EXHIBIT 10 (iii)


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

     Letter of January 16, 1998 from the Societe de Developpement Industriel
         du Quebec, known in English (but no longer used) as the Quebec
       Industrial Development Society (QIDC), a corporation wholly-owned
                          by the Government of Quebec.

(Hereinafter, the Societe de developpement industriel du Quebec will be referred
to as QIDC)

CONFIDENTIAL                                                    January 16, 1998

Mr. Terence Byrne
President
3143619 Canada Inc.
740 St. Maurice
Suite 201
Montreal, Quebec
H3C 1L5

Subject:    Offer of a loan guarantee
            File: 49067

Dear Sir:

      It is our pleasure to inform you that the QIDC has authorized a loan
guarantee in an amount up to $937,000 in favour of your company under the
Regulations of the Programme d'aide au financement des entreprises (*Assistance
Program for Financing of Enterprises) so as to finance refundable (*tax) credits
for scientific research and experimental development.

      Accordingly, you will find attached two copies of an offer of a guarantee
which defines the terms and conditions. To accept this offer, you must return to
us, prior to February 16, 1998, one copy of said offer duly signed (*and) each
page should bear the initials of all of the signatories.

      This must be accompanied by a certified copy of a resolution of your
enterprise (*company) authorizing a representative to accept the offer and to
sign all documents required to make it effective. To this end, we attach a draft
resolution which should be adopted by your enterprise.

      In addition, you should include a cheque in the amount of $29,417.58
(*Canadian $) representing the payment of the guarantee fees ($18,740), of the
commitment commission ($9,370), of the Federal Goods and Services Tax
(*refundable sales tax) ($655.90) and the Quebec Sales Tax (*refundable sales
tax) ($651.68)


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Certain  annotations  and  explanations  may have been  added by  management  to
enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

      Also, you should enclose the duly signed annexes entitled "Autorisation
d'echange des renseignements avec Revenu Quebec" (*Authorization to Exchange
Information with Revenue Quebec - a document required by Quebec law for Revenue
Quebec to be allowed to divulge information to QIDC) and "Autorisation d'echange
des renseignements avec Revenu Canada" (*Authorization to Exchange Information
with Revenue Canada - a document required by federal law for Revenue Canada to
be allowed to divulge information to QIDC).

      Once the fundamental conditions indicated in the Letter of Offer will have
been completed, QIDC will be able to issue to the lender a guarantee certificate
permitting the disbursement of an amount serving the finance the refundable tax
credits estimated for the fiscal year ending June 30, 1997.

      For subsequent disbursements, you will find attached a form entitled
"Demande de mise en vigueur de la garantie" (*Request to Give Effect to the
Guarantee) which you should complete at the end of each financial year which is
subject to the present offer. Once this form will have been received, QIDC will
be able to issue a guarantee certificate to the lender permitting the
disbursement of the balance of the loan permitting the financing of the tax
credits for the year ending June 30, 1997 plus a portion of the loan serving to
finance the refundable tax credits estimated for the financial year ending June
30, 1998.

      Please note that the disbursements of the loan cannot exceed 75% of the
amount of the refundable tax credits. To this effect, the lender should have
obtained a declaration by your company confirming the amount of scientific
research and experimental development expenses and the amount of the refundable
tax credits earned in the course of the period preceding this request for
disbursement.

      During the entire term of this guarantee, we ask you to pay particular
attention to the commitments indicated in paragraphs 4.1.6 and 4.1.7 of the loan
guarantee offer.

      If more information is required, we would ask you to contact the
undersigned.

      Nous vous prions d'accepter, Monsieur, nos meilleurs salutations
(*standard closing sentence in French formal business correspondence for which
there is no equivalent in English and which has no effect on the content of the
letter or on its attachments)

                                   Helene Payette
                                   Portfolio Director


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

                                   Technology Directorate

c.c. Bank of Montreal, 3300 Cote Vertu, St-Laurent, Quebec H4R 2B7


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

Letter of Offer of a Loan Guarantee dated January 16, 1998 from the Societe de
Developpement Industriel du Quebec, known in English (but no longer used) as the
Quebec Industrial Development Society (QIDC), a corporation wholly-owned by the
Government of Quebec.

(Hereinafter, the Societe de developpement industriel du Quebec will be referred
to as QIDC)

                            OFFER OF A LOAN GUARANTEE

File 49067

BY:   QIDC, legal person, duly incorporated under the law of the Societe de
      developpement industriel du Quebec (L.R.Q., c S-11.01), having its head
      office at 1126 St-Louis Road, Sillery, Quebec, G1S 1E5, and having a place
      of business at 770 Sherbrooke Street West, Montreal, Quebec, H3A 1G1,
      hereinafter referred to as S.D.I. (*QIDC)

TO:   3143619 Canada Inc., legal person, duly incorporated, having its principal
      place of business at 740 St. Maurice, Suite 201, Montreal, Quebec, H3C
      1L5, hereinafter referred to as "the Enterprise" (* the Company)

1.    LOAN GUARANTEE

      1.1   QIDC offers to the company a guarantee, hereinafter referred to as
            the "Guarantee", in the form of a security bond equal to 80% of the
            net loss on a loan, to a maximum amount of $937,000 (*Canadian),
            hereinafter referred to as the "Loan", approved by the Bank of
            Montreal, hereinafter referred to as the "Lender", to the Company.
            The Loan serves specifically to finance refundable tax credits for
            scientific research and experimental development, as estimated by
            QIDC, relative to the fiscal years of the Company ending June 30,
            1997 and June 30, 1998, hereinafter referred to as the "Tax
            Credits".

      1.2   For purposes of the Guarantee, the net loss is defined as being the
            sum of interest and capital of the Loan which are the object of a
            guarantee certificate according to Article 3 of the present
            (*offer), due and unpaid as of the date of the calling of the loan,
            plus accumulated interest for a maximum period of three (3) months
            from the date of the calling of the Loan, after deducting the net
            proceeds of security offered as guarantee of the repayment of the
            Loan, it being understood, however, that the accumulated interest as
            of and since the calling of the Loan can never exceed, in the
            calculation of the net loss, ten per cent (10%) of the balance of
            capital of the Loan at the time it was called.

2.    DURATION OF THE GUARANTEE


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

      The Guarantee will become null and void between the Company and QIDC, the
      latter being thus liberated from its obligations toward the Company with
      respect to the Guarantee, as of the earliest of the following dates:

      2.1   June 30, 2000

      2.2   the date of total repayment of the Loan (including interest and all
            accessory charges)

3.    COMMITMENTS ESSENTIAL TO PUT THE GUARANTEE INTO EFFECT

      3.1   Before putting the Guarantee into effect:

            3.1.1 The Lender must have received from QIDC a loan guarantee
                  certificate, which will be delivered once the conditions
                  stipulated in sub-paragraphs 3.1.2 and following will have
                  been met to the satisfaction of QIDC; this guarantee
                  certificate will permit the Lender to disburse an amount
                  representing up to 80% of the portion of the Loan serving to
                  finance the refundable tax credits estimated for the first
                  financial year covered by the present offer.

            3.1.2 The Company must have delivered to the Lender all security
                  required by the Lender for purposes of guaranteeing the
                  repayment of the amounts or obligations which are due to or
                  which might become due to the Lender by virtue of the Loan and
                  appearing in the "Declaration of the Lender", which is an
                  integral part of the "Request for Guarantee".

            3.1.3 The Company must have signed a loan agreement with the Lender
                  containing notably:

                  3.1.3.1   An article to the effect that maximum amount of the
                            loan is $937,000 (*Canadian)

                  3.1.3.2   An article to the effect that the first disbursement
                            of the Loan (and all subsequent disbursements, as
                            the case may be) must definitely be used by the
                            Company for the payment of Deductions at Source due
                            and payable at the date of the first disbursement of
                            the Loan.

                  3.1.3.3   An article to the effect that, as of January 1,
                            1998, the payroll service of the Lender, or any
                            other recognized


                                                                             480

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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

                            payroll service within this field, will prepare the
                            payroll of the Company.

                  3.1.3.4   Articles to the effect that the Company must
                            reimburse the Lender that part of the Loan relative
                            to the Tax Credits at the earliest of the following
                            dates:

                            3.1.3.1.1   the date of filing of its Declaration of
                                        Revenue (*Tax Returns) if there is, at
                                        that moment, an offset against tax
                                        credits receivable of income taxes
                                        payable.

                            3.1.3.1.2   the date on which the Company was
                                        supposed to file its Tax Returns if such
                                        filing had not effectively been
                                        undertaken.

                            3.1.3.1.3   the date of receipt of a refund from
                                        competent authorities respecting Tax
                                        Credits

                            3.1.3.1.4   the thirtieth (30th) day preceding the
                                        expiry date of the Guarantee.

                  3.1.3.5   An article to the effect that the Company commits
                            itself to apply any cheque or any amount received
                            with respect to Tax Credits uniquely to the
                            reduction of the balance of the Loan, in default of
                            which, the Loan will become payable by the Company
                            within ten (10) days following such a default.

                  3.1.3.6   An article to the effect that the Loan will become
                            payable by the Company within ten (10) days of any
                            default or non-respect by the Company of its
                            commitments or obligations with respect to the
                            present offer or any amendment thereto, as the case
                            may be.

                  3.1.3.7   An article to the effect that the disbursements of
                            the Loan will not exceed 75% of the amount of the
                            refundable tax credits; to this effect, the Lender
                            must obtain from the Company, prior to each
                            disbursement of the Loan, a declaration confirming
                            to the Lender the amount of scientific research and
                            experimental development expenses as well as the
                            amount of refundable tax credits


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.


                            earned in the course of the period preceding the 
                            request for disbursement.

                  3.1.3.8   An article to the effect that a capital investment,
                            either in the form of share capital or interest-free
                            subordinated debt, in the Canadian dollar equivalent
                            as of the date of such capital investment to
                            US$503,000, be put into the Company, this being
                            understood that this capital investment will be at
                            least $700,000 Canadian.

      3.2   Prior to each subsequent putting into effect of the Guarantee

            3.2.1 The Company must transmit a "Demande de mise en vigueur de la
                  garantie" (*Request to Give Effect to the Guarantee) using the
                  form prescribed for this purpose, accompanied by an
                  Accountant's Report respecting the scientific research and
                  experimental development expenses prepared by the Company's
                  external auditors, or any other justification document
                  acceptable to QIDC, attesting to the amount of scientific
                  research and experimental development expenses incurred for
                  each of the fiscal years of the Company covered by the present
                  offer.

                  To the extent that QIDC is satisfied with the documents
                  referred to in 3.2.1, QIDC will issue in favour of the Lender
                  a guarantee certificate permitting the Lender to disburse the
                  balance of the Loan serving to finance the refundable tax
                  credits for the financial year concerned and, at the
                  discretion of QIDC, an amount representing up to 80% of the
                  Loan serving to finance the refundable tax credits for the
                  following fiscal year, as the case may be.

4.    OBLIGATIONS OF THE COMPANY

      4.1   From the date of acceptance of the present offer, and for the entire
            duration of the Guarantee and until complete payment of any sum
            which could become due to QIDC by the Company by virtue of the
            present or by virtue of any guarantee certificate, the Company
            commits itself to:

            4.1.1 provide audited annual financial statements within ninety (90)
                  days of the end of the fiscal year, provide equally, upon
                  request, its semi-annual financial statements, the financial
                  statements of its subsidiaries and, as the case may be, its
                  consolidated financial statements or any other financial
                  statement required by QIDC, and this within the time delays
                  prescribed by QIDC;


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

            4.1.2 transact on a commercial basis and at arm's length in its
                  commercial dealings with all persons;

            4.1.3 to not provide loans or advances or any other form of
                  financial assistance to associated companies, within the
                  meaning of the Income Tax Act, nor to provide them with
                  investments, guarantees, nor effect with them transactions
                  outside of the normal course of business;

            4.1.4 to neither liquidate nor dissolve itself without the prior
                  written consent of QIDC;

            4.1.5 to inform QIDC and the Lender as received of any refund of Tax
                  Credits or as of when the Company will have become aware of
                  any compensation at source through the initiative of Revenue
                  Canada or Revenue Quebec or of any compensation through the
                  initiative of the Company;

            4.1.6 to put into place and maintain an accounting system permitting
                  the identification by project of scientific research and
                  experimental development expenses;

            4.1.7 to maintain a document system respecting scientific research
                  and experimental development projects and activities
                  acceptable to the fiscal authorities.

            4.1.8 to provide to QIDC, upon written request by QIDC, and within
                  the time delays prescribed for such requests, any information
                  and any document which QIDC would judge useful and pertinent
                  to the application of the Guarantee, to the Tax Credits and to
                  the Reglement sur le Programme d'aide au financement des
                  entreprises (*Assistance Program for Financing of Enterprises
                  Regulation);

            4.1.9 to provide to QIDC, as filed or as received, all tax returns,
                  all Notices of Assessment as well as all correspondence
                  related to refundable tax credits contemplated by the present
                  offer.

5.    EVENTS OF DEFAULT

      5.1   Notwithstanding any disposition to the contrary contained in the
            present offer and even if the conditions have been respected, QIDC
            reserves the right to annul any part of the Guarantee not put into
            effect or to defer the putting into effect (*of the Guarantee), at
            its discretion, and the Company commits itself to


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

            reimburse upon demand the Loan plus interest, fees and accessory
            costs in the following cases which constitute events of default.

            5.1.1 if the Company, without having obtained the prior written
                  consent of QIDC, moves a substantial portion of its assets
                  outside of Quebec;

            5.1.2 if the Company cedes its assets, is put under trusteeship
                  under the terms of the Bankruptcy and Insolvency Act
                  (L.R.C.(1985), Chapter B-3), makes a proposal to its creditors
                  or commits an act of bankruptcy under the terms of the said
                  law, or if the Company is under order to liquidate its assets
                  under the terms of the Law respecting the Dissolution of
                  Companies (L.R.Q., Chapter 14), or any other law to the same
                  effect, or if the Company is insolvent or on the point of
                  becoming insolvent or if the Company does not maintain its
                  legal existence or if the financial situation deteriorates to
                  the point of jeopardizing the survival of the Company.

            5.1.3 if the Company avails itself of the dispositions of the law
                  facilitating certain transactions between the Company and its
                  creditors. (L.R.C. (1985) Chapter c-36) (similar to US Chapter
                  11 - reorganization)

            5.1.4 if the Company loses 40% of its qualification for refundable
                  tax credits with respect to salary costs by virtue of the
                  Income tax Act, or its qualification for refundable tax
                  credits respecting scientific research and experimental
                  development tax credits by virtue of the Income Tax Actor in
                  respect to the Reglement sur le Programme d'aide au
                  financement des entreprises (*Assistance Program for Financing
                  of Enterprises Regulation);

            5.1.5 if there is a change in control of the Company, not previously
                  authorized by QIDC, a "de facto" change of control of the
                  company, or a change in the nature of its operations;

                  It is to be understood with respect to control, the holding of
                  a number of voting shares sufficient to elect a majority of
                  the Directors of the Company. It is to be understood by "de
                  facto" control, the holding of such shares (*voting) by one or
                  more physical persons giving the control through the
                  intermediary of one or more legal persons to one or the other
                  of the shareholders of the Company.

            5.1.6 if there is an interruption of business affairs or a
                  liquidation of the Company's assets;


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

            5.1.7 if, at any time, the Company is party to litigation or to
                  judicial procedures before a court of justice or a tribunal, a
                  commission or government agency, or with Revenue Canada or
                  Revenue Quebec, without having revealed these matters to QIDC;

            5.1.8 in case of fraud, false declarations or falsification of
                  documents submitted to QIDC or to the Lender, by the company
                  or its representatives;

            5.1.9 if the Company defaults in fulfilling any of the conditions
                  and clauses of the present offer, of the Loan Agreement
                  between the Company and the Lender, of any other document
                  accessory to the Loan and any amendment of these, as the case
                  may be.

      5.2   Notwithstanding any disposition to the contrary contained in the
            present offer, and even if the conditions have been respected, QIDC
            reserves the right to annul any unissued part of the loan guarantee
            or to defer its putting into effect, at its sole discretion, in the
            following cases:

            5.2.1 if the Company hasn't presented to QIDC any requests for
                  disbursement of the Loan, supported by justifying documents
                  required by QIDC within six (6) months of the date of
                  acceptance of the present offer;

            5.2.2 if, in the opinion of QIDC, there has been an important
                  unfavourable change in the financial situation of the Company.

6     GENERAL TERMS AND CONDITIONS

      6.1   This contract will be governed by the laws of Quebec and, in case of
            dispute, only the courts of Quebec will have jurisdiction. In
            addition, this offer is subject to the application of the terms and
            conditions enunciated in the Law respecting the Societe de
            developpement industriel du Quebec (*QIDC) and its regulations.

      6.2   By its acceptance of the present offer, the Company declares that
            all information conveyed to QIDC or to the Lender which gave rise to
            the present offer is exact, complete and true.

      6.3   The Company cannot cede or transfer the rights conferred upon it
            under the terms of the present offer without the prior written
            consent of QIDC.

      6.4   By accepting this offer, the Company consents that a public
            announcement be made by QIDC, communicating the following
            information: the name and


                                                                             485
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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

            address of the Company, the nature of the Company and the amount of
            the Guarantee.

      6.5   If the Company wishes to officially announce a project related to
            the present offer, make public the financial intervention of QIDC,
            or proceed to an official opening, the Company must advise QIDC
            fifteen (15) days in advance, so as to permit QIDC to participate.

      6.6   The Company commits itself to pay all expenses related to the
            preparation, execution and registration, if applicable, of the
            documents required to give effect to the present offer and any
            amendments thereto.

      6.7   QIDC and its representatives can, without prior notice to the
            Company, enter the premises of the Company during normal business
            hours for purposes of conducting audits judged useful or necessary.

      6.8   For purposes of the present offer, all notices must be sent in
            writing by certified mail, registered mail or hand delivery. Notices
            originating from QIDC will be sent to the Head Office of the
            Company, to the attention of the authorized representative who will
            sign the present offer for and in the name of the Company. All
            notices originating from the Company or its shareholders will be
            sent to QIDC, at its Head Office, to the attention of the Secretary.
            All notices will be deemed to have been received the date of their
            delivery in the case of hand delivery, or the third working day
            following the date of mailing in the case of certified or registered
            mail.

7.    FEES

      The present offer is subject to the payment of Guarantee fees equal to 2%
      of the amount of the Loan, to wit $18,740 (*Canadian) as well as
      management fees, hereinafter called the Commitment Fee, of 1% of the
      amount of the Loan, to wit $9,370, and to the payment of the Federal Goods
      and Services Tax (*GST) ($655.90) and of the Quebec Sales Tax (*QST)
      ($651.68) applicable to the Commitment Fee. These Guarantee Fees and
      Commitment Fees, which must be remitted to QIDC upon acceptance of the
      present offer, will not be refundable under any circumstances, in whole or
      in part.

      The cashing of the Guarantee Fees or of the Commitment Fees does not
      confer any right on the Company and in no way obliges QIDC to put into
      effect all or any part of the Guarantee, these rights and obligations
      being only created to the extent that the terms and conditions indicated
      in the present offer are met.


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

      For information purposes, QIDC possesses the GST registration number R
      107-442- 428 with respect to the federal government and the QST
      registration number 1013387857 TQ 0001 SS with respect to the Quebec
      government.

8.    GUARANTEES

      For purposes of the present offer intervene:

      Mr Terence Byrne
      489 Grosvenor
      Westmount, Quebec H3Y 2S5

      Mr. Ken Forbes
      2076 Sherbrooke West
      Montreal, Quebec H3H 1G5

      Mr. Louis Muro
      374 Oliver Street
      Westmount, Quebec H3Z 3C9

      stipulating at his time jointly and sevrally, hereinafter designated
collectively as the Intervenors .

      The Intervenors declare that they are shareholders or Directors of the
      Company, that they have been made aware of the contents of the present
      offer, its terms, conditions and application, that they understand its
      implications and that they are satisfied.

      The Intervenors declare that it is to their advantage that the QIDC Loan
      Guarantee be conferred upon the Company.

      The Company and the Intervenors declare that the Intervenors are
      shareholders of the Company or that they maintain close and continuous
      business relations with the Company.

      The Intervenors, as joint and sevral guarantors, hereby guarantee to QIDC,
      the repayment of all sums which QIDC might have to pay to the Lender under
      the terms of the guarantee in the event of the non-respect by the Company
      of its obligations to provide to QIDC, as produced or as received, all tax
      filings, Notices of Assessment, as well as any correspondence related to
      Tax Credits, or its obligation to apply any cheque or amount received as
      Tax Credits to the reduction of the balance of the Loan.

      The Intervenors, as joint and sevral guarantors, hereby guarantee to QIDC
      the repayment of any sum which QIDC might have paid to the Lender under
      the terms of


                                                                             487
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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

      the Loan Guarantee, up to the amount of any portion of Tax Credits
      refunded or credited which might have been withheld by the federal and
      provincial governments against payment of obligations by the Company to
      those governments. (*offsets...substantial rewording required to translate
      the meaning of the paragraph from French into English)

      The Intervenors will be considered and will find themselves in the same
      situation as the Company, and they expressly renounce all requests for
      payment, claims, protests and notices of same as well as all notices of
      default and they also renounce any benefits of division and discussion.

      Notwithstanding Article 2363 of the Quebec Civil Code, the Intervenors
      respectively agree that their above-mentioned obligations toward QIDC will
      continue beyond the term of their functions within the Company, unless
      they each substitute, following their mandate (*translated in terms of
      meaning rather than words insofar as there is no easy English equivalent
      of the sentence and grammatical structure), a successor acceptable to
      QIDC.

SOCIETE DE DEVELOPPEMENT INDUSTRIEL DU QUEBEC

By:   Original signature                            Date    98-01-16
----------------------------                       
        Daniel Vincent
      Technology Director

                            ACCEPTANCE BY THE COMPANY

After having become knowledgable of the terms and conditions of the present
offer, we accept the present offer of a loan guarantee and we attach a cheque in
the amount of $29,417.58(*Cdn) in payment of the Guarantee Fees ($18,740) the
Commitment Fees ($9,370) and the GST ($655.90) and QST ($651.68)

3143619 CANADA INC.


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Certain  annotations  and  explanations  may have been  added by  management  to
enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

By: _____________________________                             Date _____________

  Terence C. Byrne (handwritten)
----------------------------------
   Name of authorized signatory


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enhance  clarity.  See asterisks for such additions.  Some  punctuation may have
been modified in recognition of certain  differences  between French and English
grammar.

GUARANTEES

After having read the present offer of a Loan Guarantee, its terms and
conditions, the Intervenors declare in understanding its implications, that they
are satisfied and consent to their respective personal commitment enunciated in
Article 8.

    /s/ Terence C. Byrne                      Date  19 Jan. 1998
----------------------------
      Terence C. Byrne

____________________________                  Date  ____________________________

         Ken Forbes

       /s/ Louis Muro                         Date  19 Jan 1998
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         Louis Muro


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