<PAGE>

                                                                    Exhibit 10.3

                                     LEASE

THIS LEASE is made as of the 1st day of May, 2002.

BETWEEN:

          HALLMARK HOLDINGS LTD., a body corporate, incorporated
          under the laws of the Province of British Columbia, having
          its registered office at 2100 - 1075 West Georgia Street,
          Vancouver, British Columbia, V6E 3G2

          (the "Landlord")

                                                               OF THE FIRST PART

AND:

          GLAS-AIRE INDUSTRIES LTD., a British Columbia company
          having its registered and records office at 3137 Grandview
          Highway, Vancouver, British Columbia, V5M 2E9

          (the "Tenant")

                                                              OF THE SECOND PART

WITNESSES:

A. Demise and Habendum

In consideration of the rents reserved and the covenants herein contained on the
part of the Tenant, the Landlord hereby demises to the Tenant the building
comprising approximately 52,080 square feet of office and warehouse space as
shown outlined in red on the plan attached hereto as Schedule "A" (the
"Building") situated at 7791 Alderbridge Way, in the City of Richmond, in the
Province of British Columbia, and located on those lands being legally described
as:

          Parcel Identifier: 003-645-592
          Lot 76, Section 5
          Block 4 North, Range 6 West and
          Section 32, Block 5 North Range 6 West
          New Westminster District
          Plan 36115

          (The "Lands")
<PAGE>

                                      -2-

B. Term and Early Occupancy

To hold the Building for the term of seven (7) years (the "Term") from and
including the 1st day of May, 2002 (the "Commencement Date"), to and including
the 30th day of April, 2009.

Notwithstanding the foregoing, upon receipt of the security deposit and provided
that the Tenant has executed this Lease, the Tenant shall be permitted to have
access to the Building so that the Tenant may commence the installation of its
leasehold improvements to the Building (the "Early Occupancy Period"). The
Tenant shall be responsible for payment of additional rent, administration and
management fee during the Early Occupancy Period provided that the Tenant shall
not be responsible for payment of minimum rent until the Commencement Date.

C. Rent

The Tenant paying minimum rent therefor during the Term to the Landlord, without
deduction, abatement or set-off whatsoever, in lawful money of Canada payable in
equal monthly instalments on the 1st day of each and every month during the Term
as follows:

<TABLE>
<CAPTION>
         --------------------------------------------------------
                      Per Square
           Year       Foot         Per Month      Per Annum
         --------------------------------------------------------
         <S>          <C>          <C>            <C>
            1         $5.25        $22,785.00     $273,420.00
         --------------------------------------------------------
            2         $5.25        $22,785.00     $273,420.00
         --------------------------------------------------------
            3         $5.50        $23,870.00     $286,440.00
         --------------------------------------------------------
            4         $5.50        $23,870.00     $286,440.00
         --------------------------------------------------------
            5         $5.50        $23,870.00     $286,440.00
         --------------------------------------------------------
            6         $5.75        $24,955.00     $299,460.00
         --------------------------------------------------------
            7         $5.75        $24,955.00     $299,460.00
         --------------------------------------------------------
</TABLE>

AND FURTHER PAYING THEREFOR to the Landlord as additional rent the money and
other charges, costs and expenses herein provided to be paid by the Tenant at
the several times when they become payable. The Landlord may reasonably estimate
such money, charges, costs and expenses from time to time for such period as the
Landlord may reasonably determine and the Tenant shall pay to the Landlord such
amount in monthly instalments in advance during such period on the first day of
each month and the Landlord may from time to time revise such estimate and the
Tenant shall make payments pursuant to such revised estimate upon notice
thereof.

In this Lease the phrase "Year of the Term" means in the case of the first Year
of the Term, that period of time beginning on the Commencement Date and ending
at 11:59 p.m. on that day which is a full 12 consecutive months thereafter, and
each subsequent Year of the Term shall be calculated and determined in the same
manner.  Unless the contrary intention is set forth in this Lease, each year in
this Lease shall be calculated in the manner described in the foregoing
sentence.

It is agreed that at the end of each Year of the Term or any renewal thereof,
the aggregate of such monthly charges paid by the Tenant during the relevant
Year of the Term shall be adjusted appropriately by the Landlord on the basis of
the total amount actually payable by the Tenant for
<PAGE>

                                      -3-

such Year of the Term (or, if applicable, for a portion of the year should the
rent payable during the Term of this Lease commence on any day other than the
first day of the Year of the Term or end on any day other than the last day of a
Year of the Term, in which case Additional Rent for the fractions of any month
at the commencement and at the end of the Term shall also be adjusted pro rata)
                                                                      --- ----
pursuant to this Lease with any resulting excess or deficiency being payable
respectively by the Landlord to the Tenant within one hundred and eighty (180)
days after the end of the Year of the Term then in review, or if applicable, by
the Tenant to the Landlord as Additional Rent promptly upon demand.

Within 120 days of the end of each Year of the Term or any renewal thereof the
Landlord shall, upon written request at the end of any such year, provide to the
Tenant a statement of the actual costs paid or payable by the Tenant as
Additional Rent in respect of that year, in accordance with this Lease. The
statement must show in reasonable detail the information relevant and necessary
to the exact calculation of these amounts and the allocation of the Additional
Rent amounts among the lessees of the Lands. The Tenant shall be entitled to
inspect the Landlord's books, accounts and records solely as they pertain to
such costs, and, at the Tenant's option in the event of a dispute concerning the
accuracy of the amount or allocation of the expenses comprising Additional Rent
paid or payable by the Tenant the Tenant may have an independent audit by an
accredited public accountant made of same. Any such inspection or audit shall be
carried out at reasonable times, by appointment with reasonable notice and with
professional diligence and courtesy extended by, and to, all parties involved.
Any errors revealed by such audit, as evidenced by the auditor's professional
opinion, shall be adjusted immediately save and except as provided for elsewhere
herein, and if the dollar amount of the error results in a reduction of the
amount of Additional Rent paid or payable by the Tenant equal to or greater than
five percent (5%) of the most recent amount of Additional Rent stated by the
Landlord to be paid or payable prior to such audit, then the Landlord shall pay
the cost for the audit to the extent that such cost is reasonable.
Notwithstanding the foregoing, the Landlord may, at its option, retain a
chartered accountant to carry out an audit of the Additional Rent records at its
expense and the professional opinion of such accountant shall be conclusive and
binding on the Tenant and the Landlord; if the Landlord elects to carry out such
audit it shall be completed without any unreasonable delay.

Notwithstanding the foregoing, the Tenant shall not be obliged to pay minimum
rent during the first three (3) months starting on the Commencement Date (the
"Free Rent Months") provided that all other terms and conditions of this lease
including payment of additional rent, administration and management fee shall
apply during the Free Rent Months.

For the purposes of this Agreement, minimum rent and additional rent shall be
collectively referred to herein as "Rent" and the Tenant's Proportionate Share
shall be deemed to be fifty-five (55.00%) percent.

D. Place and Manner of Payment

All payments by the Tenant under this Lease shall be made to the Landlord at the
Landlord's office at 2100- 1075 West Georgia Street, Vancouver, British
Columbia, V6E 3G2 or to such agent of the Landlord or at such other place as the
Landlord shall hereinafter from time to time in writing direct.
<PAGE>

                                      -4-

At the request of the Landlord, the Tenant shall provide the Landlord with post-
dated cheques for the ensuing twelve month period, each cheque to be in the
amount of the monthly instalments of Rent payable hereunder, including the
amount of additional rent estimated as aforesaid, or, in the alternative,
provide the Landlord with a signed pre-authorized withdrawal form directed to
the financial institution at which the Tenant regularly keeps a chequing
account.

E. Use of Premises

The Tenant shall use the Building for the purpose of manufacturing and
distribution of acrylic automotive accessories and other manufacturing as may be
necessary and related general office use, all in accordance with the City of
Richmond zoning regulations and business licence requirements, and shall not use
the Building for any other purpose without the prior written consent of the
Landlord, which consent shall not be unreasonably withheld.

1.   TENANT'S COVENANTS

THE TENANT COVENANTS WITH THE LANDLORD AS FOLLOWS:

     (a)  Payment of Rent

          To pay Rent.

     (b)  Payment of Business Taxes

          (i)  In every year of the Term, to pay when due the business taxes
               levied in respect of the occupancy of the Building by the Tenant
               and in respect of the Tenant's fixtures and improvements, and if
               such business taxes are assessed against the Landlord, to pay the
               said taxes to the Landlord as additional rent within five (5)
               days after it has been demanded in writing provided that the
               Tenant shall have the right to contest by appropriate legal
               proceedings the validity of any business taxes, assessment or
               other charges referred to in this clause; and if the payment of
               any such business taxes, assessment or other charge may be
               legally held in abeyance without subjecting the Landlord or the
               Tenant to any liability for failure to pay it, the Tenant may
               postpone such payment until the final determination, if any, of
               such proceedings, but shall prosecute such proceedings with all
               due diligence;

     (C)  Taxes

          To pay to the Landlord monthly as additional rent:

          (i)  The Tenant's Proportionate Share of all charges, taxes, rates,
               duties and assessments whatsoever, whether municipal,
               parliamentary or otherwise, charged, levied, rated or assessed
               against the Lands, or any part thereof, and any equipment,
               facilities, installations, and improvements now or at any time
               during the Term made in or brought on the Lands or against the
               Landlord on account thereof, and including (but without
               restricting the
<PAGE>

                                      -5-

                 generality of the foregoing) realty taxes and municipal taxes
                 for local improvements for works assessed or charged against
                 the Lands and any similar taxes not now in existence or
                 contemplated but levied at any time during the Term by any
                 competent government or municipal body in addition to, or in
                 lieu of, the taxes, rates, duties and assessments hereinbefore
                 referred to, and all taxes on Rent or other taxes imposed on
                 the Landlord in respect of the Rent payable to the Landlord by
                 the Tenant or in respect of the rental of the Building by the
                 Tenant but excluding taxes on the income or capital of the
                 Landlord, and provided that the Tenant shall have the right to
                 contest by appropriate legal proceedings the validity of any
                 tax, rate (including local improvement rates), assessment or
                 other charges referred to in this clause; and if the payment of
                 any such tax, rate, local improvement rate, assessment or other
                 charge may be legally held in abeyance without subjecting the
                 Landlord or the Tenant to any liability for failure to pay it,
                 the Tenant may postpone such payment until the final
                 determination, if any, of such proceedings, but shall prosecute
                 such proceedings with all due diligence;

          (ii)   If the taxes in respect of the Lands, or any part thereof,
                 shall be increased by reason of any installations in or
                 alterations made to the Building by the Tenant, the amount of
                 such increase to the extent that such amount is not included in
                 the taxes referred to in sub-paragraph (i) of this paragraph
                 (c); and

          (iii)  On the first day of each month during the Term an amount equal
                 to one-twelfth (1/12) of the sum estimated by the Landlord to
                 be payable by the Tenant under paragraph 1(b) and 1(c) for the
                 ensuing Year of the Term. Any amount payable by the Tenant
                 under this sub-paragraph (iv) and unpaid after five (5) days
                 shall be recoverable by the Landlord as if it were Rent in
                 arrears.

     (d)  Services and Utilities

          To pay as they become due all charges for public services and
          utilities, including water, gas, electrical power or energy, steam or
          hot water used upon or in respect of the Building and for fittings,
          machines, apparatus, meters or other things leased in respect thereof,
          and for all work or services performed by any corporation or
          commission in connection with such public services and utilities.

     (e)  Repairs to Building

          To carry out promptly at its own expense all repairs, maintenance and
          painting of the Building including all machinery and equipment
          therein, so as to keep the Building in as good a state of repair and
          condition as it is in when this Lease commences (reasonable wear and
          tear excepted and excepting any items which are the responsibility of
          the Landlord pursuant to this Lease), and to repair and maintain the
          Building or any part thereof, including the Landlord's Work, and
<PAGE>

                                      -6-

          without limiting the generality of the foregoing, to repair and
          maintain the interior of the Building, the roof, water, sewer and gas
          connections, wiring, sprinkler system, pipes and water mains, and all
          other fixtures, machinery, facilities and equipment belonging to or
          connected to the Building, or any part thereof, and used in its
          operation, but excepting any repairs necessary to correct structural
          defects including the roof and roof membrane, foundations, bearing
          structures, structural elements, subfloors, and roof structures and
          supports of the Building, and excepting deficiencies in the Landlord's
          Work provided the Landlord receives notification within three months
          of completion of such work, all of which excepted items shall be the
          responsibility of the Landlord to repair, replace, reconstruct or
          rebuild at no cost to the Tenant unless made necessary by the
          negligence of the Tenant or those for whom the Tenant is responsible
          at law; PROVIDED that notwithstanding any other provision in this
          Lease to the contrary the Tenant shall not be responsible for any roof
          repair expense or expenses which in accordance with accounting
          principles generally accepted in British Columbia are capital in
          nature and are in excess of an aggregate of $5,000 in any Year of the
          Term unless made necessary by the negligence of the Tenant or those
          for whom the Tenant is responsible at law; and further PROVIDED that
          if repairs, replacements, rebuilding or reconstruction should become
          necessary, the Tenant, before commencing or authorizing any work in
          that respect, shall submit the plans and specifications therefor,
          prepared by an architect or engineer approved by the Landlord, to the
          Landlord for its approval to ensure such work is in conformity with
          the design, layout and character of the Building and with the original
          plans and specifications thereof, and comply with all applicable by-
          laws and regulations of all competent authorities, and forthwith after
          such approval has been obtained the Tenant shall proceed at its own
          expense with such work, repairs, replacement, rebuilding or
          reconstruction with all reasonable speed and shall complete it
          strictly in accordance with such approved plans and specifications;
          but if the Tenant defaults under the provisions of this paragraph, the
          Landlord may proceed with such repairs and maintenance and the Tenant
          shall pay all costs and expenses incurred by the Landlord in so doing
          and such costs and expenses shall be recovered from the Tenant as if
          they were Rent in arrears under this Lease.

          On or about the beginning of the Fourth Year of the Term of this
          Lease, if necessary, at the Landlord's sole discretion, the Landlord
          will repaint the Building at the Tenant's expense as provided in this
          paragraph.

     (f)  Delivery up of Possession

          At the expiration or sooner determination of the Term, to surrender
          the Building peaceably to the Landlord in good and substantial repair
          and condition, reasonable wear and tear excepted, together with all
          installations or erections which at any time during the Term shall be
          made therein or thereon (but excluding the Tenant's trade fixtures
          which shall remain the sole property of the Tenant and which shall be
          removed by the Tenant at its sole cost and expense at the expiration
          or sooner determination of the Term pursuant to clause 3(e) below).

                                       6
<PAGE>

                                      -7-

     (g)  Compliance with Insurance Regulations and By-Laws

          At its own cost and expense, to promptly comply with every applicable
          regulation or order of the regulatory body of the Landlord's insurer,
          or any body having similar functions, and of any liability or fire
          insurance company by which the Landlord or the Tenant may be insured,
          and with all the applicable laws, ordinances, and regulations of duly
          constituted public authorities having jurisdiction now or hereafter in
          any manner affecting the Building or the use or occupation thereof,
          whether or not such regulations, orders, laws or ordinances which may
          hereafter be promulgated, issued or enacted involve a change of policy
          or require changes or alterations in or about the Building.

     (h)  Nuisance

          Not to do or omit to do or permit to be done or omitted anything upon
          or in respect of the Building the doing or omission of which shall be
          or result in a nuisance.

     (i)  Assignment and Subletting

          Not to assign or sublet the Building or any part thereof without the
          consent in writing of the Landlord, such consent not to be
          unreasonably withheld or delayed, provided that:

          (i)    no assignment or subletting permitted by the Landlord shall in
                 any manner release the Tenant from any covenant to be observed
                 or performed by it hereunder;

          (ii)   the Tenant and any assignee or subtenant hereunder must, if not
                 a company incorporated under the Company Act of British
                 Columbia (the "Act"), be duly registered as an extra-provincial
                 company under the Act and authorized to carry on business
                 within the Province of British Columbia;

          (iii)  any consideration whatsoever including, without limitation, any
                 Rent or other charges in respect of the Building in excess of
                 that payable hereunder by the Tenant to the Landlord, payable
                 by an assignee or subtenant to the Tenant pursuant to any
                 permitted assignment or sublease shall be assigned by the
                 Tenant to the Landlord at the time such leave is granted;

          (iv)   the Tenant shall pay to the Landlord the Landlord's reasonable
                 legal costs incurred as a result of such assignment or
                 subletting;

          (v)    if the Tenant is a corporation, any change in control (as that
                 word is defined in the Act) of the Tenant will be deemed to be
                 an assignment provided that restrictions on assignment by way
                 of change in control shall

                                       7
<PAGE>

                                      -8-

                 not be applicable to any transfer of shares which are listed on
                 a security exchange (including, without limitation, NASDAQ)
                 regulated by governmental authority;

          (vi)   the consent by the Landlord to an assignment or sublet of the
                 Building will not constitute a waiver of its consent to a
                 subsequent assignment or subletting;

          (vii)  no consent of the Landlord shall be required in the event the
                 Tenant assigns or sublets the whole or any portion of the
                 Building to a corporation controlled by the Tenant or
                 affiliated with the Tenant, or to a corporation which controls
                 the Tenant, upon receipt of written notice from the Tenant to
                 the Landlord advising of same; provided that such approved
                 assignment or subletting shall in no way release the Tenant
                 from its obligations under this Lease or constitute a waiver of
                 the Landlord's consent to any subsequent assignment or
                 subletting.

     (j)  Landlord's Insurance

          To pay the Tenant's Proportionate Share of all premiums with respect
          to insurance to be placed by the Landlord and described as follows:

          (i)    All-risk insurance for the full replacement value of the
                 Building and any improvements and equipment thereon which are
                 the property of the Landlord;

          (ii)   Insurance against loss of rental income and rental value
                 attributable to all perils insured against by the Landlord or
                 commonly insured against by prudent landlords, including all
                 loss of Rent receivable from the Building in accordance with
                 the provisions of this Lease, in such amount or amounts as the
                 Landlord or mortgagees from time to time require;

          (iii)  Insurance protecting the Landlord against claims for personal
                 injury, death, property damage, or third party or public
                 liability claims arising from any accident or occurrence upon
                 the Building or the Lands, from any cause in an amount that the
                 Landlord within its sole discretion shall determine for
                 personal injury, death, property or other claims in respect of
                 any one accident or occurrence;

          (iv)   Plate glass insurance, provided that the Tenant shall also pay
                 to the Landlord the amount of any loss in respect of the plate
                 glass in the Building which is a deductible amount under such
                 plate glass insurance coverage and provided further that the
                 Tenant may elect to waive plate glass insurance in which event
                 the Tenant shall be responsible for and shall pay to the
                 Landlord the amount of any loss in respect of the plate glass
                 in the Building; and

                                       8
<PAGE>

                                      -9-

          (v)    Such other insurance as it is or may become customary for
                 owners of property to carry for loss of or damage to the
                 Building or the Lands or liability arising therefrom,
                 specifically including any insurance required by reason of the
                 introduction by or on behalf of the Tenant or its subtenants of
                 radio-active materials or substances into the Building or onto
                 the Lands.

          The Tenant may inspect the policies of insurance pertaining to the
          insurance placed under this paragraph.

     (k)  Insurance Premium Increase

          To pay the amount of any increase in the cost of insurance for the
          Building or the Lands if such increase is caused by the Tenant's
          operation at the Building and not to do anything that would cause the
          Building or the Lands to become uninsurable.

     (l)  Tenant's Insurance

          To take out and keep in force throughout the Term and during such
          other time as the Tenant occupies the Building or a part thereof, at
          its sole cost and expense:

          (i)    public liability insurance in the amount of FIVE MILLION
                 DOLLARS ($5,000,000.00) or such greater amount as the Landlord
                 may determine from time to time in respect of bodily injury,
                 including death, to one or more persons and property damage;

          (ii)   all risk insurance covering all the contents of the Building
                 including, but not being limited to, merchandise, inventory,
                 stock in trade, furniture, plate glass, fixtures and
                 improvements which the Tenant installs in the Building to the
                 full replacement value thereof;

          (iii)  automobile liability insurance to a limit of liability of not
                 less than FIVE MILLION DOLLARS ($5,000,000.00) in any one
                 accident, covering all licensed motor vehicles owned by the
                 Tenant and used in connection with the business carried on from
                 the Building; and

          (iv)   all other insurance in such amounts and upon such terms as
                 determined by the Landlord, its insurance advisors or its
                 mortgagee.

          The Tenant's insurance policies referred to under this paragraph (1)
          shall name the Landlord and any persons, firms or corporations
          designated by the Landlord as additional named insureds thereunder as
          their interests may appear, shall contain a waiver of all rights of
          subrogation against the Landlord and cross-liability clause protecting
          the Landlord and any other insured designated by it against claims by
          the Tenant as if the Landlord and such other insured designated by the
          Landlord were separately insured, and shall contain a clause that the
          insurer will not cancel, change or refuse to renew the insurance
          without first

                                       9
<PAGE>

                                     -10-

          giving the Landlord and insured party so designated thirty (30) days'
          prior written notice. All policies of insurance will be placed with
          insurers acceptable to the Landlord and in a form satisfactory to the
          Landlord and the Tenant will promptly deliver to the Landlord copies
          or certificates of such policies. If the Tenant fails to take out or
          keep in force any policy of insurance referred to in this paragraph
          (1), the Landlord may do so and pay the premium and in that event the
          Tenant shall pay to the Landlord the amount so paid as additional rent
          which shall be due and payable by the Tenant to the Landlord on
          demand.

     (m)  Indemnity

          To indemnify the Landlord from all liabilities, fines, suits, claims,
          demands and actions of any kind or nature for which the Landlord shall
          or may become liable or suffer by reason of any breach, violation or
          non-performance by the Tenant of any covenant, or proviso hereof, or
          by reason of any injury or death occasioned to or suffered by any
          person or persons or any property through any wilful act, or the
          negligence of the Tenant or any of its agents or employees; such
          indemnification in respect of any such breach, violation or non-
          performance, damage to property, injury or death occurring during the
          Term of this Lease shall survive any termination of this Lease,
          anything in this Lease to the contrary notwithstanding, provided that
          the Tenant's obligations to indemnify the Landlord under this
          paragraph shall exclude anything for which the Landlord is insured or
          that arise by reason of the wrongful or negligent acts or omissions of
          the Landlord or others for whom the Landlord is responsible at law.

     (n)  Not to Commit Waste

          To keep the Building, the Easement Area (as hereinafter defined) and
          the Licence Area (as hereinafter defined) and every part thereof in a
          clean and tidy condition and not to permit waste paper, garbage,
          ashes, waste, hazardous or objectionable material to accumulate
          thereon.

     (o)  Hazardous Substances

          Not to locate, create or store on the Building or the Lands and not to
          permit any of its agents, employees, suppliers, customers, invitees,
          subtenants, licensees or any other person having business with or
          under the control of the Tenant to locate, create or store on the
          Building or the Lands any Hazardous Substance in contravention of
          applicable Environmental Laws. The term "Environmental Laws" means all
          statutes, regulations, orders, bylaws, permits, standards, guidelines,
          policies, and any other laws, including the principles of common law
          and equity now or hereafter in force, applicable to the Building, or
          the Lands, relating in any way to health, occupational health and
          safety, product liability, transportation of dangerous goods, or the
          protection of people, plants, animals, or the environment.

                                       10
<PAGE>

                                      -11-

          The term "Hazardous Substance" means all substances, the storage,
          handling, transport, disposal, or release of which, in concentrations
          above prescribed standards, may necessitate, invite, or permit a
          governmental authority having jurisdiction over the Landlord, the
          Tenant or the Building, to require remedial or investigatory action
          under any Environmental Laws. If the Tenant is in breach of the
          foregoing prohibition regarding the location, creation or storage of
          Hazardous Substances, the Landlord, in addition to all other remedies
          it has under this Lease, may require the Tenant, at the Tenant's cost,
          to cause such Hazardous Substances to be removed and to cause the
          Building or the Lands, as the case may be, to be properly restored and
          repaired all in accordance with any applicable laws, bylaws, rules,
          regulations or orders. Alternatively, at its option, the Landlord may
          cause such Hazardous Substances to be removed and may repair and
          restore the Building or the Lands, as the case may be, and may cause
          its employees or agents to enter the Building for such purpose. Should
          the Landlord undertake such removal, repair or restoration, the Tenant
          shall forthwith pay to the Landlord the total cost of such removal,
          repair or restoration plus a fee equal to 10% of such cost, and the
          total of such fee and cost shall, until paid to the Landlord, bear
          interest at the rate stipulated herein for amounts in arrears and
          shall be recoverable as additional rent reserved hereunder. The Tenant
          hereby indemnifies and holds the Landlord harmless from and against
          all loss, cost, damage and expense (including, without limitation,
          legal fees on a solicitor and own client basis and costs incurred in
          the investigation, defence and settlement of claims) that the Landlord
          may incur as a result of or in connection with or arising from the
          breach of this paragraph by the Tenant or in respect of non-compliance
          by the Tenant with any federal, provincial or municipal laws, bylaws,
          rules, regulations or orders relating to Hazardous Substances. The
          provisions of this paragraph requiring the Tenant to reimburse the
          Landlord's costs, plus pay a fee of 10% of such costs, and requiring
          the Tenant to indemnify the Landlord, shall survive the termination of
          this Lease, anything to the contrary notwithstanding.

     (p)  Evidence of Payment

          To produce to the Landlord upon request satisfactory evidence of the
          due payment by the Tenant of all payments required to be made by the
          Tenant under this Lease.

     (q)  Notice of Damage

          In the event of any substantial damage to the Building or the Lands by
          any cause, to give notice in writing thereof to the Landlord forthwith
          upon becoming aware of it.

     (r)  Landlord's Right to Review

          To permit the Landlord at all reasonable times to enter upon and view
          the state of repair of the Building and to comply with all reasonable
          requirements of the Landlord with regard to the care, maintenance and
          repair thereof, to the extent
<PAGE>

                                      -12-

          that the Tenant is responsible under this Lease for such care,
          maintenance and repair.

     (s)  Building Maintenance

          Subject to the Landlord's obligations pursuant to paragraph 1(e) of
          this Lease, to pay all reasonable expenses incurred by the Landlord to
          repair, maintain and paint the Building including the exterior walls,
          windows and roof and all machinery and equipment therein, so as to
          keep the Building including the Landlord's Work, in as good a state of
          repair and condition as it is in when this Lease commences, and to
          repair and maintain all water, sewer and gas connections, wiring,
          sprinkler system, pipes and water mains and all other fixtures,
          machinery, facilities and equipment belonging to or connected to the
          Building, or any part thereof, and used in its operation.

     (t)  Grounds Maintenance

          To pay the Tenant's Proportionate Share of all expenses incurred by
          the Landlord to maintain the grounds of the Lands and including, but
          without restricting the generality of the foregoing, all reasonable
          expenses incurred by the Landlord for snow removal, landscaping, yard
          maintenance and clean-up, and repairs to concrete walks, stairs,
          asphalt and concrete paved areas, and gravel-surfaced areas.

     (u)  Administration and Management Fees

          To pay an administration and management fee equal to three (3) percent
          of the minimum rent payable by the Tenant to the Landlord, such fee to
          compensate the Landlord for its property management services and
          costs.

     (v)  Showing Building

          To permit the Landlord at any time within 180 days prior to the
          expiration of the Term hereby granted to enter upon the Building at
          all reasonable times for the purpose of offering the same for lease
          and exhibiting the same to prospective tenants and to place and keep
          upon the Building signs advertising the Building for lease.

     (w)  Damage to Premises

          That it will not bring upon the Building or any part thereof any
          machinery, equipment, article or thing that by reason of its weight,
          size or use might damage the floors of the Building and that if any
          damage is caused to the Building by any machinery, equipment, article
          or thing, or by overloading or by any act, neglect or misuse on the
          part of the Tenant or any of its servants, agents or employees or any
          person having business with the Tenant, the Tenant will forthwith
          repair such damage, at its own cost, or pay the cost of repair to the
          Landlord.
<PAGE>

                                      -13-

     (x)  Goods and Services Tax

          Notwithstanding any other provision of this Lease to pay to the
          Landlord an amount equal to any and all goods and services taxes,
          sales taxes, value added taxes, or any other taxes imposed on the
          Landlord with respect to minimum rent or additional rent payable by
          the Tenant to the Landlord under this Lease, or in respect of the
          Building under this Lease, whether characterized as goods and services
          tax, sales tax, value added tax, or otherwise (herein called "Sales
          Taxes"), it being the intention of the parties that the Landlord shall
          be fully reimbursed by the Tenant with respect to any and all Sales
          Taxes at the full tax rate applicable from time to time in respect of
          the minimum rent or additional rent for the Building, without
          reference to any tax credits available to the Landlord. The amount of
          the Sales Taxes 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
          Sales Taxes apply are 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. Notwithstanding any other provision of this
          Lease, the amount payable by the Tenant under this paragraph shall be
          deemed not to be minimum rent or additional 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 minimum rent or additional rent under
          this Lease.

     (y)  Recovery of Rent

          That whenever any amount by the terms of this Lease is payable by the
          Tenant to the Landlord, whether as additional rent or otherwise, such
          amount shall be recoverable by the Landlord in the same manner as if
          such amount were Rent in arrears under this Lease after the Landlord
          has demanded such amount be paid and the Landlord shall be entitled to
          take any action therefor in respect of Rent in arrears under the Lease
          and if the Tenant fails to pay any sum required to be paid by it under
          the provisions of this Lease to any person, firm or corporation other
          than the Landlord, the Landlord shall have the right to pay any such
          sum and to demand reimbursement of such sum from the Tenant and in
          default of reimbursement to recover it as if it were Rent in arrears
          under this Lease and the Landlord shall be entitled to take any action
          therefor which it may be entitled to take with respect to Rent in
          arrears under this Lease.

     (z)  Costs of Enforcement

          To pay and to indemnify the Landlord against all legal costs and
          charges including legal fees on a solicitor and own client basis and
          all bailiffs fees and costs of distress lawfully and reasonably
          incurred in obtaining possession of the Building after default of the
          Tenant or upon expiration or earlier termination of the Term of this
          Lease or in enforcing any covenant or agreement of the Tenant herein
          contained.
<PAGE>

                                      -14-

     (aa) Overdue Payments

          To pay to the Landlord interest at the then current rate of interest
          being charged to the Landlord by the Landlord's bank on all overdue
          payments required to be made by the Tenant under any one or more of
          the provisions of this Lease.

     (bb) Maintenance of Licence Area

          To maintain the Licence Area (hereinafter defined) including without
          restriction the generality of the foregoing snow removal, landscaping
          including planting and replanting of shrubs and plants, yard
          maintenance, the clean up and repair of concrete walk, stairs, asphalt
          and concrete paved areas and gravel surfaced areas; provided that if
          the Tenant is in default under the provisions of this paragraph the
          Landlord may proceed with such repairs, maintenance, painting,
          replacements, rebuilding or reconstruction and the Tenant shall all
          costs and expenses incurred by the Landlord in so doing and such costs
          and expenses shall be recovered by the Landlord as if they were
          minimum rent in arrears under this Lease.

2.  LANDLORD'S COVENANTS

THE LANDLORD COVENANTS WITH THE TENANT AS FOLLOWS:

     (a)  Quiet Enjoyment

          For quiet enjoyment.

     (b)  Tenant's Furniture and Equipment

          To allow the Tenant to install at the Building such furniture and
          equipment as the Tenant may require for the purpose of its business.

     (c)  Signs

          The Tenant may from time to time during the Term erect, paint,
          display, maintain, alter, change or remove signs on the exterior and
          interior of the walls, all such signs to be dignified in appearance,
          approved in writing by the Landlord acting reasonably and without
          delay as to dimensions, type and location, and to comply with the
          requirements of municipal and governmental authorities; and the
          Landlord in approving such sign shall have regard to:

          (i)   the aesthetic appeal of the Building;

          (ii)  the need, as a primary purpose to identify and not to advertise
                the Tenant; and

          (iii) the necessity on a multiple occupancy site for all signs to be
                complementary and not to detract from each other.
<PAGE>

                                      -15-

          The signs shall remain the property of the Tenant and shall be removed
          by it on the termination of the Term hereby granted. Upon removal of
          any such signs the Building shall be restored to its original
          condition at the Tenant's cost, except for reasonable wear and tear.
          The Tenant shall indemnify the Landlord against any loss or damage
          caused to any person or property as a result of the placing, use or
          removal of any sign on the Building.

     (d)  Parking

          The Landlord hereby grants to the Tenant the licence irrevocable
          during the Term or any renewal thereof to the intent that the benefit
          of such licence may be annexed to and run with this Lease or any
          renewal lease, over the licensed area outlined in green on Schedule
          "A" hereto (the "Licence Area") for the purposes only of parking and
          loading.

     (e)  Access Easement

          The Landlord hereby grants to the Tenant an easement over the easement
          area shown outlined in blue on Schedule "A" hereto (the "Easement
          Area") to pass and repass by foot or by vehicle over said easement
          area together with the Tenant or tenants of the other building on the
          Lands.

     (f)  Tenant's Allowance

          The Landlord shall provide to the Tenant, a tenant improvement
          allowance (the "Allowance") in the amount of Sixty-Two Thousand Five
          Hundred Dollars ($62,500.00) inclusive of GST which shall be used by
          the Tenant towards non-structural partitions, location of heavy
          machinery, electrical updates including extra lighting within the
          Building.  The Landlord will reimburse the Tenant for improvement work
          done by the Tenant from the Allowance on or before thirty (30) days
          following submission to the Landlord of receipted invoices for
          completed work by the Tenant.

     (g)  Landlord's Work

          The Landlord shall construct or effect the construction of
          improvements to the Building at its sole cost and expense, as outlined
          in Schedule "B" attached to this Lease (the "Landlord's Work").

          Subject to the provisions of paragraph 3(n), the Landlord covenants
          with the Tenant to repair, rebuild, re-construct or replace as
          necessary and with all reasonable diligence to correct structural
          defects including the roof and roof membrane, foundations, bearing
          structures, subfloors, and roof structures and supports of the
          Building, and deficiencies in the Landlord's Work provided the
          Landlord receives notification within three months of completion of
          such work, at no cost to the Tenant unless made necessary by the
          negligence of the Tenant or those for whom the Tenant is responsible
          at law.
<PAGE>

                                      -16-


3.   PROVISOS

PROVIDED ALWAYS AND IT IS HEREBY AGREED AS FOLLOWS:

     (a)  Acceptance of Building

          Subject to the completion of the Landlord's Work as set forth in
          paragraph 2(g) hereof, the Tenant accepts the Building on an "as is"
          basis.

     (b)  Special Equipment

          The Tenant shall be responsible, at its sole cost and expense, for the
          installation, operation and maintenance of any special equipment
          required by the Tenant's occupancy and business at the Building.

     (c)  Subordination of Lease

          This Lease and everything herein contained shall be deemed to be
          subordinate to any charge or charges from time to time created by the
          Landlord by charge or mortgage on the Building or the Lands and the
          Tenant shall promptly at any time as required by the Landlord execute
          all documents and give such further assurances as may be reasonably
          required to postpone its rights and privileges to the holder of any
          charge or mortgage; provided that such chargeholder or mortgagee shall
          give an assurance to the Tenant in writing acceptable to the Tenant
          acting reasonably and without delay that it shall be permitted to
          continue in quiet possession of the Building in accordance with the
          terms and conditions of this Lease as long as the Tenant is not in
          default hereunder, whether such charge or mortgage is in good standing
          or not.

     (d)  Estoppel Certificate

          At any time or times at reasonable intervals and within ten (10) days
          after a written request by the Landlord, the Tenant will execute,
          acknowledge and deliver to the Landlord or such assignee or mortgagee
          as the Landlord designates, a certificate setting forth the status of
          this Lease, in such form and content required by the Landlord acting
          reasonably.

     (e)  Removal of Trade Fixtures

          Provided the Tenant is not in default hereunder, the Tenant may remove
          its trade fixtures, and shall in such removal do no damage to the
          Building, and shall, at its own cost, make good any damage which it
          may occasion thereto; provided that any erection, addition, structure
          or improvement erected upon the Building (excluding trade fixtures)
          shall become a part thereof, shall not be removed and shall be subject
          to all of the provisions of this Lease but the Tenant at its own
          expense, shall remove all or some of any erection, addition, structure
          or improvement erected upon the Building if, and to the extent,
          requested by the Landlord.
<PAGE>

                                      -17-

     (f)  Alterations and Installations

          The Tenant shall not erect or cause to be erected any addition,
          structure or improvement upon the Building without the prior written
          consent of the Landlord, which consent shall not unreasonably be
          withheld or delayed. As a condition of the Landlord's consent, the
          Tenant shall be required to prepare working drawings of the proposed
          improvement work and present same to the Landlord for its approval.
          All improvement work shall be completed by qualified and licensed
          contractors and sub-contractors approved in writing by the Landlord
          prior to the commencement of alterations. All improvements to the
          Building shall be completed to a good and workmanlike standard in
          keeping with the appearance and character of the Building and shall be
          completed in compliance with all applicable municipal, provincial and
          federal laws, bylaws, regulations and ordinances.

     (g)  Bankruptcy and Insolvency

          If the Term or any of the goods or chattels of the Tenant shall be at
          any time seized or taken in execution or in attachment by any creditor
          of the Tenant, or if a writ of execution shall issue against the goods
          and chattels of the Tenant and remain unsatisfied for ten days, (and
          if the Tenant shall not contest such seizure or execution by
          appropriate legal proceedings), or if the Tenant shall execute any
          bill of sale of any of its goods or chattels, other than a bill of
          sale of goods in the ordinary course of the Tenant's business or if
          the Tenant shall make any assignment for the benefit of creditors or
          shall be adjudged bankrupt or insolvent by any court of competent
          jurisdiction under any legislation then in force or shall take the
          benefit of any statute that may be in force for bankrupt or insolvent
          debtors or shall attempt to abandon the Building, or to sell or
          dispose of its goods and chattels so that there would not remain after
          such sale or disposal a sufficient distress on the Building in the
          opinion of the Landlord for the then accruing Rent, or if a Receiver
          or Receiver-Manager of any of the assets, business or undertaking of
          the Tenant is appointed by Court Order or otherwise, then and in each
          of such cases, the minimum rent and any additional rent for the month
          then current and the next ensuing three months and taxes payable
          hereunder by the Tenant for the then current year, including local
          improvement rates (to be reckoned on the rate for the next preceding
          year in case the rate should not have been fixed for the current year)
          shall, immediately become due and payable, and the Term shall, at the
          option of the Landlord, forthwith be determined and in each of the
          above cases such accelerated minimum rent, additional rent and taxes
          shall be recoverable by the Landlord as if it were Rent in arrears.

     (h)  Right to Re-enter or Relet

          If and whenever the minimum rent or additional rent hereby reserved,
          or any part thereof, shall not be paid on the date appointed for
          payment thereof, whether lawfully demanded or not, or in case the
          Building shall be vacated or remain unoccupied or in case the Term
          shall be taken in execution or attachment for any
<PAGE>

                                      -18-

          cause whatsoever, then and in every such case, it shall be lawful for
          the Landlord at any time thereafter to enter into and upon the
          Building or any part thereof in the name of the whole and the same to
          have again, repossess and enjoy as of its former state, anything in
          this Lease to the contrary notwithstanding or, at the Landlord's
          option, to relet the Building to the Tenant's account and to claim any
          loss between the Rent and other moneys payable by the Tenant to the
          Landlord under this Lease and the Rent and other moneys receivable
          from any party to whom the Building is relet.

     (i)  Landlord's Rights on Seizure of Forfeiture of Term

          If the Term should be seized or forfeited for any of the causes set
          forth in paragraph 3(g) hereof, the Landlord may exercise the rights
          and remedies set out in paragraph 3(h).

     (j)  Notice of Default

          Notwithstanding anything herein contained to the contrary, if the
          Tenant shall fail to comply with any of its covenants hereunder,
          except the covenants to pay Rent, the Landlord may give to the Tenant
          notice in writing stating the default with reasonably sufficient
          particulars and requiring it to be remedied, and if such default is
          not remedied by the Tenant within fifteen (15) days after the receipt
          of such notice, or such longer period as may be reasonably necessary
          (in view of the nature of the default), the Landlord at its option may
          either exercise the rights and remedies set out in paragraph 3(h)
          hereof or take such steps as may be necessary to remedy and correct
          such default and recover the costs and expenses incurred in so doing
          from the Tenant as additional rent.

     (k)  Waiver of Lien

          The Landlord waives any lien rights it may hold to any inventory,
          fixtures, equipment or other personal property owned or leased by the
          Tenant now or hereafter located at the Building in favour of the
          Tenant's lender.  The Landlord shall execute such documents as the
          Tenant may require to evidence such waiver.

     (l)  Holding Over

          If the Tenant should hold over after the original Term or any extended
          term hereof, and the Landlord accepts Rent, such holding over shall be
          deemed to be a tenancy from month to month only and shall have no
          greater effect, any custom, statute, law or ordinance to the contrary
          notwithstanding. Such month to month tenancy shall be governed by the
          terms and conditions hereof notwithstanding any statutory provisions
          or rules of law with respect to month to month leases, and during such
          period of holding over the Tenant shall be required to pay the monthly
          rental previously paid by the Tenant under the terms hereof during the
          month immediately preceding the expiration or termination of this
          Lease or any extension thereof and all other payments for which the
          Tenant is liable hereunder.
<PAGE>

                                      -19-

     (m)    Non-Waiver

            Any condoning, excusing or overlooking by the Landlord of any
            default, breach, or non-performance by the Tenant at any time of any
            covenant, proviso or condition herein contained shall not operate to
            waive the Landlord's rights under this Lease in respect of any later
            default, breach or non-observance so as to defeat in any way the
            rights of the Landlord under this Lease on any such later default,
            breach or non-observance, and all rights and remedies of the
            Landlord shall be deemed to be cumulative, not alternative.

     (n)    Damage to Premises

            Whenever during the Term the Building shall be damaged by fire,
            lightning or tempest, or any of the perils insured against under the
            provisions or clause 1(j) hereof, the following terms shall apply:

            (i)    If the damage is such that the Building is rendered wholly
                   unfit for occupancy or it is impossible or unsafe to use and
                   occupy it and if the damage cannot be repaired with
                   reasonable diligence within 120 days from the time the damage
                   occurs, the Landlord may terminate this Lease by giving to
                   the Tenant notice in writing of such termination, in which
                   event this Lease shall be at an end from the date of such
                   damage and the Rent and all other payments for which the
                   Tenant is liable hereunder shall be apportioned and paid in
                   full to the date of such damage and if the Landlord does not
                   terminate this Lease as aforesaid, then the Landlord shall
                   repair the Building with all reasonable speed and the Rent
                   hereby reserved and all other payments for which the Tenant
                   is liable hereunder shall abate from the date of the
                   occurrence of the damage until the Building shall have been
                   restored to substantially the same condition as prior to the
                   occurrence of such damage.

            (ii)   If the damage be such that the Building is rendered wholly
                   unfit for occupancy, or it is impossible or unsafe to use or
                   occupy it, but if in either event the damage can be repaired
                   with reasonable diligence within 120 days from the happening
                   thereof, then the Rent hereby reserved and all other payments
                   for which the Tenant is liable hereunder shall abate from the
                   date of occurrence of the damage until the Building has been
                   restored to substantially the same condition as prior to the
                   occurrence of such damage, and the Landlord shall repair the
                   damage with all reasonable speed;

            (iii)  If the damage can be made good as aforesaid within 120 days
                   of its occurrence and is such that the Building is capable of
                   being partially used for the purposes for which the Tenant
                   has used them then until such damage has been repaired, the
                   Tenant shall pay that portion of the Rent hereby reserved and
                   all other payments for which the Tenant is liable hereunder
                   as the floor areas of the part of the Building that is fit
                   for the
<PAGE>

                                      -20-

                   Tenant's use and occupancy compares with the floor area of
                   the whole of the Building and the Landlord shall repair the
                   damage with all reasonable speed.

     (o)  Adjustments

          Upon the Tenant's occupancy of the Building and upon the termination
          of this Lease, the Landlord and the Tenant shall prorate, adjust,
          apportion and allow between themselves as of the said dates all items
          which are required to be paid by the Tenant under this Lease and
          including, without restricting the generality of the foregoing, all
          items of taxes, utility charges, repairs and maintenance, insurance
          premiums, common expenses, and all other costs, charges and expenses
          of a similar nature, to the extent that the burden thereof shall be
          borne by the Landlord until the Tenant takes possession of the
          Building and by the Tenant thereafter until it shall deliver up
          possession of the Building in accordance with the provisions hereof
          upon the termination of this Lease or of any holding over hereunder
          and not afterwards.

     (p)  Termination on Expropriation

          If the Building or any part thereof is expropriated the Landlord shall
          be entitled, at its option, to terminate the Lease by giving notice to
          the Tenant, and thereafter Rent and all other payments payable by the
          Tenant hereunder shall be apportioned and paid to the date of
          termination and the Tenant shall surrender and yield up possession of
          the Building to the Landlord and the Landlord shall be solely entitled
          to any award payable on such expropriation free of any apportionment
          in favour of the Tenant.

     (q)  Notices

          All notices, elections, demands and requests which may or are required
          to be given or made hereunder shall be in writing and either delivered
          or mailed, if to the Landlord, to:

               Hallmark Holdings Ltd.
               c/o 2100 - 1075 West Georgia Street
               Vancouver, British Columbia, V6E 3G2

               Attention: George W. Hungerford

               and if to the Tenant, to:

               Glas-Aire Industries Ltd.
               c/o 3137 Grandview Highway
               Vancouver, British Columbia,  V5M 2E9

               Attention: Craig Grossman, President
<PAGE>

                                     -21-

          and shall be deemed to have been received on the date of delivery if
          delivered or, if mailed, during periods of normal postal service,
          within 72 hours of mailing the same by postage prepaid registered mail
          from any post office in the Province of British Columbia. Either party
          may change its address by notice to the other and in such event this
          paragraph shall be deemed to be amended accordingly.

     (r)  Liens

          The Tenant shall not suffer or permit any lien under the Builders Lien
          Act or any like statute to be filed or registered against the Building
          or the Lands, by reason of work, labour, services or materials
          supplied or claimed to have been supplied to the Tenant or anyone
          holding any interest in any part thereof through or under the Tenant.
          If any such lien shall at any time be filed or registered the Tenant
          shall procure registration of its discharge within 20 days after the
          lien has come to the notice or knowledge of the Tenant; provided,
          however, that should the Tenant desire to contest in good faith the
          amount or validity of any lien and it shall have so notified the
          Landlord, and if the Tenant shall have deposited with the Landlord or
          paid into court to the credit of any lien action, the amount of the
          lien claimed plus a reasonable amount for costs, then the Tenant may
          defer payment of such lien claim for a period of time sufficient to
          enable the Tenant to contest the claim with due diligence, provided
          always that neither the Building nor any part thereof, nor the
          Tenant's leasehold interest therein shall thereby become liable to
          forfeiture or sale. The Landlord may, but shall not be obliged to
          discharge any lien filed or registered at any time if in the
          Landlord's judgment the Building or the Lands or any part thereof or
          the Tenant's interest therein becomes liable to any forfeiture or sale
          or is otherwise in jeopardy, and any amount paid by the Landlord in so
          doing, together with all reasonable costs and expenses of the
          Landlord, shall be reimbursed to the Landlord by the Tenant on demand
          and it may be recovered as Rent in arrears. Nothing herein contained
          shall authorize the Tenant, or imply any consent or agreement on the
          part of the Landlord, to subject the Landlord's estate and interest in
          the Building to any lien.

4.   OPTION TO RENEW

          Provided that the Tenant has duly and regularly paid the Rent and has
          duly and regularly performed each and every of the covenants herein to
          be performed by the Tenant, the Tenant shall have the right to extend
          the term of this Lease for one further term of five (5) years (the
          "First Renewal Term") upon giving the Landlord at least six months
          prior to the expiration of the Term written notice of the exercise of
          such right. If this right of renewal is exercised, the Lease shall
          continue for the First Renewal Term on the same terms and conditions
          as this Lease, save and except minimum rent (which is to be negotiated
          for the First Renewal Term), Landlord's Work, the Allowance and this
          right of renewal. The minimum rent payable by the Tenant during the
          First Renewal Term shall be the fair market rental value based on the
          rents then payable for leased premises of the same permitted use,
          similar size, type, location and quality in the same geographical area
          as mutually agreed upon by the Landlord and the Tenant by a
<PAGE>

                                     -22-

          date six months prior to the date upon which the First Renewal Term is
          to commence. If the Landlord and the Tenant are unable to agree on or
          before the aforesaid date upon the fair market rental value of the
          Building, the fair market rental value payable by the Tenant to the
          Landlord shall be determined by arbitration pursuant to the Commercial
          Arbitration Act of British Columbia, as amended from time to time, or
          any successor legislation; provided always that in no event will the
          minimum rent payable during the First Renewal Term be less than that
          payable during the Seventh Year of the Term.

5.   MISCELLANEOUS

     (a)  Net Lease

          It is the intent of this Lease and agreed by the parties hereto that
          except as otherwise set out in this Lease, this is an absolutely net
          lease and that all and every cost, expense, rate, tax or charge in any
          way related to the Building will be borne by the Tenant without any
          variation, setoff or deduction whatsoever.

     (b)  Marginal Notes

          The captions herein have been inserted as a matter of convenience and
          for reference only and in no way define, limit or enlarge the scope or
          meaning of this Lease or any provision hereof.

     (c)  Binding Effect

          This Lease and anything herein contained shall extend to, bind and
          enure to the benefit of the successors and assigns of each of the
          parties hereto subject to the consent of the Landlord being obtained,
          as hereinbefore provided, to any assignment or sublease by the Tenant
          and, where there is more than one Landlord or Tenant or Guarantor (if
          any) or where the Landlord or Tenant or Guarantor (if any) is a male,
          female or a corporation, the provisions herein shall be read with all
          grammatical changes thereby rendered necessary. All covenants herein
          contained shall be deemed joint and several and all rights and powers
          reserved to the Landlord may be exercised by either the Landlord or
          its agents or representatives.

     (d)  Governing Law

          This Lease shall be construed in accordance with the laws of the
          Province of British Columbia.

     (e)  Registration

          The Landlord shall prepare this Lease in 8.5" by 11" format to enable
          the Tenant to register the Lease on title if it so desires and
          provided that the Tenant pays all costs, expenses, fees, and taxes in
          connection with the registration of this Lease in the
<PAGE>

                                     -23-

          appropriate land title office and the costs of any plans required for
          such registration and the Landlord shall execute and deliver this
          Lease in registrable form.

     (f)  Prepaid Rent and Security Deposit

          The Landlord acknowledges receipt of the sum of FIFTY-ONE THOUSAND,
          EIGHTY-ONE DOLLARS AND EIGHTY CENTS ($51,081.80) from the Tenant,
          which sum shall be applied firstly in payment of the fourth month's
          minimum rent, and the remainder held by the Landlord, without
          liability for interest, as security for the faithful performance by
          the Tenant of the terms of this Lease, and if at any time Rent is
          overdue, then the Landlord may apply any portion of the deposit toward
          payment of such Rent and any money not so applied will be applied
          toward payment of minimum rent for the last month of the Term.

     (g)  Assignment by Landlord

          If the Landlord sells an interest in the Building, the Lands or in
          this Lease, to the extent that the purchaser or assignee agrees to be
          responsible for compliance with the covenants and obligations of the
          Landlord hereunder, the Landlord without further agreement will be
          relieved of liability under those covenants and obligations.

     (h)  Time

          Time shall be of the essence hereof.

     (i)  Entire Agreement

          The Tenant acknowledges that there are no covenants, representations,
          warranties, agreements or conditions expressed or implied, collateral
          or otherwise forming part of or in any way affecting or relating to
          this Lease or the Building save as expressly set out in this Lease and
          the Offer to Lease made by the Tenant on the 6th day of February, 2002
          and accepted by the Landlord on the 6th day of February, 2002 (the
          "Offer") and that this Lease and the Offer constitute the entire
          agreement between the Landlord and the Tenant and may not be modified
          except as herein explicitly provided or except by subsequent agreement
          in writing of equal formality hereto executed by the Landlord and the
          Tenant.
<PAGE>

                                     -24-

WITNESS WHEREOF the parties hereto have executed this Lease as of the day and
year first written above.


HALLMARK HOLDINGS LTD.
by its authorized signatory:

Per: __________________________
     George William Hungerford
     Authorized Signatory



GLAS-AIRE INDUSTRIES LTD.
by its authorized signatory:

Per: __________________________
     Authorized Signatory
<PAGE>

                                  SCHEDULE "A"


Attach Plan of Premises
<PAGE>

                                     -26-

                                  SCHEDULE "B"

                                LANDLORD'S WORK

The Landlord shall use its best efforts to complete the following work on or
before the Commencement Date:

1.  Ensure that all lighting, plumbing, air conditioning, heating units, and
loading doors are functional and in good working order.

2.  Provide washrooms as follows:

    (a)   new washrooms in
          warehouse area:            6 cubicles plus 3 sinks for women

                                     3 cubicles plus 3 urinals plus 3 sinks for
                                     men

    (b)   existing washrooms
               in office area:       2 cubicles for women

                                     1 cubicle plus 1 urinal plus 1 private
                                     washroom for men.


3.  Provide primary electrical service to the Building as follows:

Following removal of all conditions of the Offer, the Landlord shall immediately
commence installation of the new electrical service as described in the Offer
which will be contracted on a best efforts basis to complete on or about 16
weeks.   For greater certainty, particulars and specifications of the new
electrical work is attached and will be installed in compliance with the
standards and requirements of the municipal governmental authorities.  Power
interruptions will be anticipated in order to complete installation of the new
electrical work.  Reasonable prior notice of any power interruptions will be
given to the Tenant.