<PAGE>

                                                                      26/11/96

     THIS LEASE dated as of the 26th day of November, 1996


                                   B E T W E E N:

                      STANDA INVESTMENTS INC.
                      A corporation incorporated under the
                      laws of the Province of Ontario

                            (hereinafter called "Landlord")
                                                OF THE FIRST PART;

                                    - and -

                      TORFEACO INDUSTRIES LIMITED
                      A corporation incorporated under the
                      laws of the Province of Ontario

                             (hereinafter called "Tenant")
                                                OF THE SECOND PART;


1.00 - LEASE SUMMARY

1.01 Lease Summary
     The following is a summary of some of the basic terms of this Lease.  For
details of the terms referred to below, recourse should be bad to the balance of
this Lease.  This Section 1.01 is for convenience and if a conflict occurs
between the provisions of this Section 1.01 and any other provisions of this
Lease, the other provisions of this Lease shall govern.

(a) Premises             A free standing building and adjacent lands described 
                         as the Lands and Building and municipally known as 
                         545 Trethewey Drive, Toronto, Ontario

(b) Term                 3 years

(c) Commencement Date    the earlier of March 1, 1997 or the date upon which the
                         Tenant first uses any part of the Premises.

(d) Expiry Date:         February 29, 2000

(e) Basic Rent

(f) Option to Renew      Nil

(g) Use of Premises:     Light manufacturing and office and/or warehousing
                         and/or storage, sale or 

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                         distribution of merchandise handled by the Lessee

(h) Security Deposit:    Nil

(i) Prepaid Rent         Nil


                                  ARTICLE II

2.00 - DEFINITIONS

2.01 Definitions

Where used in this Lease, the following words or phrases shall have the meanings
set forth in the balance of this Article.

2.02 "Actual Floor Area" shall mean the actual floor area of the Premises as
same shall be determined by the Landlord's architect, engineer or surveyor as
soon as the demising walls separating the Premises from other areas of the
Building are completed.

2.03 "Additional Rent" shall have the meaning ascribed to it in Section 5.03.

2.04 "Building" means the building located on the Lands and forming part of the
Premises.

2.05 "Commencement Date" shall have the meaning ascribed to it in Section
1.01(c).

2.06 "Lands" means the lands more particularly described in Schedule "A"hereto.

2.07 "Laws" means all statutes, regulations,  bylaws, orders, rules,
requirements and directions of all federal,provincial, municipal and other
governmental authorities having jurisdiction.

2.08 "Lease" means this Lease including all of the schedules attached hereto.

2.09 "Operating Costs" means the costs referred to in 5.03(a), (b) and (c).

2.10 "Premises" means the Building and adjacent land thereto and includes
without limitation all structures and improvements and the roof, walls and
foundation and footings thereof, and all fixtures, plants, apparatus,
appliances, furnaces, boilers, machinery, engines, motors, compressors, dynamos,
elevators, escalators,fittings, piping, connections, conduits, ducts, equipment,
partitions, furnishings and personal property of the Tenant of every kind and
description affixed or attached to any such building and improvements without in
any way limiting the generality of the foregoing, it is understood and agreed

                                                                             2
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that the Premises includes and contains lighting fixtures and all wiring,
conduits and apparatus for electrical power all of which remain the property of
the Landlord.

2.11 "Realty Taxes" means all taxes, rates, duties, levies, fees, charges, local
improvement rates, imposed charges, levies and assessments whatever (including
school taxes, water and sewer taxes, extraordinary and special assessments and
all rates, charges, excises or levies whether or not of the foregoing nature),
and whether municipal, provincial, federal or otherwise, which may be levied,
confirmed, imposed, assessed, charged or rated against the Lands and Buildings
or any part thereof, or with respect to the capital invested by the Landlord in
respect thereof, and any fixtures, equipment or improvements therein, or against
Landlord in respect of any of the same or in respect of any rental or other
compensation receivable by Landlord in respect of the same, including any
commercial concentration levy or any tax or duty imposed upon Landlord which is
measured by or based in whole or in part directly upon the Rent payable under
this Lease whether existing at the date hereof or hereafter imposed by any
governmental authority including, without limitation, value added tax, goods and
services tax, business transfer tax, retail sales tax, federal sales tax, excise
taxes or duties or any tax similar to the foregoing, but not including taxes
which are based on the Landlord's profits which are of the nature of a personal
income tax liability imposed on the Landlord.

2.12 "Rent" shall have the meaning ascribed to it in Section 5.01 hereof.

2.13 "Rental Year" means a period of twelve (12) consecutive calendar months.

2.14 "Term" shall have the meaning ascribed to it in Section 4.02.


                                  ARTICLE  III

3.00 - INTENT OF LEASE

3.01 Net Lease

It is the intent of the parties hereto that this Lease be a lease that is
absolutely net to Landlord, and that, except as expressly herein set out,
Landlord shall not be responsible for any expenses or obligations of any kind
whatsoever in respect of or attributable to the Premises.

                                     ARTICLE IV

4.00 - LEASE OF PREMISES

4.01 Premises

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord 

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the Premises.

4.02 Term

The Term of the Lease shall be for the period described as the Term in Section
1.01(1)) hereof, commencing on the Commencement Date and to be fully completed
and ended on the date described as the Expiry Date in Section 1.01(d) hereof.

4.03 Quiet Enjoyment

Subject to all of the terms of this Lease and subject to Tenant's paying all
Rent and performing all obligations whatsoever as and when the same are due to
be paid and performed by Tenant, Tenant may peaceably possess and enjoy the
Premises for the Term without interruption by Landlord or any person claiming
by, from or under Landlord.

                                     ARTICLE V

5.00 - RENT

5.01 Tenant to Pay

Tenant shall pay in lawful money of Canada at par at such address as shall be 
designated from time to time by Landlord, Basic Rent and Additional Rent (all 
of which are collectively herein sometimes referred to as "Rent") as herein 
provided without any deduction, set-off or abatement whatsoever, Tenant 
hereby agreeing to waive any rights it may have pursuant to the provisions of 
Section 35 of the Landlord and Tenant Act R.S.O. 1980 or any other statutory 
provision to the same or similar effect and any other rights it may have at 
law to set-off.

On the Commencement Date and the first day of each Rental Year thereafter and at
any time during any Rental Year when required by Landlord, Tenant shall deliver
to Landlord as requested by Landlord either postdated cheques or a requisition
for a pre-authorized debit from Tenant's bank account in such form as reasonably
required by Landlord, for all payments of Basic Rent and estimates by Landlord
of Additional Rent or any portions thereof payable during the balance of such
Rental Year.

5.02 Basic Rent

Commencing on the Commencement Date, Tenant shall pay to Landlord a fixed
minimum annual rent ("Basic Rent") in the amount described as Basic Rent in
Section 1.01(e) hereof, to be paid in equal monthly installments in advance on
the first day of each month during the Term.

In the event that the Actual Floor Area is different from the Floor Area set out
in 1.01(a) and the Basic Rent is determined at a rate per square foot of Actual
Floor Area, the Basic Rent shall be adjusted accordingly, based on the rental
rate per square foot set out in 

                                                                             4
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1.01(e).

If the first day upon which Rent is payable is other than the first day of a
calendar month, the Tenant shall pay upon such date Rent from such date to the
end of such month calculated at a daily rate of 1/365th of the annual Rent.

5.03 Additional Rent

In addition to Basic Rent, Tenant shall pay to Landlord (i) all Additional Rent
and other amounts as and when the same shall be due and payable pursuant to the
provisions of this Lease all of which shall be deemed to accrue on a per diem
basis; and (ii) all other amounts as and when the same shall be due and payable
pursuant to any agreement or other obligation, whether or not related to the
Premises, between Landlord and Tenant; all of such amounts whether originally
payable pursuant to this Lease or otherwise, being herein sometimes referred to
as "Additional Rent".

5.04 Deemed Rent and Allocation

If Tenant defaults in payment of any Rent (whether to Landlord or otherwise) 
as and when the same is due and payable hereunder, Landlord shall have the 
same rights and remedies against Tenant (including rights of distress) upon 
such default as if such sum or sums were rent in arrears under this Lease.  
All Rent shall, as between the parties hereto, be deemed to be rent due on 
the date upon which such sum or sums were originally payable pursuant to this 
Lease and shall be paid in accordance with this Lease without any deduction, 
abatement or set-off whatsoever.

Landlord may, at its option, from time to time, apply or allocate or re-apply or
re-allocate any sums received from or payable by Tenant to Landlord on account
of any amounts payable by Tenant hereunder in such manner as Landlord determines
in its sole and absolute discretion, without regard to and notwithstanding any
instructions given by or allocations in respect of such amounts made by Tenant.

No payment by Tenant or acceptance of payment by Landlord of any amount less
than the full amount payable to Landlord, and no endorsement, direction or note
on any cheque or other written instruction or statement respecting any payment
by Tenant shall be deemed to constitute payment in full or an accord and
satisfaction of any obligation of Tenant and Landlord may receive any such
lesser amount and any such endorsement, direction, note, instruction or
statement without prejudice to any of Landlord's other rights under this Lease
or at law, whether or not Landlord notifies Tenant of any disagreement with or
nonacceptance of any amount paid or any endorsement, direction, note,
instruction or statement received.

5.05  Monthly Payments of Additional Rent

Landlord may from time to time estimate any amount(s) payable by Tenant 

                                                                           5
<PAGE>

pursuant to any provisions of this Lease for the then current or the next 
following Rental Year or, if applicable, any broken portion thereof and may 
notify Tenant in writing of the estimated amounts thus payable by Tenant. The 
amounts so estimated shall be payable by Tenant in advance in equal monthly 
installments over the Rental Year or broken portion thereof, such monthly 
installments being payable on the same day as the monthly payments of Basic 
Rent.  Landlord may, from time to time, designate or alter the Rental Year 
for which accounts shall be prepared covering the Building Operating Costs. 
As soon as practicable after the expiration of each fiscal period, Landlord 
shall furnish to Tenant a statement of me actual expenses it has incurred 
which are the Tenant's responsibility for such Rental Year and shall make a 
final determination of the amounts payable by Tenant.  If the amount 
determined to be payable by Tenant as aforesaid shall be greater or less than 
the payments on account thereof made by Tenant prior to the date of such 
determination, then the appropriate adjustments will be made and Tenant shall 
pay any deficiency to Landlord within thirty (30) days after delivery of such 
statement and final determination and if Tenant is not in default under the 
terms of the Lease, the amount of any Overpayment shall be paid to or 
credited to the account of Tenant within thirty (30) days after the delivery 
of such statement.

Landlord shall, at Tenant's request, provide Tenant with copies of the invoices
covering the expenses included in the statement of Building Operating Costs to
be furnished annually to the Tenant.

                                     ARTICLE VI

6.00 - REALTY TAXES

6.01  Realty Tax Payable by Tenant

Landlord shall have the right to require Tenant to pay Realty Taxes and any
other taxes which are Tenant's responsibility as set out herein to the relevant
taxing authority or Landlord shall have the right to pay any such Realty Taxes
or other taxes directly to such taxing authority without thereby affecting
Tenant's obligation to pay such Realty Taxes or other taxes. To the extent of
Realty Taxes received by Landlord from Tenant, Landlord shall pay same to the
relevant taxing authority.

Commencing on the Commencement Date and thereafter at all times throughout the
Term, Tenant shall pay to Landlord in monthly installments based on Landlord's
estimate of the Realty Taxes for the relevant Lease Year, or to the relevant
taxing authority, if so requested by Landlord, not later than the time when they
fall due the Realty Taxes, and other taxes, if any, levied, confirmed, imposed,
assessed or charged (herein collectively or individually referred to as
"charged") against or in respect of the Premises and all, furnishings, fixtures,
equipment, improvements and alterations in or forming part of the Premises.

6.02  Determination of Tenant's Realty Tax

                                                                             6
<PAGE>

Tenant's obligation to pay Realty Taxes and other taxes, if any, charged against
the Premises shall be determined on the basis of separate tax bills or
assessment notices respecting the Premises, where available.  If the relevant
taxing authority does not issue a separate tax bill respecting the Premises,
then Tenant's obligation in respect of Realty Taxes shall be computed by
applying the relevant tax rate to the applicable assessment of the Premises if
the Premises have been separately assessed by the relevant assessing authority. 
If there is neither a separate realty tax bill for the Premises, nor a separate
assessment of the Premises for any period of time, then for such period of time,
the Realty Taxes shall be determined by the Landlord acting reasonably, on an
equitable and consistent basis for all occupants of the Lands.

Tenant shall also pay any increase in Realty Taxes assessed against tile
Building which may be levied as a result of any improvements made by Tenant to
the Premises.

6.03 Business Taxes

Tenant shall pay as and when the same are due and payable all business taxes
including all taxes charged in respect of any business conducted on the Premises
or in respect of any use or occupancy of the Premises, whether or not charged
against Landlord or the Premises.  In the event that the Tenant is not assessed
for business taxes as a result of its being business tax exempt but the Landlord
is assessed for business taxes for the business carried on by the Tenant in the
Premises, the Tenant shall pay to the Landlord forthwith upon demand all such
business taxes assessed against the Landlord in respect of the Tenant's use of
the Premises.

6.04 Tax Bills and Assessment Notices

Tenant shall promptly deliver to Landlord forthwith upon Tenant's receiving the
same:

     (a) copies of all assessment notices, tax bills and any other documents
received by Tenant related to Realty Taxes.

     (b) receipts for payment of Realty Taxes and business taxes payable by
Tenant pursuant hereto.

On or before the expiry of each calendar year, in the event that the Landlord
has requested that Tenant pay its share of Realty Taxes directly to the relevant
taxing authority, Tenant shall provide to Landlord evidence satisfactory to
Landlord that all Realty Taxes and business taxes payable by Tenant pursuant to
the terms hereof up to the expiry of such calendar year, including all penalties
and interest resulting from any delay in the payment of Realty Taxes and
business taxes, have been duly paid.

6.05 Contest of Realty Taxes

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<PAGE>

Realty Taxes, or the assessments in respect of Realty Taxes which are the
subject of any contest by Landlord or Tenant shall nonetheless be paid in
accordance with the foregoing provisions hereof, provided, however, that in the
event Tenant shall have paid any amount in respect of Realty Taxes in excess of
the amount ultimately found payable as a result of the disposition of any such
contest, and Landlord receives a refund in respect of the Tenant's share
thereof, if Tenant is not in default hereunder the appropriate amount of such
refund shall be refunded to or, at the option of Landlord, credited to the
account of Tenant.

Landlord may contest any Realty Taxes and appeal any assessments related thereto
and may withdraw any such contest or appeal or may agree with the relevant
authorities on any settlement, compromise or conclusion in respect thereof and
Tenant consents to Landlord's so doing. Tenant shall co-operate with Landlord in
respect of any such contest and appeal and shall make available to Landlord such
information in respect thereof as Landlord requests, Tenant will execute
forthwith on request all consents, authorizations or other documents as Landlord
requests to give full effect to the foregoing.

Tenant shall not contest any Realty Taxes or appeal any assessments related
thereto without first notifying Landlord in writing.

Tenant shall pay to Landlord forthwith upon demand all costs and expenses of any
kind incurred by Landlord bona fide and acting reasonably in obtaining or
attempting to obtain information in respect of or a reduction in respect of
Realty Taxes and any assessments related thereto including, without limitation,
legal, appraisal, administration and overhead costs.

6.06 Adjustments

Any amounts payable by Tenant on account of Realty Taxes shall be adjusted on a
per diem basis in respect of any period not falling wholly within the Term, for
which Realty Taxes are payable.


                                    ARTICLE VII

7.00 - OPERATION OF PREMISES

7.01 Operation of Premises by Tenant

The Tenant at its own expense shall maintain, manage and operate the Premises in
the same manner as a reasonable and prudent owner of same would do in a fast
class and reputable manner befitting the Premises and in conformity with all
Laws and present and fixture requirements of every governmental or other
authority having jurisdiction and shall act diligently and use all proper and
reasonable efforts consistent with good business practice.

7.02 Landlord May Perform or Pay

                                                                            8
<PAGE>

In the event that Tenant fails to pay any cost or expense associated with or
arising in connection with its use and operation, maintenance and repair of the
Premises and including any and every obligation contained in this Lease or in
the event Tenant fails to perform or fulfill any of its obligations hereunder,
Landlord may pay or perform tile same and shall be entitled to charge all of its
costs and expenses together with an administrative charge of twenty (20%)
percent in Connection therewith to the Tenant as Additional Rent who shall pay
them forthwith on demand, Landlord without prejudice and in addition to any
other rights shall have the same remedies and may take the same steps for the
recovery of all such sums as Landlord may take for the recovery of rent in
arrears hereunder.


                                 ARTICLE VIII

8.00 - USE OF PREMISES

8.01 Use of Premises

Tenant covenants that it shall not use and shall not cause, suffer or permit the
Premises to be used for any purpose other than as described as Use of Premises
in Section 1.01(g) hereof without Landlord's prior written consent which may be
withheld in Landlord's sole and absolute discretion.

8.02 Conduct of Business

At all times throughout the Term, Tenant shall continuously, actively and
diligently conduct its business in the whole of the Premises in an up-to-date
first class and reputable manner.

8.03 Tenant's Fixtures

Tenant shall install and maintain at all times during the Term in the Premises
first-class trade fixtures including furnishings and equipment adequate and
appropriate for the business to be conducted on the Premises and of no less a
quality or quantity than whatever is usual for such type of business, all of
which shall be kept in good order and condition.

Tenant may not remove any trade fixtures or other contents of the Premises
therefrom other than in the ordinary course of business except that, with the
prior written consent of Landlord, Tenant may remove such trade fixtures
provided that Tenant provides evidence satisfactory to Landlord that it is
substituting therefor trade fixtures at least equal in value and function to
those being removed.

8.04 Signs

The Tenant shall have the right to erect signs on or about the Premises (except
on or from the root) advertising its business, provided that 

                                                                            9
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such signs are first approved in writing by the Landlord and such signs shall:

     (a) comply with all applicable bylaws and regulations;

     (b) be maintained in good repair by the Tenant and

     (c) not be erected if to do the same would weaken or impair the structural
strength of the Building;

     (d) at Landlord's request be removed on termination of the Lease.

The Tenant shall upon removal of such signs repair any damage caused by their
installation or removal.

8.05 Waste Removal

Tenant shall not allow any refuse, garbage or any loose or objectionable
material to accumulate in or about the Premises and will at all times keep the
Premises in a clean and neat condition.  Tenant shall comply with Landlord's
regulations respecting the removal of waste and Tenant shall at its own expense
remove all waste from the Premises, Until removed from the Premises, all waste
from the Premises shall be kept in appropriate containers.

8.06 Pest Control

Tenant shall be responsible for pest extermination in respect of the Premises
and shall engage, for such purpose, such contractors and at such intervals as
Landlord shall require.

8.07 Waste and Nuisance

     (a) Tenant shall not cause, suffer or permit any waste or damage to the
Premises or leasehold improvements, fixtures or equipment therein nor permit any
overloading of the floors thereof and shall not use or permit to be used any
part of the Premises for any dangerous, noxious or offensive activity or goods
and shall not do anything or permit anything to be done upon or about the
Premises nor anything to be brought thereon which Landlord may reasonably deem
to be hazardous or a nuisance or annoyance.  Tenant shall take every reasonable
precaution to protect the Premises from risk of damage by fire, water or the
elements or any other cause.

     (b) Tenant shall not use any advertising transmitting or other media or
transmissions of any kind, or other devices in a manner which can be heard,
seen, or received outside the Premises, or which would in any way interfere with
any communications or other Systems outside of the Premises.

8.08 Compliance with Law

(a) Tenant shall be solely responsible for obtaining from all 

                                                                           10
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authorities having jurisdiction all necessary permits, licenses and approvals 
as may be necessary to permit Tenant to hold this Lease and to occupy the 
Premises and conduct its business thereon, as required by all applicable 
Laws, including, without limiting the generality of the foregoing, any 
necessary extra provincial license, any necessary license and any necessary 
approvals under the Foreign Investment Review Act (Canada).

Tenant shall be responsible for and shall comply at its own expense with all
applicable Laws respecting the use, condition and occupation of the Premises,
and all leasehold improvements, trade fixtures, furniture, fixtures, equipment
and contents thereof (collectively called "Contents") and Tenant shall promptly
perform all necessary repairs, alterations, changes and improvements to the
Premises and Tenant's business, use, or occupancy thereof and the Contents in
order to comply with all of such Laws.

     (b) Tenant shall provide Landlord on request with evidence satisfactory to
Landlord acting reasonably that Tenant has obtained and is complying with the
terms of all applicable Laws, licenses, approvals and permits from time to time.

8.09 Prohibited Uses

If, in the opinion of Landlord, Tenant is in breach of any of the provisions of
this Article, Tenant shall immediately discontinue such breach upon Landlord's
written request.

                                     ARTICLE IX

9.OO - SERVICES AND UTILITIES

901 Utilities

     (a) Tenant shall be solely responsible for supplying all utilities, beating
and air-conditioning equipment in such manner as a reasonable, prudent owner of
the Premises would do.  Tenant shall promptly pay for, as and when they fall
due, all costs of supplying hot and cold water, electricity, file!, gas, steam,
sewer charges and other utilities, forms of energy, or other services to or used
in respect of the Premises and the Tenant's operation therein.

     (b) Should individual meters or apparatus for the measurement of the
Consumption of any or all utilities supplied to the premises not be available,
Landlord, acting reasonably, shall on an equitable and consistent basis for all
Occupants of the Premises allocate the cost of such utilities including heat and
air conditioning among the various users thereof and such allocation by Landlord
shall be final and binding upon Tenant.  If required by Landlord, Tenant shall
install at its expense, a separate meter or meters to measure the Consumption of
any or all utilities in the Premises, the type of meter and location to be as
determined by Landlord.

                                                                              11
<PAGE>

     (c) If the heating or cooling equipment shall require maintenance, repair
or replacement, Tenant shall promptly arrange for the necessary work to be done
at its expense by contractors approved by the Landlord, or Landlord may at its
option, attend to the same at Tenant's expense with reasonable promptness having
regard to the then existing climatic conditions but in any event Landlord,
having so attended, shall not be liable for any losses or damages arising from
the resulting lack of heating or cooling and, in any event, Landlord shall not
be liable for any indirect or consequential losses or damages or any damages for
personal discomfort arising from any lack of heating or cooling, whether caused
by landlord's negligence or otherwise.

     (d) Tenant shall promptly pay as and when the same shall be payable all
costs for all fittings, machine apparatus, connections, including, but not
limited to telephone installation, and meters and all work, services and rental
charges, charged or performed in connection with any services or utilities
provided to or in respect of the Premises including the costs of maintaining and
repairing all such items.  Tenant shall pay the total cost of and carry out any
replacement of electric light bulbs, tubes, starters and ballasts in the
Premises.

     (e) Tenant's use of any such utilities shall not exceed the available
capacity of the existing systems from time to time.  If Tenant desires at any
time to obtain any such utilities in excess of such available capacity, Tenant
may supply and install at its expense any special wires, conducts or other
equipment necessary' to provide such additional capacity' subject to the prior
written consent of Landlord.

     (f) Landlord shall not be responsible for the inadequacy of any heating or
cooling of the Premises if (i) the use or occupancy of the Premises, or (ii) the
electrical or other power consumed on the Premises, or (iii) the configuration
of partitions or other items on the Premises, or (iv) the failure of Tenant to
keep the equipment in good maintenance or repair or (v) the failure of Tenant to
adequately shade exterior windows, interferes with or impairs the functioning of
equipment for heating or cooling of the Premises.

9.02 Non-Liability of Landlord

Landlord shall not be liable for any damages, direct or indirect, resulting from
or contributed to by any interruption or cessation of or failure in supply of
any utilities, or any heating or air-conditioning equipment or any other systems
or equipment on the Premises.  Without limiting the generality of the foregoing,
Landlord shall not be liable for and Tenant shall indemnify Landlord and save
Landlord harmless from and against any and all indirect or consequential damages
or damages for personal discomfort or illness of Tenant or any persons permitted
by it to be on the Premises by reason of the suspension, non-operation, or
failure for any period of time of any utilities, heating or air-conditioning
equipment or any other systems or equipment on the Premises.

                                                                         12
<PAGE>

9.03 Landlord's Suspension of Utilities. etc.

Should Landlord at any time wish to effect or make any inspection or any 
maintenance, repairs, replacements, alterations or improvements to any 
utilities, heating or air-conditioning equipment or systems (notwithstanding 
that Landlord has no obligation to do so), Landlord shall have the right, on 
at least 4 day's written notice to the Tenant, or with no prior notice in the 
event of an emergency, without any liability and without thereby constituting 
an interference with Tenant's rights under this Lease or a breach by Landlord 
of this Lease, and without thereby entitling Tenant to any rights in respect 
thereof, to discontinue, suspend or modify any utilities, heating, 
air-conditioning and other systems at such time or times and from time to 
time in order to allow the Landlord to do so. The costs incurred by the 
Landlord in connection with any of the above shall be payable by the Tenant 
forthwith on demand, and shall be recoverable by the Landlord as additional 
rent.

                                     ARTICLE X


10.00  MAINTENANCE, REPAIRS AND ALTERATIONS

10.01  Maintenance and Repairs of Premises

     (a) At all times throughout the Term the Tenant at its sole expense 
shall perform or cause to be performed maintenance, decoration, repairs and 
replacements to keep the Premises and all the contents thereof and all 
services, equipment and systems located in or serving the Premises, at all 
times in first-class appearance and condition, and in accordance with all 
Laws.

     (b) At all times throughout the Term the Tenant at its sole expense shall
maintain the outside of the Premises including driveways, trucking and parking
areas, lawn and shrubbery maintenance and snow removal.

     (c) The Landlord shall be responsible for the cost of all structural 
repairs or replacements to the extent that the cost of any such repair or 
replacements shall exceed the sum of $50,000.00 unless caused by the 
negligence or omission of the Tenant.  The Tenant shall be responsible for 
the first $50,000.00 of cost of such repair or replacements during the Term 
or as otherwise set out herein.

10.02 Approval of Repairs and Alterations

     (a) Tenant shall not make any repairs, replacements, changes, additions,
improvements or alterations (hereinafter in this Article X referred to as
"Alterations") to the Premises without Landlord's prior written consent, which
consent shall not be unreasonably withheld unless such proposed Alterations
might; (i) in any way affect the structure of the Premises, any demising walls
or entrances, or the 

                                                                            13
<PAGE>

coverage of the Lands for zoning purposes; or (ii) in the reasonable opinion 
of Landlord, detrimentally affect the appearance or quality of the Premises, 
or impair the value or usefulness of the Premises, in either of which events 
such consent may be withheld in Landlord's sole discretion.

     (b) With its request for Landlord's consent, Tenant shall submit to
Landlord details of the proposed Alterations including plans and specifications
in respect thereof prepared by qualified architects or engineers, and which
Alterations shall be completed in accordance with the plans and specifications
approved in writing by Landlord.

     (c) Unless expressly authorized in writing by Landlord to the contrary, all
Alterations which might cost in excess of Ten thousand ($10,000.00) dollars to
complete or which might affect the structure or mechanical or electrical systems
of the Premises, shall be conducted under the supervision of a qualified
architect or engineer approved by Landlord, such approval not to be unreasonably
withheld.

     (d) All Alterations shall be planned and completed in compliance with all
Laws and Tenant shall, prior to commencing any Alterations, obtain, at its
expense, all necessary permits and licenses and provide evidence thereof
satisfactory to Landlord.

     (e) Tenant shall, prior to the commencement of any such Alterations furnish
to Landlord at Tenant's expense such evidence as reasonably required by Landlord
of the projected cost of Alterations together with such indemnification against
costs, liens and damages as Landlord shall reasonably require including, if
required by Landlord, a performance bond in such terms and issued by such
company as shall be acceptable to Landlord in its sole discretion in an amount
at least equal to the estimated cost of such Alterations, guaranteeing
completion within a reasonable time of such Alterations free and clear of any
liens or encumbrances.

     (f) All Alterations shall be performed without any disruption to other
tenants of the Building and promptly and in a good and workmanlike manner and in
compliance with Landlord's rules and regulations by competent contractors or
workmen who shall be designated or approved by Landlord.

     (g) If Tenant performs any such Alterations without compliance with all of
the foregoing provisions of this Article X, Landlord, without prejudice to and
without limiting Landlord's other rights pursuant to this Lease and at law,
shall have the right to require Tenant to cease and/or remove such Alterations
forthwith.

10.03 Repair According to Landlord's Notice

Landlord or any persons designated by it shall have the right to enter the
Premises at any time to view the state of repair, condition and use thereof and
Tenant shall promptly perform any maintenance, decoration, repairs, replacements
or Alterations according to written notice from 

                                                                             14
<PAGE>

Landlord.  In the event that the Tenant shall refuse or neglect to make 
forthwith the repairs referred to in any such notice, the Lessor may make the 
same and the costs thereof, together with reasonable compensation to the 
Landlord for administration and/or supervision of the work required, shall be 
paid forthwith by the Tenant as additional rent.

10.04  Notice by Tenant

Tenant shall give immediate written notice to Landlord of any accident, defect,
damage or deficiency in any part of the Premises, which comes to the attention
of Tenant or any of its employees or contractors notwithstanding the fact that
Landlord has no obligation in respect of the same.  The provisions of this
Section 10.04 shall not be interpreted so as to imply or impose any obligation
whatsoever upon Landlord.

Tenant shall exercise all due diligence to become aware of any such situation.

10.05  Ownership of Leasehold Improvements

All leasehold improvements installed in the Premises shall forthwith upon the
installation thereof become the absolute property of Landlord without
compensation therefor but without Landlord's having or thereby accepting any
responsibility in respect of the maintenance, repair or replacement thereof. all
of which shall be Tenant's responsibility.  The expression "Leasehold
Improvements" where used in this Lease includes, without limitation, all
fixtures, improvements, installations, alterations and additions from time to
time made, erected or installed in or about the Premises, and includes all the
following, whether or not easily disconnected and moveable: doors partitions and
hardware, mechanical, electrical and utility installations, carpeting, drapes,
other floor and window coverings, and drapery hardware, and decorations of any
kind, heating, ventilating, air-conditioning and humidity control equipment,
lighting fixtures, built-in furniture and furnishings, all counters in any way
connected to the Premises or to any utility services located therein.

The only exclusions from "Leasehold Improvements" are free-standing furniture,
trade fixtures and equipment not in any way connected to the Premises or to any
utility systems located therein.

10.06  Construction Liens

Tenant shall make all payments and take all steps necessary to ensure that no
lien or other charge is registered against the Lands or any portion thereof or
against either Landlord's or Tenant's interest therein as a result of any work
done or material supplied to Tenant or the Premises.  Tenant shall cause any
such registrations to be discharged or vacated immediately after notice from
Landlord, or within ten (10) days after registration, whichever is earlier.

                                                                           15
<PAGE>

Tenant shall indemnify and save harmless Landlord from and against any
liabilities, claims, damages, costs or expenses, including legal expenses,
arising in connection with any work done or materials supplied in respect of the
Premises.

If Tenant permits there to be registered or fails to cause any such registration
to be discharged or vacated as aforesaid, then, in addition to any other rights
of Landlord, Landlord may, but shall not be obliged to. discharge or vacate the
same by paying the amount claimed to be due together with any other amounts into
court or otherwise as Landlord determines, including legal fees and
disbursements, in thus arranging for the discharging or vacating of any such
liens or certificates of action and all amounts so paid by Landlord shall be
paid by Tenant to Landlord forthwith upon demand together with reasonable
compensation to Landlord for administration in respect thereof.


                                     ARTICLE XI

11.00 - END OF TERM

11.01 Vacating of Possession

Forthwith upon the expiry or earlier termination of the Term, Tenant shall
peaceably deliver to Landlord vacant possession of the Premises in such
condition in which Tenant is required to maintain and keep the Premises during
the Term pursuant hereto and shall leave the Premises in a neat, clean and
broom-swept condition and Tenant shall deliver all keys for the Premises and all
keys or combinations to locks on doors, safes or vaults within the Premises.

11.02 Removal of Trade Fixtures

Provided that Tenant has paid all Rent to the date of expiry or earlier
termination of the Term and any and all damages and other amounts payable by
Tenant to Landlord for any reason whatever and provided Tenant is not otherwise
in default hereunder, or if otherwise authorized or requested by the Landlord,
Tenant shall at the expiry or earlier termination of the Term remove its trade
fixtures and shall repair all damage or injury caused to the Premises resulting
from the installation or removal of such trade fixtures.

Other than as provided above, Tenant shall not remove trade fixtures from the
Premises.

If at the expiry or earlier termination of the Term, Tenant does not remove its
trade fixtures or any of its other property on the Premises, Landlord shall have
no obligation in respect of any such trade fixtures or property and may sell or
destroy the same or have them removed or stored at the expense of Tenant or
dispose of them in any other manner whatsoever as may be determined by Landlord
in its sole discretion; at the option of Landlord, such trade fixtures or
property not removed at 

                                                                            16
<PAGE>

the expiry or earlier termination of the Term shall become the absolute 
property of Landlord without payment of any compensation therefor to Tenant 
and may be dealt with by Landlord in such manner as it determines.

11.03  Removal of Leasehold Improvements

Notwithstanding that the Leasehold Improvements become the absolute property of
Landlord upon installation, at the expiry or earlier termination of the Term,
Tenant shall remove any or all of such Leasehold Improvements as required by
Landlord and in so doing, shall repair any damage caused as a result of the
installation or removal of the same.

11.04 Overholding by Tenant

If Tenant remains in possession of all or any part of the Premises after the
expiry of the Term with the consent of Landlord and without any further written
agreement, this Lease shall not be deemed thereby to have been renewed and
Tenant shall be deemed conclusively to be occupying the Premises as a monthly
tenant on the same terms as set forth in this Lease so far as they are
applicable to a monthly tenancy except the monthly Rent shall be 200% of an
amount determined by taking 1/12 of the Rent payable for the period of the last
twelve months of the Term.


                                    ARTICLE XII

12.00  DAMAGE AND DESTRUCTION

12.01 Termination of Lease

If any part of the Premises is damaged or destroyed and either

     (a) in the opinion of Landlord acting reasonably, the damage or destruction
cannot be rebuilt within one hundred and eighty (180) days after the damage or
destruction;

     (b) such damage or destruction is caused by an occurrence against which
Landlord is not insured or required to insure or the cost of repairs of which
would be in excess of the amount which Landlord is required to insure pursuant
hereto or is otherwise insured; or

     (c) such damage or destruction occurs within two (2) years prior to the
expiry of the Term and either there are no remaining rights in Landlord or
Tenant to extend or renew this Lease or Landlord or Tenant, having the right to
renew or extend this Lease, fails to do so within fifteen (15) days after such
occurrence:

Landlord may, at its option to be exercised by written notice given to Tenant
within sixty (60) days after such occurrence, terminate this Lease whereupon
Tenant will immediately surrender the Premises and all 

                                                                           17
<PAGE>

its interest therein to Landlord, and Basic Rent and all other payments for 
which Tenant is liable pursuant to this Lease shall be apportioned to the 
effective date of termination. Tenant will remain liable to Landlord for all 
sums accrued due under this Lease to the date of termination, and Landlord 
may re-enter and repossess the Premises.

12.02 Repair and Rebuilding

If this Lease is not terminated pursuant to this Article XII:

     (a) Landlord, to the extent of insurance proceeds which Landlord receives,
and to the extent that any mortgagee entitled to be paid such insurance proceeds
consents to the use of same for repair of such damage or destruction, shall
diligently proceed to perform such repairs to the Premises to the extent of
insurance proceeds being available. Within thirty (30) days after Landlord has
completed its repairs, Tenant shall complete any necessary repairs to the
Premises to render the Premises usable for Tenant's purposes and shall fully
fixture, stock and staff the Premises and recommence the operation of Tenant's
business.

     (b) Except to the extent of insurance proceeds received by the Landlord for
the repair of the Premises, Tenant acknowledges that its obligations to repair
the Premises after damage or destruction as aforesaid or otherwise shall be
performed at Tenant's sole cost whether or not the damage or destruction was
caused by Landlords fault or negligence and whether or not Landlord had at any
time made any contribution to the cost of supply, installation or construction
of any Leasehold Improvements in the Premises.

     (c) Landlord, in performing its repairs to the Premises or the Common
Facilities as required hereby shall not be obliged to repair or rebuild in
accordance with plans or specifications for the Premises as they existed prior
to such damage or destruction, but Landlord may repair or rebuild the same in
accordance with any plans and specifications chosen by Landlord in its sole and
absolute discretion provided that Tenant's use and occupancy of and access to
the Premises and the general overall usability of the Premises are not
materially detrimentally affected by any difference in plans, specifications, or
form of the Premises or from such plans, specifications and form as the same
existed immediately prior to the occurrence of such damage or destruction.

12.03 Abatement

     (a) If the damage or destruction is such as to render the whole or any part
of the Premises unusable for the purpose of Tenant's use as permitted hereby,
then Basic Rent shall only abate from the date of the damage or destruction
until the Premises are again usable by Tenant for the purpose intended.  Basic
Rent shall abate to the extent that Tenant's use and occupancy of the Premises
is in fact diminished, which determination shall be made by Landlord in its sole
discretion acting reasonably.  The abatement will diminish proportionately as
repairs are 

                                                                             18
<PAGE>

made and more of the Premises is returned to a usable state.

     (b) Notwithstanding any other provision of this Section 12.03:

         (i)   if the necessary repairs have been made within fifteen (15) 
days after the date of the damage or destruction, there will be no abatement 
of Basic Rent;

         (ii)  to the extent that any part of the Premises remains unusable 
because Tenant's repairs have not been completed, no abatement of Basic Rent 
will extend beyond the date by which, in the opinion of Landlord arrived at 
on a reasonable basis, Tenant's repairs would have been completed had Tenant 
exercised reasonable diligence.

         (iii) Basic Rent shall abate only to the extent that such rent is 
recovered by Landlord under any policies of insurance against rental loss 
which Landlord may have obtained.

12.04 Determination of Matters

For the purposes of this Article XII, all matters requiring determination such
as, without limitation, the extent to which any area(s) of the Premises are
damaged, or are not capable of being used, or the times within which repairs may
be made, shall. be determined by Landlord acting reasonably, such determination
to be final and binding on the parties.


                                 ARTICLE XIII

13.00 - INSURANCE AND INDEMNITY

13.01 Tenant's Insurance

     (a) Tenant shall obtain in full force and effect during the Term with
respect to the Premises insurance against such occurrences and in such amounts
and on such terms and conditions and with such deductible(s) as Landlord may
determine from time to time.  Unless and until otherwise determined by Landlord,
such insurance shall include, without limitation:

         (i)   insurance on the building and improvements and equipment 
contained therein owned or leased by Landlord or which Landlord desires to 
insure, for full replacement cost, against damage by fire, lightning, 
explosion, sprinkler leakage and other risks contained in fire insurance 
policies with endorsements generally known as extended coverage and riot 
vandalism and malicious acts, endorsements or, at Landlord's option, all 
risks insurance;

         (ii)  boiler and machinery insurance on such insurable objects as 
Landlord may elect to insure;

         (iii) rental income insurance covering such occurrences, in 

                                                                         19
<PAGE>

such form, and with such period of indemnity as Landlord may determine; and

         (iv)  public liability insurance.

     (b) Tenant shall maintain during the Term

         (i)   all risks insurance upon property owned by the Tenant or for 
which it is liable (including glass) and which is located on the Premises 
including, without limitation, furniture, fittings, installations, 
alterations, additions, partitions and fixtures or anything in the nature of 
a leasehold improvement made or installed by or on behalf of the Tenant in an 
amount equal to the full replacement cost thereof;

         (ii)  comprehensive general liability insurance against claims for 
death, personal injury and property damage in or about the Premises in 
amounts satisfactory from time to time to the Landlord acting reasonably but 
in any event in an amount not less than $5,000,000.00 per occurrence for 
personal injury and property damage;

         (iii) tenant's legal liability insurance for limits satisfactory 
from time to time to the Landlord acting reasonably;

         (iv)  Business interruption insurance;

         (v)   such other insurance as the Landlord may from time to time
reasonably require; and

The insurance described in parts (a), E)(i) and (b)(ii) shall name the 
Landlord and anyone designated in writing by the Landlord as Mortgagee as 
additional insureds as their interests may appear.  All property damage and 
public liability insurance shall contain a provision for cross-liability or 
severability of interest as between the Landlord and the Tenant, The Tenant 
hereby releases the Landlord from any liability for loss to the extent of all 
insurance proceeds paid under policies of insurance carried by the Tenant or 
which would have been paid if the Tenant had maintained the insurance it is 
required to maintain under this Lease Such policies shall contain an 
endorsement requiring the insurers under such policies to notify the Landlord 
in writing at least thirty (30) days prior to any material change or 
cancellation thereof. The Tenant shall furnish to the Landlord certificates 
of insurance as aforesaid and shall provide written evidence of the 
continuation of such policies not less than ten days prior to their 
respective expiry dates.

The cost or premium for each and every such policy shall be paid by the 
Tenant. If the Tenant fails to maintain such insurance, the Landlord shall 
have the right, but not the obligation or any liability to do so, to pay the 
cost or premium therefor, and in such event the Tenant shall repay to the 
Landlord, as Additional Rent, forthwith on demand the amount so paid.

                                                                            20
<PAGE>

     (c) such other insurance in such amounts and on such terms as Landlord, in
its discretion, may determine.

13.O2  Cancellation of Insurance

     (a) In the event of an actual or threatened cancellation of or adverse
change in any policy of insurance of Tenant on or related to the Premises or any
pan of contents thereof by reason of:

         (i)   the use of occupancy of the Premises by tenant or any other 
person permitted by Tenant on the Premises; or

         (ii)  anything placed on or permitted by Tenant or any person m the
Premises and if Tenant fails to remedy the situation, condition, use, occupancy
or other factor giving rise to such actual or threatened cancellation or change
within twenty-four (24) hours after notice thereof by Landlord,

         Landlord may, at its option, either:

         (i)   terminate this Lease forthwith by written notice; or

         (ii)  remedy the situation, condition, use, occupancy or other factor
giving rise to such actual or threatened cancellation or change, all at the cost
of Tenant to be paid to Landlord forthwith upon demand; for any or all of such
purposes as set forth in this subsection (ii) Landlord shall have the right to
enter upon the Premises without further notice.

13.03 Landlord's Non-Liability

Tenant agrees that Landlord shall not be liable or responsible in any way for 
any injury or death to any person or for any loss or damage to any property 
at any time, in, on or about the Premises, no matter how the same shall be 
caused and unless any such death, injury, loss or damage is caused or 
attributed to the gross negligence of the Landlord, its servants, agents, 
employees, contractors or persons for whom Landlord is in law responsible in 
performing any of its obligations hereunder or otherwise.  Without limiting 
the generality of the foregoing, Landlord shall not be liable or responsible 
for any injury, death) loss or damage to any persons or property caused or 
contributed to by any of the following: fire, explosion, steam, water, rain, 
snow, electricity, gas, or falling plaster; or by dampness or leaks from any 
pipes, appliances, plumbing works, roof, exterior walls or any other source 
whatsoever.  All property kept or stored in or about the Premises shall be at 
the sole risk of Tenant and Tenant shall indemnify Landlord and save it 
harmless in respect of the same. Without in any way limiting or affecting the 
generality or interpretation of the foregoing provisions of this Section 
13.03, it is agreed that Landlord shall in no event be liable for any 
indirect or consequential damages suffered by Tenant or any person arising 
therefrom except if arising from the Landlord's gross negligence in 
performing any of its obligations hereunder or otherwise.

                                                                            21
<PAGE>

13.04 Indemnity of Landlord

Tenant shall indemnify Landlord and all of its servants, agents, employees, 
contractors and persons for whom Landlord is in law responsible and shall 
hold them and each of them harmless from and against any and all liabilities, 
claims, damages, losses and expenses, including all legal fees and 
disbursements, due to, arising from or to the extent contributed to by:

     (a) any breach by Tenant of any of the provisions of this Lease;

     (b) any act or omission of any person on the Premises or any use of 
occupancy of or any articles in the Premises;

     (c) any act or omission of Tenant or any of its servants, agents, 
employees, invitees, licensees, sub-tenants, concessionaires, contractors or 
persons for whom Tenant is in law responsible on the Premises;

     (d) any injury, death or damage to persons or property of Tenant of its 
servants, agents, employees, customers, contractors or any other persons on 
the Premises by or with the invitation, license or consent of Tenant;

     (e) any damage, destruction or need of repair to any part of the 
Premises caused by any act or omission of Tenant or its servants, agents, 
employees, customers, contractors, or persons for whom Tenant is in law 
responsible, notwithstanding any other provisions of this Lease including 
Landlord's repair obligations under Section 10.07 above.

13.05 Landlord's Employees

It is agreed that every indemnity, exclusion or release of liability and 
waiver of subrogation herein contained for the benefit of Landlord shall 
extend to and benefit all of Landlord's servants, agents, employees, and 
those for whom Landlord is in law responsible (collectively referred to in 
this Section 13.05 as "Employees"); solely for such purpose, and to the 
extent that Landlord expressly choose; to enforce the benefits of the Section 
13.05 for its Employees, it is agreed that Landlord is the agent or trustee 
for its Employees.
                                       
                                  ARTICLE XIV

1400 - ASSIGNMENT SUBLETTING AND CHANGE OF CONTROL

14.01  Consent Required

This Lease is personal to Tenant only and therefore Tenant shall not assign 
this Lease in whole or in part and shall not sublet or part with or share 
possession of all or any part of the Premises, nor shall it 

                                                                            22
<PAGE>

grant any concessions, franchises, licenses or other rights to others to use 
any portion of the Premises (all of the foregoing being hereinafter 
individually or collectively referred to as a "Transfer") without the written 
consent of the Landlord, which written consent is to be obtained in advance 
from the Landlord such consent not to be unreasonably withheld.  If the 
Tenant has entered into a bona fide arm's length agreement to sell the 
business conducted at the Premises, Tenant may Transfer this Lease to the 
purchaser thereunder but only with the prior written consent of Landlord in 
each instance, which consent may not be unreasonably withheld.

Notwithstanding and without in any way affecting or limiting the 
interpretation of the foregoing, it is agreed that it shall be reasonable for 
Landlord to withhold its consent to a Transfer unless it is shown to the 
Landlord's satisfaction that:

     (i) the proposed Transferee has a good business and personal reputation;

     (ii) the proposed Transferee has not been bankrupt or the holder of 
twenty (20%) percent or more of the issued shares of any class of shares of a 
corporation or of an interest in a partnership, either of which has been 
bankrupt in the ten (10) years preceding the date of the proposed Transfer;

No Transfer may be made other than pursuant to an agreement in writing of 
which a copy is given to Landlord together with the request for consent.  The 
provisions of this Article XIV shall apply to any transfer which might occur 
by inheritance or operation of law.

14.02 Obtaining Consent

All requests to Landlord for consent to any Transfer shall be made to 
Landlord in writing together with a copy of the agreement pursuant to which 
the proposed Transfer will be made and, where applicable, a copy of the 
agreement of purchase and sale in respect of the Tenant's business.  All 
costs incurred by Landlord, in respect of any such request for consent, 
including legal costs and Landlord's administrative fee, shall be the 
responsibility of and shall be paid by Tenant forthwith upon demand, whether 
or not Landlord grants its consent to any proposed Transfer.

All such requests to Landlord for consent to any Transfer shall also be 
accompanied by such information in writing as a landlord might reasonably 
require respecting a proposed Transferee and which might be required to 
provide Landlord with all the information necessary to determine whether the 
aforementioned factors are satisfied, and which information shall include, 
without limitation, the name, business and home addresses and telephone 
numbers, business experience, credit information and rating, financial 
position and banking and personal references of such proposed Transferee.

14.03 Terms of Consent

                                                                            23
<PAGE>

If Landlord consents to a Transfer, or a consent to such Transfer is obtained by
the order of a court of competent jurisdiction, or if a Transfer occurs as a
result of operation of law not requiring Landlord's consent (notwithstanding the
express agreement between the parties hereto that any Transfer by operation of
law shall in any event be subject to the consent of Landlord and all of the
other provisions as contained in this Article XIV), Landlord shall have the
following rights, in default of any of which no such Transfer shall occur or be
effective:

     (a) to collect a deposit or further deposit to be held as a security 
deposit for the prompt performance by the Transferee of all of the terms, 
covenants, conditions and provisions of this Lease such that a security 
deposit held by Landlord shall be equivalent to at least the last one (1) 
months' Rent payable in respect of the remaining term for the Transferred 
Premises;

     (b) to require Tenant and the Transferee and any indemnifier in respect 
of Tenant's or Transferee's obligations hereunder to enter into an agreement 
in writing and under seal to implement any amendments to this Lease to give 
effect to Landlord's exercise of any of its rights hereunder;

     (c) to require the Transferee to enter into an agreement with Landlord 
in writing and under seal to be bound by all of Tenant's obligations under 
this Lease amended as herein provided;

     (d) to require the Transferee to waive any rights pursuant to subsection 
39(2) of the Landlord and Tenant Act (Ontario) and any amendments thereto and 
any other statutory provisions of the same or similar effect, to pay any Rent 
less than the amount payable hereunder;

     (e) to require, if the Transfer is a sublease or other transaction not 
including an assignment, that all amounts payable by the Transferee to the 
Tenant be paid directly to Landlord who shall apply the same on account of 
Tenant's obligations under this Lease; and

     (f) to require, if the Transfer provides for a rental, a bonus, key 
money, a lump sum payment or any consideration incidental thereto which is in 
excess of the Rent or that portion of Rent attributable to the portion of the 
Premises transferred, then the excess shall be paid by Tenant to Landlord as 
Additional Rent, it being acknowledged by Tenant that it is not permitted to 
profit in any way from Transferring this Lease or parting with any portion of 
the Premises and that all additional payments in excess of the Rent and 
Additional Rent provided herein shall also be paid to Landlord as Additional 
Rent.

14.04 Effect of Transfer

     (a) No consent of Landlord to a Transfer shall be effective unless given 
in writing and executed by Landlord under seal and no such consent shall be 
deemed or presumed by any act or omission of Landlord 

                                                                            24
<PAGE>

or by Landlord's failure to respond to any request for consent or by 
Landlord's accepting any payment of any amount payable hereunder from any 
patty other than Tenant.  Without limiting the generality of the foregoing, 
Landlord may collect rent and any other amounts from any Transferee and apply 
the net amount collected to any Rent and the collection or acceptance of any 
Rent shall not be deemed to be a waiver of Landlord's rights under this 
section nor an acceptance of or consent to any such Transfer or a release of 
any of Tenant's obligations under this Lease.  No Transfer and no consent by 
Landlord to any Transfer shall constitute a waiver of the necessity to obtain 
Landlord's consent to any subsequent or other Transfer.

     (b) In the event of any Transfer or any consent by Landlord to any 
Transfer, Tenant shall not thereby be released from any of its obligations 
hereunder but shall remain bound by all such obligations pursuant to this 
Lease for the balance of the Term.  Tenant hereby consents to any amendments 
of this Lease which may be made between the Transferee and Landlord without 
the further consent or agreement of Tenant ("Amendments") and Tenant also 
consents to all Alterations as referred to in Section 10.02 above) after any 
such Transfer. Tenant shall continue to be bound by all of its obligations 
pursuant hereto notwithstanding any such Amendments or Alterations, to the 
extent of what would have been Tenant's obligations pursuant hereto had such 
Amendments or Alterations not been made.

     (c) Every Transferee shall be obliged to comply with all of the 
obligations of Tenant under this Lease.  Tenant shall enforce all of such 
obligations against each Transferee.  Any default of any Transferee shall 
also constitute a default of Tenant hereunder.

     (d) Tenant agrees that if this Lease is ever disclaimed or terminated by 
a trustee in bankruptcy of a Transferee or, if Landlord terminates this Lease 
as a result of the bankruptcy, insolvency or any act or default of any 
Transferee, Tenant shall, upon Landlord's request, enter into a new lease of 
the Premises on the identical terms hereof subject to such amendments hereto 
which had been agreed upon prior to such disclaimer or termination, with the 
exception that the length of the term of such new lease shall commence on 
tile date upon which Landlord exercises its right to require Tenant to enter 
into such new lease and shall expire on the date upon which tile Term would 
have expired but for such disclaimer or termination by such trustee in 
bankruptcy or such termination by Landlord, and with the exception that 
Tenant will accept the Premises on an "as is" condition, as of such date upon 
which Landlord exercises its right to require Tenant to enter into such new 
lease.

14.05 No Advertising of Premises

Tenant shall not advertise this Lease or all or any part of the Premises or 
the business or fixtures or contents therein for sale without Landlord's 
prior written consent, which consent Landlord shall not unreasonably withhold 
subject to the other provisions hereof.

                                                                            25
<PAGE>

14.06 Mortgage of Lease

The restrictions on Transfer as aforesaid shall apply, mutatis mutandis, to 
any assigning, subletting, mortgaging, charging or otherwise transferring of 
the Premises or this Lease for the purpose of securing any loan or the 
repayment thereof by Tenant.

14.07 Corporate Tenant

If Tenant or any occupant of the Premises at any time is a corporation, it is 
acknowledged and agreed that the transfer of the majority of the issued 
shares in the capital stock or any transfer, issuance or division of any 
shares of the corporation or of any affiliated corporation of the corporation 
sufficient to transfer control to others than the then present shareholders 
of the corporation shall be deemed for all purposes of this Article XIV to be 
a Transfer and, accordingly, shall be subject to the requirements of this 
Article XIV, and it is agreed that the parties hereto shall have all of the 
same rights and obligations in respect thereof as are applicable to a 
Transfer.

This Section 14.07 shall not apply to Tenant if and as long as Tenant is in 
occupancy of the Premises and is a corporation whose shares are listed and 
traded on any recognized public stock exchange in Canada or the United States.

14.08  Assignment by Landlord

Landlord shall have the right to sell, lease, convey or otherwise dispose of 
the Lands or any portion thereof, and to assign this Lease and any interest 
of Landlord pursuant to this Lease without restriction.

If Landlord shall sell, lease, convey or otherwise dispose of the Lands or 
any portion thereof, or shall assign this Lease or any interest of Landlord 
pursuant to this Lease, then, to the extent that the purchaser or assignee 
agrees with Landlord to assume the covenants and obligations of Landlord 
hereunder.

Landlord shall thereupon and without further agreement be released of all 
liability under this Lease.

                                     ARTICLE XV

15.00 - STATUS AND SUBORDINATION OF LEASE

15.01 Status Statement

Tenant shall, within ten (10) days' after written request from Landlord, 
execute and deliver to Landlord, or to any actual or proposed lender, 
purchaser or assignee of Landlord, a statement or certificate in such form as 
requested by Landlord stating with reasonable particularity (if such is the 
case or stating with reasonable particularity the manner in which such may 
not be the case):

                                                                            26
<PAGE>

     (a) that this Lease is unmodified and in full force and effect, or 
particulars of any such modifications or stating that this Lease is not in 
it'll force and effect if such is the case;

     (b) the date of commencement and expiry of the Term and the dates to 
which Basic Rent and any other Rent, including any prepaid rent have been 
paid;

     (c) whether or not there is any existing default by either patty under 
this Lease and. if so, specifying, such default;

     (d) that there is no reason why the obligations of Tenant under this 
Lease may not be folly enforced in accordance with their terms and that there 
are no defenses, counterclaims or rights of set-off in respect of any of the 
same; and

     (e) full details of the financial and credit standing and details of the 
corporate organization of Tenant and the Indemnifier, if any, it being 
intended that any such statement delivered pursuant hereto may be relied upon 
by an actual or prospective lender, purchaser and assignee of any interest of 
Landlord under this Lease or in the Premises.

15.02 Subordination

This Lease and the rights of Tenant hereunder are and shall be subject and 
subordinate to any and all mortgages, trust deeds, and charges (any of which 
are herein called "Mortgage" or "Mortgages") now or which in the future may 
be registered against the Lands or any portion thereof, and including all 
renewals, extensions, modifications and replacements of any Mortgages from 
time to time. Tenant shall at any time on notice from Landlord or a holder of 
any Mortgage attorn to and become a tenant of the holder of any of such 
Mortgages upon the same terms and conditions as set forth herein and shall 
execute promptly on request by Landlord any certificates, agreements, 
instruments of postponement or attornment or other such instruments or 
agreements as requested from time to time to postpone or subordinate this 
Lease and all of Tenant's rights hereunder to any of such Mortgages or to 
otherwise give full effect to any of the provisions of this Article XV.

Tenant agrees to attorn to and become the tenant of any party whose tide to 
the Premises is superior to that of Landlord or to any assignee from Landlord 
of Landlord's interest under this Lease upon the same terms and conditions as 
are set forth in this Lease and shall execute promptly on request any 
agreements or instruments of attornment to give effect to such attornment as 
shall be requested by Landlord at any time and from time to time.

Provided Tenant is not in default hereunder, Landlord shall use reasonable 
efforts to obtain from the holder of any Mortgage, in respect of which Tenant 
has executed and delivered an instrument of postponement, subordination or 
attornment as required hereby, its agreement to permit Tenant to continue in 
occupation of the Premises in accordance with and subject to the terms of 
this Lease so long as 

                                                                            27
<PAGE>

Tenant is in foil and prompt compliance with all of its terms.

15.03 Tenant's Failure to Comply

If Tenant fails to execute any certificate, agreement, instrument, or other 
document as required by the foregoing provisions of this Article XV within 
ten (10) days after request by Landlord, then Landlord shall have the right 
to.

     (a) execute any such certificate, agreement, instrument or document for 
and on behalf of Tenant and in Tenant's name, Tenant hereby agreeing to be 
bound by the same, and for such purpose Tenant hereby irrevocably appoints 
Landlord as Tenant's attorney for and on behalf of Tenant pursuant to the 
Powers of Attorney Act (Ontario) and which appointment shall survive the 
death or incapacity of Tenant;

     (b) to terminate this Lease; and

     (c) in any event, and without being affected by either of the foregoing 
rights, to exercise all rights against Tenant in respect of Tenant's default 
as aforesaid as Landlord might otherwise have pursuant to this Lease or at 
law.

15.04 Registration

Tenant shall not register this Lease or any short form or notice hereof 
except in Landlord's form prepared by Landlord on Tenant's request or in such 
form as has been approved by Landlord in writing.  The cost of preparation, 
approval, execution and registration of any notice or short form of this 
Lease or other document to be registered by Tenant shall be borne by Tenant 
and shall be paid by Tenant forthwith upon demand.  If Tenant, with 
Landlord's prior consent, registers or causes or permits there to be 
registered against the title to the Lands any short form or notice of this 
Lease or other document, Tenant shall forthwith provide to the Landlord 
details of such registration and a duplicate registered copy of the 
registered document.

Any lease or notice or short form of this Lease registered by or at the 
request of Tenant shall contain an irrevocable power of attorney by Tenant in 
favour of Landlord, which power of attorney is also hereby irrevocably 
granted by Tenant to Landlord under the Powers of Attorney Act (Ontario) and 
which power of attorney shall survive the death or incapacity of Tenant, 
authorizing Landlord to execute on behalf of and in the name of Tenant such 
notices, agreements and documents as shall be required or desired by Landlord 
to expunge or discharge from the register of the title of the Lands any 
interest of Tenant therein after the expiry or earlier termination of this 
Lease, or to give full effect to Landlord's rights under this Article XV.

                                 ARTICLE XVI

16.00 - DEFAULT AND REMEDIES

                                                                            28
<PAGE>

16.01 Default and Remedies

If any of the following shall occur:

     (a) Tenant shall fail, for any reason, to make any payment of Rent as be 
paid hereunder arid such default shall continue for five (5) days whether or 
not notice is given to Tenant;

     (b) Tenant shall fail, for any reason, to perform any other covenant, 
condition, agreement or other obligation on the part of Tenant to be observed 
or performed pursuant to this Lease (other than the payment of any Rent) and 
such default shall continue for fifteen (15) days after written notice 
thereof or such shorter period as expressly provided herein;

     (c) any of the policies of Landlord's insurance on the Premises or any 
part or contents thereof shall be actually or threatened to be cancelled or 
adversely changed as a result of any use or occupancy of or contents in the 
Premises;

     (d) Tenant shall purport to make a Transfer affecting the Premises, or 
the Premises shall be used by any person or for any purpose, other than in 
compliance with and as expressly authorized by this Lease;

     (e) Tenant or any other person occupying any portion of the Premises 
shall make an assignment for the benefit of creditors or become bankrupt or 
insolvent or take the benefit of any statute for bankrupt or insolvent 
debtors or make any proposal, assignment, arrangement or compromise with its 
creditors or, if any steps are taken or action or proceedings commenced by 
any person for the dissolution, winding-up or other termination of Tenant's 
existence or liquidation of its assets;

     (f) a trustee, receiver, receiver-manager, agent or other like person 
shall be appointed in respect of the assets or business of Tenant or any 
other occupant of the Premises;

     (g) Tenant attempts to or does abandon the Premises or remove or dispose 
of any goods and chattels from the Premises so that there would not, in the 
event of such removal or disposition, be sufficient goods of Tenant on the 
Premises subject to distress to satisfy all arrears of Rent payable under 
this Lease and all Rent payable hereunder for a further period of at least 
twelve (12) months, or if the Premises shall be vacant or unoccupied for a 
period of five (5) consecutive days or more without the prior written consent 
of Landlord;

     (h) Tenant makes any sale in bulk affecting any property on the Premises 
(other than in Conjunction with a Transfer approved in writing by Landlord 
and made pursuant to all applicable legislation);

     (i) this Lease or any goods or other property of Tenant shall at 

                                                                            29
<PAGE>

any time be seized or taken in execution or attachment which remains 
unsatisfied for a period of five (5) days or more; and

     (j) termination or reentry by Landlord is permitted under any provision 
of this Lease or at law;

then, without prejudice to and in addition to any other rights and remedies 
to which Landlord is entitled pursuant hereto or at law, the then current and 
the next three (3) months' Rent shall be forthwith due and payable arid 
Landlord shall have the following rights and remedies, all of which are 
cumulative and not alternative, to:

     (a) terminate this Lease in respect of the whole or any part of the 
Premises by written notice to Tenant; if this Lease is terminated in respect 
of pan of the Premises, this Lease shall be deemed to be amended by the 
appropriate amendments, and proportionate adjustments in respect of Rent and 
any other appropriate adjustments shall be made in such manner as shall be 
determined by Landlord;

     (b) enter the Premises as agent of Tenant and as such agent to relet 
them for whatever term (which may be for a term extending beyond the Term) 
and on whatever terms and conditions as Landlord in its sole discretion may 
determine and to receive the rent therefor and, as the agent of Tenant, to 
take possession of any furniture, fixtures, equipment, stock or other 
property thereon and, upon giving written notice to Tenant, to store the same 
at the expense and risk of Tenant or to sell or otherwise dispose of the same 
at public or private sale without flintier notice, and to make such 
alterations to the Premises in order to facilitate their reletting as 
Landlord shall determine, and to apply the net proceeds of the sale of any 
furniture, fixtures, equipment, stock or other property or from the reletting 
of the Premises; less all expenses incurred by Landlord in making the 
Premises ready for reletting and in reletting the Premises, on account of the 
Rent due and to become due under this Lease and Tenant shall be liable to 
Landlord for any deficiency arid for all such expenses incurred by Landlord 
as aforesaid; no such entry or taking possession of or performing alterations 
to or reletting of the Premises by Landlord shall be construed as an election 
on Landlord's part to terminate this Lease unless a written notice of such 
intention or termination is given by Landlord to Tenant;

     (c) remedy or attempt to remedy any default of Tenant in performing any 
repairs, work or other covenants of Tenant hereunder and, in so doing, to 
make any payments due or claimed to be due by Tenant to third parties and to 
enter upon the Premises, without any liability to Tenant therefor or for any 
damages resulting thereby, and without constituting a reentry of the Premises 
or termination of this Lease, and without being in breach of any of 
Landlord's covenants hereunder and without thereby being deemed to infringe 
upon any of Tenant's fights pursuant hereto, and, in such case, Tenant shall 
pay to Landlord forthwith upon demand all amounts paid by Landlord to third 
parties in respect of such default and all reasonable costs of Landlord in 
remedying or attempting to remedy any such default plus ten (10%) 

                                                                            30
<PAGE>

percent of the amount of such costs for Landlord's inspection and 
supervision, plus a further ten (10%) percent for Landlord's overhead and 
profit;

     (d) obtain damages from Tenant including, without limitation, if this 
Lease is terminated by Landlord, all deficiencies between all amounts which 
would have been payable by Tenant for what would have been the balance of the 
Term, but for such termination, arid all net amounts actually received by 
Landlord for such period of time.

16.02 Interest

All amounts of Rent shall bear interest from their respective due dates until 
the actual dates of payment at a rate which shall be the greater of (1) 2 per 
cent per month (twenty-four (24%) per annum) calculated and compounded 
monthly; (ii) six (6%) per cent per annum in excess of the prime commercial 
rate of interest charged by Landlord's bank in Ontario for loans to its most 
favoured commercial customers from time to time; and (iii) the rate expressly 
agreed by Tenant in writing to be paid in respect of any amount(s) from time 
to time.

16.03 Costs

Tenant shall be responsible for and pay to Landlord forthwith upon demand all 
costs incurred by Landlord, including, without limitation, reasonable 
compensation for all time expended by Landlord's own personnel, legal costs 
on a solicitor and his own client basis, and all other costs of any kind 
whatsoever, arising from or incurred as a result of any default of Tenant or 
any enforcement by Landlord of any of Tenant's obligations under this Lease 
or any other agreement or obligation of Tenant to Landlord, whether or not 
related to the Premises.

16.04  Allocation of Payments

Tenant agrees that Landlord may, at its option to be exercised by written 
notice to Tenant at any time, apply all gums received by Landlord from Tenant 
or any other persons in respect of any Rent to any amounts whatsoever payable 
by Tenant and it is further agreed that any allocation made by Landlord, on 
its books and records or by written notice to Tenant or otherwise, may 
subsequently be re-allocated by Landlord as it may determine in its sole 
discretion, and any such allocation and re-allocation from time to time shall 
be final and binding on Tenant unless and to the extent subsequently 
re-allocated by Landlord.

16.05  Security Deposit

     (a) Tenant has deposited or agreed that it is obliged to deposit upon 
execution of this Lease with Landlord the sum described as Security Deposit 
in Section 1.01 hereof ("Security Deposit"). The Security Deposit together 
with a security interest in all of the Assets and Undertakings of the Tenant 
which the Tenant hereby grants to Landlord shall be security for the prompt 
performance by Tenant of all 

                                                                            31

<PAGE>

of the terms, covenants, conditions and provisions of this Lease by Tenant.

     (b) If at any time any Rent shall be overdue Landlord may, at its 
option, appropriate and apply all or any portion of the Security Deposit to 
the payment of the said Rent. Further, if Tenant defaults in the performance 
of any of the terms, covenants,  conditions and provisions of this Lease as 
and when the same are due to be performed by Tenant then Landlord, at its 
option, may appropriate and apply all or any part of the Security Deposit on 
account of any losses or damages sustained by Landlord as a result of such 
default.

     (c) If all or any part of the Security Deposit is appropriated and 
applied by Landlord on account of the payment of Rent or on account of losses 
or damages sustained by Landlord, then Tenant shall, within three (3) days 
after demand from Landlord, remit to Landlord a sufficient amount by 
certified cheque to restore the Security Deposit to the original sum 
deposited or required to be deposited as herein set forth.

     (d) If Tenant complies with all of the terms, covenants, conditions and 
provisions under this Lease and promptly pays all Rent herein provided as and 
when the same shall be due and payable, the Security Deposit shall be 
returned in full to Tenant within sixty (60) days after the later of (i) the 
end of the term or (ii) Tenant's vacating the Premises.

     (e) Landlord may deliver the Security Deposit, or such portion thereof 
remaining on hand to the credit of Tenant, to any purchaser, mortgagee or 
assignee of Landlord's interest in the Premises or the Building or this Lease 
and thereupon Landlord shall be arid is hereby discharged from any further 
liability with respect to the Security Deposit.

16.06 Remedies to Subsist

     (a) No waiver of any of Tenant's obligations under this Lease and no 
waiver of any of Landlord's rights hereunder in respect of any default by 
Tenant hereunder shall be deemed to have occurred or be given as a result of 
any condoning, excusing, overlooking or delay in acting upon by Landlord in 
respect of any default by Tenant or by any other act or omission of Landlord 
including, without limitation, the acceptance of any Rent less than the bill 
amount thereof, the acceptance of any Rent after the occurrence of any 
default by Tenant, or any verbal or written statements or agreements made by 
any employee of Landlord other than an agreement in writing duly executed on 
behalf of Landlord by one of its personnel with ostensible authority to do 
so.  No waiver of any of Tenant's obligations or any of Landlord's rights 
hereunder shall be effective except and only to the extent of any express 
waiver in writing duly executed on behalf of Landlord by one of its personnel 
with ostensible authority to do so. The waiver by Landlord of any default of 
Tenant or of any rights of Landlord shall not be deemed to be a waiver of any 
term, covenant or condition in 

                                                                            32
<PAGE>

respect of which such default or right has been waived and shall not be 
deemed to be a waiver of any subsequent default of Tenant or right of 
Landlord.

     (b) All rights and remedies of Landlord under this Lease and at law, 
shall be cumulative and not alternative, and the exercise by Landlord of any 
of its rights pursuant to this Lease or at law shall at all times be without 
prejudice to any other rights of Landlord, whether or not they are expressly 
reserved.

     (c) If Landlord assigns this Lease to a mortgagee or holder of other 
security on the Premises or any part thereof or to any other person 
whatsoever. Landlord shall nonetheless be entitled to exercise all rights and 
remedies available to it pursuant to this Lease and at law without providing 
evidence of the approval or consent of such mortgagee, holder of other 
security or other person whatsoever.

     (d) All Rent shall be paid by Tenant to Landlord without deduction, 
abatement or set-off whatsoever, except as and to the extent expressly 
permitted pursuant to the terms of this Lease, and Tenant hereby waives any 
rights of deduction, abatement or set-off available to it now or at any time 
in the future,  including any right to deduction, abatement or set-off 
contained in any statute.

16.07 Impossibility of Performance

If and to the extent that either Landlord or Tenant shall be unable to 
fulfill or shall be delayed or restricted in the fulfillment of any 
obligation under this Lease, other than the payment by Tenant of any Rent, by 
reason of unavailability of material, equipment, utilities, services or labor 
required to enable it to fulfill such obligation or by reason of any laws, or 
by reason of its not being able to obtain any permission or authority 
required pursuant to any applicable laws or by reason of any other such cause 
beyond its control and not the fault of the party being delayed and not 
avoidable by the exercise of reasonable foresight (excluding the inability to 
pay for the performance of such obligation), then the party being delayed 
shall be entitled to extend the time for fulfillment of such obligation by a 
time equal to the duration of such delay or restriction, and the other party 
shall not be entitled to any compensation for any loss, inconvenience, 
nuisance or discomfort occasioned thereby. The party delayed will, however, 
use its best efforts to fulfill the obligation in question as soon as is 
reasonably practicable by arranging an alternate method of providing the 
work, services or materials being delayed subject, in the case of performance 
by Tenant, to the approval of Landlord in its sole and absolute discretion. 
In any event, the provisions of this Section 16.07 shall not apply to permit 
any delay in any payment by Tenant of any Rent.

                                 ARTICLE XVII

17.00 - CONTROL OF PREMISES

                                                                            33
<PAGE>

17.01 Rules and Regulations

Landlord may, from time to time, make and amend such rules and regulations 
for the management and operation of the Lands, Building and Premises as 
Landlord shall determine arid Tenant and all persons under its control shall 
be bound by and shall comply with all of such rules and regulations of which 
notice is given to Tenant from time to time, and all of such rules and 
regulations shall be deemed to be incorporated into and form a part of this 
Lease.  Without limiting the generality of the foregoing, Tenant shall comply 
with all rules and regulations made by Landlord respecting security and 
respecting shipping, receiving, loading and unloading of merchandise, 
supplies, materials, garbage and all other things whatsoever, all of which 
shall be made only at such times and from, over or by means of such access 
routes, driveways, doors, loading areas, stairs and other areas or passages 
whatsoever as Landlord shall determine in writing from time to time.  
Landlord shall not make any rules or regulations which conflict with any 
express provisions of this Lease unless and only to the extent required by 
any applicable laws or unless Tenant consents thereto. Landlord shall act 
reasonably in enforcing such rules and regulations, but the imposition of any 
rules and regulations shall not create or imply any obligation of Landlord to 
enforce them or create any liability of Landlord for their non-enforcement or 
otherwise.

17.02     ACCESS TO PREMISES

     (a) Landlord (including its agents, employees, contractors or 
representatives), without limiting any other rights Landlord may have 
pursuant hereto or at law, shall have the right, but not the obligation, to 
enter the Premises at any time and for any of the following purposes:

     (i) to examine the Premises and to perform any maintenance, repairs and 
alterations to the same or any part thereof as may be required or permitted 
by this Lease and to perform any maintenance, repairs and alterations to any 
mechanical, electrical, heating, ventilating, air-conditioning and humidity 
control equipment and services located therein serving the Premises or any 
part thereof, and for all of such purposes, Landlord may take such material 
and equipment into the Premises as Landlord may require;

     (ii) to protect the Premises in respect of any construction or other 
work being performed in premises adjoining or in the vicinity of the Premises;

     (iii) for any purposes as determined by Landlord in cases of emergency;

     (iv) to read any utility or other similar meters located in the Premises;

     (v) during the last twelve (12) months of the Term to show the Premises 
to prospective tenants, and to permit prospective tenants to 

                                                                            34
<PAGE>

make inspections, measurements and plans;

     (vi) at any time during the Term, to show the Premises to prospective 
purchasers, mortgagees or lenders; and

     (vii) to exercise any of the rights available to Landlord pursuant to 
this Lease.

     (b) Landlord shall have the right to run through the Premises conduits, 
wires, pipes, ducts and other elements of any systems for utilities, heating, 
ventilating, air-conditioning and humidity control, telephone and other 
communications systems and any other such systems to serve the Premises or 
any parts thereof, and Landlord shall have access for itself and those 
designated by it to the Premises for the purpose of inspecting, maintaining, 
repairing, replacing and altering any services in respect of any of the same. 
Notwithstanding the foregoing, the Rent shall not be reduced or otherwise 
affected as a result of any of such systems being located on or running 
through the Premises.

     (c) Landlord shall exercise its rights pursuant to this Section 17.02 in 
such manner and at such times as Landlord, acting reasonably but in its sole 
discretion, shall determine; at any time that entry by Landlord is desired in 
case of emergency, and if no personnel of Tenant are known by Landlord to be 
present on the Premises or if such personnel fail for any reason to provide 
Landlord immediate access at the time such entry is desired, Landlord may 
forcibly enter the Premises without liability for damage caused thereby.

                                ARTICLE XVIII

18.00 - EXPROPRIATION

1801 Expropriation

If the whole or any part of the Premises shall be expropriated (which term 
shall for the purposes of this Article XVII include expropriation, 
condemnation or sale by Landlord to an authority with the power to 
expropriate, condemn or take) by any competent authority then:

     (a) Landlord and Tenant shall co-operate with each other in respect of 
such expropriation so that Tenant may receive the appropriate award to which 
it is entitled in law for relocation costs and business interruption and so 
that Landlord may receive the maximum award to which it may he entitled in 
law for all other compensation arising from such expropriation, including, 
without limitation, all compensation for the value of Tenant's leasehold 
interest in the Premises, all of which shall be the property of Landlord and 
all of such Tenant's rights in respect of such expropriation, excluding only 
rights in respect of relocating costs and business interruption, shall he and 
are hereby assigned to Landlord, To give effect to such assignment to 
Landlord, Tenant shall execute such further documents as 

                                                                            35
<PAGE>

Me necessary, in Landlord's opinion, to effect such assignment, and in 
default of Tenant's completing such documents within ten (10) days after 
demand, Landlord shall be and is hereby appointed the attorney for Tenant to 
execute such documents for and on behalf of Tenant and in its name, such 
appointment being hereby made pursuant to the Power of Attorney Act (Ontario) 
and shall survive the death or incapacity of Tenant;

     (b) Landlord shall have the option, to be exercised by written notice to 
Tenant, to terminate this Lease, such termination to be effective on the date 
the expropriating authority takes possession of the whole or any portion of 
the Premises; and

     (c) this Lease shall continue in full force and effect in accordance 
with its terms until the date on which this Lease is terminated in accordance 
with the provisions of this Article XVIII, if terminated in accordance with 
the express provisions hereof and, if terminated, Rent and all other 
obligations under this Lease shall be accrued to and he adjusted as of the 
date of such termination.

                                 ARTICLE XIX

19.01 ENVIRONMENTAL MATTERS

19.01 Definitions

     In this Lease:

"Environmental Audit" shall mean a complete review of the Premises and the 
environmental practices of the Tenant thereon by the Landlord, its employees 
or agents and shall include such visual inspections, interviews with the 
Tenant, its employees, servants, or agents, and such soil, air, or other 
tests as the Landlord shall in its sole discretion deem to be necessary.

"Hazardous Substance" means any contaminant, pollutant or hazardous substance 
that is likely to cause immediately or at some future time, harm or 
degradation to the environment or risk to human health or safety, and without 
restricting the generality of the foregoing, includes without limitation any 
pollutant, contaminant, waste, hazardous waste, toxic substance or dangerous 
good which is defined or identified in any municipal, provincial or federal 
environmental legislation.

19.02 Tenant's Obligations

     (a) The Tenant shall at all times use the Premises so as to comply with 
all municipal, provincial and federal environmental legislation in keeping 
with first class environmental protection practices and so as not to allow 
Hazardous Substance to be on the Premises.

                                                                            36
<PAGE>

     (b) The Landlord shall have the right to conduct an Environmental Audit 
of the Premises at any time and from time to time throughout the term and any 
renewal thereof.

     (c) In the event that the Environmental Audit reveals that the Tenant is 
storing, handling, transporting, manufacturing, processing or otherwise 
dealing with any Hazardous Substances in the Premises, Building or Centre, 
the Landlord shall give the Tenant ninety (90) days within which to amend its 
manner of storing, handling, transporting, manufacturing, processing or 
otherwise dealing with such Hazardous Substances to comply with first class 
environmental practices and the manner in which the Landlord indicates such 
Hazardous Substances be stored, handled, transported, manufactures, processed 
or otherwise dealt with.  The shall further forthwith carry out such 
procedures as are, in the sole opinion of the Landlord, necessary to correct 
any damage which may have been done to the Premises, Building or Centre and 
to forestall any damage to the Premises, Building or Centre which in the 
opinion of the landlord may be created by the unsatisfactory storing, 
handling, transporting, manufacturing, processing or otherwise dealing with 
any Hazardous Substances.

     (d) In the event that the Tenant shall be in default of the provisions 
hereof and shall fail to amend its practices or take such corrective measures 
as are required pursuant to subparagraph (d) hereof within the aforesaid 
ninety (90) day period the Landlord shall have the right to enter upon the 
Premises and carry out such procedures as are, in the sole opinion of the 
Landlord, necessary to correct any damage which may have been done to the 
Premises, Building or Centre, or to forestall any damage to the Premises, 
Building or Centre which in the opinion of the Landlord may be created by the 
unsatisfactory storing, handling, transporting, manufacturing, processing or 
otherwise dealing with such Hazardous Substances and the Tenant shall pay to 
the Landlord on demand, as Additional Rent, all costs and expenses of 
carrying out such procedures. Further, and in addition, to any other remedies 
available to the Landlord, the Landlord may, on seven (7) days' notice, 
terminate the Lease.

     (e) Any entry on the Premises of the Tenant by the Landlord pursuant to 
the terms of the Lease shall not constitute a breach of the Landlord's 
covenant of Quiet Enjoyment.

                                   ARTICLE XX

20.00 - MISCELLANEOUS

20.01 Notices

All notices, requests, demands, acceptances, consents, communications or 
other writings required or permitted to be given hereunder or for the 
purposes hereof ("Notice" in this Section) will be in writing and be 
sufficiently given if personally delivered, sent by prepaid registered mail 
or transmitted by telex, telecopier or other form of 

                                                                            37
<PAGE>

recorded communication tested prior to transmission, addressed to the party 
to whom it is given, as follows:

To the Tenant: 545 Trethewey Drive, Toronto, ON with a copy to Pillowtex 
Corporation, Attention: T.R. Tunnell,  Vice-President, General Counsel, 4111 
Mint Way, Dallas, Texas 75237-1605

To the Landlord: 2 Lynwood Avenue, suite 403, Toronto, ON M4V 1K2 with a copy 
to Torkin, Manes, Cohen & Arbus, Attention: Barry S. Arbus, QC, 151 Yonge 
Street, Suite 1500, Toronto, ON M5C 2W7.

or such other address of which Notice has been given. Any Notice mailed as 
aforesaid will be deemed to have been given and received on the third 
Business Day following the date of its mailing. Any Notice personally 
delivered will be deemed to have been given and received on the day it is 
personally delivered, provided that if such day is not a Business Day, the 
Notice will be deemed to have been given and received on the Business Day 
next following such day. Any Notice transmitted by telex, telecopier or other 
form of recorded communication will be deemed given and received on the first 
Business Day after its transmission.

If a Notice is mailed and regular mail service is interrupted by strike or 
other irregularity on or before the fourth Business Day after the mailing 
thereof, such Notice will be deemed to have not been received unless 
personally delivered or transmitted by telex, telecopier or other form of 
recorded communication.

20.02 Planning Act

This Lease is entered into subject to the provisions of and compliance with 
the provisions of all applicable legislation dealing with planning 
restrictions including the Planning Act S.O. 1983 and amendments.

20.03 Complete Agreement

It is understood and agreed that other than and to the extent that any other 
written agreement between Landlord and Tenant respecting the Premises remains 
in force, this Lease constitutes the complete agreement between the parties 
and that there are no covenants, representations, agreements, warranties or 
conditions in any way relating to the subject matter of this Lease or the 
tenancy created hereby, expressed or implied, collateral or otherwise, except 
as expressly set forth herein, Tenant acknowledges that no representatives of 
Landlord are authorized to make on Landlord's behalf any covenants, 
representations, agreements, warranties or conditions of any kind or in any 
manner whatsoever other than as expressly set forth in writing in this Lease 
in the form in which it is executed by Landlord under seal.

No amendment to this Lease shall be binding upon Landlord unless the same is 
in writing and executed by Landlord under seal.

20.04 Use Prior to Commencement Date

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If Tenant uses or occupies the whole or any part of the Premises in any way 
prior to the Commencement Date without entering into a lease with Landlord in 
respect of such use or occupancy, then during the period of such use or 
occupancy, Tenant shall be a tenant of Landlord subject to all the terms and 
conditions as contained in this Lease which shall apply to such tenancy 
mutatis mutandis; the inclusion of this paragraph shall not be deemed to 
authorize or permit Tenant to use or occupy the whole or any portion of the 
Premises in any way prior to the Commencement Date.

20.05 Acceptance of Premises

The Landlord agrees to complete the work as set out in Schedule "D", and 
provided that all such work is completed in a good and workmanlike manner, 
subject to any items of outstanding work set out in a deficiency list which 
may be delivered by Tenant to the Landlord within 30 days of taking 
possession, the Tenant's entering into possession of the Premises shall be 
conclusive evidence of the acceptance by Tenant of the condition of the 
Premises.

20.06 Time of the Essence

Time is of the essence of this Lease and all parts hereof.

20.07 Applicable Law

     This Lease shall be governed by and interpreted in accordance with the 
laws of the Province of Ontario.  The panics agree that the Courts of 
Ontario. shall have jurisdiction to determine any matters arising hereunder, 
except to the extent, if any, expressly provided to the contrary herein, and 
the panics hereby attorn to the jurisdiction of the Courts of Ontario.

20.08 Severability

If any provision of this Lease or any portion thereof or the application of 
any of the same is illegal, unenforceable or invalid, it shall be considered 
separate and severable from this Lease and all of the remaining provisions 
hereof shall remain in full force and effect as though any such provision of 
this Lease or any portion thereof had not been included in this Lease but 
such provision of this Lease or portion hereof shall nonetheless continue to 
be enforceable to the full extent permitted by law.

Neither parry is obliged to enforce this Lease to the extent that by so doing 
they would be contravening any applicable laws.

20.09  Section Numbers and Headings

The table of contents of this Lease and all section numbers and all headings 
are inserted as a matter of convenience only and shall in no way limit or 
affect the interpretation of this Lease.

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20.10 Interpretation

Whenever a word importing singular or plural is used in this Lease such word 
shall include the plural and singular respectively. Where any patty is 
comprised of more than one entity, the obligations of each of such entities 
shall be joint and several. Words importing either gender or firms or 
corporations shall include persons of the other gender and firms or 
corporations as applicable. Subject to the express provisions contained in 
this Lease, words such as "hereof", "herein", "hereby", hereinafter", and 
"hereunder" and all similar words or expressions shall refer to this Lease as 
a whole and not to any particular section, or portion thereof being less than 
the whole, unless the context otherwise requires.

20.11 Successors

This Lease and all portions hereof shall inure to the benefit of and be 
binding upon the parties hereto and theft respective heirs, executors, 
administrators, successors, assigns and other legal representatives excepting 
only that this Lease shall not inure to the benefit of any of such parties 
unless and only to the extent expressly permitted pursuant to the provisions 
of this Lease.

IN WITNESS WHEREOF this Lease has been executed by the parties hereto under 
their respective corporate seals and under the hands of their duly authorized 
officers in that behalf, as of the day and year first written above.

SIGNED, SEALED AND DELIVERED in the presence of:

STANDA INVESTMENTS INC.

TORFEACO INDUSTRIES

                                       /s/ (Signature Illegible)
                                       -------------------------------

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                                  SCHEDULE A


ALL AND SINGULAR that certain parcel or tract of land and premises situate, 
lying and being in the Borough of North York, in The Municipality of 
Metropolitan Toronto, in province of Ontario, composed of part of Lot 3 in 
the 4th Concession, west of Yonge Street, in the said Borough and designated 
as parts 1 and 2, on a Reference plan deposited in the Registry office for 
the Registry Division of Toronto Boroughs and York South (No 64) as Plan No. 
64R2734.

The description of the south-west side of Tretheway Drive in Plan No. 64R2734 
conforms with the description in Plan BA-474.






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