<PAGE>

          Exhibit 10.7 - Assignment of Lease and Modification of Lease
       Agreement dated August 17,1998 between HOOPP Realty Inc., Techwest
           Management Inc., Sideware Systems Inc., and BrainTech, Inc.


<PAGE>

                             ASSIGNMENT OF LEASE AND
                         MODIFICATION OF LEASE AGREEMENT


This Assignment of Lease and Modification of Lease Agreement dated as of the
17th day of August, 1998.


BETWEEN:

         HOOPP REALTY INC. by its duly appointed agent EDGECOMBE REALTY ADVISORS
         INC. of 1704-1166 Alberni Street, Vancouver, B.C. V6E 2Z3

         (the "Landlord")

AND:

         TECHWEST MANAGEMENT INC. #102 - 930 West 1st Street, North Vancouver,
         B.C. V7P 3P7

              (the "Tenant")


AND:
         SIDEWARE SYSTEMS INC. #102 - 930 West 1st Street, North Vancouver, B.C.
         V7P 3P7

         (the "Assignor")

AND:

         SIDEWARE SYSTEMS INC. and BRAINTECH INC. #102-930 West First Street,
         North Vancouver, B.C., V7P 3P7

         (the "Co-Covenantors")

         WHEREAS

A.          The Landlord and the Assignor are parties to a lease (the "Original
Lease") whereby the Assignor leased from the Landlord Suite 102 and the upper
portion of Suite 103 - 930 West 1st Street, North Vancouver, B.C. for a term
expiring August 31, 2001, a copy of which is attached hereto as Schedule A.

<PAGE>

B.          By a Modification of Lease Agreement dated the 12th day of August,
1996 (the "First Modification") the Assignor and the Landlord agreed to extend
the term of the Lease, additionally lease the lower portion of Suite 103 and
modify the Lease on the terms and conditions as therein set forth, a copy of
which is attached as Schedule B.

C.          The Original Lease and the First Modification taken together are
hereinafter referred to as the Lease, and Suite 102 and 103 - 930 West 1st
Street, North Vancouver, B.C. are hereinafter referred to as the Existing
Premises.

D.          The Tenant performs maintenance functions for Co-Covenantors and the
Lease is to be assigned to the Tenant.

E.          The Tenant wishes to lease additional space described as Suites 100
and 101 (lower) and 104 and 105 (upper) (the "Expansion Premises") from the
Landlord and to modify the Lease as herein set forth and the Landlord wishes to
lease such Expansion Premises to the Tenant and modify the Lease as herein set
forth.

F.          The Existing Premises and the Expansion Premises take together shall
hereinafter be referred to as the Leased Premises.

            NOW THEREFORE THIS MODIFICATION OF LEASE AGREEMENT WITNESSES that in
consideration of the sum of $10.00 now paid by each party to the other (the
receipt and sufficiency of which is hereby acknowledged by each of the parties),
the rents, covenants, conditions and agreements herein reserved and contained
and other good and valuable consideration, the parties covenant and agree with
each other as follows:

1.          All capitalized terms not otherwise defined herein or in the
recitals hereto shall have the respective meanings attributed to them in the
Lease.

2.          Effective September 1, 1998 (the "Effective Date") the Assignor
hereby grants and assigns unto the Tenant the Existing Premises together with
the residue of the unexpired term of the Lease and the said Lease as they relate
to the Existing Premises and all the benefit and advantage to be derived
therefrom subject to the payment of Minimum Rent and Additional Rent and the
performance of the covenants and agreements contained in the Lease with respect
to the Existing Premises.

3.          The Tenant hereby covenants with the Assignor and the Landlord to
abide by the terms and conditions of the Lease with respect to the Existing
Premises and to pay Minimum Rent and Additional Rent and observe and perform the
covenants and obligations in the Lease and this Agreement.

4.          The Assignor hereby covenants to continue to abide by the terms and
conditions of the Lease and observe and perform the covenants and conditions in
the Lease.

5.          The Landlord hereby consents to the assignment of the Lease on the
terms and conditions contained herein without releasing the Assignor from its
obligations under or in

<PAGE>

respect of the Lease.

6.          The Landlord hereby leases to the Tenant, the Expansion Premises on
the terms and conditions set out in the Lease and the parties hereby agree to be
bound by the terms and conditions of the Lease subject to the amendments,
modifications and additions contained herein effective the Effective Date.

7.          Article 1.01 of the Lease is deleted in its entirety and replaced
with the following:


                                    ARTICLE 1
                       BASIC TERMS. SCHEDULES. DEFINITIONS

1.01       BASIC TERMS

           (a)      (i)       Landlord: HOOPP REALTY INC. by its duly appointed
                              agent EDGECOMBE REALTY ADVISORS INC.

                   (ii)       Address of Landlord: c/o Edgecombe Realty Advisors
                              Inc., Suite 1704, 1166 Alberni Street, Vancouver,
                              B.C. V6E 2Y3

            (b)     (i)       Tenant: TECHWEST MANAGEMENT INC.

                   (ii)       Description of Tenant: Computer Software
                              Development

                  (iii)       Address of Tenant: 102-930 West 1st Street, North
                              Vancouver, B.C. V7P 317

                   (iv)       Operating Name: N/A

            (c)     (i)       Co-Covenantor: SIDEWARE SYSTEMS INC. and BRAINTECH
                              INC.

                   (ii)       Description of Co-Covenantor: Computer Software
                              Developer

                  (iii)       Address of Co-Covenantor: 102-930 West 1st Street,
                                                        North Vancouver, B.C.,
                                                        V7P 317

             (d)    Address of Premises:        Suites 100, 101, 102,
                                                103(lower), 102, 103, 104, 105
                                                (upper) - 930 West 1st Street,
                                                North Vancouver, B.C. V7P 3P7


             (e)    Floor Area: 14,867 square feet.


              (f)   (i)     Term: 5 years.

<PAGE>

                   (ii)     First Day of Term:  September 1, 1998

                  (iii)      Termination Date: August 31, 2003

             (g) Minimum Rent (per square foot):

<TABLE>
<CAPTION>
   Lease Year                Minimum Rent Per           Monthly Minimum               Annual Minimum
                              Square Foot of                Rent                          Rent
                                Floor Area
<S>                          <C>                        <C>                           <C>
         I                      $13.00                    $16,105.92                    $193,271.00
         2                      $13.25                    $16,415,65                    $196,987.75
         3                      $13.50                    $16,725.38                    $200,704.50
         4                      $13.75                    $17,035.10                    $204,421.25
         5                      $14.00                    $17,344.83                    $208,138.00
</TABLE>

       (h)    Use of Premises: Office for conduct of Tenant's business

       (i)    Fixturing Period: N/A

         The foregoing Basic Terms are hereby approved by the parties and each
reference in this Lease to any of the Basic Terms shall be construed to include
the provisions set forth.

8.          The Landlord shall complete at its own cost and expense all of
the Landlord's work described in Schedule C hereto. Any work not described in
Schedule C hereto shall be Tenant's work hereunder and shall be the Tenant's
responsibility and to be performed by the Tenant.

9.          Article 17.19 of the Lease entitled "Tenant's Improvements" is
deleted in its etitirety and replaced with the following:

            "17.19          Tenant's Improvements

                                     The Landlord shall reimburse the Tenant for
                                     improvements to the Leased Premises
                                     completed and paid for by the Tenant, to a
                                     maximum amount of $80,000.00. Such money
                                     shall be due and payable upon execution of
                                     this Lease by all parties, occupancy of the
                                     Leased Premises by the Tenant and receipt
                                     by the Landlord of paid invoices from the
                                     Tenant's contractor. All Tenant's
                                     improvements shall be completed in a good
                                     and workmanlike manner in accordance with
                                     plans and specifications submitted to the
                                     Landlord for approval and in accordance
                                     with the provisions of the Lease.
                                     Notwithstanding anything to the contrary,
                                     if the Landlord's work and the Tenant's
                                     work are completed prior to the first day
                                     of the term such that the Tenant is able-
                                     to take early possession of the Leased
                                     Premises and conduct its business
                                     operations there in, all provisions of this
                                     Lease shall apply and

<PAGE>

                                     the Tenant shall commence payments of
                                     Minimum Rent and Additional Rent as of such
                                     date.

10.         Page 2 of Schedule A of the Lease is arnended by deleting it in
its entirety and replacing it with the floor plan attached hereto as Schedule
D.

11.         Schedule E of the Lease is deleted in its entirety and replaced
with the Offer to Lease attached as Schedule B hereto.

12.         The Tenant shall have the use of 21 parking stalls in the
Development.

13.         This Agreement as of and from the Effective Date will be read and
construed along with the Lease and treated as a part thereof; and the Lease
as modified hereby will continue to be of full force and effect with respect
to the Leased Premises.

14.         This Agreement will enure to the benefit of and be binding upon
each of the Landlord, the Tenant, the Assignor and the Covenantors and their
respective successors and permitted assigns.

15.         The parties will execute promptly such further assurances and do
all such further things as may be required in order to effect or perfect the
terms of this Agreement.

            IN WITNESS WHEREOF the parties have executed this Agreement as
of the date first above written.


                                HOOPP REALTY INC. by its duly
                                appointed  agent   EDGECOMBE   REALTY  ADVISORS
                                INC. by its authorized signatories:


                                         "signed"
                                --------------------------------------------
                                Name:

                                         "signed"
                                --------------------------------------------
                                Name:

                                TECHWEST  MANAGEMENT  INC.  by  its  authorized
                                signatories:


                                         "signed"
                                --------------------------------------------
                                Name:

                                         "signed"
                                --------------------------------------------
                                Name:

<PAGE>

                                SIDEWARE   SYSTEMS   INC.  by  its   authorized
                                signatories:


                                         "signed"
                                --------------------------------------------
                                Name:

                                         "signed"
                                --------------------------------------------
                                Name:


                                BRAINTECH INC. by its authorized signatories:


                                         "signed"
                                --------------------------------------------
                                Name:

                                         "signed"
                                --------------------------------------------
                                Name: