DIRECTOR’S
      AGREEMENT

     

    THIS
      AGREEMENT
      (the “Agreement”) is made as of this 26th day of January 2005, by Coda Octopus
      Group, Inc., a Delaware corporation (“Coda Octopus”), with its principal place
      of business at 245 Park Avenue, 39th Floor, New York, New York 10167 and Rodney
      Peacock (the “Director”) (collectively the "Parties").

     

    WHEREAS,
      the Director was appointed to serve on the Board of Directors of Coda Octopus
      for a term until the next meeting of stockholders and, if replaced, until his
      replacement is elected and qualifies and the new Director has accepted such
      appointment; and

     

    WHEREAS,
      the Parties desire to enter into the Agreement to reflect the Director’s duties
      and responsibilities; and

     

    WHEREAS,
      the Parties wish to set forth the terms and conditions of service as a
      director;

     

    NOW
      THEREFORE,
      in consideration of the mutual covenants and promises contained herein, and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged by the Parties, the Parties agree as follows:

     

    
      	
              1.
                

            	
              Roles
                and Responsibilities of the Board of Directors 

            


    

     

    The
      Board
      of Directors represents and is accountable to the shareholders of the Company.
      The Board's responsibilities are active and not passive and include the
      responsibility to regularly evaluate the strategic direction of the Company,
      management policies and the effectiveness with which management implements
      its
      policies. The Board's responsibilities further include overseeing the structure
      and composition of the Company's top management and monitoring legal compliance
      and the management of risks related to the Company's operations. In doing so
      the
      Board may set out annual ranges and/or individual limits for capital
      expenditures, investments and divestitures and financial commitments not to
      be
      exceeded without Board approval.

     

    The
      Board
      has the responsibility for appointing and discharging the Chief Executive
      Officer and the President and the other members of management. Subject to the
      requirements of Delaware law, the Compensation Committee of the Board will
      confirm the compensation and the employment conditions of management
      employees.

     

    The
      basic
      responsibility of the members of the Board is to act in good faith and with
      due
      care so as to exercise their business judgment on an informed basis in what
      they
      reasonably and honestly believe to be the best interests of the Company and
      its
      shareholders. In discharging that obligation, the directors must inform
      themselves of all relevant information reasonably available to
      them.

     

    The
      incidence of corporate fraud and the increased emphasis on uncovering fraud
      and
      exposure has resulted in almost daily revelations. The annual cost of fraud
      is
      significant enough to cause concerned investors to insist on better procedures
      for fraud prevention and detection. 

     

    There
      are
      generally three conditions present when fraud occurs: incentive (pressure),
      opportunity, and rationalization (attitude). The policies, procedures, and
      tone
      set by the Company's Board have a direct impact on the prevalence of these
      conditions and therefore on the occurrence of fraud. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    The
      most
      pervasive area of board influence is developing a culture of compliance.
      Arguably more far-reaching than a good system of internal controls, a tone
      of
      sound ethics and corporate responsibility set at the top and pushed down
      throughout the organization, is paramount in addressing the fraud condition
      of
      rationalization (attitude). Well-designed systems are key to addressing the
      condition of opportunity. 

     

    The
      most
      challenging area is pressure or incentive. This condition is fostered internally
      in companies as managerial performance and compensation are often linked to
      company performance, creating incentive. While performance incentives are an
      effective form of remuneration, controls surrounding the determination of
      management compensation must be well designed.

     

    Fraud
      prevention and detection is another key area of corporate governance. Even
      in
      the absence of regulation, investors see the benefit of good governance
      practices to minimize financial losses and lessen the risk of damage to
      corporate reputations - thereby contributing to maintaining the value of shares
      in the marketplace.

     

    Investor
      relations: adoption of good governance practices will enable the Company to
      conduct its business locally and internationally with improved
      investor/shareholder support. Pre-compliance without regulation precludes the
      likelihood of encountering foreign obstacles to corporate endeavors in raising
      capital, competing for business, or merger and acquisition activities. There
      is
      less chance of an objection being raised on technical or compliance grounds,
      reducing project costs and improving the opportunity of success.

     

    
      	2.	
              Extent
                of Services

            


    

     

    The
      Director will devote as much time and attention to the business activities
      of
      Coda Octopus as is needed to carry out his duties in effectuating the roles
      and
      responsibilities of the Board of Directors as set forth in paragraph 1 above,
      including but not limited to; as a member of the compensation committee, review
      of employment arrangement with management personnel, contact with management
      to
      gain relevant information on an as needed basis, review and analysis of relevant
      contracts and business decisions including pro forma financial information
      of
      product launches and business acquisitions, and review of quarterly and annual
      financial statements and contact as needed with in-house accountants and
      auditor.

     

    He
      may
      engage in other business activities which do not conflict with the operations
      of
      Coda Octopus and may sit on charitable, professional and business Boards
      provided that in no event shall the Director be permitted to serve on the board
      of directors of any other entity that owns, operates, acquires, sells, develops
      and/or manages any companies which are involved in sub sea or sonar inspection
      or visualization.

     

    
      	3.	
              Compensation
                and Benefits

            


    

     

    
      	
              (a)
                

            	
              Fees.
                Coda Octopus shall pay the Director an initial gross base annual
                fee of
                $20,000 commencing the first attended meeting of the Board of Directors
                and payable quarterly in arrears, plus a fee of $2,500 per meeting
                of the
                Board of Directors attended by the
                Director.

            


    

     

    
      	
              (b)

            	
              Reimbursable
                Travel.
                Coda Octopus shall reimburse the Director for personal travel to
                meetings
                of the Board of Directors upon presentation by the Director of
                documentation, expense statements, vouchers, and/or such other supporting
                information as Coda Octopus may reasonably
                request.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    
      	
              (c)
                

            	
              Initial
                Restricted Stock Grant.
                Provided that neither the Director nor Coda Octopus has prior thereto
                given notice terminating this Agreement, the Director shall, effective
                January 26th,
                2005 be issued 150,000 shares of common stock of Coda Octopus.
                Certificates representing said shares will bear a restrictive legend
                stating that sale or other transfer of the shares be made only pursuant
                to
                an effective registration statement filed with the Securities and
                Exchange
                Commission (“SEC”) or an exemption from such registration.
                

            


    

     

    
      	
              (d)
                

            	
              Option
                Grant.
                On joining the Board of Directors, the Director shall be issued 200,000
                options to purchase shares of Coda Octopus common stock with an exercise
                price at a level agreed at the start of each year (the exercise price
                for
                2004-05 and 2005-06 is $1, with this price to be adjusted to match
                any
                lower warrant or option price included in any financing or offering).
                Options will expire five years from date of issue. The Shares underlying
                said options will be registered on a piggy back basis in the first
                registration statement filed with the SEC under the Securities Act
                of
                1933. The Director shall also receive each year a grant of 50,000
                common
                stock purchase options with an exercise price to be determined at
                the
                first meeting of the Board of Directors in each fiscal year, with
                this
                grant pro-rated to commence from the first attended meeting of the
                Board
                of Directors.

            


    

     

    
      	
              (e)
                

            	
              D&O
                Insurance Coverage.
                During and for a period of at least three years after the Term, the
                Director shall be entitled to director and officer insurance coverage
                for
                his acts and omissions while an officer and director of Coda Octopus
                on a
                basis no less favorable to him than the coverage provided current
                officers
                and directors.

            


    

     

    
      	
              4.
                

            	
              Termination

            


    

     

    
      	
               

            	
              This
                Agreement will terminate when the Director no longer serves on the
                Board
                of Directors.

            


    

     

    
      	
              5.
                

            	
              Effect
                of Termination

            


    

     

    
      	 	
              Fees
                and other compensation to the Director will cease upon termination.
                The
                Director is entitled to all other compensation received prior to
                the date
                of termination. Options to purchase stock will terminate 90 days
                from the
                date of termination.

            


    

     

    
      	
              6.
                

            	
              Confidentiality

            


    

     

    
      	
              (a)
                

            	
              Definition
                of Proprietary Information.
                The Director acknowledges that he may be furnished or may otherwise
                receive or have access to confidential information which relates
                to Coda
                Octopus’s past, present or future business activities, strategies,
                services or products, research and development, specifically all
                formulas,
                processes, computer code, customer lists, computer user identifiers
                and
                passwords, and all purchasing, engineering, accounting, marketing
                and
                other information, proprietary to Coda Octopus and not generally
                known,
                relating to research, development, manufacture, marketing and sale
                of Coda
                Octopus products, as well as formulas, computer code, processes and
                other
                information received by Coda Octopus from third parties under an
                obligation of secrecy.

            


    

     

    
      	 	
              All
                such information, including any materials or documents containing
                such
                information, shall be considered by Coda Octopus and the Director
                as
                proprietary and confidential (the “Proprietary
                Information”).

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
              (b)

            	
              Definition
                of Inventions.
                Invention(s) means all formulas, processes, discoveries, improvements,
                ideas and works of authorship, whether patentable or copyrightable
                or not,
                which the Director learns, has access to, has a part in developing,
                first
                conceives or first reduces to practice, alone or with others (1)
                that are
                developed on Coda Octopus time, or (2) that relate directly to Coda
                Octopus’ business or actual or anticipated research, or (3) for which Coda
                Octopus’ Proprietary Information or other Coda Octopus property is used,
                or (4) that result from any of the Director’s work for Coda
                Octopus.

            


    

     

    
      	 	
              Director's
                Obligation With Regard to Inventions.
                

            


    

     

    (A) All
      Inventions that the Director may learn, have access to, have a part in
      developing, first conceive, or first reduce to practice (i) during service
      as a
      director with Coda Octopus, whether or not during normal work time or at Coda
      Octopus’ premises, or (ii) at any time after termination if based on
      Confidential Information, are and shall remain the sole property of Coda Octopus
      in all countries, and shall be promptly disclosed to and are hereby assigned
      to
      Coda Octopus without charge to Coda Octopus. In the absence of clear and
      convincing proof to the contrary, all formulas, processes, inventions, ideas,
      and works of authorship conceived by the Director within one year after
      termination that directly relate to Coda Octopus business or demonstrably
      anticipated research or development will be considered to be Inventions to
      be
      disclosed to and owned by Coda Octopus.

     

    (B) The
      Director will acknowledge and deliver promptly without charge all documents
      to
      Coda Octopus, and to do such other acts as may be necessary in Coda Octopus’
opinion to obtain and maintain patents or copyrights and to vest the entire
      right and title in Coda Octopus to such patents, copyrights and Inventions
      in
      all countries, including, if required by Coda Octopus but not limited to,
      completion and signing of the Assignment exhibited as Appendix A to this
      Agreement. Failure on the part of Coda Octopus at any time to require the
      Executive to sell, assign, transfer and set over the entire right, title and
      interest in and to said Inventions shall not be deemed to be a waiver of its
      rights thereto.

     

    (C) The
      obligations of this section shall not apply to any invention developed entirely
      on the Director's own time without the use of any Coda Octopus equipment,
      supplies, facility or Proprietary Information and (i) which does not relate
      to
      Coda Octopus business, or to Coda Octopus’ actual or demonstrably anticipated
      research or development or (ii) which does not result from any work performed
      by
      the Director for Coda Octopus.

     

    
      	
              (c)
                

            	
              Exclusions.
                Notwithstanding the foregoing, Proprietary Information shall not
                include
                information in the public domain not as a result of a breach of any
                duty
                by the Director or any other
                person.

            


    

     

    
      	
              (d)
                

            	
              Obligations.
                Both during and after he serves as a Director, the Director will
                preserve
                and protect the confidentiality of the Proprietary Information and
                all
                physical forms thereof, whether disclosed to him before this Agreement
                and
                Inventions signed or afterward (except as required by applicable
                law or
                otherwise as necessary in connection with the performance of the
                Director’s duties to Coda Octopus hereunder). In addition, the Director
                shall not (i) disclose or disseminate the Proprietary Information
                to any
                third party, including employees of Coda Octopus (or its affiliates)
                without a legitimate business need to know; (ii) remove the Proprietary
                Information from Coda Octopus’s premises without a valid business purpose;
                or (iii) use the Proprietary Information for his own benefit or for
                the
                benefit of any third party.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	
              (e)
                

            	
              Return
                of Proprietary Information.
                The Director acknowledges that all the Proprietary Information and
                Inventions used or generated during the course of working for Coda
                Octopus
                is the property of Coda Octopus. The Director will deliver to Coda
                Octopus
                all documents and other tangibles (including diskettes and other
                storage
                media) containing the Proprietary Information and Inventions at any
                time
                upon request by the Board of Directors during his service and immediately
                upon termination of his service as a director. If requested by Coda
                Octopus, the Director will enter into an Assignment of Intellectual
                Property.

            


    

     

    
      	
              7.
                

            	
              Noncompetition
                and Nonsolicitation

            


    

     

    
      	
              (a)
                

            	
              Restriction
                on Competition.
                Throughout the period in which the Director serves as such and for
                a
                period of twelve (12) months thereafter (the “Restricted Period”),
                provided, however, that the Restricted Period shall only extend for
                six
                months following the expiration or termination of the Director’s service
                if the Director’service is terminated following a Change in Control, the
                Director will not engage, directly or indirectly, as an owner, director,
                trustee, manager, member, employee, consultant, partner, principal,
                agent,
                representative, stockholder, or in any other individual, corporate
                or
                representative capacity, in any of the following: (i) any subsea
                visualization company, or (ii) any other business in which Coda Octopus
                is
                engaged or is actively planning to engage as of the date of the Director’s
                termination.. Notwithstanding the foregoing, the Director shall not
                be
                deemed to have violated this section solely by reason of his passive
                ownership of 1% or less of the outstanding stock of any publicly
                traded
                corporation or other entity.

            


    

     

    
      	
              (b)
                

            	
              Non-Solicitation
                of Clients.
                During the Restricted Period, the Director will not solicit, directly
                or
                indirectly, on his own behalf or on behalf of any other person(s),
                any
                client of Coda Octopus to whom Coda Octopus had provided services
                at any
                time during the Director’s service with Coda Octopus in any line of
                business that Coda Octopus conducts as of the date of the Director’s
                termination of service or that Coda Octopus is actively soliciting,
                for
                the purpose of marketing or providing any service competitive with
                any
                service then offered by Coda
                Octopus.

            


    

     

    
      	
              (c)
                

            	
              Non-Solicitation
                of Employees.
                During the Restricted Period, the Director will not, directly or
                indirectly, hire or attempt to hire or cause any business, other
                than a
                Qualified Affiliate, to hire any person who is then or was at any
                time
                during the preceding six months an employee of Coda Octopus and who
                is at
                the time of such hire or attempted hire, or was at the date of such
                employee’s separation from Coda Octopus a vice president, senior vice
                president or director vice president or other senior director employee
                of
                Coda Octopus.

            


    

     

    
      	
              (d)
                

            	
              Acknowledgment.
                The Director acknowledges that he will acquire much Proprietary
                Information concerning the past, present and future business of Coda
                Octopus as the result of his service as well as access to the
                relationships between Coda Octopus and Coda Octopus and their clients
                and
                employees. The Director further acknowledges that the business of
                Coda
                Octopus is very competitive and that competition by him in that business
                during his service, or after his service terminates, would severely
                injure
                Coda Octopus. The Director understands that the restrictions contained
                in
                this Section 7 are reasonable and are required for Coda Octopus’s
                legitimate protection, and do not unduly limit his ability to earn
                a
                livelihood.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	
              (e)
                

            	
              Rights
                and Remedies upon Breach.
                The Director acknowledges that any breach of Restrictive Covenants
                would
                result in irreparable injury and damage for which money damages would
                not
                provide an adequate remedy. Therefore, if the Director breaches,
                or
                threatens to commit a breach of, any of the provisions of the Restrictive
                Covenants, Coda Octopus shall have the following rights and remedies,
                each
                of which rights and remedies shall be independent of the other and
                severally enforceable, and all of which rights and remedies shall
                be in
                addition to, and not in lieu of, any other rights and remedies available
                to Coda Octopus under law or in equity (including, without limitation,
                the
                recovery of damages):

            


    

     

    
      	 	
              (i)
                

            	
              The
                right and remedy to have the Restrictive Covenants specifically enforced
                (without posting bond and without the need to prove damages) by any
                court
                of competent jurisdiction, including, without limitation, the right
                to an
                entry against the Director of restraining orders and injunctions
                (preliminary, mandatory, temporary and permanent) against violations,
                threatened or actual, and whether or not then continuing, of such
                covenants; and

            


    

     

    
      	 	
              (ii)
                

            	
              The
                right and remedy to require the Director to account for and pay over
                to
                Coda Octopus and its affiliates all compensation, profits, monies,
                accruals, increments or other benefits (collectively, “Benefits”) derived
                or received by him as the result of any transactions constituting
                a breach
                of the Restrictive Covenants, and the Director shall account for
                and pay
                over such Benefits to Coda Octopus and, if applicable, its affected
                affiliates.

            


    

     

    
      	
              (f)
                

            	
              If
                any court or other decision-maker of competent jurisdiction determines
                that any of the Restrictive Covenants, or any part thereof, is
                unenforceable because of the duration or geographical scope of such
                provision, then, after such determination has become final and
                non-appealable, the duration or scope of such provision, as the case
                may
                be, shall be reduced so that such provision becomes enforceable and,
                in
                its reduced form, such provision shall then be enforceable and shall
                be
                enforced.

            


    

     

    
      	
              8.
                

            	
              Director
                Representation

            


    

     

    
      	 	
              The
                Director represents and warrants to Coda Octopus that he is not now
                under
                any obligation of a contractual or other nature to any person, business
                or
                other entity which is inconsistent or in conflict with this Agreement
                or
                which would prevent him from performing his obligations under this
                Agreement. 

            


    

     

    
      	
              9.
                

            	
              Enforcement
                and Indemnification

            


    

     

    
      	
              (a)
                

            	
              Coda
                Octopus, in its sole discretion, may bring an action in any court
                of
                competent jurisdiction to seek injunctive relief and such other relief
                as
                Coda Octopus shall elect to enforce the Restrictive Covenants. If
                the
                courts of any one or more of such jurisdictions hold the Restrictive
                Covenants wholly unenforceable by reason of breadth of scope or otherwise
                it is the intention of Coda Octopus and the Director that such
                determination not bar or in any way affect Coda Octopus’s right, or the
                right of any of its affiliates, to relief in the courts of any other
                jurisdiction within the geographical scope of such Restrictive Covenants,
                as to breaches of such Restrictive Covenants in such other respective
                jurisdictions, such Restrictive Covenants as they relate to each
                jurisdiction being, for this purpose, severable, diverse and independent
                covenants, subject, where appropriate, to the doctrine of res judicata.
                The parties hereby agree to waive right to a trial by jury for any
                and all
                disputes hereunder (whether or not relating to the Restrictive
                Covenants).

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              (b)
                

            	
              In
                accordance with Appendix B to this Agreement, Coda Octopus will indemnify
                the Director, to the maximum extent permitted by applicable law,
                against
                all costs, charges and expenses incurred or sustained by the Director,
                including the cost of legal counsel selected and retained by the
                Director
                in connection with any action, suit or proceeding to which the Director
                may be made a party by reason of the Director acting as such. Coda
                Octopus
                will pay to the Director in advance of the final disposition of any
                proceeding all such amounts incurred or suffered.
                

            


    

     

    
      	
              10.
                

            	
              Miscellaneous

            


    

     

    
      	
              (a)
                

            	
              Litigation
                and Regulatory Cooperation.
                During and after Director’s service, Director shall reasonably cooperate
                with Coda Octopus in the defense or prosecution of any claims or
                actions
                now in existence or which may be brought in the future against or
                on
                behalf of Coda Octopus which relate to events or occurrences that
                transpired while Director served; provided, however, that such cooperation
                shall not materially and adversely affect Director or expose Director
                to
                an increased probability of civil or criminal litigation. Director’s
                cooperation in connection with such claims or actions shall include,
                but
                not be limited to, being available to meet with counsel to prepare
                for
                discovery or trial and to act as a witness on behalf of Coda Octopus
                at
                mutually convenient times. During and after Director’s service, Director
                also shall cooperate fully with Coda Octopus in connection with any
                investigation or review of any federal, state or local regulatory
                authority as any such investigation or review relates to events or
                occurrences that transpired while Director served. Coda Octopus shall
                also
                provide Director with compensation on an hourly basis for requested
                litigation and regulatory cooperation that occurs after his termination,
                and reimburse Director for all costs and expenses incurred in connection
                with his performance under this section including, but not limited
                to,
                reasonable attorneys’ fees and
                costs.

            


    

     

    
      	
              (b)
                

            	
              Notices.
                All notices required or permitted under this Agreement shall be in
                writing
                and shall be deemed effective (i) upon personal delivery, (ii) upon
                deposit with the United States Postal Service, by registered or certified
                mail, postage prepaid, or (iii) in the case of facsimile transmission
                or
                delivery by nationally recognized overnight delivery service, when
                received, addressed as follows:

            


    

     

    
      	
              (i)
                

            	
              If
                to Coda Octopus, to:

            


    

    Coda
      Octopus Group, Inc. 

    245
      Park
      Avenue, 39th Floor

    New
      York,
      New York 10167

     

    
      	
              (ii)
                

            	
              If
                to the Director, to:

            


    

    24
      Stonehill Road

    Headley
      Down

    Hampshire

    U.K.

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    
      	 	
              or
                to such other address or addresses as Party shall designate to the
                other
                in writing from time to time by like
                notice.

            


    

     

    
      	
              (c)
                

            	
              Pronouns.
                Whenever the context may require, any pronouns used in this Agreement
                shall include the corresponding masculine, feminine or neuter forms,
                and
                the singular forms of nouns and pronouns shall include the plural,
                and
                vice versa.

            


    

     

    
      	
              (d)
                

            	
              Entire
                Agreement.
                This Agreement constitutes the entire agreement between the parties
                and
                supersedes all prior agreements and understandings, whether written
                or
                oral, relating to the subject matter of this
                Agreement.

            


    

     

    
      	
              (e)
                

            	
              Amendment.
                This Agreement may be amended or modified only by a written instrument
                executed by both Coda Octopus and the
                Director.

            


    

     

    
      	
              (f)
                

            	
              Governing
                Law.
                This Agreement shall be construed, interpreted and enforced in accordance
                with the laws of the State of New York, without regard to its conflicts
                of
                laws principles.

            


    

     

    
      	
              (g)
                

            	
              Successors
                and Assigns.
                This Agreement shall be binding upon and inure to the benefit of
                both
                parties and their respective successors and assigns, including any
                entity
                with which or into which Coda Octopus may be merged or which may
                succeed
                to its assets or business or any entity to which Coda Octopus may
                assign
                its rights and obligations under this Agreement; provided, however,
                that
                the obligations of the Director are personal and shall not be assigned
                or
                delegated by him.

            


    

     

    
      	
              (h)
                

            	
              Waiver.
                No delays or omission by Coda Octopus or the Director in exercising
                any
                right under this Agreement shall operate as a waiver of that or any
                other
                right. A waiver or consent given by Coda Octopus or the Director
                on any
                one occasion shall be effective only in that instance and shall not
                be
                construed as a bar or waiver of any right on any other
                occasion.

            


    

     

    
      	
              (i)
                

            	
              Captions.
                The captions appearing in this Agreement are for convenience of reference
                only and in no way define, limit or affect the scope or substance
                of any
                section of this Agreement.

            


    

     

    
      	
              (j)
                

            	
              Severability.
                In case any provision of this Agreement shall be held by a court
                or
                arbitrator with jurisdiction over the parties to this Agreement to
                be
                invalid, illegal or otherwise unenforceable, such provision shall
                be
                restated to reflect as nearly as possible the original intentions
                of the
                parties in accordance with applicable law, and the validity, legality
                and
                enforceability of the remaining provisions shall in no way be affected
                or
                impaired thereby.

            


    

     

    
      	
              (k)
                

            	
              Counterparts.
                This Agreement may be executed in two or more counterparts, each
                of which
                shall be deemed an original but all of which together shall constitute
                one
                and the same instrument.

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the Parties have executed this Agreement as of the day and year first above
      written.

    


    CODA
      OCTOPUS GROUP, INC.

     

    By:
      __________________________

    Name:
      Jason Reid 

    Title:
      President

    


    DIRECTOR

    


    ______________________________

    Name:
      Rodney Peacock

    
 

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    


    APPENDIX
      A


     

    ASSIGNMENT


     

    WHEREAS,
      Rodney
      Peacock, hereinafter called "Assignor", residing at 24 Stonehill Road, Headley
      Down, Hampshire, U.K., has certain new and useful formulas, processes,
      discoveries, improvements, ideas and works of authorship (“Inventions”)
      disclosed in an application for United States and other Letters Patent entitled
      _________________________________________________________________________________
      and executed by __________________________________________________ on date
      herewith;

     

    AND
      WHEREAS
      Coda
      Octopus Group, Inc., located at 245 Park Avenue, New York, New York and or
      a
      subsidiary thereof, together with any successors, legal representatives or
      assigns thereof, called "Assignee" wants to acquire the entire right, title
      and
      interest in and to said Inventions and application.

     

    NOW,
      THEREFORE,
      in
      consideration of the entering into an Director’s Contract with Assignee dated
      January 26th, 2005 and other good and valuable consideration, the receipt of
      which is hereby acknowledged, the Assignor has sold, assigned, transferred
      and
      set over, and does hereby sell, assign, transfer and set over to Assignee the
      entire right, title and interest in and to said Inventions, and said application
      and all divisions and continuations thereof, and all United States Letters
      Patents which may be granted thereon and all reissues, reexaminations and
      extensions thereof, and all priority rights under all available International
      Agreements, Treaties and Conventions for the protection of Intellectual property
      in its various forms in every participating country, and all applications for
      patents (including related rights such as utility-model registrations,
      inventor's certificates, and the like) heretofore or hereafter filed for said
      Inventions in any foreign countries, and all patents (including all
      continuations, divisions, extensions, renewals, substitutes, and reissues
      thereof) granted for said Inventions in any foreign countries; and the Assignor
      hereby authorizes and requests the United States Commissioner of Patents and
      Trademarks, and any officials of foreign countries whose duty it is to issue
      patents on applications as aforesaid, to Issue all patents for said Inventions
      to Assignee in accordance with the terms of this Assignment;

     

    AND
      THE
      ASSIGNOR HEREBY
      covenants that he has full right to convey the entire Interest herein assigned,
      and that he has not executed, and will not execute, any agreement in conflict
      herewith;

     

    AND
      THE
      ASSIGNOR HEREBY
      further
      covenants and agrees that he will communicate to Assignee any facts known to
      him
      respecting said Inventions, and testify in any legal proceeding, sign all lawful
      papers, execute all divisional, continuation, substitute and reissue
      applications, make all rightful oaths and generally do everything possible
      to
      aid Assignee to obtain and enforce proper patent protection for said Inventions
      in all countries.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    In
      testimony whereof, I hereunto set my hand this ____ day of _______________
      20____

     

    SIGNATURE
      OF ASSIGNOR

     

    STATE
      OF
      ________________________________________

     

    COUNTY
      OF
      ______________________________________

     

    On
      _____________________ before me _________________________ Notary Public,
      personally appeared _______________________________ personally known to me
      (or
      proved to me on the basis of satisfactory evidence) to be the person whose
      name
      is subscribed to the within instrument and acknowledged to me that he executed
      the same in his authorized capacity, and that by his signature on the instrument
      the person, or the entity upon behalf of which the person acted, executed the
      Instrument.

     

    


     

    WITNESS
      my hand and official seal.

     

     

    _____________________________

     

    


     

    Signature
      of Notary

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      B

     

    INDEMNITY
      AGREEMENT

     

    This
      Agreement is made as of the 26th
      day of
      January 2005, by and between Coda Octopus Group, Inc., a Delaware corporation
      (the “Corporation”), and Rodney Peacock (the “Indemnitee”), a Director and/or
      Officer of the Corporation (collectively the "Parties").

     

    WHEREAS,
      it is
      essential to the Corporation to retain and attract as Directors and Officers
      the
      most capable persons available, and

     

    WHEREAS,
      the
      substantial increase in corporate litigation subjects Directors and Officers
      to
      expensive litigation risks at the same time that the availability of Directors’
and Officers’ liability insurance has been severely limited, and

     

    WHEREAS,
      it is
      now and has always been the express policy of the Corporation to indemnify
      its
      Directors and Officers so as to provide them with the maximum possible
      protection permitted by law, and

     

    WHEREAS,
      the
      Corporation does not regard the protection available to Indemnitee as adequate
      in the present circumstances, and realizes that Indemnitee may not be willing
      to
      serve as a Director and/or Officer without adequate protection, and the
      Corporation desires Indemnitee to serve in such capacity;

     

    NOW,
      THEREFORE,
      in
      consideration of Indemnitee’s service as a Director and/or Officer after the
      date hereof, the Parties agree as follows:

     

    
      	
              1.

            	
              Definitions.
                As used in this Agreement:

            


    

     

    
      	 	
              (a)
                

            	
              The
                term “Proceeding” shall include any threatened, pending or completed
                action, suit or proceeding, whether brought by or in the right of
                the
                Corporation or otherwise and whether of a civil, criminal, administrative
                or investigative nature.

            


    

     

    
      	 	
              (b)
                

            	
              The
                term “Expenses” shall include, but is not limited to, expenses of
                investigations, judicial or administrative proceedings or appeals,
                damages, judgments, fines, amounts paid in settlement by or on behalf
                of
                Indemnitee, attorneys’ fees and disbursements and any expenses of
                establishing a right to indemnification under this
                Agreement.

            


    

     

    
      	 	
              (c)
                

            	
              The
                terms “Director” and “Officer” shall include Indemnitee’s service at the
                request of the Corporation as a director, officer, employee or agent
                of
                another corporation, partnership, joint venture, trust or other enterprise
                as well as a Director and/or Officer of the Corporation.
                

            


    

     

    
      	
              2.

            	
              Indemnity
                of Director or Officer.
                Subject only to the limitations set forth in Section 3, Corporation
                will
                pay on behalf of the Indemnitee all Expenses actually and reasonably
                incurred by Indemnitee because of any claim or claims made against
                him in
                a Proceeding by reason of the fact that he is or was a Director and/or
                Officer.

            


    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
              3.

            	
              Limitations
                on Indemnity.
                Corporation shall not be obligated under this Agreement to make any
                payment of Expenses to the
                Indemnitee,

            


    

     

    
      	 	
              (a)
                

            	
              which
                payment it is prohibited by applicable law from paying as
                indemnity;

            


    

     

    
      	 	
              (b)
                

            	
              for
                which payment is actually made to the Indemnitee under an insurance
                policy, except in respect of any excess beyond the amount of payment
                under
                such insurance;

            


    

     

    
      	 	
              (c)
                

            	
              for
                which payment the Indemnitee is indemnified by Corporation otherwise
                than
                pursuant to this Agreement;

            


    

     

    
      	 	
              (d)
                

            	
              resulting
                from a claim decided in a Proceeding adversely to the Indemnitee
                based
                upon or attributable to the Indemnitee gaining in fact any personal
                profit
                or advantage to which he was not legally
                entitled;

            


    

     

    
      	 	
              (e)

            	
              resulting
                from a claim decided in a Proceeding adversely to the Indemnitee
                for an
                accounting of profits made from the purchase or sale by the Indemnitee
                of
                securities of Corporation within the meaning of Section 16(b) of
                the
                Securities Exchange Act of 1934 and amendments thereto or similar
                provisions of any state statutory law or common law;
                or

            


    

     

    
      	 	
              (f)

            	
              brought
                about or contributed to by the dishonesty of the Indemnitee seeking
                payment hereunder; however, notwithstanding the foregoing, the Indemnitee
                shall be indemnified under this Agreement as to any claims upon which
                suit
                may be brought against him by reason of any alleged dishonesty on
                his
                part, unless it shall be decided in a Proceeding that he committed
                (i)
                acts of active and deliberate dishonesty, (ii) with actual dishonest
                purpose and intent, and (iii) which acts were material to the cause
                of
                action so adjudicated.

            


    

     

    
      	 	
              For
                purposes of Sections 3 and 4, the phrase “decided in a Proceeding” shall
                mean a decision by a court, arbitrator(s), hearing officer or other
                judicial agent having the requisite legal authority to make such
                a
                decision, which decision has become final and from which no appeal
                or
                other review proceeding is
                permissible.

            


    

     

    
      	
              4.
                

            	
              Advance
                Payment of Costs.
                Expenses incurred by Indemnitee in defending a claim against him
                in a
                Proceeding shall be paid by the Corporation as incurred and in advance
                of
                the final disposition of such Proceeding; provided, however, that
                Expenses
                of defense need not be paid as incurred and in advance where the
                judicial
                agent of first impression has decided the Indemnitee is not entitled
                to be
                indemnified pursuant to this Agreement or otherwise. Indemnitee hereby
                agrees and undertakes to repay such amounts advanced if it shall
                be
                decided in a Proceeding that he is not entitled to be indemnified
                by the
                Corporation pursuant to this Agreement or
                otherwise.

            


    

     

    
      	
              5.

            	
              Enforcement.
                If a claim under this Agreement is not paid by Corporation, or on
                its
                behalf, within thirty days after a written claim has been received
                by
                Corporation, the Indemnitee may at any time thereafter bring suit
                against
                Corporation to recover the unpaid amount of the claim and if successful
                in
                whole or in part, the Indemnitee shall also be entitled to be paid
                the
                Expenses of prosecuting such claim.

            


    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
              6.

            	
              Subrogation.
                In the event of payment under this Agreement, Corporation shall be
                subrogated to the extent of such payment to all of the rights of
                recovery
                of the Indemnitee, who shall execute all papers required and shall
                do
                everything that may be necessary to secure such rights, including
                the
                execution of such documents necessary to enable Corporation effectively
                to
                bring suit to enforce such rights.

            


    

     

    
      	
              7.

            	
              Notice.
                The Indemnitee, as a condition precedent to his right to be indemnified
                under this Agreement, shall give to Corporation notice in writing
                as soon
                as practicable of any claim made against him for which indemnity
                will or
                could be sought under this Agreement. Notice to Corporation shall
                be given
                at its principal office and shall be directed to the Corporate Secretary
                (or such other address as Corporation shall designate in writing
                to the
                Indemnitee); notice shall be deemed received if sent by prepaid mail
                properly addressed, the date of such notice being the date postmarked.
                In
                addition, the Indemnitee shall give Corporation such information
                and
                cooperation as it may reasonably
                require.

            


    

     

    
      	
              8.

            	
              Saving
                Clause.
                If this Agreement or any portion thereof shall be invalidated on
                any
                ground by any court of competent jurisdiction, the Corporation shall
                nevertheless indemnify Indemnitee to the full extent permitted by
                any
                applicable portion of this Agreement that shall not have been invalidated
                or by any other applicable law.

            


    

     

    
      	
              9.

            	
              Indemnification
                Hereunder Not Exclusive.
                Nothing herein shall be deemed to diminish or otherwise restrict
                the
                Indemnitee’s right to indemnification under any provision of the
                Certificate of Incorporation or Bylaws of the Corporation or under
                Delaware law.

            


    

     

    
      	
              10.

            	
              Applicable
                Law.
                This Agreement shall be governed by and construed in accordance with
                internal laws of the State of
                Delaware.

            


    

     

    
      	
              11.

            	
              Counterparts.
                This Agreement may be executed in any number of counterparts, each
                of
                which shall constitute the
                original.

            


    

     

    
      	
              12.

            	
              Successors
                and Assigns.
                This Agreement shall be binding upon the Corporation and its successors
                and assigns.

            


    

     

    
      	
              13.

            	
              Continuation
                of Indemnification.
                The indemnification under this Agreement shall continue as to Indemnitee
                even though he may have ceased to be a Director and/or Officer and
                shall
                inure to the benefit of the heirs and personal representatives of
                Indemnitee.

            


    

     

    
      	
              14.

            	
              Coverage
                of Indemnification.
                The indemnification under this Agreement shall cover Indemnitee’s service
                as a Director and/or Officer prior to or after the date of the
                Agreement.

            


    

     

    IN
      WITNESS WHEREOF,
      the
      Parties have caused this Agreement to be duly executed and signed as of the
      day
      and year first above written.

     

    
      	CODA OCTOPUS GROUP, INC. 	INDEMNITEE
	 	 
	By: _______________________	 
	Name:  ____________________	_________________________
	Position: __________________	Print Name: Rodney
              Peacock


    

     

    
      
        
        

      

      
        14