured
under such policy or policies.  The Landlord may, but shall not be obligated to,
carry such other insurance  including public liability insurance and rental loss
insurance  related to the Lands or such risks and perils in relation  thereto or
the Landlord's interest

                                     - 10 -

<PAGE>


derived therein as the Landlord may so determine. All such insurance so obtained
by the  Landlord  shall be for the sole  benefit of the  Landlord and the Tenant
shall be entitled to no interest therein or benefit thereof.


                                   ARTICLE 9
                               Tenant Alterations

9.01     Painting, Decorating and Alterations


         The Tenant may,  provided it first obtains the consent of the Landlord,
at any  time  and from  time to time at its  expense,  paint  and  decorate,  in
accordance  with the manner  and  standard  referred  to in  Article  5.01,  the
interior of the Leased  Premises and make such changes,  alterations,  additions
and  improvements  in and to the Leased  Premises as will in the judgment of the
Tenant  better  adapt the Leased  Premises  for the  purposes  of its  business;
provided,  however, that no changes,  alterations,  additions or improvements to
the  structure,   any  perimeter  wall,  the  sprinkler  system,   the  heating,
ventilating,  air-conditioning,  plumbing, electrical or mechanical equipment or
the concrete  floor or the roof shall be made without the prior written  consent
of the Landlord,  and without the use of contractors or other qualified  workmen
approved by the Landlord. All changes, alterations,  additions and improvements,
whether  structural  or otherwise,  shall be carried out in accordance  with the
reasonable  requirements  or rules of the  Landlord  and shall  comply  with all
applicable statutes, regulations or bylaws of any municipal, provincial or other
governmental authority. As part of the process of the Landlord's examination and
approval of the Tenant's plans and specifications, materials may, in addition to
being  submitted to the  Landlord's  Architect,  be submitted by the Landlord to
other  architects,   engineers,  and  special  consultants,   and  progress  and
completion of the work may require supervision and/or inspection by the Landlord
or any of the foregoing  persons on behalf of the  Landlord.  Any fees and costs
incurred by the Landlord in relation to the foregoing will be paid by the Tenant
to the Landlord within fifteen (15) days of billing. The Tenant shall pay to the
Landlord the amount of the increase for any  insurance  coverage of the Landlord
directly  attributable  to any  action  by the  Tenant as  hereinbefore  in this
Article 9.01 provided and the Tenant  covenants  that such  insurance  shall not
thereby be made liable to avoidance or  cancellation by the insurer by reason of
such changes, alterations, additions or improvements.

9.02     Landlord's Property

         At the expiration of the Term all changes,  alterations,  additions and
improvements  made to or installed upon or in the Leased  Premises  whether made
pursuant to this Article 9 or otherwise and which in any manner are attached in,
to on or under the floors,  walls or ceilings  (other  than  unattached  movable
trade  fixtures)  shall remain upon and be  surrendered to the Landlord with the
Leased Premises as part thereof, without disturbance,  molestation or injury and
shall be and become the absolute property of the Landlord without any payment or
indemnity  by the  Landlord or any third party to the Tenant or any other party.
Notwithstanding the foregoing  provisions of this Article 9.02, unless the Lease
has been  terminated  pursuant to Article  5.08(a) the Landlord may by notice in
writing  require  the  Tenant  to remove  the  aforesaid  changes,  alterations,
additions and  improvements in whole or in part, in which event the Tenant shall
remove the same and restore to the extent so requested  that Leased  Premises to
the state in which they were  prior to the  commencement of any of the  Tenant's
Work and shall  make good any  damage or injury  caused to the  Leased  Premises
resulting from such  installation and removal,  reasonable wear and tear and the
Landlord's repair obligations only excepted. The obligations of the Tenant under
this Article 9.02 shall survive the expiration of the Term.

9.03     Prohibitions

         The Tenant, its employees,  agents and  representatives,  are expressly
prohibited  from entering  upon the roof of the Building or any Other  Buildings
for any reason  whatsoever.  The Tenant shall not make any repairs,  openings or
additions  to any part of the  exterior  of the Leased  Premises,  nor place any
attachments,  decorations,  signs or  displays in or upon any Common Area or the
exterior  of  the  Leased  Premises  failing  which  the  Tenant  will  be  held
responsible for all ensuing costs and damages whether to remove such items or to
effect repairs needed as a result of such acts and shall pay the cost thereof to
the  Landlord  forthwith  on  demand  together  with  a  supervisory  fee to the
Landlordof  twenty  (20%)  percent  of such  cost as  well  as  interest  on the
aggregate of the foregoing from the date funds are so expended by the Landlord.

9.04     No Liens

         The Tenant covenants with the Landlord that it will not permit,  do, or
cause  anything  to be  done  to  the  Leased  Premises  during  the  period  of
construction  and  fixturing  of the Leased  Premises or at any time which would
allow  any  lien,  lis  pendens,  judgment  or  certificate  of any court or any
mortgage,  charge or  encumbrance  of any nature  whatsoever to be imposed or to
remain  upon  the  Leased  Premises  or the  Development.  In the  event  of the
registration of any lien or other encumbrance as aforesaid,  the Tenant shall at
its own expense  immediately cause the same to be discharged.  Should the Tenant
fail to discharge  such lien or  encumbrance  within two (2) days of notice from
the  Landlord so to do, the  Landlord  shall be at liberty to pay and  discharge
such lien or  encumbrance  and any amount so paid by the Landlord  together with
any disbursements and costs incurred by the Landlord on a solicitor-client basis
together with interest on any such amounts from the date of  expenditure of such
funds by the Landlord shall be paid by the Tenant to the Landlord forthwith.

                                     - 11 -

<PAGE>
                                   ARTICLE 10
                           Public Utilities and Taxes

10.01    Public Utilities, Business Tax and Machinery Tax

         The Tenant shall pay and discharge as the same fall due all charges for
utilities  provided  to or  consumer  on the  Leased  Premises  during  the Term
including telephone  installations,  water,  electrical power, gas and telephone
charges metered separately or charged separately by the authority  providing the
same to the Leased  Premises as well as any charges of any such authority  based
thereon for  treatment  or other  facilities  and all other  charges  similar in
nature, and shall also pay and discharge as the same fall due all business taxes
and rates, floor space and personal property taxes, licence fees or similar fees
which may be imposed by any municipal, legislative or other authority in respect
of the use or occupancy of the Leased Premises or any personal  property situate
thereon  or in  respect  of any  fixtures,  machinery,  equipment  or  apparatus
installed  in the  Leased  Premises  (or  elsewhere  in the  Development  by the
Tenant).

         PROVIDED ALWAYS that if any of the aforesaid  utilities are provided to
the Leased  Premises  through a common  metering  device or on any other  shared
basis with any other  premises or portions of the  Building or the  Development,
the Tenant shall pay to the Landlord  forthwith on demand,  from time to time by
the Landlord, the Tenant's share of the cost thereof based on such allocation as
the  Landlord  may  reasonably  determine  in relation to the other  premises or
portions of the Building or the Development being so served.

10.02    Payment of Real Property Taxes by Landlord

         The  Landlord  shall,  without  derogating  from  any of  the  Tenant's
obligations  with respect to payment of Additional Rent, pay or cause to be paid
when due to the municipality or other taxing authorities having jurisdiction all
Real Property Taxes, PROVIDED ALWAYS that the Landlord may postpone such payment
to the extent  permitted by law if pursuing in good faith any appeal against the
imposition thereof.

10.03    Increase in Real Property Taxes Attributable to Tenant

         The Tenant shall from time to time if requested by the Landlord, pay to
the  Landlord  forthwith  on demand  by the  Landlord,  an  amount  equal to any
increase  in the amount of Real  Property  Taxes by reason of any  installation,
alteration,  or use made in or to the Leased  Premises  by or for the benefit of
the Tenant or any party claiming by or through the Tenant

10.04    Goods and Services Tax

         Despite any other section or clause of this Lease, the Tenant shall pay
to the  Landlord  upon demand an amount  equal to any and all Goods and Services
Tax, it being the  intention  of the parties  that the  Landlord  shall be fully
reimbursed  by the Tenant with  respect to any and all Goods and Services Tax at
the full tax rate  applicable  from time to time in respect of the Rent  payable
for the lease of the Leased Premises  pursuant to this Lease.  The amount of the
Goods and  Services  Tax so  payable by the Tenant  shall be  calculated  by the
Landlord in accordance with the applicable  legislation and shall be paid to the
Landlord  at the same time as the amounts to which such Goods and  Services  Tax
apply and is  payable  to the  Landlord  under  the terms of this  Lease or upon
demand at such other time or times as the Landlord from time to time determines.
Despite  any other  section or clause in this Lease,  the amount  payable by the
Tenant  under this  paragraph  shall be deemed not to be Rent,  but the Landlord
shall have all of the same remedies for and rights of recovery of such amount as
it has for recovery of Rent under this Lease.  As referred to herein  "Goods and
Services Tax" means the tax imposed under part IX of the Excise Tax Act (Canada)
or any similar tax  hereafter  imposed in  substitution  therefor or in addition
thereto.


                                   ARTICLE 11
                      Exclusion of Liability and Indemnity

11.01    Exclusion of Liability

             It is agreed between the Landlord and the 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 the Development
                  or for  any  loss  of or  damage  or  injury  to any  property
                  belonging  to the Tenant or to its  employees  or to any other
                  person  while such  property is on the Leased  Premises or the
                  Development   and,  in   particular   (without   limiting  the
                  generality of the

                                     - 12 -
<PAGE>


                  foregoing)  the Landlord shall not be liable for any damage or
                  damages of any nature  whatsoever to any such property  caused
                  by the failure by reason of a  breakdown  or other  cause,  to
                  supply adequate drainage, snow or ice removal, or by reason of
                  the  interruption  of any  public utility or service or in the
                  event that steam,  water, rain or snow may leak into, issue or
                  flow  from any  part of the  Development  or from  the  water,
                  steam,  sprinkler,  or drainage  pipes or  plumbing  works the
                  same,  or from  another  place or  quarter  or for any  damage
                  caused by any thing  done or omitted  by any  tenant,  but the
                  Landlord  shall,  after  notice  of the same  and  where it is
                  within its obligation so to do, use all  reasonable  diligence
                  to remedy such  condition,  failure or interruption of service
                  when not directly or  indirectly  attributable  to the Tenant,
                  and the Tenant shall not be entitled to any  abatement of Rent
                  in respect of any such  condition,  failure or interruption of
                  service; and

         (c)      the Landlord, its agents,  servants,  employees or contractors
                  shall not be liable  for any  damage  suffered  to 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  examination  thereof or
                  any work therein or in the case of an emergency.

11.02    Indemnification

         Notwithstanding any other provision of this Lease to the contrary,  the
Tenant shall:

         (a)      be liable to the Landlord for; and

         (b)      indemnify  and  hold   harmless  the  Landlord,   its  agents,
                  advisors, servants and employees from and against:

any and all liabilities,  claims, suits or actions,  costs, damages and expenses
(and without limiting the generality of the foregoing, any direct losses, costs,
damages  and  expenses of the  Landlord  including  costs on a  solicitor-client
basis) which may be brought or made against the Landlord,  or which the Landlord
may pay or incur as a result of or in connection with:

         (c)      any breach,  violation  or  non-performance  of any  covenant,
                  condition or  agreement in this Lease set forth and  contained
                  on the part of the Tenant to be fulfilled,  kept, observed and
                  performed;

         (d)      any damage to property,  including  property of the  Landlord,
                  occasioned by the  operations of the Tenant's  business on, or
                  the Tenant's occupation of, the Leased Premises; or

         (e)      any injury to person or persons,  including death resulting at
                  any  time  therefrom,  occasioned  by  the  operation  of  the
                  Tenant's  business  on, or the  Tenant's  occupation  of,  the
                  Leased Premises;

such indemnity and hold harmless to survive the expiration of the Term.


                                   ARTICLE 12
                         Landlord's Rights and Remedies

12.01    Default

         If and whenever:

         (a)      the Rent hereby  reserved,  or any part  thereof,  be not paid
                  when due, or there is  non-payment  of any other sum which the
                  Tenant is obligated to pay under any  provisions  hereof,  and
                  such default shall  continue for ten (10) days after notice by
                  the Landlord requiring the Tenant to rectify the same;

         (b)      the Term or any goods,  chattels,  equipment or other personal
                  property  of the  Tenant,  shall be taken  or be  exigible  in
                  execution or attachment, or if a writ of execution shall issue
                  against the Tenant;

         (c)      the  Tenant  shall  become  insolvent  or  commit  any  act of
                  bankruptcy  or become  bankrupt or take the benefit of any Act
                  that maybe in force for  bankrupt  or  insolvent  debtors,  or
                  become  involved  in a  winding-up  proceeding,  voluntary  or
                  otherwise,  or  if a  receiver  shall  be  appointed  for  the
                  business,  property,  affairs or revenues of the Tenant, or if
                  any  governmental  authority  should  take  possession  of the
                  business or property of the Tenant;

                                     - 13 -

<PAGE>


         (d)      the  Tenant  shall  fail to  commence  business  actively  and
                  diligently  from and on the Leased Premises within thirty (30)
                  days after the Commencement Date;

         (e)      the  Tenant  shall  make a bulk  sale of its  goods or move or
                  commence,  attempt or threaten to move its goods, chattels and
                  equipment  out of  the  Leased  Premises  (other  than  in the
                  routine course of its business) or shall,  for a period of ten
                  (10)  consecutive  days (without the prior written  consent of
                  the  Landlord),  fail to  conduct  business  from  the  Leased
                  Premises;

         (f)      the Tenant  shall  vacate or abandon  the Leased  Premises  in
                  whole or in part;

         (g)      the Tenant  shall  transfer or purport to Transfer any portion
                  or all of the Term of the Leased Premises  without the written
                  consent  of  the  Landlord  or  control  of  the  Tenant  if a
                  corporation  is changed  without the prior written  consent of
                  the Landlord,  in either case as required  pursuant to Article
                  7;

         (h)      the Tenant shall fail to remedy any  condition  giving rise to
                  cancellation, threatened cancellation, reduction or threatened
                  reduction of any insurance  policy on the  Development  or any
                  part  thereof  within  twenty-four  (24)  hours  after  notice
                  thereof by the Landlord; or

         (i)      the Tenant  shall not  observe,  perform and keep any other of
                  the  covenants,  agreements,   provisions,   stipulations  and
                  conditions  herein to be observed,  performed  and kept by the
                  Tenant  and shall  persist in such  failure  for ten (10) days
                  after notice by the Landlord requiring that the Tenant remedy,
                  correct,  desist or comply (or in the case of any such  breach
                  which  reasonably  would  require  more  than ten (10) days to
                  rectify unless the Tenant shall commence  rectification within
                  the said  ten (10) day  period  and  thereafter  promptly  and
                  diligently and continuously  proceed with the rectification of
                  the breach);

then and in any of such cases at the option of the Landlord,  the full amount of
the  current  month's  and  the  next  ensuing  three  (3)  month's  Rent  shall
immediately  become due and  payable as  Additional  Rent and the  Landlord  may
immediately  distrain for the same,  together with any arrears then unpaid;  and
the Landlord may without notice or any form of legal process forthwith  re-enter
upon and take  possession of the Leased Premises or any part thereof in the name
of the whole and remove and sell the Tenant's goods, chattels, equipment and any
other  property   therefrom,   any  rule  of  law  or  equity  to  the  contrary
notwithstanding;  and the  Landlord  may seize and sell  such  goods,  chattels,
equipment and other  property of the Tenant as are in the Leased  Premises or at
any place to which the Tenant or any other  person may have  removed them in the
same  manner  as if they had  remained  and  been  distrained  upon  the  Leased
Premises; and such sale may be effected in the discretion of the Landlord either
by public  auction or by  private  treaty,  and either in bulk or by  individual
item,  or partly by one means and partly by another,  all as the Landlord in its
entire discretion may decide, and the Tenant waives and renounces the benefit of
any present or future statute or amendments  thereto taking away or limiting the
Landlord's right of distress.

12.02    Consequences of Default

         If and  whenever  the  Landlord  is  entitled  to  re-enter  the Leased
Premises,  the Landlord may terminate  this Lease and the Term by giving written
notice of  termination  to the Tenant or by posting notice of termination in the
Leased  Premises,  and in such  event  the  Tenant  will  forthwith  vacate  and
surrender the Leased Premises. Alternatively, the Landlord may from time to time
without terminating the Tenant's  obligations under this Lease, make alterations
and repairs considered by the Landlord necessary to facilitate a sub-letting and
sub-let the Leased  Premises or any part thereof as agent of the Tenant for such
term or terms and at such rent or rents and upon such other terms and conditions
as the Landlord in its sole discretion considers advisable. Upon each subletting
all rent and other monies received by the Landlord from the sub-letting shall be
applied first to the payment of indebtedness  other than Rent due hereunder from
the Tenant to the  Landlord,  second to the payment of costs and expenses of the
sub-letting  including  brokerage  fees  and  solicitors  fees  and the  cost of
alterations  and  repairs,  and  third to the  payment  of Rent  due and  unpaid
hereunder.  The  residue,  if any,  shall be held by the Landlord and applied in
payment of future Rent as it becomes due and payable.  If the Rent received from
the sub-letting  during a month and any surplus then held by the Landlord to the
credit of the Tenant is less than the Rent to be paid  during  that month by the
Tenant, the Tenant will pay the deficiency to the Landlord.  The deficiency will
be calculated and paid monthly. No re-entry by the Landlord will be construed as
an election on its part to terminate  this Lease unless a written notice of that
termination is given to the Tenant or posted as aforesaid.  Despite a subletting
without termination,  the Landlord may elect at any time to terminate this Lease
for a previous  breach.  If the Landlord so  terminates  this Lease,  the Tenant
shall pay to the Landlord on demand therefor:

         (a)      Basic Rent and  Additional  Rent accrued due up to the time of
                  re-entry or  termination,  whichever  is later,  plus the next
                  three (3) months' Rent payable as Additional  Rent as provided
                  in Article 12.01;

         (b)      all costs payable by the Tenant  pursuant to the provisions of
                  this  Lease up  until  the date of  re-entry  or  termination,
                  whichever is later;

                                     - 14 -

<PAGE>


         (c)      such  expenses as the  Landlord  may incur or has  incurred in
                  connection with re-entering or terminating and re-letting,  or
                  collecting sums due or payable by the Tenant or realizing upon
                  assets  seized  including  brokage  expenses,  legal  fees and
                  disbursements  determined  on  a  full  indemnity  basis,  and
                  including  the expense of keeping the Leased  Premises in good
                  order and repairing or  maintaining  the same or preparing the
                  Leased Premises for re-letting; and

         (d)      as liquidated damages for the loss of Rent and other income of
                  the Landlord expected to be derived from this Lease during the
                  period which would have  constituted the unexpired  portion of
                  the Term had the Lease not been so terminated,  the amount, if
                  any, by which the rental value of the Lease  Premises for such
                  period established by reference to the terms and provisions of
                  this Lease exceeds the rental value of the Leased Premises for
                  such  period   established  by  reference  to  the  terms  and
                  provisions  upon  which  the  Landlord  relets  them,  if such
                  re-letting  is  accomplished  within a  reasonable  time after
                  termination of this Lease, and otherwise with reference to all
                  market and other relevant circumstances. Rental value is to be
                  computed  in each  case by  reducing  to  present  worth at an
                  assumed  interest rate of ten percent (10%) per annum all Rent
                  and other amounts to become  payable for such period and where
                  the  ascertainment  of amounts to become payable  requires the
                  same, the Landlord may make estimates and  assumptions of fact
                  which  will  govern  unless  shown  to  be   unreasonable   or
                  erroneous;

such obligations of the Tenant to survive the expiration of the Term.

12.03    Non-Waiver

         The failure of the Landlord to insist in any one or more cases upon the
strict  performance  of any of the  covenants  of this Lease or to exercise  any
option herein  contained shall not be construed as a waiver or a  relinquishment
for the  future of such  covenant  or option and the  acceptance  of Rent by the
Landlord  with  knowledge  of the  breach  by the  Tenant  of any  covenants  or
conditions  of this Lease  shall not be deemed to be a waiver of such breach and
no waiver by the  Landlord  of any  provisions  of this Lease shall be deemed to
have been made unless expressed in writing by the Landlord.

12.04    Right of Landlord to Perform Tenant's Covenants

         If at any time and so often as the same shall happen,  the Tenant shall
make default in the observance or  performance of any of the Tenant's  covenants
herein contained,  then the Landlord may, but shall not be obligated to, without
waiving or  releasing  the Tenant from its  obligations  under the terms of this
Lease,  itself observe and perform the covenant or covenants in respect of which
the Tenant is in default,  and in that  connection may pay such monies as may be
required or as the Landlord may  reasonably  deem expedient and the Landlord may
thereupon  charge all monies so paid and  expended by it to the Tenant  together
with interest  thereon from the date upon which the Landlord shall have paid out
the same;  provided however that if the Landlord  commences and completes either
the  performance  of any such  covenant or  covenants or any part  thereof,  the
Landlord  shall not be obliged to complete such  performance or be later obliged
to act in like fashion.

12.05    Time for Payment and Legal Costs

         Unless otherwise  expressly  provided in this Lease, all sums and costs
paid by the Landlord,  including  costs paid between  solicitor  and client,  on
account of any default by the Tenant  under this Lease,  shall be payable to the
Landlord by the Tenant  forthwith,  with interest  thereon at the rate aforesaid
from date of payment of such sums or costs by the Landlord.

         Unless  otherwise  expressly  provided in the Lease, all amounts (other
than Rent)  required to be paid by the Tenant to the  Landlord  pursuant to this
Lease shall be payable on demand at the place  designated  by the  Landlord  for
payment of Rent and if not so paid within ten (10) days of such demand  shall be
treated as Rent in arrears and the Landlord may, in addition to any other remedy
it may have for the  recovery of the same,  distrain  for the amount  thereof as
Rent in arrears.

12.06    Remedies Cumulative

         All rights and remedies of the Landlord in this Lease  contained  shall
be cumulative and not alternative and are not dependent the one on the other and
mention of any  particular  remedy or remedies of the Landlord in respect of any
default by the Tenant shall not  preclude the Landlord  from any other remedy in
respect thereof,  whether available at law or in equity or as expressly provided
for herein.

                                     - 15 -

<PAGE>


                                   ARTICLE 13
                      Mortgages and Assignment by Landlord

13.01    Sale or Financing of Development

         The Landlord may sell, transfer, lease, mortgage, encumber or otherwise
dispose  of the  Development  or any  portion  thereof  or any  interest  of the
Landlord  therein,  in every case  without the  consent of the  Tenant,  and the
rights of the Landlord under this Lease may be mortgaged,  charged,  transferred
or assigned in conjunction therewith.  The Tenant acknowledges that in the event
of the  sale  or  lease  by the  Landlord  of the  lands  or a  portion  thereof
containing  the Leased  Premises or the assignment by the Landlord of this Lease
or of any  interest  of the  Landlord  hereunder,  to the  extent  that any such
purchaser,  lessee 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 such covenants and obligations.

13.02    Subordination and Acknowledgement

         This Lease shall at the option of the Landlord or the  mortgagee  under
any mortgage now or hereafter existing affecting the Development, exercisable at
any time and from  time to time by the  Landlord  or such  mortgagee,  be either
subject and  subordinate to such mortgage and  accordingly not binding upon such
mortgagee  or  alternatively  rank prior to such  mortgage  and  accordingly  be
binding upon such mortgagee. On request at any time and from time to time of the
Landlord or such  mortgagee,  the Tenant shall either  postpone and  subordinate
this Lease or any caveat  based  thereon  to such  mortgage  with the intent and
effect  that this  Lease and all  rights of the  Tenant  shall be subject to the
rights of such  mortgagee as fully as if the mortgage  (regardless of when made)
had been made prior to the making of this Lease, or  alternatively  to attorn to
such  mortgagee and become bound to it as its tenant of the Leased  Premises for
the then expired residue of the Term and upon the terms and conditions contained
in this Lease,  in each case as the  Landlord  or such  mortgagee  may  require.
Without limiting the foregoing (and notwithstanding that any previous attornment
or  subordination  in favour of such mortgagee shall have been given) the Tenant
shall  execute   promptly  the  appropriate   instrument  of  postponement   and
subordination or alternatively the appropriate instrument of attornment,  as the
case may be, in order to give effect to the foregoing.

13.03    Offset Statement

         Within ten (10) days following  request therefor by the Landlord,  from
time to time,  the Tenant  shall  execute  and  deliver to the  Landlord  and if
required by the Landlord, to any mortgagee, assignee, or transferee of the Lease
or the  Development,  a  certificate  in writing  as to the then  status of this
Lease,  including  whether  it is in full  force  and  effect,  as  modified  or
unmodified, confirming the Tent payable hereunder, the state of accounts between
the Landlord and the Tenant and the existence or  non-existence  of defaults and
any other matters  pertaining  to the Lease which the Landlord  shall request be
included in such certificate.

13.04    Registration

         The Tenant shall not without the consent of the Landlord  register this
Lease  against  title to the Lands.  The Tenant will, at the cost and expense of
the Tenant,  cause this Lease to be  registered  in the  appropriate  Land Title
Office in the Province of British  Columbia  upon the request of the Landlord in
the event that the Landlord  requires the same to be  registered  in priority to
any  mortgage,  trust  deed or  trust  indenture  which  may now or at any  time
hereafter  affect in whole or in part the Leased Premises or the Development and
the Tenant shall execute  promptly any certificate or other instrument which may
from time to time be requested by the Landlord to give effect to the  provisions
of this Article 13.04.


                                   ARTICLE 14
                               Overholding Tenant

14.01    No Tacit Renewal

         In the event the Tenant  remains in possession  of the Leased  Premises
after the end of the Term and without the execution and delivery of a new lease,
there shall be no tacit  renewal of this Lease and the Term  hereby  granted and
the Tenant shall be deemed to be occupying the Leased  Premises as a Tenant from
month to month on the terms and  conditions  contained  herein  except  that the
Basic  Rent  shall be one  hundred  and  fifty  percent  (150%)  of the  monthly
instalment  of Basic  Rent  required  to be paid  pursuant  to this Lease in the
immediately  preceding  Year  of  the  Term,  but  otherwise  on the  terms  and
conditions  of  this  Lease  which  shall  be  read  with  such  changes  as are
appropriate to a monthly tenancy; provided however that this provision shall not
authorize the Tenant to so overhold where the Landlord has objected to such over
holding or has required the Tenant to vacate the Leased Premises.

                                     - 16 -

<PAGE>


                                   ARTICLE 15
                                Quiet Possession

15.01    Quiet Possession

         Upon the Tenant  paying the Rent hereby  reserved and all other charges
herein  provided  and  observing,  performing  and  keeping  the  covenants  and
agreements  herein  contained,  the Tenant shall and may  peaceably  possess and
enjoy the Leased  Premises  for the Term  granted  without any  interruption  or
disturbance  from the  Landlord or any person or persons  lawfully  claiming by,
from or under it.


                                   ARTICLE 16
                              Legal Relationships

16.01    No Partnership

         Nothing  contained  in this Lease nor in any acts of the  Landlord  and
Tenant pursuant to this Lease shall be deemed to create any relationship between
the parties hereto other than the relationship of Landlord and Tenant,  it being
expressly  provided  that  there is no  intention  to create a  relationship  of
partners or a joint venture.

16.02    Joint and Several Liability

         Should the Tenant  comprise two (2) or more persons,  each of them, and
not one for the other or others,  shall be jointly and severally  bound with the
other  or  others  for the due  performance  of the  obligations  of the  Tenant
hereunder.  Where  required by the context hereof the singular shall include the
plural and the  masculine  gender  shall  include  either the feminine or neuter
genders, as the case may be and vice versa.

16.03    Successors and Assigns

         This Lease and everything  herein  contained shall enure to the benefit
of and be binding  upon the parties  hereto,  to  successors  and assigns of the
Landlord, and the approved successors and assigns of the Tenant.


                                   ARTICLE 17
                                    Notices

17.01    Notices

         Any notices  herein  provided or permitted to be given by the Tenant to
the  Landlord  shall,  except in the event of actual or  threatened  mail strike
during  which time all  notices  must be  delivered,  be  sufficiently  given if
delivered or sent by registered  mail,  postage  prepaid,  posted within British
Columbia addressed to the Landlord at:

                          Bentall Property Management
                          3100 - Three Bentall Centre 
                          595 Burrard Street
                          P.O. Box 49001
                          Vancouver, B.C.
                          V7X 1B1

or to such other  address as might be designated in writing by the Landlord from
time to time,  and any notice  herein  provided or  permitted to be given by the
Landlord to the Tenant shall,  except in the event of actual or threatened  mail
strike during which time all notices must be delivered, be sufficiently given if
delivered  or mailed,  postage  prepaid  and  posted  within  British  Columbia,
addressed to the Tenant at the Leased Premises.

         Notice  given  as  aforesaid,  posted  in  British  Columbia,  shall be
conclusively  deemed to have been given on the third  business day following the
day on which such notice was mailed,  or if delivered,  on the date of delivery.
The  Landlord  may at any time  given in  writing  to the  Tenant of a change of
address  for the  Landlord  and from and after the  giving  of such  notice  the
address therein  specified shall be deemed to be the address of the Landlord for
the giving of notice hereunder. The word "notice" in this Article 17.01 shall be
deemed to include any request, statement, demand, or other writing in this Lease
provided or permitted to be given by the Landlord to the Tenant or by the Tenant
to the Landlord.

                                     - 17 -


<PAGE>
                                   ARTICLE 18
                                    General

18.01    Collateral Representations and Agreements

         The Tenant  acknowledges  that the Leased  Premises  are taken  without
representation  of any kind on the part of the  Landlord or its agent other than
as set forth  herein,  that the plans  attached  as  Schedule  "A" set forth the
general layout of the Building and shall not be deemed to be a representation or
agreement of the Landlord that the Building will be exactly as indicated on such
plans,  and that  nothing  contained  in the Lease shall be  construed  so as to
prevent the  Landlord  from  varying or altering the location or size of parking
areas,  driveways,  sidewalks or from erecting additional buildings or extending
buildings after the Commencement  Date and without  limiting the foregoing,  the
Landlord  shall  have  the  unrestricted  right to add  additional  lands to the
Development,  which upon such addition,  these additional lands will be included
within the  definition  of the Lands and  Development,  to construct  additional
buildings from time to time on the Lands,  add or change any building,  or alter
the ingress and egress to the Development and to change the loading or unloading
facilities  and  service  entrances  from time to time  without in any way being
responsible  to the Tenant,  provided only that the Landlord  shall at all times
provide  reasonable  access  to the  Leased  Premises  across  the Lands for the
Tenant, its employees, suppliers, agents, licencees and invitees. Subject to the
foregoing  and to the  obligations  of the  Landlord  to  maintain  at all times
adequate parking facilities, the Landlord may transfer or dispose of portions of
the Lands to the owners of  abutting  property,  or  dedicate or transfer to the
municipal  authorities  portions  of  the  Lands  for  road-widening  and  other
purposes,  and when and so often as the  Landlord  shall  dispose or transfer or
dedicate any portion of the Lands,  then the reference herein to the Lands shall
mean and refer to the portion of the Lands  remaining  after any such  transfer,
disposition or dedication  together with any adjacent land which may be acquired
by the Landlord on any such  transfer,  disposition  or  dedication.  The Tenant
further agrees that no representative of or agent of the Landlord is or shall be
authorized or permitted to make any representation with reference to this Lease,
or to vary or modify this Lease in any way, and that this Lease contains all the
agreements  and  conditions  made  between the  Landlord  and the Tenant  hereto
respecting  the Leased  Premises other than for any provisions of the Agreement,
if any, on which this Lease is based and which are  specifically  stated therein
to survive  the  execution  and  delivery  of this  Lease.  Any  addition  to or
alteration  of or change in this  Lease or other  agreements  hereafter  made or
conditions  created,  to be  binding,  must be made in writing and signed by the
Landlord and the Tenant.

18.02    Management of Development

         The Tenant  acknowledges  to the Landlord that the  Development  may be
managed by such party or parties as the Landlord may in writing designate and to
all intents and  purposes the manager of the  Development  shall be the party at
the Development authorized to deal with the Tenant on behalf of the Landlord.

18.03    Time of the Essence  

         Time shall be of the essence of this Lease. 

18.04    Unavoidable Delays

         In the event that the Landlord shall be delayed,  hindered or prevented
from the performance of any covenant hereunder by Force Majeure, the performance
of such covenant  shall be excused for the period during which such  performance
is rendered  impossible and the time for  performance  thereof shall be extended
accordingly,  but this shall not excuse  the Tenant  from the prompt  payment of
Rent or any other amount  required to be paid by the Tenant under the provisions
of this Lease.

18.05    Accord and Satisfaction

         No payment  by the Tenant  hereunder  or receipt by the  Landlord  of a
lesser  amount  than the payment of Basic Rent or  Additional  Rent or any other
payments  herein  stipulated  shall be deemed to be other than on account of the
stipulated  sum,  nor shall any  endorsement  or  statement on any cheque or any
letter  accompanying any cheque or payment be deemed an accord and satisfaction,
and the  Landlord  may accept such cheque or payment  without  prejudice  to the
Landlord's  right to recover the balance due or pursue any other remedy provided
in this Lease.

18.06    Competition Act

         No provision of this Lease is intended to apply or to be enforceable to
the extent that it might give rise to any offence under the Competition Act, RSC
1970 Chapter 23 or any statute that may be substituted therefor, as from time to
time amended.

18.07    Covenants

         Each of the terms and  conditions  of this  Lease to be  performed  and
observed by the Tenant or by the  Landlord,  as the case may be, is and shall be
construed  as a covenant  of the party so  required  to perform  and observe the
same.

                                     - 18 -
<PAGE>

18.08    Consent or Approval of Landlord

         Wherever  and  whenever  the  consent,  approval or  permission  of the
Landlord  is required  by the Tenant  pursuant  to the terms of this Lease,  and
unless  otherwise  specifically  provided,  the Landlord shall have the right to
withhold or grant such consent, approval or permission in its sole and arbitrary
discretion.  Such  consent,  approval  or  permission  must be in  writing to be
effective,  and such consent,  approval or permissions must be obtained prior to
the taking of the action to which the same refers.

18.09    For Lease Signs

         The Landlord shall have the right during the last six (6) months of the
Term to place  upon the  Leased  Premises,  a notice  of  reasonable  dimensions
stating that the Leased  Premises are for lease and the Tenant shall not obscure
or remove such notice or permit the same to be obscured or removed.

18.10    The Commercial Tenancy Act

         Each of the Landlord and the Tenant  waives any and all  provisions  of
the  Commercial  Tenancy  Act  (British  Columbia)  or any  statute  that may be
substituted therefore, as from time to time amended, to the extent that the same
are inconsistent with or conflict with the terms and conditions of this Lease.

18.11    No Exclusivity

         This Lease shall not in any way be construed as giving to or conferring
upon the Tenant any rights to carry on any  business or  undertaking  in or from
the Leased Premises to the exclusion of third parties in the Development.

18.12    Schedules
         
         Any and all  schedules  attached  hereto are deemed to be  incorporated
into and form part hereof.

18.13    Applicable Law

         This Lease shall be governed by and  construed in  accordance  with the
laws in force in the Province of British Columbia.

18.14    Headings

         The index and headings in this Lease are inserted  for  convenience  of
reference  only and shall  not  affect  the  construction  of this  Lease or any
provision hereof.

18.15    Tenant's Acceptance

         The Tenant hereby  accepts the Lease of the Leased  Premises to be held
by the Tenant,  subject to the conditions,  restrictions and covenants set forth
herein

18.16    Arbitration

         If at any time the parties herein are unable within the time specified,
or if no time is specified,  then within a reasonable time to reach agreement on
any matter which is to be settled by mutual agreement, then such matter shall be
submitted  and  referred  to a  single  arbitrator  pursuant  to the  Commercial
Arbitration Act of British  Columbia,  whose decision shall be final and binding
on the parties hereto.

18.17    Severability

         Should  any  provision  of this  Lease  be  unenforceable  it  shall be
considered  separate and severable  from the remaining  provision of this Lease,
which shall remain in force and be binding as though the said  provision had not
been included.

                                   ARTICLE 19
                                  Definitions

         In this Lease,  the following  words,  phrases and expressions are used
with the meanings described as follows:

19.01    "Additional Rent" for a Lease Year or portion thereof means in addition
to the Basic Rent all other amounts which shall become due and payable hereunder
by the Tenant to the Landlord and  includes the amounts  which is the  aggregate
of:

         (i)      the Tenant's Proportionate Share of the HVAC Costs,


                                     - 19 -

<PAGE>

         (ii)     the Tenant's Proportionate Share of the Building Operation and
                  Maintenance Costs,

         (iii)    the Tenant's  Proportionate Share of the Development Operation
                  and Maintenance Costs, and

         (iv)     the Tenant's Proportionate Share of the Tax Cost.

In each case the items  comprising or being deducted from the aforesaid Costs or
Cost are to be allocated to such Lease Year by the Landlord in  accordance  with
generally  accepted  accounting  practice,  provided that if the Term  commences
other than at the beginning of a Lease Year or ends other than at the conclusion
of a Lease Year a pro rata  adjustment  of the  aforesaid  costs for such  Lease
Year  shall be made based on the length of the Term  falling  within  such Lease
Year,  provided further that the Tax Cost shall,  unless otherwise  specifically
stated in the  enabling  legislation  giving rise  thereto,  be deemed to accrue
equally  from day to day in the  calendar  year to which  the same  related  and
shall, if adjustment is required as aforesaid, be adjusted on that basis and not
on a straight pro rata basis as provided aforesaid.

19.02    "Area  of  Leased  Premises"  means  the  area of the  Leased  Premises
measured  from a  perpendicular  line drawn at right angles from the edge of the
roof to the ground for all exterior walls, doors and windows and from the centre
line of all  interior  walls  separating  the  Leased  Premises  from  adjoining
premises,  which area for all purposes of this Lease unless otherwise determined
by  recalculation  of  the  Landlord's  Architect  following  completion  of the
Tenant's Work or any subsequent construction by the Tenant is the area set forth
in Basic Term .01.

19.03    "Basic  Rent"  means  the  annual  rent  payable  by the  Tenant to the
Landlord in  accordance  with Article 2.01 for each Year of the Term,  being the
amount set forth in Basic Term .02.

19.04    "Basic  Term"  means  each  of  those  terms  defined  as  such  at the
commencement of this Lease.

19.05    "Building"  means the building in which the Leased Premises are located
as shown on Schedule "A" hereto.

19.06    "Building  Operation and Maintenance Costs" means all of the Landlord's
costs,  charges and expenses for  operating,  maintaining,  managing,  repairing
(excluding repairs of a structural nature),  rebuilding,  inspecting,  insuring,
supervising and administering the Building including the Common Areas and Common
Facilities of the Building, if any, and includes without limiting the generality
of the foregoing:

         (a)      the cost of lighting, heating,  ventilating,  air-conditioning
                  and  supplying   water  and  other  utilities  to  the  Common
                  Facilities  and  Common  Areas,  as  aforesaid;  cleaning  and
                  janitorial  services  relating  to the  Building;  repairs and
                  replacements  to the Building  other than  structural  repairs
                  required to be carried out by the Landlord pursuant to Article
                  5.06(a)  but  including  any  changes  made  to the  Building,
                  whether  or  not   structural  in  nature,   required  by  any
                  governmental or other agencies which regulate the operation of
                  the Development, insurance premiums for any insurance required
                  or  permitted  to be carried by the  Landlord  pursuant to the
                  terms of this Lease and related only to the Building;

         (b)      an  administration  fee to the Landlord equal to fifteen (15%)
                  percent of the aggregate of the aforesaid  costs,  charges and
                  expenses; and

         (c)      depreciation,  at rates determined by the Landlord, but not to
                  exceed  the  maximum  permitted  to  the  Landlord  under  the
                  provisions of the Income Tax Act, Canada, from time to time or
                  any  legislation  substituted  therefore on the  equipment and
                  machinery  employed in operating or  maintaining  repairing or
                  replacing  the Common  Areas or the Common  Facilities  of the
                  Building,  if any, and a carrying cost at the rate of two (2%)
                  percent  above  prime,  from  time to  time,  of the  Canadian
                  chartered bank designated by the Landlord on the undepreciated
                  portion of the costs of such equipment and machinery;

and there shall be excluded from such costs the following:

         (i)      payments  of  principal  and  interest  under any  mortgage or
                  mortgages on the Development; and

         (ii)     corporate,  income,  profits or excess  profits taxes assessed
                  upon the income of the Landlord;

and there  shall be  deducted  from such costs the amount of  proceeds  actually
recovered by the Landlord  from  insurance  and relating to damage,  the cost of
repair of which was included in Building Operation and Maintenance Costs.

                                      - 20-

<PAGE>
19.07    "Commencement Date" means the first day of October 1994.

19.08    "Common  Areas" means those areas located  either in the Building or on
the Lands but not in any Other  Building,  that are not  intended  for lease and
designated (which  designation may be changed from time to time) by the Landlord
as  Common  Areas  set  aside by the  Landlord  for the  common or joint use and
benefit of the Tenant,  its  employees,  customers and other  entities in common
with others  entitled to the use and benefit of such areas in the manner and for
the purposes established or altered pursuant to the terms of this Lease.

19.09    "Common  Facilities" means the electrical,  heating,  ventilating,  air
conditioning,  plumbing and  drainage  equipment,  any music and public  address
systems,  installations  and any  enclosures  constructed  therefor,  fountains,
service  rooms,  customer  and  service  stairways,  escalators,  signs,  lamps,
standards,  public  washroom  facilities  and all  other  facilities  which  are
provided and designated (and which designation may be changed from time to time)
by the Landlord for the common or joint use and benefit of the  occupants of the
Development.

19.10    "Development"  means the Lands,  Buildings,  Other    Buildings and all
buildings and improvements existing on the Lands from time to time.

19.11    "Development   Operation  and  Maintenance  Costs"  means  all  of  the
Landlord's  costs,  charges and expenses of  operating,  maintaining,  managing,
repairing,  rebuilding,  inspecting, insuring, supervising and administering the
Development, other than the Building or any Other Building, including the Common
Areas and the Common  Facilities and include without  limiting the generality of
the foregoing:

         (a)      the cost of lighting, heating,  ventilating,  air-conditioning
                  and  supplying  water and other  utilities to the Common Areas
                  and Common Facilities; cleaning, janitorial services, snow and
                  ice removal, striping or repairing parking areas; supervising,
                  policing  and  security;  painting,  planting or  landscaping,
                  operating and maintaining the garbage compaction equipment, if
                  any; the cost of maintaining,  repairing, replacing or leasing
                  the pylon signs and public address, intercom, music, and alarm
                  systems; repairs and replacements to the Development, business
                  taxes,  place of  business  taxes  and other  taxes  levied in
                  respect thereof or fairly  attributable to the Common Areas or
                  the Common  Facilities;  insurance  premiums for any insurance
                  required or permitted  to be carried by the Landlord  pursuant
                  to the terms of this Lease other than for the  Building or any
                  Other   Building;   supplies,   personnel  wages  and  payroll
                  expenses:

         (b)      an  administration  fee to the Landlord equal to fifteen (15%)
                  percent of the aggregate of the aforesaid  costs,  charges and
                  expenses; and
                         
         (c)      depreciation,  at rates determined by the Landlord, but not to
                  exceed  the  maximum  permitted  to  the  Landlord  under  the
                  provisions of the Income Tax Act (Canada) from time to time or
                  any  legislation  substituted  therefor,  on the equipment and
                  machinery  employed in  operating,  maintaining,  repairing or
                  replacing  the  Common  Areas or the Common  Facilities  and a
                  carrying  cost at the rate of two (2%)  percent  above  prime,
                  from time to time, of the Canadian  chartered bank  designated
                  by the Landlord,  on the undepreciated portion of the costs of
                  such equipment and machinery;

and there shall be excluded from such costs the following:


         (i)      payments of  principal  and  interest  under any  mortgage or
                  mortgages on the development;

         (ii)     corporate,  income,  profits or excess  profits taxes assessed
                  upon the income of the Landlord; and

         (iii)    Building Operation and Maintenance Costs; 

and there  shall be  deducted  from such costs the amount of  proceeds  actually
recovered by the Landlord  from  insurance  and relating to damage,  the cost of
repair of which was included in Development Operation and Maintenance costs.

19.12  "Force  Majeure"  means any cause  beyond  the  control  of the  Landlord
delaying,  hindering  or  preventing  the  Landlord  from  performing  any term,
covenant or act required  hereunder and,  without limiting the generality of the
foregoing,  includes lock-outs  (including  lock-outs decreed or recommended for
its members by a recognized contractors'  association of which the Landlord is a
member or to which the Landlord is otherwise bound),  strikes,  labour disputes,
inability to procure  materials or services,  restrictive  governmental  laws or
regulations, fire, act of God, riots, insurrection, sabotage, rebellion and war.

19.13  "Gross  Leaseable  Area" means the  aggregate  floor area  (expressed  in
square meters or square feet),  from time to time,  determined by the Landlord's
Architect  of all  premises  leased to or  intended  to be leased to tenants and
located within the area to which the measurement is being applied.

                                     - 21 -
<PAGE>
19.14    "HVAC Costs" includes with respect to the Building:

         (a)      all  of  the  Landlord's   costs,   charges  and  expenses  of
                  operating,  maintaining,  managing,  replacing,  repairing and
                  supervising  the  apparatus for heating,  ventilating  and air
                  conditioning  installed  in the  Building,  from time to time,
                  other  than those part of such  apparatus  installed  by or on
                  behalf of the Tenant or any other tenant (the "HVAC  System");
                  and

         (b)      an  administrative  fee equal to fifteen  (15%) percent of the
                  total of the  costs,  charges  and  expenses  incurred  by the
                  Landlord under the preceding provision of this definition;

19.15    "Landlord's Architect" means an architect or engineer from time to time
selected  by the  Landlord  for the  purpose  of  making  any  certification  or
determination in accordance with the terms of this Lease.

19.16    "Landlord's Work" means the work specified in Schedule "B" hereto.

19.17    "Lands"  means  those  lands  located in the City of  Richmond,  in the
Province of British Columbia legally described as:

          Firstly:  Parcel Identifier 003-406-385 and 003-406-407
                    Lots l and 2                                 
                    Section 32                                   
                    Block 5 North, Range 5 West                  
                    New Westminster District, Plan 71192         
                    
          Secondly: Parcel Identifier 006-280-595        
                    Lot B, Section 32,                   
                    Block 5 North, Range 5 West,         
                    New Westminster District, Plan 73672 
                                                         
          Thirdly:  Parcel Identifier 003-473-392           
                    Lot 7, Section 32,                      
                    Block 5 North, Range 5 West             
                    New Westminster District, Plan 64718    
                    


19.18    "Lease" means this agreement,  including any and all schedules attached
hereto as the same may be amended from time to time.

19.19    "Lease  Year" means each  calendar  year in which a portion of the Term
falls,  provided that the Landlord, if it deems the same convenient or necessary
for its  accounting  purposes,  may,  from time to time, by notice to the Tenant
alter the Lease Year to any other twelve (12) month period in which a portion of
the Term falls by specifying  an annual date,  being the first day of a calendar
month,  upon which a subsequent  Lease Year is to commence and in such event the
current Lease Year shall terminate on the day preceding the specified date.

19.20    "Leased Premises" means that portion of the Building outlined in red on
Schedule "A" hereto, subject to such minor variations as may occur in the course
of construction of the Building by the Landlord.

19.21    "Other Buildings" means any building or buildings existing on the Lands
from time to time  containing  premises that are leased or intended to be leased
to tenants, but excluding the Building.

19.22    "Permitted Use" means the use set forth in Basic Term .03.

19.23    "Prime Rate" means the rate of interest expressed as an annual rate, at
the relevant time or times,  determined by the Toronto-Dominion Bank at its main
branch in Vancouver, British Columbia, as a reference rate for commercial demand
loans to its major commercial  borrowers determined in Canadian dollars and made
by such bank in Canada and adjusted from time to time.

19.24 "Real  Property  Taxes" means all  general,  special,  local  improvement,
school and other taxes,  levies,  rates and charges levied,  assessed or imposed
against the Development or any part thereof and all business taxes, assessments,
rates and levies,  including any corporation  capital tax,  levied,  assessed or
imposed on the  Landlord  in  respect  of the  ownership  or  management  of the
Development by municipal or other  governmental  authority having  jurisdiction,
whether of a nature now or hereafter levied, assessed or imposed,  together with
the cost to the Landlord of  contesting,  appealing or  negotiating  the same in
good faith but  excluding  those  taxes and fees of the Tenant or other  tenants
referred to in Article 10.01 hereof.

19.25     "Rent" means Basic Rent and Additional Rent.

19.26     "Tax Cost" means the cost of Real Property Taxes.

19.27     "Tenant's Proportionate Share" means:

                                     - 22 -


<PAGE>


         (a)      in  relation  to each of Building  Operation  and  Maintenance
                  Costs  and  HVAC  Costs  the  proportion  that the Area of the
                  Leased  Premises  is  of  the  Gross  Leaseable  Area  of  the
                  Building; and

         (b)      in relation to Development  Operation and  Maintenance  Costs,
                  and Tax  Cost, the  proportion  that  the  Area of the  Leased
                  Premises is  of the  Gross Leaseable Area of the Development.

19.28    "Tenant's Work" has the meaning set out in Article 3.01 hereof.

19.29    "Term" means the term of the Lease, as set out in Basic Term 0.4.

19.30    "Year of the Term" means each  successive  twelve (12) month  period of
the Term, the first of which commences on the Commencement Date.



                                   ARTICLE 20
                                Special Clauses

20.01    Early Occupancy

         For the period  commencing  September 1, 1994 and ending the day before
the Commencement Date the Tenant shall be permitted to conduct its business in a
portion of the Leased Premises,  being  approximately  1,500 square feet. During
such  period the Tenant  shall pay to the  Landlord in respect of the portion so
used as Rent,  $1,113.75 per month and all other  provisions of this Lease shall
be applicable.

20.02    Delayed Occupancy

         If the Tenant has not  completed the Tenant's Work and occupancy of the
Leased  Premises  is  delayed  due to the  Landlord's  failure to  complete  the
Landlord's Work then Basic Rent and Additional Rent shall abate until sixty (60)
days' following the completion of the Landlord's Work.

20.03    Tenant Improvement Allowance

         Provided  the  Tenant  has  executed  this  Lease  the  Landlord  shall
contribute  a sum  equal  to $7.50  per  square  foot of the Area of the  Leased
Premises (the "Allowance") toward the leasehold improvements  constructed in the
Leased  Premises.  Payment  of the  Allowance  shall  be based  upon the  Tenant
providing bona fide paid invoices to the Landlord evidencing the Tenant spent at
minimum $95,000.00 on leasehold improvements constructed in the Leased Premises.
The Landlord shall pay the Allowance to the Tenant within five (5) business days
of receipt of such paid invoices.

         The parties  agree that the Tenant  shall  re-pay to the  Landlord  the
Allowance  amortized  over five (5)  years at an  interest  rate of ten  percent
(10%),  being equal to  $15,200.00  per annum in equal  monthly  instalments  of
$1,266.67  each in  advance  on the first day of each  calendar  month  from the
Commencement  Date,  based on a rate of $1.90 per square foot of the Area of the
Leased  Premises  per annum.  It is further  agreed  that at any time during the
Term,  the Tenant may, at its sole option,  re-pay the  Allowance in full to the
Landlord without penalty.

                                     - 23 -

<PAGE>

20.04    Deposit

         A deposit in the sum of $15,755.60  (the "Deposit) has been paid by the
Tenant to Royal LePage Real Estate  Services  Ltd. The Deposit shall be retained
by Royal LePage Real Estate Services Ltd. with interest accruing to the Tenant's
benefit  until the  Commencement  Date.  On the  Commencement  Date the Deposit,
including the accrued interest,  shall be transferred to the Landlord to be held
without  liability  for interest  and applied by the  Landlord  against the Rent
(including  Goods and Services Tax) first  accruing due during the Term with the
balance to be held without liability for interest as a security deposit.  If the
Tenant fails to take  possession of the Leased Premises within fifteen (15) days
of the Leased Premises being ready for occupancy,  the Landlord may, at its sole
option,  terminate  this Lease,  whereupon  the Deposit shall be retained by the
Landlord as liquidated damages and not as a penalty.

         IN WITNESS  WHEREOF the parties  hereto have executed this agreement by
their respective duly authorized officers in that behalf, as of the day and year
first above written.

BENTALL PROPERTIES LTD.                   ) 
                                          ) 
                                          ) 
Per:         /s/ Timothy P. Hogan         ) 
------------------------------------------) 
Authorized Signatory                      ) 
                                          ) 
                                          ) 
Per:        /s/ Don Weber                 )  
------------------------------------------)
Authorized Signatory                      )


THE CORPORATE SEAL of                     )
WESTMINSTER MANAGEMENT CORPORATION        )
was hereunto affixed in the presence of:  )
                                          )
           /s/ David Greenwood            ) 
------------------------------------------) 
Authorized Signatory                      ) 
                                          ) 
                                          ) 
          /s/ Evangeline Brightman        )  
------------------------------------------)
Authorized Signatory                      )

THE CORPORATE SEAL of                     )
APPLIED VASCULAR ENGINEERING CANADA, INC. )
was hereunto affixed in the presence of:  )
                                          )
         /s/ Creg W. Dance                ) 
------------------------------------------) 
Authorized Signatory                      ) 
                                          ) 
                                          ) 
                                          ) 
------------------------------------------)
Authorized Signatory                      )

                                     - 24 -

<PAGE>

                                 SCHEDULE "A**

                              PLAN OF THE PREMISES

                               MAP OF BUILDING 5
                          KNIGHTSBRIDGE BUSINESS PARK

                                     - 25 -


<PAGE>



                                  SCHEDULE "B"

                                LANDLORD'S WORK

         The Landlord shall be solely  responsible for the demising wall and the
preparation of electrical services.

                                     - 26 -

<PAGE>

                                  SCHEDULE "C"

Attached to and forming part of the Lease dated the 10th day of AUGUST, 1994.

BETWEEN:

                          BENTALL PROPERTIES LTD. and
                          WESTMINSTER MANAGEMENT CORPORATION

                          (the "Landlord")

AND:

                          APPLIED VASCULAR ENGINEERING CANADA INC.

                          (the "Tenant")

1.   Signs may be illuminated  with the Landlord's  approval but in no case will
     they be allowed to flash or rotate.

2.   The use of any  electronic  signage or other form of reader  board  signage
     shall be approved at a  preliminary  design  stage with the  Landlord.  All
     signage  must be  approved  by the  Landlord at the time of approval of the
     final design of the Leased Premises.

3.   The Building may have a free standing "suit case" sign provided by Landlord
     to identify  building only. No other form of free standing signage shall be
     allowed.

4.   Signs featuring general advertising shall not be permitted.

5.   Free standing roof signs shall not be permitted.

6.   Signs  affixed  to  fascias  shall not  protrude  above the roof level of a
     building nor the upper level of the fascia to which they are  attached.  No
     external supporting structures shall be visible.

7.   Signs may include  the  registend  trademark  or symbol of a company if the
     signage  complies  with  the  intent  of  these  guidelines,  and is to the
     Landlord's satisfaction.

8.   The  Tenant  reserves  the  right to  identify  itself  and its  associated
     companies on a sign  supplied by the Tenant above the front office  windows
     at a location to be mutually  agreeable  to the Landlord and the Tenant and
     the size,  type and style of the sign shall be subject to the  approval  of
     the Landlord.

                                     - 27 -

<PAGE>

                                  SCHEDULE "D"

                             INTENTIONALLY DELETED

                                     - 28 -


<PAGE>

                                  SCHEDULE "E"

                            ENVIRONMENTAL COVENANTS

1.   Definitions

     In this Schedule:

         "Hazardous Substance" means:

         (a)      any radioactive material;

         (b)      any explosive;

         (c)      any substance  that,  if added to any water,  would degrade or
                  alter or form part of a process of  degradation  or alteration
                  of the  quality  of  that  water  to  the  extent  that  it is
                  detrimental to its use by man or by any animal, fish or plant;

         (d)      any solid,  liquid, gas or odour or combination of any of them
                  that,  if emitted into the air,  would create or contribute to
                  the creation of a condition of the air that:

                  (i)      endangers the health, safety or welfare of persons or
                           the health or animal life;

                  (ii)     interferes with normal enjoyment of life or property;
                           or

                  (iii)    causes damage to plant life or to property;

         (e)      any toxic substance;

         (f)      any substance declared to be hazardous or toxic under any Law,
                  Regulation  or  Order  (as  defined  below)  now or  hereafter
                  enacted or promulgated by any  governmental  authority  having
                  jurisdiction  over  the  Landlord,   the  Tenant,  the  Leased
                  Premises or the  Development of which the Leased Premises form
                  a part; and

         (g)      any  other  substance  which  is  or  may  become   hazardous,
                  dangerous or toxic to persons or property;

         "Laws" means all applicable federal,  provincial,  state, municipal, or
         local  laws,  by-laws,  statutes,  or  ordinances,  including,  without
         limitation,  the following:  the Canadian Environmental Protection Act,
         the British  Columbia Waste  Management Act and other  applicable  laws
         relating to the environment, occupational safety, product liability and
         transportation;

         "Regulations"  mean  all  rules,  regulations  or the like  promulgated
         under or pursuant to any Laws; and

         "Orders" mean all applicable orders, decisions, or the like rendered by
         any ministry, department or administrative or regulatory agency.

2.   Tenant's Covenant as to Use

     Without limiting the generality of the covenants of the Tenant in the Lease
     contained including Basic Term .03 thereof, the Tenant covenants and agrees
     that the Tenant will not bring upon the Leased Premises or any part thereof
     any  Hazardous  Substances  if at any time,  notwithstanding  the foregoing
     covenant of the Tenant,  there shall be any Hazardous  Substances  upon the
     Leased Premises or a part thereof  whether or not brought  thereupon by the
     Tenant, the Tenant shall, at its own expense:

     (a) immediately give the Landlord notice specifying the nature and location
         of the Hazardous  Substances and thereafter give the Landlord from time
         to time  written  notice  of the  extent  and  nature  of the  Tenant's
         compliance with the following provisions of this paragraph;


     (b) promptly remove the Hazardous  Substances from the Leased Premises in a
         manner which conforms with all Laws,  Regulations and Orders  governing
         the  movement  of the  same  and  the  reasonable  requirements  of the
         Landlord in connection with the movement; and

     (c) if requested by the  Landlord,  obtain at the Tenant's cost and expense
         from an independent  consultant  designated or approved by the Landlord
         verifying  the  complete  and proper  removal  thereof  from the Leased
         Premises  or, if such is not the case,  reporting  as to the extent and
         nature of any failure to comply with the  foregoing  provisions of this
         paragraph.

                                     - 29 -
<PAGE>

3.   Compliance with Laws

     Without limiting the generality of the covenants of the Tenant in the Lease
     contained including Section 4.09 thereof, the Tenant shall, at its own cost
     and expense, comply with all Laws, Regulations and Orders from time to time
     in force relating to the Landlord,  the Tenant, the business of the Tenant,
     the Leased Premises or the Development relating to Hazardous Substances and
     the protection of environment and shall  immediately give written notice to
     the Landlord of the  occurrence  of any event in the Leased  Premises or on
     the Development or a contravention thereof and, if the Tenant shall, either
     alone or with others, cause the occurrence of such event, the Tenant shall,
     at its own expense:

     (a) immediately  give  the  Landlord  notice  of  the  occurrence  and  the
         contravention  and  thereafter  give  the  Landlord  from  time to time
         written notice of the extent and nature of the Tenant's compliance with
         the following provisions of this paragraph;

     (b) promptly remedy the  contravention  in a manner which conforms with all
         Laws, Regulations and Orders governing the movement of the same; and

     (c) if requested by the  Landlord,  obtain at the Tenant's cost and expense
         from an independent  consultant  designated or approved by the Landlord
         verifying the complete and proper remedying of the contravention or, if
         such is not the case,  reporting  as to the  extent  and  nature of any
         failure to comply with the foregoing provisions of this paragraph.

     The  Tenant  shall,  at its own  expense,  remedy  any damage to the Leased
     Premises  and the  Development  caused  by such  event  within  the  Leased
     Premises  or by the  performance  of the  Tenant's  obligations  under this
     paragraph as a result of such occurrence. If the Tenant fails to do so, the
     Landlord may at its option remedy the damage,  and may recover its cost and
     expenses of so doing from the Tenant as additional rental under the Lease.

     If  any  governmental  authority  having  jurisdiction  shall  require  the
     clean-up of any Hazardous Substances held, released,  spilled, abandoned or
     placed upon the Leased  Premises or the  Development  or released  into the
     environment  by the Tenant in the course of the  Tenant's  business or as a
     result of the Tenant's use or  occupancy of the Leased  Premises,  then the
     Tenant shall, at its own expense,  prepare all necessary studies, plans and
     proposals  and submit the same for  approval,  provide  all bonds and other
     security required by governmental authorities having jurisdiction and carry
     out the work  required  and shall  keep the  Landlord  fully  informed  and
     provide to the Landlord full information with respect to the proposed plans
     and comply with the Landlord's reasonable requirements with respect to such
     plans.  The  Tenant  agrees  that if the  Landlord  determines,  in its own
     discretion,  that the Landlord, its property or its reputation is placed in
     any jeopardy by the  requirement for any such work, the Landlord may itself
     undertake  such work or any part  thereof  at the cost and  expense  of the
     Tenant.

4.   Enquiries by Landlord

     The Tenant hereby  authorizes  the Landlord to make  enquiries from time to
     time of any government or governmental  agency with respect to the Tenant's
     compliance with any and all laws and regulations  pertaining to the Tenant,
     the Tenant's business and the Leased Premises  including without limitation
     Laws,  Regulations  and Orders  pertaining to Hazardous  Substances and the
     protection of the environment; and the Tenant covenants and agrees that the
     Tenant  will  from  time to  time  provide  to the  Landlord  such  written
     authorization as the Landlord may reasonably require in order to facilitate
     the obtaining of such information.

                                     - 30-

<PAGE>

5.   Event of Default

     The presence of any Hazardous Substances in the Leased Premises without the
     prior written  approval of the Landlord shall be considered to be a default
     for the purposes of the Lease.

6.   Ownership of Hazardous Substances

     If the Tenant  shall  bring or create  upon the  Development  or the Leased
     Premises any Hazardous Substance or if the conduct of the Tenant's business
     shall cause thereto be any Hazardous  Substance upon the Development or the
     Leased Premises then, notwithstanding any rule of law to the contrary, such
     Hazardous  Substance shall be and remain the sole and exclusive property of
     the Tenant and shall not become the  property of  Landlord  notwithstanding
     the degree of affixation of the Hazardous Substance or the goods containing
     the  Hazardous  Substance  to the Leased  Premises or the  Development  and
     notwithstanding the expiry or earlier termination of this Lease.

7.   Survival of Covenants

     The obligations of the Tenant  hereunder  relating to Hazardous  Substances
     shall  survive  the expiry or earlier  termination  of this Lease save only
     that,  to the extent that the  performance  of those  obligations  requires
     access to or entry upon the Leased  Premises or the Development or any part
     thereof, the Tenant shall have such entry and access only at such times and
     upon  such  terms  and  conditions  as the  Landlord  may from time to time
     specify; and the Landlord may, at the Tenant's cost and expense,  itself or
     by  its  agents,  servants,  employees,   contractors  and  subcontractors,
     undertake the  performance  of any necessary work in order to complete such
     obligations  of the Tenant;  but having  commenced  such work, the Landlord
     shall have no obligation to the Tenant to complete such work.

8.   Right to Use Hazardous Substances

     Notwithstanding  anything to the contrary herein or in the Lease contained,
     the  Landlord   acknowledges  and  agrees  that  the  Tenant  uses  certain
     substances  and  materials  in the conduct of the Tenant's  business  which
     would  be  considered  Hazardous  Substances  hereunder.  Accordingly,  the
     Landlord  hereby  consents  and agrees to the  presence  of such  Hazardous
     Substances  upon the  Development  and the Leased  Premises,  provided  the
     following conditions are met:

     (a) the Tenant  shall only bring upon the  Development  and upon the Leased
         Premises such Hazardous  Substances as are reasonably  required for the
         conduct of its  business  operations  within the Leased  Premises,  and
         shall  forthwith  remove  from the  Development  and  from  the  Leased
         Premises any Hazardous Substances which are no longer required for such
         business operations;

     (b) under no  circumstances  will the Tenant use the Leased Premises or any
         portion thereof to stockpile or warehouse Hazardous  Substances,  other
         than in such  reasonable quantities as may be required for its business
         operations within the Leased Premises;

     (c) the Tenant  will  comply  fully with all Laws,  Regulations  and Orders
         related  to  the  transportation,  storage,  use  and  disposal  of all
         Hazardous  Substances  so brought  upon the  Development  or the Leased
         Premises by the Tenant; and

     (d) save for the right to bring  Hazardous  Substances upon the Development
         and the Leased Premises for use as aforesaid, the Tenant shall be bound
         by all of the other terms and  conditions of this  Schedule  including,
         without  limitation,  the obligation to remedy any damage to the Leased
         Premises or to the Development  caused by the Tenant's  exercise of its
         rights hereunder.                                         

                                     - 31 -