EXHIBIT 10.160


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                          MULTI-TENANT COMMERCIAL LEASE

                                     BETWEEN

                                TAG QUATTRO INC.

                                      -and-

                          CATALINA LIGHTING CANADA INC.

                                185 Courtney Park
                              Mississauga, Ontario

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                                  PALLETT VALO
                           90 BURNHAMTHORPE ROAD WEST
                                   SUITE 1600
                              MISSISSAUGA, ONTARIO
                                     L5B3C3

<PAGE>
                                                   

                                TABLE OF CONTENTS


                                BASIC PROVISIONS

                          ARTICLE 1.00 - INTERPRETATION

1.01    Defined Terms........................................................-2-
1.02    Schedules............................................................-6-
1.03    Agreement to Act Reasonably..........................................-6-

                             ARTICLE 2.00 - PREMISES

2.01    Premises ............................................................-7-
2.02    Use of Common Areas .................................................-7-
2.03    Examination and Acceptance ..........................................-7-

                               ARTICLE 3.00- TERM

3.01    Term ................................................................-7-
3.02    Surrender............................................................-7-
3.03    Occupancy Prior to Commencement Date ................................-8-

                               ARTICLE 4.00 - RENT

4.01    Minimum Rent.........................................................-8-
4.02    Adjusted Rent........................................................-8-
4.03    Additional Rent Treated as Minimum Rent .............................-8-
4.04    Accrual of Rent .....................................................-8-
4.05    Currency and Place of Payment .......................................-8-
4.06    Rental Arrears ......................................................-8-
4.07    Security Deposit.....................................................-9-
4.08    Rental Deposit.......................................................-9-
4.09    Net Lease ...........................................................-9-
4.10    Landlord's Option....................................................-9-
4.11    Payments.............................................................-9-
4.12    Rent to be Paid without Set-Off .....................................-9-

                        ARTICLE 5.00 - OPERATING COSTS

5.01    Tenant to Bear Proportionate Share of Operating Costs...............-9-
5.02    Payment of Tenant's Proportionate Share............................-11-
5.03    Reallocation of Operating Costs....................................-12-

                             ARTICLE 6.00 - TAXES

6.01    Taxes Payable by Landlord...........................................-12-
6.02    Business Taxes of Tenant............................................-12-
6.03    Real Property Taxes.................................................-12-
6.04    Alternate Methods of Taxation.......................................-13-
6.05    Pro-Rata Adjustment.................................................-13-
6.06    Appeal of Real Property Assessment..................................-13-
6.07    GST ................................................................-14-

                             ARTICLE 7.00 - UTILITES

7.01    Utility Rates ......................................................-l4-
7.02    Heating, Ventilating and Air Conditioning...........................-14-
7.03    Meters .............................................................-14-
7.04    Non-Liability of the Landlord.......................................-14-
7.05    Landlord's Suspension of Utilities..................................-15-

                     ARTICLE 8.00 - CONTROL OF THE BUILDING

8.01    Control of the Building and Common Areas............................-15-

<PAGE>

                                     - ii -

8.02    Parking ............................................................-16-
8.03    Right to Relocate ..................................................-16-

                     ARTICLE 9.00 - MAINTENANCE AND REPAIRS

9.01    Tenant's and Landlord's Repairs ....................................-16-
9.02    Repair on Notice ...................................................-17-
9.03    Landlord's Right to Enter ..........................................-17-
9.04    Alterations or Improvements ........................................-18-
9.05    Notify Landlord ....................................................-19-
9.06    Party Wall..........................................................-19-
9.07    Maintenance of the Premises ........................................-19-
9.08    Loading and Unloading ..............................................-19-
9.09    Glass...............................................................-19-
9.10    Air Conditioning Units..............................................-20-
9.11    Tenant Not to Overload..............................................-20-
9.12    Protection of Equipment.............................................-20-

                         ARTICLE 10.00 - USE OF PREMISES

10.01   Use of Premises.....................................................-20-
10.02   Conduct of Business.................................................-20-
10.03   Observance of Law...................................................-21-
10.04   Rules and Regulations...............................................-21-
10.05   Energy Conservation.................................................-21-
10.06   Exhibiting Premises.................................................-22-
10.07   By-Laws.............................................................-22-

                  ARTICLE 11.00 - INSURANCE AND INDEMNIFICATION

11.01   Tenant's Insurance..................................................-22-
11.02   Adverse Impact on Insurance.........................................-24-
11.03   Landlord's Insurance................................................-24-
11.04   Limitation of the Landlord's Liability .............................-25-
11.05   Indemnification.....................................................-26-
11.06   Employees...........................................................-26-

                           ARTICLE 12.00- CONSTRUCTION

12.01   Landlord's Work.....................................................-26-
12.02   Tenant's Work.......................................................-27-
12.03   No Obligation To Proceed............................................-27-

                    ARTICLE 13.00 - ASSIGNING AND SUBLETTING

13.01   Consent Required....................................................-27-
13.02   Factors for Consent.................................................-28-
13.03   Transfers...........................................................-28-
13.04   Corporate Ownership.................................................-30-
13.05   No Advertising of the Premises......................................-30-
13.06   Assignment by Landlord..............................................-30-

                  ARTICLE 14.00 - CONSTRUCTION AND OTHER LIENS

14.01   Discharge Of Liens..................................................-31-

                       ARTICLE 15.00 - FIXTURES AND SIGNS

15 01  Removal and Restoration by Tenant....................................-31-
15 02  Tenant's Signs.......................................................-31-
15.03  Landlord's Signs.....................................................-32-


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                                     - iii -


         ARTICLE 16.00 - STATUS STATEMENT, ATTORNMENT AND SUBORDINATION

16.01  Status Statement.....................................................-32-
16.02  Attornment...........................................................-32-
16.03  Lease Subordination..................................................-32-
16.04  Non-Disturbance Agreement............................................-32-
16.05  Power of Attorney....................................................-32-
16.06  Financial Information................................................-32-

                           ARTICLE 17.00 - OVERHOLDING

17.01  Overholding..........................................................-33-

              ARTICLE 18.00 - DAMAGE, DESTRUCTION AND EXPROPRIATION

18.01  Destruction..........................................................-33-
18.02  Expropriation of Premises............................................-34-
18.03  Partial Expropriation of Building....................................-35-
18.04  Surrender............................................................-35-
18.05  Awards...............................................................-35-

                  ARTICLE 19.00 - IMPOSSIBILITY OF PERFORMANCE

19.01  Impossibility........................................................-35-

                             ARTICLE 20.00 - DEFAULT

20.01  Default..............................................................-35-
20.02  Legal Expenses.......................................................-36-
20.03  Rights Cumulative....................................................-37-
20.04  Acceptance of Rent-Non-Waiver........................................-37-
20.05  No Waiver............................................................-37-
20.06  Accord and Satisfaction..............................................-37-
20.07  Distress.............................................................-37-
20.08  Security Interest....................................................-38-
20.09  Restriction on Right.................................................-39-
20.10  Right to Perform.....................................................-39-

                      ARTICLE 21.00 - ENVIRONMENTAL MATTERS

21.01  Environmental Laws and Policies......................................-39-
21.02  Use of Hazardous Substances..........................................-39-
21.03  No Adverse Impact....................................................-40-
21.04  Tenant's Responsibility..............................................-40-
21.05  Landlord's Audit Right...............................................-41-
21.06  Removal of Hazardous Substances......................................-41-

                             ARTICLE 22.00 - GENERAL

22.01  Quiet Enjoyment......................................................-42-
22.02  Notice...............................................................-42-
22.03  Lease Entire Agreement...............................................-43-
22.04  Registration.........................................................-43-
22.05  Applicable Law.......................................................-43-
22.06  Interpretation.......................................................-43-
22.07  Headings and Captions................................................-44-
22.08  Gender and Number....................................................-44-
22.09  Partial Invalidity...................................................-44-
22.10  Compliance with the Planning Act.....................................-44-
22.11  Indemnification......................................................-44-
22.12  Survival of Obligations..............................................-44-
22.13  No Option............................................................-45-
22.14  References to Statutes...............................................-45-
22.15  Approval in Writing..................................................-45-

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                                     - iv -

22.16  Time.................................................................-45-
22.17  Calculation of Time..................................................-45-
22.18  Counterparts.........................................................-45-
22.19  No Contra Proferentem................................................-45-
22.20  Brokerage Commissions................................................-45-
22.21  Successors...........................................................-45-

Schedule "A"      -       Legal Description of the Lands
Schedule "B"      -       Diagram of the Premises' Location
Schedule "C"      -       Landlord's Work
Schedule "D"      -       Tenant's Work
Schedule "E"      -       Rules and Regulations
Schedule "F'      -       Indemnification Agreement
Schedule "G"      -       Right to Extend the Term


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                          MULTI-TENANT COMMERCIAL LEASE

         THIS LEASE made as of March 19, 1998.

BETWEEN:

         TAG QUATTRO INC.

         (the "Landlord")

         - and -

         CATALINA LIGHTING CANADA LTD.

         (the "Tenant")

RECITALS:

1.   All capitalized terms used in these recitals shall, unless otherwise
     defined, have the meaning given such terms in section 1.01;

2.   The Landlord is leasing premises in the Building;

3.   The Tenant wishes to lease the Premises from the Landlord on the terms and
     conditions contained in this Lease;

         NOW THEREFORE THIS LEASE WITNESSES that in consideration of the mutual
covenants and agreements contained in this Lease and other good and valuable
consideration (the receipt and suffeiency of which is hereby acknowledged by the
parties) the parties covenant and agree as follows:

                                BASIC PROVISIONS

The following are certain basic terms and provisions of this Lease (the "Basic
Provisions"), which Basic Provisions form part of this Lease and are in certain
instances referred to in subsequent sections of this Lease. Any conflict or
inconsistency between the Basic Provisions and the other provisions of this
Lease shall be resolved in favour of such other provisions.

Address of the
 Lands:           185 Courtney Park Drive, Mississauga, Ontario

 Premises         The area cross-hatched on Schedule "B".

Rentable Area of
 the Premises:    Subject to section 4.01(c), 48,560 square feet.

Term:             10 years.

Commencement
 Date:            Subject to section 3.01, July 1, 1998.

Surrender
 Date:            Subject to section 3.01, June 30, 2008.

Minimum Rent:

 Period                 Annual           Monthly       Rate Per Square
 of Term                Minimum Rent     Minimum Rent  Foot Per Annum
--------                -----------      -----------   ---------------
First 12 Months         $239,400.80      $19,950.07    $4.93

<PAGE>

                                      -2-

Next 12 Months          $244,256.80      $20,354.73    $5.03

Next 12 Months          $246,684.80      $20,557.07    $5.08

Next 12 Months          $249,112.80      $20,759.40    $5.13

Next 12 Months          $253,968.80      $21,164.07    $5.23

Final 60 Months         $278,734.40      $23,227.87    $5.74

Minimum Rent Free
 Period:          None.

Security Deposit: None.

Rental Deposit:   $39,365.84

Permitted Uses:   The Tenant shall only use the Premises for
                  the supply and distribution of lighting supplies
                  and other dry consumer goods or for such other
                  industrial or commercial uses as are permitted
                  by all applicable Laws.

Name of
 Indemnifier:     Catalina Lighting Inc.

Right to Extend
 Term:            The Tenant shall have the right
                  to extend the Term for a further period of 5 years in
                  accordance with the provisions of  Schedule "G".

                          ARTICLE 1.00 - INTERPRETATION

1.01     DEFINED TERMS

         In this Lease, unless there is something in the subject matter or
         context inconsistent therewith:

         "Act" means the LANDLORD AND TENANT Act (Ontario);

         "Additional Rent" means all sums of money or charges required to be
         paid by the Tenant under this Lease in addition to Minimum Rent whether
         or not designated "Additional Rent";

         "Alterations" shall have the meaning given that term in section 9.04;

         "Authorities" means all federal, provincial, municipal and other
         governmental authorities, departments, boards and agencies having or
         claiming jurisdiction, and "Authority" shall have a corresponding
         meaning;

         "Basic Provisions" means those provisions set out under the heading
         "Basic Provisions" and immediately preceding Article 1.00;

         "Building" means the building located on the Lands, together with all
         fixtures (excluding tenant's trade fixtures), improvements, heating,
         ventilation, air conditioning, electrical, mechanical, sprinkler and
         plumbing systems and facilities located in, on or serving such
         building, and all alterations, additions and replacements thereto;

         "Business Day" means any day which is not a Saturday, Sunday or a
         statutory holiday observed in Ontario, and "Business Days shall have a
         corresponding meaning;

         "Capital Tax" means an amount imputed by the Landlord to the Building
         in respect of taxes, rates duties and assessments presently or
         hereafter levied, rated, charged or assessed from time to time upon the
         Landlord and payable by the Landlord (or by any corporation on behalf
         of the Landlord) on account of its or their capital. Capital Tax shall
         be imputed based on the amount allocated by the Landlord, acting
         reasonably, to the Building. Capital Tax also means the amount of any
         capital or place of business tax levied by any government of other
         applicable taxing authority against the Landlord with respect to the
         Building whether known as Capital Tax or by any other name. Capital Tax
         shall not include the Landlord's income taxes, profit tax or any tax,
         rate or other assessment payable by the

<PAGE>

                                      - 3 -
      
         Landlord on income, profit or revenue;
      
         "Claims" means claims, losses, damages (direct, indirect,
         consequential or otherwise), suits, judgments, causes of action legal
         proceedings, executions, demands, penalties or other sanctions of every
         nature and kind whatsoever, whether accrued, actual, contingent or
         otherwise and any and all costs arising in connection therewith,
         including, without limitation, reasonable legal fees and disbursements
         on a solicitor and his own client basis (including, without limitation,
         all such legal fees and disbursements in connection with any and all
         appeals);
                   
         "Commencement Date" means the date more particularly described in
         section 3.01 as being the date on which the Term commences;
                   
         "Common Areas" means those exterior areas and facilities which serve or
         are for the benefit of the Building and which are located on the Lands
         and which are designated from time to time by the Landlord as part of
         the Common Areas, but no interior areas in the Building shall be
         designated Common Areas, other than the Electrical Room (as defined in
         section 5.01);
                   
         "CPI" means the Consumer Price Index, for all items, published by
         Statistics Canada (or by any successor thereof or by any other agency
         designated by the Landlord) for Toronto, or if not published for
         Toronto, for Ontario, or if not published for Toronto and Ontario, for
         Canada (or any index published in substitution for the Consumer Price
         Index or any other replacement index reasonably designated by the
         Landlord if it is no longer published). In the case of any required
         substitution, the Landlord shall be entitled to make all necessary
         conversions for comparison purposes;
                   
         "Event of Default" means any of the following events:
                   
         (a)      the Tenant fails to pay any Rent reserved by this Lease on the
                  day or dates appointed for the payment thereof and such
                  failure continues for 5 days following written demand for the
                  payment thereof being made by the Landlord. If, however, the
                  Landlord provides such written notice twice in any 12 month
                  period, it shall not be required to give any further written
                  notices for the 12 month period following the date that the
                  Landlord gives such second notice;
                   
         (b)      the Tenant fails to observe or perform any of the Tenant's
                  Covenants (other than the payment of Rent) to be observed or
                  performed by the Tenant and:  

                  (i)      fails to remedy such breach within 10 days (or such
                           shorter period as may be provided in this Lease) of
                           the receipt or deemed receipt by the Tenant of
                           written notice from the Landlord respecting such
                           breach; or
                   
                  (ii)     if such breach cannot be reasonably remedied within
                           10 days or such shorter period, the Tenant fails to
                           commence to remedy such breach within 10 days or
                           shorter period or thereafter fails to proceed
                           diligently to remedy such breach;
                   
         (c)      the Tenant becomes bankrupt or takes the benefit of any
                  statute for bankrupt or insolvent debtors or makes any
                  proposal, assignment or arrangement with its creditors;
                   
         (d)      a receiver or a receiver and manager is appointed for all or a
                  portion of the Tenant's property;
                   
         (e)      any steps are taken or any actions or proceedings are
                  instituted by the Tenant or by any other party and not being
                  actively disputed by the Tenant including without limitation
                  any court or Authority having jurisdiction for the
                  dissolution, winding up or liquidation of the Tenant or its
                  assets;
                   
         (f)      the Tenant makes a sale in bulk of all or a substantial
                  portion of its assets other than in conjunction with a
                  Transfer approved by the Landlord;
                   
         (g)      this Lease or any of the Tenant's assets are taken under a
                  writ of execution which is not removed within 30 days of
                  service;
                   
         (h)      the Tenant assigns, transfers or encumbers this Lease or
                  sublets or permits the occupation or use or the parting with
                  or sharing possession of all or any part of the Premises by
                  anyone except in a manner permitted by this Lease;
<PAGE>

                                     - 4 -


         (i)      the Premises become vacant or unoccupied for a period of 10
                  consecutive days or more without the consent of the Landlord
                  or the Tenant abandons or attempts to abandon the Premises or
                  disposes of its goods so that there would not after such
                  disposal be sufficient goods of the Tenant on the Premises
                  subject to distress to satisfy Rent for at least 3 months,
                  unless the Tenant provides security to the Landlord equal to 3
                  months Rent;
                  
         (j)      any insurance policies covering any part of the Building or
                  any occupant thereof are actually or threatened to be
                  cancelled or adversely changed as a result of any use or
                  occupancy of the Premises and the Tenant does not correct the
                  cause thereof within the period of time, if any, given by the
                  relevant insurance company to correct the cause; or
                  
         (k)      an Event of Default as defined in this paragraph occurs with
                  respect to any lease or agreement under which the Tenant
                  occupies other premises, if any, in the Building;
                  
         "Expert" means any architect, engineer, land surveyor, chartered
         accountant or other professional consultant, in any case, appointed by
         the Landlord and, in the reasonable opinion of the Landlord, qualified
         to perform the specific function for which such person was appointed;
                  
         "GST" means the goods and services tax imposed under the EXCISE TAX ACT
         (Canada), and all other goods and services taxes, business transfer
         taxes, value-added or transaction taxes, sales taxes, multi-stage sales
         taxes, use or consumption taxes or any other taxes on the Landlord with
         respect to the Rent and any other amounts payable by the Tenant to the
         Landlord under this Lease which may at any time be imposed by an
         Authority on or in respect of rental or real property (other than Real
         Property Taxes or Landlord's business, income or similar taxes),
         whether characterized as a goods and services tax, sales tax,
         value-added tax or otherwise;
                  
         "Hazardous Substance" means all contaminants, pollutants, explosives,
         radioactive materials, noxious substances, hazardous waste, toxic
         materials (including, without limitation, polychlorinated biphenyls,
         asbestos and urea formaldehyde foam insulation) and all other
         materials and substances defined to be hazardous or toxic contaminants
         in or pursuant to any federal, provincial or municipal statute,
         regulation, by-laws or directive;
                  
         "HVAC Equipment" means the heating, ventilating, air conditioning and
         humidity control equipment servicing the Premises;
                  
         "Indemnifier" means the Person named as such in the Basic Provisions
         and who has executed or agreed to execute the indemnity Agreement
         attached as Schedule "F", or who otherwise guarantees the Tenant's
         obligations under this Lease, if applicable;
                  
         "Injury" means, without limitation, bodily injury, personal injury,
         personal discomfort, mental anguish, shock, sickness, disease, death,
         false arrest, detention or imprisonment, malicious prosecution, libel,
         slander, defamation of character, invasion of privacy, wrongful entry
         or eviction and discrimination, or any of them, as the case may be;
                  
         "Insured Damage" means that part of any damage occurring to the
         Premises of which the entire cost of the repair is actually recovered
         by the Landlord under insurance policies carried by the Landlord
         pursuant to sections 11.03(a)(i), (ii) and (iv), or would have been
         recovered had the Landlord taken out such insurance;
                  
         "Landlord's Covenants" means all of the terms, covenants and conditions
         of this Lease on the part of the Landlord to be observed and performed;
                  
         "Landlord's Employees" means the Landlord's directors, officers,
         employees, servants, agents and those for whom the Landlord is
         responsible at law;
                  
         "Landlord's Work" means the work, if any, required to be performed by
         the Landlord as set out in Schedule "C";
                  
         "Lands" means the lands described in Schedule "A" and which have the
         municipal address set out in the Basic Provisions;
                  
         "Laws" means all laws, statutes, ordinances, regulations, by-laws,
         directions, orders, rules, requirements, directions and guidelines of
         all Authorities, and "Law" shall have a corresponding meaning;
                  

<PAGE>

                                     - 5 -

         "Lease" means this document and the Schedules attached to it as
         originally signed and delivered or as amended from time to time;
                   
         "Lease Year" means a period of 12 months commencing on the first day of
         January in each year except that:
                   
         (a)      the first Lease Year begins on the Commencement Date and ends
                  on the last day of the calendar year in which the Commencement
                  Date occurs; and
                   
         (b)      the last Lease Year of the Term begins on the first day of the
                  calender year during which the last day of the Term occurs and
                  ends on the last day of the Term,
                   
         provided that the Landlord may, from time to time, by written notice to
         the Tenant specify an annual date upon which each subsequent Lease Year
         is to commence, in which event the Lease Year which would otherwise be
         current when such annual date first occurs shall terminate on such date
         and appropriate adjustments of Rent resulting from any Lease Year being
         shorter or longer shall be made;
                   
         "Minimum Rent" means the annual rent payable by the Tenant under
         section 4.01;
                   
         "Mortgage" means any mortgaged; charge or security instrument
         (including a deed of trust and mortgage securing bonds and all
         indentures supplemental thereto) which may now or hereafter affect the
         Building;
                   
         "Mortgagee" means the mortgagee, chargee, secured party or trustee for
         bond-holders, as the case may be, named in a Mortgage;
                   
         "Operating Costs" means the costs more particularly described in
         section 5.01;
                   
         "Permitted Uses" means the uses which may be made of the Premises and
         which are more particularly described in the Basic Provisions;
                   
         "Person" means an individual, a corporation, a limited partnership, a
         general partnership, a trust, a joint stock company, a joint venture,
         an association, a syndicate, a bank, a trust company, an Authority and
         any other legal and business entity, and "Persons" shall have a
         corresponding meaning;
                   
         "Premises" means the premises demised by the Landlord to the Tenant for
         the Tenant's exclusive possession as described in section 2.01;
                   
         "Prime Rate" means the rate of interest per annum established and
         quoted from time to time by such Canadian Chartered Bank designated
         from time to time by the Landlord as its reference rate of interest for
         the determination of interest rates that it charges customers of
         varying degrees of credit-worthiness for Canadian dollar loans made by
         it in Toronto, Ontario;
                   
         "Proportionate Share" means a ratio, the numerator of which is the
         Rentable Area of the Premises and the denominator of which is the
         Rentable Area of the Building;
                   
         "Real Property Taxes" means:
                   
         (a)      all real property taxes, including local improvement rates,
                  levies, commercial concentration levies, rates, duties and
                  assessments whether general or special, ordinary or
                  extraordinary, foreseen or unforeseen, which may be levied or
                  assessed by any lawful Authority against the Building or any
                  part thereof and any taxes or other amounts which are imposed
                  instead of, or in addition to any of the foregoing (whether
                  of the foregoing character or not or whether in existence at
                  the date that this Lease was executed);
                   
         (b)      all costs and expenses incurred by or on behalf of the
                  Landlord for consulting, appraisal, legal and other
                  professional fees and expenses to the extent they are incurred
                  in an attempt to minimize or reduce the amounts described in
                  paragraph (a); and
                   
         (c)      any and all penalties, late payment or interest charges
                  imposed by any relevant taxing Authority as a result of the
                  Tenant's late payment of any of the amounts described in
                  paragraph (a) or any instalments thereof, as the case may be;
                   
         "Rent" means all Minimum Rent and Additional Rent payable by the Tenant
         pursuant to this Lease;

<PAGE>

                                     - 6 -

         "Rentable Area of the Building" means the total area in square feet of
         all premises in the Building set aside for leasing by the Landlord from
         time to time, including the Premises, and consisting of 48,560 square
         feet;
             
         "Rentable Area of the Premises" means the area in square feet of the
         Premises consisting of 97,067 square feet,
             
         "Schedules" means the schedules attached to this Lease and which are
         more particularly described in section 1.02, and "Schedule" shall have
         a corresponding meaning;
             
         "Tenant's Covenants" means all of the terms, covenants and conditions
         of this Lease on the part of the Tenant to be observed and performed;
             
         "Tenant's Employees" means the Tenant's directors, officers,
         employees, servants, agents and those for whom the Tenant is
         responsible at law;
             
         "Tenant's Work" means the work, if any, to be performed by the Tenant
         as set out in Schedule "D";
             
         "Term" means the term of this Lease as set out in section 3.01, any
         extended or renewal term and any overholding period; 
             
         "Transfer" means any of:
             
         (a)      an assignment of this Lease by the Tenant in whole or in part;

         (b)      any arrangement, written or oral, whether by sublease, licence
                  or otherwise, whereby rights to use space within the Property
                  are granted to any Person (other than the Tenant) from time to
                  time, which rights of occupancy are derived through or under
                  the interest of the Tenant under this Lease; and 

         (c)      intentionally deleted; and
             
         "Transferee" means any Person deriving rights through a Transfer.
             
Certain terms which have been defined within specific sections of this Lease for
use solely within those sections, or the Article within which such section is
located, are not referred to above.
             
1.02     SCHEDULES
             
         The Schedules to this Lease are as follows:
             
         Schedule "A"      -      Legal Description of the Lands
         Schedule "B"      -      Diagram of the Premises' Location
         Schedule "C"      -      Landlord's Work
         Schedule "D"      -      Tenant's Work
         Schedule "F'      -      Rules and Regulations
         Schedule "F"      -      Indemnification Agreement
         Schedule "G"      -      Right to Extend the Term
             
The Schedules are incorporated into and form an integral part of this Lease.
             
1.03     AGREEMENT TO ACT REASONABLY
             
         In making a determination (including, without limitation, a
determination of whether or not to provide its consent), designation,
calculation, estimate, conversion or allocation under this Lease, the Landlord
shall (unless this Lease specifically provides to the contrary) act reasonably
and in good faith. The Landlord shall respond to the Tenant's request for the
Landlord's consent within 20 days of the date that the Tenant makes such request
in writing to the Landlord If the Landlord refuses to provide its consent when
requested to do so, it shall provide the Tenant with written reasons for its
refusal at the same time as it advises the Tenant that it refuses to provide its
consent.
             
             
<PAGE>

                                     - 7 -

                             ARTICLE 2.00 - PREMISES

2.01     PREMISES
             
         The Landlord hereby demises and leases to the Tenant and the Tenant
hereby leases from the Landlord the Premises for use and occupation by the
Tenant in carrying on its business commencing on the Commencement Date. The
Premises comprise the unit in the Building described in the Basic Provisions and
are shown cross-hatched on Schedule "B". The Rentable Area of the Premises is
as set out in the Basic Provisions.
             
2.02     USE OF COMMON AREAS
             
         The use and occupation by the Tenant of the Premises includes the
non-exclusive right of the Tenant and Persons having business with the Tenant,
in common with the Landlord, its other tenants, subtenants and all others
entitled or permitted by the Landlord to the use of such parts of the Common
Areas as may be designated from time to time as being available for general use
by tenants and other occupants of the Building and customers and visitors
thereto.
             
2.03     EXAMINATION AND ACCEPTANCE 
             
         The Tenant acknowledges and agrees that it has examined the Premises
and that it accepts the Premises on an "as is" basis, subject only to completion
by the Landlord of the Landlord's Work, if any.
             
(a)      The Tenant will examine the Premises within 5 days after the date that
this Lease is signed by the parties and within such period will advise the
Landlord in writing, with a reasonable amount of detail, of any defects in the
Premises. The Landlord shall proceed in a diligent manner to rectify the defects
specified in such notice. Except to the extent that the Tenant has so advised
the Landlord, the Tenant will be considered for all purposes to have accepted
the Premises in their then existing condition, subject only to completion by the
Landlord of the Landlord's Work. 
             
(b)      Upon the Landlard completing the Landlord's Work, the Tenant will
inspect the Landlord's Work within 5 days after the Landlord advises the Tenant
that it has completed the Landlord's Work and within such period will advise the
Landlord in writing, with a reasonable amount of detail, of any defects in the
Landlord's Work. The Landlord shall proceed in a diligent manner to rectify the
defects specified in such notice. Except to the extent that the Tenant has so
advised the Landlord, the Tenant will be considered for all purposes to have
accepted the Premises in their then existing condition.
             
                               ARTICLE 3.00 - TERM
             
3.01     TERM
             
(a)      The Term of this Lease shall be for the period of time set out in the
Basic Provisions, as same may be extended in accordance with Schedule "G".
Subject to section 3.01(b), the Term shall commence on the date shown in the
Basic Provisions as the Commencement Date and end on the date shown in the Basic
Provisions as the Surrender Date, both dates inclusive, unless the Term is
otherwise terminated, renewed or extended as provided for in this Lease.
             
(b)      If the Landlord's Work has not been completed by June 1, 1998 due to
the occurrence of an event described in section 19.01 (an "Unforeseen Event"),
then the Commencement Date shall be deferred for a period of time equal to the
amount of time that the Landlord has been delayed as a result of an Unforeseen
Event. If the Landlord has not delivered possession of the Premises to the
Tenant by September 1, 1998 with the Landlord's Work completed, the Tenant may
at any time thereafter terminate this Lease on written notice to the Landlord
(the "Termination Notice"), but upon the Landlord delivering possession of the
Premises, the Tenant may not thereafter deliver a Termination Notice.
             
(c)      If the Commencement Date is amended in accordance with section 3.01(b),
the Term shall commence on such amended Commencement Date and continue for the
full period of time described as comprising the Term in the Basic Provisions.
             
3.02     SURRENDER
             
         The Tenant shall, on the last day of the Term, or upon the sooner
termination of the Term, peaceably
             
<PAGE>

                                      - 8 -
            
and quietly surrender and deliver vacant possession of the Premises to the
Landlord in the condition and state of repair that they were required to be
maintained during the Term or as the Landlord may otherwise require in
accordance with section 15.01.
            
3.03     OCCUPANCY PRIOR TO COMMENCEMENT DATE
            
         The Landlord shall deliver possession of the Premises to the Tenant on
the later of June 1, 1998 and the day following the date that the Landlord
completes the Landlord's Work. If the Tenant is in possession of the Premises
prior to the Commencement Date, whether or not such possession is exclusive, for
any reason whatsoever, including, without limitation, for the purpose of
performing the Tenant's Work, the Tenant will be subject to and shall comply
with all of the provisions of this Lease on its part to be complied with, other
than the obligation to pay Rent, but the Tenant shall be responsible for the
cost of all utilities consumed in the Premises during such period of possession
prior to the Commencement Date.
            
                               ARTICLE 4.00 - RENT
            
4.01     MINIMUM RENT
            
(a)      The Tenant shall pay, unless otherwise expressly provided in this
Lease, yearly and every year during the Term to the Landlord without notice or
demand and without abatement, deduction or set-off for any reason the Minimum
Rent described in the Basic Provisions.
            
(b)      The annual Minimum Rent is based upon an annual rate per square foot of
the Rentable Area of the Premises as set out in the Basic Provisions.
            
(c)      For the purpose of determining the Rent payable hereunder, the Rentable
Area of the Premises shall be deemed to be the amount set out in the Basic
Provisions.
            
(d)      The Minimum Rent is to be paid in advance, in equal monthly
instalments on the first day of each and every month during the Term.
            
(e)      If the Basic Provisions indicate that the Tenant is entitled to a
Minimum Rent free period, then, despite the foregoing provisions of this section
4.01, the Tenant shall not be required to pay any Minimum Rent during such
Minimum Rent free period.
            
4.02     ADJUSTED RENT
            
         If the Term or any renewal thereof commences on a day other than the
first day of the month or ends on any day other than the last day of the month,
the Rent for the fraction of the month at the commencement or end of the Term
shall be adjusted pro rata on a daily basis.
            
4.03     ADDITIONAL RENT TREATED AS MINIMUM RENT
            
         Additional Rent shall be recoverable as Minimum Rent, and the Landlord
shall have all rights against the Tenant for default in any such payment as in
the case of arrears of Minimum Rent.
            
4.04     ACCRUAL OF RENT
            
         Rent shall be considered as accruing from day to day hereunder from the
Commencement Date, and where it becomes necessary for any reason to calculate
Rent for an irregular period of less than 1 year or less than 1 calendar month,
then appropriate apportionment and adjustment shall be made on a per diem basis
based upon a period of 365 days.
            
4.05     CURRENCY AND PLACE OF PAYMENT
            
         All Rent hereunder shall be payable in lawful money of Canada and shall
be payable to the Landlord at the address set out in section 22.02, unless or
until otherwise notified by the Landlord in writing and the Tenant covenants
with the Landlord to do so accordingly.
            
4.06     RENTAL ARREARS

(a)      If the Tenant fails to pay when due any amount of Rent required to be
paid pursuant to this Lease, such
            
<PAGE>

                                      - 9 -
             
Rent shall bear interest at a rate per annum equal to the Prime Rate plus 5%,
calculated and compounded monthly. Interest calculated as aforesaid shall only
be payable by the Tenant upon demand being made by the Landlord.
             
(b)      If any cheque given by the Tenant to the Landlord in payment of Rent is
refused payment by the Tenant's bank for any reason, the Tenant shall
immediately replace such cheque with cash or a certified cheque or bank draft
and, in addition, shall pay, as Additional Rent, the sum of $100.00 (plus GST)
as a service charge to the Landlord immediately upon demand being made by the
Landlord.
             
4.07     SECURITY DEPOSIT
             
Intentionally Deleted.
             
4.08     RENTAL DEPOSIT
             
         If the Basic Provisions indicate that a rental deposit has been
provided, the Landlord acknowledges receipt of such rental deposit in the amount
described in the Basic Provisions. The Landlord shall hold the said monies as a
deposit to be applied on account of the Minimum Rent coming due wader this Lease
for the first and second months' of the Term. The Landlord will not be required
to pay interest to the Tenant on any amount held by the Landlord under this
section.
             
4.09     NET LEASE
             
         Except as otherwise set out in this Lease, this Lease is a completely
carefree and absolutely net lease to the Landlord. Except as otherwise stated in
this Lease, the Landlord is not responsible during the Term for any costs,
charges, taxes (except the Landlord's income taxes), expenses or outlays of any
nature whatsoever arising from or relating to the Premises or the Building, or
the use and occupancy of them, or their contents or the business carried on in
them, and the Tenant shall pay, as Additional Rent, all amounts which it is
required to pay as expressly set out in this Lease.
             
4.10     LANDLORD'S OPTION

         The Landlord may, at its option, estimate from time to time any
Additional Rent and such estimated amount is payable in monthly instalments in
advance on the days upon which Minimum Rent is payable hereunder, with annual
adjustments in the manner set out in section 5.02. Notices to the Tenant of such
estimated amount need not include particulars of any such amounts. The Landlord
estimates, but does not guarantee, that for the calendar year 1998 the Tenant's
Proportionate Share of (a) the Real Property Taxes will be approximately $1.73
per square foot per annum; and (b) the Operating Costs will be approximately
$0.40 per square foot per annum.
             
4.11     PAYMENTS
             
Intentionally Deleted.
             
4.12     RENT TO BE PAID WITHOUT SET-OFF
             
         Except to the extent specifically permitted by the terms of this Lease,
all Rent shall be paid by the Tenant without set-off, abatement, or deduction
for any reason or cause whatsoever, including, without limitation by reason of
section 35 of the Act, the benefits of which are expressly waived by the Tenant.
             
                         ARTICLE 5.00 - OPERATING COSTS
             
5.01     TENANT TO BEAR PROPORTIONATE SHARE OF OPERATING COSTS
             
(a)      During the Term the Tenant shall pay to the Landlord as Additional Rent
its Proportionate Share of all costs and expenses incurred by or on behalf of
the Landlord and amounts paid by or on behalf of the Landlord with respect to
and for the complete operation, administration, repair (including repairs and
replacements of a capital nature) and maintenance of the electrical and
mechanical room serving the Building (the "Electrical Room"), the Lands and the
exterior Common Areas in keeping with maintaining the standard of a first-class
industrial building so as to give it high character and distinction (the
"Operating Costs"). Operating Costs shall be determined in accordance with
generally accepted accounting principles and without duplication. Without
limiting the generality of the foregoing, Operating Costs shall include:

<PAGE>

                                     - 10 -
       
         (i)      the cost of all insurance maintained by the Landlord in
                  respect of the Building or its operation and the cost of any
                  deductible amounts payable by the Landlord in respect of any
                  insured risk or claim;
       
         (ii)     complete maintenance and repair for the exterior of the
                  Electrical Room and the exterior Common Areas, including,
                  without limitation, snow removal, window cleaning, garbage and
                  waste collection and disposal;
       
         (iii)    intentionally deleted;

         (iv)     periodic renovation, reconstruction and improvements to the
                  exterior Common Areas;

         (v)      intentionally deleted;

         (vi)     amounts paid for all labour and/or wages and other payments
                  made to janitors or caretakers or any independent contractors
                  employed in the repair, care, maintenance or cleaning of the
                  exterior of the Building, the Electrical Room and the exterior
                  Common Areas, including contibutions and premiums for fringe
                  benefits, unemployment and workers' compensation insurance,
                  pension plan contributions and similar premiums and
                  contributions;
       
         (vii)    the cost to the Landlord of the rental of any equipment,
                  furniture, installations, systems and signs and the cost of
                  building supplies used by the Landlord in the operation,
                  maintenance and servicing of the exterior Common Areas and the
                  Electrical Room;
       
         (viii)   intentionally deleted;

         (ix)     the costs:
       
                  (A)      of repairing, operating and maintaining the exterior
                           Common Areas and the equipment serving the Building
                           and cleaning and maintaining the Electrical Room;
       
                  (B)      intentionally deleted;

                  (C)      incurred by the Landlord in making alterations,
                           replacements or additions to the exterior of the
                           Building and/or Lands intended to reduce operating
                           costs, improve the operation of the Building or
                           maintain its operation as a first class commercial
                           building; and
       
                  (D)      intentionally deleted,
       
                  all to the extent that such costs are fully chargeable in the
                  Landlord's fiscal year in which they are incurred in
                  accordance with generally accepted accounting principles and
                  to the extent that such costs are of a capital nature and:
       
                  (I)      are not in excess of $10,000.00, the Landlord shall
                           be deemed to be acting in accordance with generally
                           accepted accounting principles if it elects to charge
                           such costs in the Landlord's fiscal year in which
                           they are incurred; or
       
                  (II)     exceed $10,000.00, the Landlord shall depreciate or
                           amortize such costs in accordance with section
                           5.01(a)(x);
       
         (x)      amortization of the costs referred to in section 5.01(a)(ix)
                  and all other capital costs incurred by the Landlord in
                  connection with the maintenance, repair or replacement of the
                  exterior Common Areas, all as determined by the Landlord in
                  accordance with generally accepted accounting principles, if
                  such costs have not been charged fully in the Landlord's
                  fiscal year in which they are incurred. If the Landlord
                  decides to amortize such costs, it shall do so over the useful
                  life of the item for which the cost was incurred and shall
                  include in the Operating Costs for each Lease Year, the amount
                  of the amortized costs attributable to such Lease Year;
       
         (xi)     interest calculated at 2 percentage points above the average
                  daily prime bank commercial lending rate charged during such
                  rental year by any Canadian Chartered Bank designated from
                  time to time by the Landlord upon the unamortized balance of
                  the costs referred to in
       
<PAGE>

                                     - 11 -
             
                  section 5.01(a)(x);
             
         (xii)    intentionally deleted;

         (xiii)   all business taxes, if any, from time to time payable by the
                  Landlord in respect of its operations in the Building, but
                  excluding income tax of the Landlord;
             
         (xiv)    all Capital Tax as it relates to or is attributed by the
                  Landlord to the Building;

         (xv)     the GST payable by the Landlord on the purchase of goods and
                  services included in Operating Costs (excluding any such GST
                  which will be available to the Landlord when claimed as a
                  credit or a refund in determining the Landlord's net tax
                  liability on account of GST, but only to the extent that such
                  GST is included in Operating Costs);
             
         (xvi)    intentionally deleted;

         (xvii)   intentionally deleted;
             
         (xviii)  an administrative and supervisory fee equal to 15% percent of
                  all the costs and expenses incurred by the Landlord above
                  enumerated and the Real Property Taxes applicable to the Lands
                  and the Building.
             
(b)      The following shall be excluded or deducted from the Operating Costs,
         as the case may be:
             
         (i)      all amounts which would otherwise be included in Operating
                  Costs but which are recovered by the Landlord from tenants in
                  the Building as a result of any act, omission default or
                  negligence of such tenants,
             
         (ii)     such of the Operating Costs as are recovered from insurance
                  proceeds, to the extent such recovery represents
                  reimbursements for costs previously included in Operating
                  Costs;

         (iii)    interest on debt and capital retirement of debt;

         (iv)     the cost of all structural repairs to the Building;

         (v)      repairs of a capital nature, except to the extent that same
                  may included in Operating Costs pursuant to section
                  5.01(a)(ix) and (x); and
             
         (vi)     the cost of maintenance and repair of the roof, walls, floors,
                  services and sewage drainage in or servicing the Building.
             
(c)      Intentionally Deleted.
             
5.02     PAYMENT OF TENANT'S PROPORTIONATE SHARE
             
(a)      The Operating Costs may be estimated by the Landlord for a period no
greater than 12 months and the Tenant shall pay to the Landlord as Additional
Rent, one-twelfth of such estimated payments in advance during such period
together with the monthly instalments of Minimum Rent. Notwithstanding the
foregoing, as soon as bills for all or any portion of the said amounts are
received, the Landlord may bill the Tenant for its Proportionate Share of the
said amounts (less all amounts previously paid by the Tenant on the basis of the
Landlord's estimate which have not already been so applied) and the Tenant shall
pay the Landlord such amount as Additional Rent on demand. Despite the
foregoing, the Landlord's estimate of Operating Costs may not exceed the actual
Operating Costs for the previous 12 month period by more than 10%.
             
(b)      At the end of the 12 month period for which such estimated payments
have been made, the Landlord shall deliver to the Tenant a statement containing
reasonable particulars of the actual Operating Costs, together with a statement
of the Tenant's Proportionate Share of the Operating Costs, and if necessary,
an adjustment shall be made between the parties.
             
(c)      If the Tenant has paid more than the amount actually payable by it (the
difference being called the "Excess"), then the Excess will be applied by the
Landlord against the next succeeding instalments of Rent. If there is any
Excess for the last year of the Term, the Excess will be refunded by the
Landlord to the Tenant within 30 days after the expiration of the Term.
             
<PAGE>
                                     - 12 -
            
(d)      If the Tenant has paid less than the amount actually payable by it (the
difference being called the "Deficiency',), the Tenant shall pay the Deficiency
with the next fixed Minimum Rent instalment due or upon demand. If the
Deficiency arises in respect of the last year of the Term, the Tenant shall pay
the Deficiency within 30 days after the expiration of the Term.
            
(e)      The Landlord shall keep such proper records of the Operating Costs as
would be maintained by a reasonably prudent landlord.
            
(f)      The Tenant shall have 90 days from the date of the Landlord delivering
         the said statements to:
            
         (i)      request copies of all invoices, statements of account or any
                  other reasonable item to facilitate the Tenant's review and
                  verification of the Operating Costs charged to the Tenant by
                  the Landlord; and
            
         (ii)     deliver to the Landlord written notice setting out in detail
                  any objections it may have to the statements and the reasons
                  therefor,
            
failing which the Tenant shall be deemed to have accepted the statements and
they shall be conclusive and binding upon the Tenant. Despite the foregoing and
while the Landlord shall be under no obligation to provide the Tenant with any
information after the expiry of the said 90 day period, if within 36 months
following the date of such statement the Tenant is able to demonstrate an error
in such statement based upon information not originally available to the Tenant,
then the parties shall promptly make any necessary adjustment.
            
5.03     REALLOCATION OF OPERATING COSTS
            
Intentionally Deleted.
            
                              ARTICLE 6.00 - TAXES

6.01     TAXES PAYABLE BY LANDLORD
            
         Subject to the obligations of the Tenant as set out in this Lease, the
Landlord shall pay the Real Property Taxes. Any fine, penalty or interest for
late payment of the Real Property Taxes shall be paid by the Landlord, unless
the reason for such late payment is due to the Tenant's failure to pay its
share of Real Property Taxes in accordance with this Article.
            
6.02     BUSINESS TAXES OF TENANT
            
         Each year during the Term, the Tenant shall pay to the taxing Authority
or Authorities having jurisdiction and discharge when the same become due and
payable, all taxes, duties and assessments and other charges that may be levied,
rated, charged or assessed against or in respect of all improvements, equipment
and facilities of the Tenant on or in the Premises or any part or parts thereof
and all taxes, rates, duties, assessments, licence fees and franchise fees in
respect of any and every business carried on thereon or therein or in respect of
the use or occupancy thereof by the Tenant (and any sub-tenant or licensee),
whether any such taxes, rates, duties, assessments, licence fees or franchise
fees are charged by any municipal, parliamentary, school or other body, and the
Tenant will indemnify and keep indemnified the Landlord from and against payment
for all losses, costs, charges and expenses, occasioned by, or arising from any
and all such taxes, rates, duties, assessments, licence fees, franchise fees,
and any and all taxes which may in future be levied in lieu of such taxes,
whether foreseen or unforeseen. If the Tenant or any person occupying the
Premises or any part thereof shall elect to have the Premises or any part
thereof assessed for separate school taxes, the Tenant shall pay to the Landlord
as soon as the amount of the separate school taxes is ascertained, any amount by
which the separate school taxes exceed the amount which would have been payable
for school taxes had such election not been made as aforesaid, and any loss,
costs, charges and expenses suffered by the Landlord may be collected by the
Landlord as Additional Rent. The Tenant shall, upon request of the Landlord,
deliver to the Landlord for inspection, receipts for payment of all taxes,
rates, duties, assessments and other charges in respect of all improvements,
equipment and facilities of the Tenant on or in the Premises which were due and
payable up to one (1) month prior to such request and will furnish such other
information in connection therewith as the Landlord may reasonably require.
            
6.03     REAL PROPERTY TAXES

(a)      The Tenant shall pay as Additional Rent to the Landlord, or to the
taxing Authorities if the Landlord so directs, and discharge in each year during
the Term and within the times provided for by the taxing Authorities

<PAGE>

                                     - 13 -
             
(provided that if the Landlord requests the Tenant to pay the Real Property
Taxes directly to the relevant taxing Authorities, the Landlord has given the
Tenant at notice within which to pay such Taxes at least lO days prior to the
due date of payment to the Authorities):
             
         (i)      all Real Property Taxes levied, rated, charged or assessed
                  from time to time, respectively, against the Premises or any
                  part thereof, on the basis of a separate real property tax
                  bill and separate real property assessment notices rendered by
                  any lawful taxing Authority; and
             
         (ii)     the Tenant's Proportionate share of all Real Property Taxes
                  levied, rated, charged or assessed from time to time,
                  respectively, against the Common Areas, or any part thereof,
                  on the basis of a separate real property tax bill and separate
                  real property assessment notices rendered by any lawful taxing
                  Authority.
             
(b)      If there are not separate real property tax bills and separate real
property assessment notices for the Premises and the Common Areas, the Tenant
shall pay to the Landlord, as Additional Rent, its Proportionate Share of all
Real Property Taxes levied, rated, charged or assessed from time to time against
the Building and the Lands.
             
(c)      The Tenant shall provide the Landlord, within lO days after receipt by
the Tenant, a copy of any separate tax bills and assessment notices for the
Premises or any part thereof. If the Landlord requires the Tenant to pay Real
Property Taxes directly to the relevant taxing Authority, the Tenant shall
promptly deliver to the Landlord receipts evidencing the payment of all such
Real Property Taxes and furnish such other information in connection therewith
as the Landlord reasonably requires.
             
(d)      If the Landlord does not require the Tenant to pay the Real Property
Taxes to the relevant taxing Authority, the Tenant shall pay the amounts payable
under section 6.03(a) or (b), as the case may be, to the Landlord within 20 days
following date that the Landlord provides the Tenant with bills (including
interim bills) showing the amount of Real Property Taxes payable.
             
(e)      Intentionally Deleted.

(f)      Intentionally Deleted.

(g)      Intentionally Deleted.
             
6.04     ALTERNATE METHODS OF TAXATION
             
         If, during the Term, the method of taxation is altered so that the
whole or any part of the Real Property Taxes now levied, rated, assessed or
imposed on real estate and improvements are levied, assessed, rated or imposed
wholly or partially as a capital levy or on the rents received or otherwise, or
if any tax, assessment, levy, imposition or charge, in lieu thereof shall be
imposed upon the Landlord, then all such taxes, assessments, levies, impositions
and charges shall be included within the Tenant's obligation to pay its
Proportionate Share of Real Property Taxes as set out in Article 5.00.
             
6.05     PRO-RATA ADJUSTMENT
             
         If any taxation year during the Term of this Lease is less than 12
calendar months, the Tenant's Proportionate Share of Real Property Taxes shall
be subject to a per diem pro-rata adjustment.
             
6.06     APPEAL OF REAL PROPERTY ASSESSMENT
             
(a)      The Landlord may defer payment of Real Property Taxes, or defer
compliance with any statute, law, by-law, regulation or ordinance in connection
with the levying of any such Real Property Taxes, in each case, to the fullest
extent permitted by law, so long as it shall diligently prosecute any contest,
appeal or assessment on which such tax is based. The Tenant shall co-operate
with the Landlord in respect of any such contest, appeal or assessment and shall
provide the Landlord with all relevant information, documents and consents
required by the Landlord. The Tenant shall not be responsible for paying any
fines, penalties or interest as a result of any such deferral.
             
(b)      The Tenant may, with the prior written consent of the Landlord, appeal
or contest the assessment of Real Property Taxes in respect of the Premises, in
each case, to the fullest extent permitted by law, so long as it shall
diligently prosecute any contest, appeal or assessment on which such tax is
based. If the Tenant obtains the Landlord's written consent, the Tenant will
deliver to the Landlord whatever security for the payment of Real Property Taxes
the Landlord considers advisable and will keep the Landlord informed of its
progress from time
             
<PAGE>
                                     - 14 -
    
to time and upon the request of the Landlord.
    
6.07     GST
    
         The Tenant shall pay to the Landlord all GST payable on the Rent
(including, without limitation, accelerated Rent), which payment shall be made
at the same time as the Rent to which the GST relates is to be paid in
accordance with the terms of this Lease. Regardless of any other provision of
this Lease to the contrary, the amounts payable by the Tenant under this section
shall be deemed not to be Rent, but the Landlord shall have all of the same
remedies for and rights of recovery for such amounts as it has for the recovery
of Rent under this Lease, including, without limitation, the right to distrain
against the Tenant's property.
    
                            ARTICLE 7.00 - UTILITIES
    
7.01     UTILITY RATES
    
         In each and every year during the Term, the Tenant shall pay as
Additional Rent and discharge all rates and charges (the "Charges") for electric
charges, air-conditioning, ventilation, water, gas, light, heat, power,
telephone, television and other public uttilities and services supplied to or
used on or in connection with the Premises or in cormection with the business or
occupation of the Tenant (the "Utilities") and indemnify and keep indemnified
the Landlord and the Premises from and against any and all Claims in respect
thereof. Notwithstanding any other provision of this Lease, the Tenant shall
commence paying the Charges for all Utilities consumed upon the Premises
commencing on the earlier of the date of substantial completion of the Premises
and the date the Tenant commences any of the Tenant's Work.
    
7.02     HEATING, VENTILATING AND AIR CONDITIONING
    
(a)      Whenever the Premises are vacant, the Tenant shall operate the heating
equipment serving the Premises so as to maintain reasonable conditions
of temperature within the Premises so as to prevent the freezing of pipes. The
Tenant shall comply with all reasonable rules and regulations as the Landlord
may make from time to time respecting the operation and maintenance of the HVAC
Equipment.
    
(b)      Without limiting the provisions of section 9.01, the Tenant shall,
throughout the Term and its sole cost, maintain, repair, replace when necessary
and regulate the HVAC Equipment so as to maintain same in first class operating
condition.
    
         (c) The Landlord shall be entitled to elect to maintain and repair the
HVAC Equipment (or to retain a service company to do so) in which case the
Landlord or its duly authorized agents shall be entitled to enter upon the
Premises for the purpose of maintaining and repairing the HVAC Equipment. The
Tenant shall be responsible for all costs and expenses incurred by the Landlord
in maintaining or repairing the HVAC Equipment, or causing such service company
to maintain and repair the HVAC Equipment, from time to time, together with an
administrative fee in the amount of 15% of the said costs and expenses. Such
costs shall be paid by the Tenant to the Landlord within l5 days of receiving an
invoice from the Landlord in respect of such costs.
    
(d)      Intentionally Deleted.
    
(e)      The foregoing costs and expenses shall exclude the cost of fuel and
electricity consumed by the use of such equipment to the extent only that such
costs and expenses are charged separately to and paid by the Tenant pursuant to
other provisions of this Lease.
    
7.03     METERS
    
Intentionally Deleted.
    
7.04     NON-LIABILITY OF THE LANDLORD
    
         The 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 the supply of any Utilities or heating, ventilating, air-conditioning and
humidity control, unless caused by the negligence of the Landlord or the
Landlord's Employees. Without limiting the generality of the foregoing, the
Landlord shall not be liable for, and the Tenant shall indemnify and save the
Landlord harmless from and against, any and all indirect or consequential
damages or damages for personal discomfort or illness ofthe 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,
ventilating, air-conditioning
    
<PAGE>
                                     - 15 -
            
or humidity control, unless caused by the negligence of the Landlord or the
Landlord's Employees.
            
7.05 LANDLORD'S SUSPENSION OF UTILITIES
            
         In order to effect any maintenance, repairs, replacements, alterations
or improvements to any Utilities, heating, ventilating, air conditioning or
humidity control systems, the Landlord shall have the right, without any
liability whatsoever and without thereby constituting an interference with the
Tenant's rights under this Lease or a breach by the Landlord of this Lease, and
without thereby entitling the Tenant to any rights in respect thereof, to
discontinue, suspend or modify any Utilities, heating, ventilating,
air-conditioning and humidity control systems at such time or times and from
tune to time as the Landlord shall deem desirable. In exercising its rights in
this section, the Landlord shall:
            
         (i)      make any such changes as expeditiously as reasonably possible;

         (ii)     provide at least l0 days' notice to the Tenant (except in the
                  case of an emergency, real or apprehended, in which case no
                  notice shall be required); and
            
         (iii)    use reasonable commercial efforts to minimize interference
                  with the Tenant's business operations in the Premises.
            
If as a result of the Landlord exercising its rights in this section, the Tenant
cannot and does not carry on its business in all or any part of the Premises
(the part incapable of being used being called the "Unusable Part") for more
than 48 hours, then Rent shall abate in the same proportion that the area of the
Unusable Part bears to the Rentable Area of the Premises from the expiry of such
48 hour period until such time as the Landlord rectifies the matters giving rise
to the state of affairs which resulted in the Tenant not being able to use the
Unusable Part.
            
                     ARTICLE 8.00 - CONTROL OF THE BUILDING
            
8.01     CONTROL OF THE BUILDING AND COMMON AREAS
            
         The Building and all Common Areas and such other areas, facilities,
utilities and improvements provided by the Landlord from time to time for the
general use, in common, of tenants, their officers, agents, employees and
customers shall at all times be subject to the exclusive control and management
of the Landlord. The Landlord will operate and maintain the Building and the
Common Areas as a first class industrial building. Without limiting the
generality of the foregoing, but subject to the foregoing qualifications, the
Landlord shall have the right, in the control, management and operation of the
Building and the Common Areas to:
            
         (a)      construct, maintain and operate lighting facilities;

         (b)      intentionally deleted;

         (c)      close all or any portion of the Common Areas to such extent as
                  may, in the opinion of the Landlord's counsel, be legally
                  sufficient to prevent a dedication thereof or the accrual of
                  any rights to any Person or the public therein;
            
         (d)      grant, modify and terminate easements or other agreements
                  pertaining to the use and maintenance of all or any part or
                  parts of the Building or the Common Areas, or both;
            
         (e)      obstruct or close off all or any part of the Building and/or
                  the Common Areas, or parts thereof, for the purpose of
                  maintenance or repair, or for any other reason deemed
                  necessary by the Landlord;
            
         (f)      intentionally deleted;

         (g)      make any changes or additions to the pipes, conduits,
                  utilities and other services in the Premises which service the
                  Premises or other premises in the Building;
            
         (h)      designate the areas and entrances through and at which loading
                  and unloading of goods shall be done. However, there shall be
                  no change to the loading areas, loading docks and drive-in
                  door in existence on the Commencement Date;
            
         (i)      intentionally deleted;
            
<PAGE>
                                     - 16 -
             
         (j)      designate and specify the kind of container to be used for
                  garbage and refuse and the manner and the times and places at
                  which same shall be placed for collection. If the Landlord
                  provides or designates a service for picking up refuse and
                  garbage, the Tenant shall use same at the Tenant's cost. The
                  Tenant shall pay the cost of removing its refuse or rubbish.
                  The Tenant shall not burn any trash or garbage of any kind in
                  or about the Premises or the Building;
             
         (k)      intentionally deleted;

         (1)      intentionally deleted;

         (m)      intentionally deleted,

         (n)      intentionally deleted.
             
In exercising any of its foregoing rights, the Landlord shall have the right to
enter upon the Premises to make such changes to same as the Landlord in its sole
discretion deems necessary in connection with any changes to the Building and
the Common Areas. In exercising its rights in this section, the Landlord shall:
             
         (i)      make any such changes as expeditiously as reasonably possible;

         (ii)     provide at least lO days' notice to the Tenant (except in the
                  case of an emergency, real or apprehended, in which case no
                  notice shall be required);
             
         (iii)    not diminish the Rentable Area of the Premises, the exterior
                  parking areas outlined in green on Schedule "B", and the
                  loading docks and loading areas serving the Premises; and
             
         (iv)     use reasonable commercial efforts to minimize interference
                  with the Tenant's business operations in the Premises
                  (including access to the Premises and the shipping areas of
                  the Premises),
             
the Tenant shall not be entitled to any abatement in Rent or compensation for
any inconvenience, nuisance or discomfort occasioned thereby and nothing herein
contained is deemed or construed to impose upon the Landlord any obligation,
responsibility or liability whatsoever for the care, maintenance or repair of
the Premises, or any part thereof, except as otherwise herein specifically
provided. The Tenant agrees that any entry by the Landlord upon the Premises in
accordance with the provisions hereof is not a re-entry or a breach of any
covenant for quiet enjoyment contained in this Lease and shall not affect the
Tenant's Covenants. Despite the foregoing, if as a result of the Landlord
exercising its rights in this section the Tenant cannot and does not carry on
its business in all or any part of the Premises (the part incapable of being
used being called the "Unusable Part") for more than 48 hours, then Rent shall
abate in the same proportion that the area of the Unusable Part bears to the
Rentable Area of the Premises from the expiry of such 48 hour period until such
time as the Landlord rectifies the matters giving rise to the state of affairs
which resulted in the Tenant not being able to use the Unusable Part.
             
8.02     PARKING
             
(a)      The Tenant shall be entitled to mark those areas which are outlined in
green on Schedule "B" as being the Tenant's exclusive parking spaces. The
Landlord shall have no obligation whatsoever to enforce such exclusive rights or
ensure that only the Tenant and its employees and customers park in such parking
spaces.
             
(b)      The Tenant and the Tenant's Employees shall not be entitled to park in
those parking spaces in the area outlined in orange on Schedule "B".
             
8.03     RIGHT TO RELOCATE
             
Intentionally Deleted.
             
                     ARTICLE 9.00 - MAINTENANCE AND REPAIRS
             
9.01     TENANT'S AND LANDLORD'S REPAIRS
             
(a)      If the Building or any part thereof becomes damaged or destroyed
through the negligence, carelessness or misuse by the Tenant, its employees,
invitees or anyone permitted by it to be in the Building, or through it or

<PAGE>
                                     - 17 -
             
them in any way stopping up or injuring the heating apparatus, water pipes,
drainage pipes, or other equipment or part of the Building, the expense of the
necessary repairs, replacements or alterations shall be borne by the Tenant who
shall pay the same to the Landlord as Additional Rent forthwith upon demand.
             
(b)      Subject to sections 9.04 and 18.01, the Tenant shall, at all times
during the Term at its sole cost and expense, keep and maintain the Premises in
good order, first-class condition and repair (which shall include periodic
painting and decorating and preventative maintenance as determined by the
Landlord, acting reasonably), and shall carry out all needed maintenance,
repairs and replacements to and for the whole of the Premises, including,
without limitation, all glass and windows in the interior and exterior walls of
the Premises and all signs, partitions, doors, fixtures, equipment and
appurtenances thereof and improvements thereto. The Tenant shall also, at its
sole cost and expense, maintain, repair and replace as required lighting,
wiring, plumbing fixtures and equipment within the Premises (other than those
forming part of the Building systems). The Tenant shall make all needed repairs
and replacements with due diligence and dispatch. The Tenant's obligation to
repair and maintain shall not extend to:
             
         (i)      repairs and maintenance necessitated by reasonable wear and
                  tear to the Premises (provided that the cumulative effect of
                  such wear and tear does not amount to or result in a state of
                  disrepair inconsistent with the Tenant's obligation to
                  maintain the Premises in good order and first-class
                  condition);

         (ii)     repairs or replacements arising as a result of Insured Damage;
                  and

         (iii)    repairs to be made by the Landlord pursuant to section
                  9.01(c).
             
(c)      Subject to section 18.01 and any other provision of this Lease dealing
with the Landlord's obligation to effect repairs, the Landlord shall at all
times throughout the Term maintain and repair, or cause to be maintained and
repaired, the structure of the Building, including, without limitation, the
foundations, exterior weather walls, floor, roof, wills and structural columns
and beams of the Building and the plumbing, electrical and mechanical services
generally serving the Building and the sewage drainage system serving the
Building. The costs of such maintenance, repairs and replacements shall be the
Landlord's sole responsibility. The Landlord may, in its sole and absolute
discretion, do the maintenance and repair of, or caused to be maintained and
repaired, the HVAC Equipment in which case and only in which case, the Tenant
shall pay to the Landlord, as Additional Rent the costs so incurred by the
Landlord, all in accordance with section 7.02. The Landlord shall undertake such
repairs promptly upon receipt of written notice from the Tenant. 

9.02     REPAIR ON NOTICE
             
         The Tenant shall commence to repair upon 15 days notice in writing from
the Landlord, but the Landlord's failure to give notice shall not relieve the
Tenant from its obligation to repair. If, after receiving such notice, the
Tenant refuses or neglects to perform the repairs required by section 9.01 to
the reasonable satisfaction of the Landlord, the Landlord may, but shall not be
obligated to, make such repairs without liability to the Tenant for any loss or
damage that may accrue to the Tenant's merchandise, fixtures or other property
or to the Tenant's business by reason thereof and upon completion thereof, the
Tenant shall pay, as Additional Rent the Landlord's costs for making any such
repairs plus a sum equal to 15% thereof for overhead.
             
9.03     LANDLORD'S RIGHT TO ENTER
             
(a)      The Landlord and the Landlord's Employees may, at all reasonable times
and upon at least 48 hours written notice (except in the case of an emergency,
real or apprehended, in which case no notice shall be required), enter the
Premises for the purpose of:
             
         (i)      viewing the state of repair and maintenance of the Premises.
                  The Tenant shall comply with all requirements of the Landlord
                  with respect to the care, maintenance and repair thereof,
                  provided that they are not inconsistent with Tenant's
                  obligations contained in section 9.01;
             
         (ii)     making such repairs and replacements as are the Landlord's
                  obligations under this Lease;

         (iii)    making such repairs and replacements as are the Tenant's
                  obligations pursuant to the terms of this Lease and which the
                  Tenant is in default of making after the expiry of the 15 day
                  notice period referred to in section 9.02;
             
         (iv)     making changes and additions to the pipes, conduits, wiring
                  and ducts in the Premises where necessary to serve other
                  premises in the Building.

<PAGE>

                                     - 18 -
            
The Landlord may bring onto the Prenises all materials required in order for it
to exercise its rights in this section 9.03.
            
(b)      The Tenant shall not be entitled to any abatement in Rent as a result
of the Landlord exercising its rights in this section 9.03. The Landlord shall
not be liable for any damage caused to any property located in the Premises as a
result of the Landlord exercising its rights in this section 9.03.
            
(c)      If the Tenant is not present to open and permit an entry into the
Premises during normal business hours and there is an emergency (real or
apprehended), the Landlord or the Landlord's Employees may, using reasonable
force, exercise the Landlord's rights in section 9.03(a) to enter the Premises
without rendering the Landlord or the Landlord's Employees liable therefor, and
without affecting or releasing the Tenant from the observance and performance of
any of the Tenant's Covenants. In exercising its rights in this section, the
Landlord shall take such reasonable steps as are necessary so as to minimize the
interference with the Tenant's business operations in the Premises.
            
(d)      Nothing in this section shall impose upon the Landlord any obligation,
responsibility or liability for the care, maintenance or repair of the Premises,
except as specifically provided in this Lease.
            
9.04     ALTERATIONS OR IMPROVEMENTS
            
(a)      The Tenant will not commence the Tenant's Work nor make any repairs,
replacements, alterations, or improvements (all of the foregoing being
collectively called "Alterations") to any part of the Premises without the
Landlord's prior written consent, which consent, subject to section 9.04(b),
shall not be unreasonably withheld. If the Landlord refuses its consent, such
refusal must be accompanied with the reasons for the Landlord's refusal.
            
(b)      If any proposed Alterations.
            
         (i)      affect the structure of the Premises or the Building, or the
                  store front of the Premises, or any part of the Premises which
                  may be under warranty to the Landlord, 

         (ii)     require compatibility with the Landlord's systems (including,
                  without limitation, the HVAC Equipment); or
            
         (iii)    materially and adversely affect any other tenant in the
                  Building,
            
the Landlord may withhold its consent to the proposed Alterations. No
Alterations by or on behalf of the Tenant shall be permitted which may weaken or
endanger the structure or adversely affect the condition or operation of the
Premises or the Building or diminish the value thereof, or restrict or reduce 
Landlord's coverage for municipal zoning purposes.
            
(c)      If the Landlord determines, or has reasonable grounds for believing,
that the Tenant will not carry out the Alterations in a good and workmanlike
manner or if the Alterations affect the structure of the Building, the exterior
of the Building or any part of the Building which may be under warranty to the
Landlord, then the Landlord may require that Alterations be performed by the
Landlord or its agents, in which case such Alterations shall be performed by the
Landlord or its agents at the Tenant's expense plus a further 15% of the
Landlord's total cost of such Alterations payable as Additional Rent upon
demand.
            
(d)      Prior to commencing any Alterations, the Tenant shall submit to the
         Landlord:
            
         (i)      details of the proposed Alterations, including, without
                  limitation drawings and specifications prepared by qualified
                  designers and conforming to good engineering practice;
            
         (ii)     such indemnification against liens, costs, damages and
                  expenses as the Landlord shall reasonably require; and
            
         (iii)    evidence satisfactory to the Landlord that the Tenant has
                  obtained all necessary consents, permits, licences and
                  inspections from all Authorities having jurisdiction.
            
(e)      All Alterations by the Tenant shall be:
            
         (i)      at the sole cost of the Tenant;
            
         (ii)     performed by competent workmen who are fully covered by
                  Workers' Compensation;
            
<PAGE>

                                     - 19 -
             
         (iii)    performed in a good and workmanlike manner in accordance with
                  the approved drawings and specifications, all applicable codes
                  and regulations, and the very best standards of practice;
             
         (iv)     subject to the reasonable inspection of the Landlord, and

         (v)      completed as expeditiously as possible with first class new
                  materials.
             
(f)      The Tenant shall carry builder's all risks insurance satisfactory to
the Landlord, acting reasonably, during the making of the Alterations and the
Tenant will provide the Landlord with a copy of such insurance policy for the
Landlord's approval prior to the commencement of any Alterations and the Tenant
shall not commence any Alterations until the Landlord has approved the said
insurance and the Tenant provides the Landlord with evidence satisfactory to the
Landlord, acting reasonably, that the Tenant has taken out such insurance as
approved by the Landlord.
             
(g)      Any Alterations made by the Tenant without the prior written consent of
the Landlord or which are not in accordance with the drawings and specifications
approved by the Landlord shall, if requested by the Landlord, be promptly
removed by the Tenant at its expense and the Premises restored to their previous
condition.
             
(h)      Upon completion of any Alterations, the Tenant shall provide to the
Landlord as-built drawings for the Premises (unless as-built drawings would not
normally be prepared in light of the nature of the relevant Alterations) and
shall secure all applicable statutory declarations and certificates of
inspection approval and occupancy and provide evidence of same to the Landlord.
             
(i)      Under no circumstances shall the Tenant, its employees, agents,
contractors, suppliers or workmen enter onto the roof of the Building or make
any opening in the roof of the Premises in connection with the performance of
any Alterations or for any other reason whatsoever.
             
(j)      Notwithstanding any consents granted by the Landlord to any proposed
Alterations, such consents relate only to the general acceptability of the
proposed Alterations and that by giving such consents, the Landlord shall not be
deemed to have any direct or indirect interest, responsibility or liability with
respect to such Alterations or the design, installation or maintenance of same
or for the payment of same, all of which shall be the sole responsibility of the
Tenant.
             
9.05     NOTIFY LANDLORD
             
         The Tenant shall give immediate notice in writing to the Landlord of
any damage caused to the Premises or the HVAC Equipment upon the same becoming
known to the Tenant.
             
9.06     PARTY WALL
             
         The parties agree that one or more of the walls of the Premises may be
party walls which may be used, as to the portion adjacent to the Premises, by an
adjoining tenant, or by the Landlord, and as to any repairs to such party walls
as may be required pursuant to the provisions of section 9.01 or pursuant to any
other provision of this Lease, the Tenant shall bear one-half of the cost of
such repairs, unless such repairs are necessitated wholly by reason of the
negligence of the Tenant, in which event the Tenant shall be responsible for the
entire costs of such repairs, but if such repairs are made necessary by reason
of the negligence of the Landlord, or of adjoining tenants, then the costs of
such repairs shall not be borne by the Tenant.
             
9.07     MAINTENANCE OF THE PREMISES
             
         The Tenant shall keep, operate and maintain the Premises in a clean and
sanitary condition having regard to the nature of the business operations being
carried on therein. The Tenant shall be responsible for the cost of removing all
of its trash and refuse arising from the Tenant's Work and the stocking and
operation of its business in the Premises.
             
9.08     LOADING AND UNLOADING
             
         The Tenant shall ensure that all deliveries or movement of heavy
articles to and from the Premises shall be made only by doorways or corridors
designated by the Landlord for such purpose.
             
9.09     GLASS
             
         The Tenant shall pay the cost of replacement with equal quality and
size of any glass broken on the Premises including outside windows and doors of
the perimeter of the Premises (Including perimeter of the
             
<PAGE>

                                     - 20 -
            
windows in the exterior walls) during the continuance of this Lease.
            
9.10     AIR CONDITIONING UNITS
            
         The Tenant shall not install in the Premises free standing
air conditioning units, without the prior written consent of the Landlord.
            
9.11     TENANT NOT TO OVERLOAD
            
         The Tenant shall not:
            
         (a)      bring upon the Premises or any part thereof, any machinery,
                  equipment, article or thing that by reason of its weight, size
                  or use, might in the opinion of the Landlord damage the
                  Premises;
            
         (b)      overload the floors of the Premises;

         (c)      overload any of the utility, electrical, mechanical or
                  structural systems in or servicing the Premises;
            
         (d)      place on or suspend from the roof structure or the building
                  structure any loads whatsoever without first obtaining the
                  Landlord's prior written consent, which consent may be
                  unreasonably and arbitrarily withheld.
            
If any damage is caused to the Premises by any machinery, equipment, object or
thing or by its overloading, or by any act, neglect, or misuse on the part of
the Tenant, the Tenant will forthwith repair the Premises, or at the option of
the Landlord, pay the Landlord forthwith on demand the cost of making good the
Premises together with an amount equal to 15% of such costs for overhead.
            
9.12     PROTECTION OF EQUIPMENT

         The Tenant shall protect from damage all of the heating and
air-conditioning apparatus, water, gas and drain pipes, water closets, sinks and
accessories thereof in or about the Premises and keep same free from all
obstructions that might prevent their free working and give to the Landlord
prompt written notice of any accident to or defects in same or any of their
accessories. Any damage resulting from misuse or failure to protect same shall
be the sole responsibility of the Tenant. The Tenant specifically undertakes to
install and maintain at its sole cost and expense, fire extinguishers and such
other fire protection equipment as is deemed reasonably necessary or desirable
by the Landlord, any Authority or insurance body.
            
                         ARTICLE 10.00 - USE OF PREMISES
            
10.01    USE OF PREMISES
            
         The Tenant shall only use the Premises for the Permitted Uses. The
Tenant shall not use or permit, or suffer the use of, the Premises or any part
or parts thereof for any business or purpose other than the Permitted Uses.
            
10.02    CONDUCT OF BUSINESS
            
         In the conduct of the Tenant's business, the Tenant shall:
            
         (a)      not perform any acts or carry on any practices which may
                  damage the Building or be a nuisance or menace to the Landlord
                  or to other tenants in the Building;
            
         (b)      not do, nor suffer or permit to be done, any act in or about
                  the Common Areas or the Building which hinder or interrupt the
                  flow of traffic to, in and from the Building and not do, nor
                  suffer or permit anything to be done which will in any way
                  obstruct the free movement of persons doing business in the
                  Building with any tenant or occupant of the Building;
            
         (c)      not commit or suffer or permit to be committed any waste upon
                  the Premises;

         (d)      not use any outside garbage or other containers or allow any
                  ashes, refuse, garbage or other

<PAGE>
                                            - 21 -
             
                  loose or objectionable material to accumulate in or about the
                  Premises and shall not store or caused to be stored outside of
                  the Building any of its inventory or stock in trade or raw
                  materials;
             
         (e)      not use any loud speakers, television, phonographs, radios or
                  other devices in a manner so that they can be heard outside of
                  the Premises without the prior written consent of the
                  Landlord;
             
         (f)      carry out all modifications, alterations of or to the Premises
                  and the Tenant's conduct of business in or its use of the
                  Premises which are required by any of the Authorities referred
                  to in section 10.03;
             
         (g)      obtain and provide evidence to the Landlord from time to time
                  on demand being made by the Landlord that the Tenant has
                  obtained all necessary approvals, licenses and consents from
                  all Authorities having jurisdiction for the operation of its
                  business on and from the Premises and that such approvals,
                  licenses and consents are in full force and effect; and
             
         (h)      if required by the Landlord or any Authority, the Tenant shall
                  properly contain within the Premises and dispose of its
                  garbage in accordance with practices acceptable to the
                  Landlord or any Authority, as the case may be.
             
10.03    OBSERVANCE OF LAW
             
         The Tenant shall, at its sole cost and expense, and subject to the
other provisions of this Lease, promptly:
             
         (a)      observe and comply with all Laws including, without limiting
                  the generality of the foregoing, all legislative enactments,
                  by-laws and other regulations now or hereafter in force which
                  pertain to or affect the Premises, the Tenant's use of the
                  Premises or the conduct of any business in the Premises, or
                  the making of any repairs, replacements, alterations,
                  additions, changes, substitutions or improvements of or to the
                  Premises;
             
         (b)      observe and comply with all police, fire and sanitary
                  regulations imposed by any Authority or made by fire insurance
                  underwriters, and
             
         (c)      carry out all modifications, alterations or changes of or to
                  the Premises and the Tenant's conduct of business in or the
                  use of the Premises which are required by any Authority.
             
10.04 RULES AND REGULATIONS
             
         The Tenant and the Tenant's Employees shall be bound by, and shall
observe the rules and regulations attached as Schedule "F" and such further and
other rules and regulations made hereafter by the Landlord relating to the
Building, Common Areas or the Premises of which notice in writing shall be given
by the Landlord to the Tenant. The Landlord may, in all cases acting reasonably
and in good faith, from time to time amend or supplement the rules and
regulations or adopt and promulgate additional rules and regulations applicable
to the Premises and/or the Building, including, without limitation, rules and
regulations for the operation and maintenance of the Common Areas, business
hours of the Building, lighting of premises and display sign and other matters
relating to the establishment of a proper image for the Building, which rules
and regulations may differentiate between different types of businesses in the
Building All such rules and regulations shall be deemed to be incorporated into
and form part of this Lease, provided that if there is a conflict between such
rules and regulations and the other provisions of this Lease, such other
provisions of this Lease shall in all cases prevail. The Landlord shall not be
responsible to the Tenant for the non-observance or violation of any provisions
of such rules and regulations or of the terms of any other lease of premises in
the Building, and shall be under no obligation to enforce any such provisions.
In no event will the Landlord enact any rules or regulations prohibiting the
Tenant from having its garbage containers located nearby or adjacent to the
Tenant's loading docks.
             
10.05    ENERGY CONSERVATION
             
         The Tenant shall co-operate with the Landlord in conserving energy of
all types in the Building, including complying, at the Tenant's own cost, with
all reasonable requests and demands of the Landlord with a view to energy
conservation.

<PAGE>

                                     - 22 -
            
10.06    EXHIBITING PREMISES
            
         The Landlord and the Landlord's Employees shall be entitled to, at all
reasonable times and upon not less than 48 hours written notice, enter upon the
Premises in order to exhibit them to:
            
         (a)      prospective tenants, but only during the last 6 months of the
                  Term; or
            
         (b)      prospective purchasers, at any time during the Tenn.
            
The Tenant shall be entitled to have one of its representatives accompany the
Landlord and any prospective tenant or purchaser during their inspection of the
Premises.
            
10.07    BY-LAWS
            
         The Tenant shall not make any application or representation to or for
any Authority which would have the effect of, in any way, amending or varying
the provisions of any Laws affecting the Premises (including, without
limitation, the zoning affecting the Premises), without first obtaining the
written consent and authorization of the Landlord.
            
                  ARTICLE 11.00 - INSURANCE AND INDEMNIFICATION
            
11.01    TENANT'S INSURANCE
            
(a)      The Tenant shall, at its sole cost and expense, take out and keep in
full force and effect throughout the Term and any period when it is in
possession of the Premises, the following insurance:
            
         (i)      "all-risks" insurance (including flood and earthquake) upon
                  properly of every description and kind owned by the Tenant, or
                  for which the Tenant is legally liable, or installed by or on
                  behalf of the Tenant, including, without limitation,
                  stock-in-trade, furniture, fittings, installations, signs,
                  alterations, additions, partitions, fixtures and anything in
                  the nature of a leasehold improvement in an amount of not less
                  than the full replacement cost thereof without deduction for
                  depreciation, subject to an stated amount clause. The Landlord
                  shall be named as an additional named insured and the
                  Mortgagee shall be named as a loss payee pursuant to the terms
                  of the standard Insurance Bureau of Canada mortgae clause in
                  such insurance policies Such insurance policies may contain
                  reasonable deductible in amounts acceptable to the Landlord,
                  acting reasonably;
            
         (ii)     commercial general liability insurance IBC Form 2100 or better
                  on an occurence basis including personal injury liability,
                  bodily injury liability, contractual liability tenant's legal
                  liability for the full replacement cost of the Premises,
                  non-owned automobile liability and owners' and contractors'
                  protective insurance coverage with respect to the Premises and
                  the Common Areas, coverage to include the business operations
                  conducted by the Tenant and any other Person on the Premises.
                  Such policies shall be written on a comprehensive basis with
                  limits of not less than $5,000,000.00 for any one occurrence
                  and contain an aggregate limit of no less than $5,000,000.00.
                  The Landlord and the Mortgagee shall be named as additional
                  insureds in such insurance policies;
            
         (iii)    intentionally deleted;

         (iv)     broad form boiler and machinery insurance on a blanket repair
                  and replacement basis with limits for each accident in an
                  amount at least equal to the replacement cost of all leasehold
                  improvements and of all boilers, pressure vessels,
                  air-conditioning equipment and miscellaneous electrical
                  apparatus owned or operated by the Tenant or by others (other
                  than the Landlord) on behalf of the Tenant in the Premises, or
                  relating to, or serving the Premises, subject to an agreed
                  amount clause. The Landlord shall be named as an additional
                  named insured and the Mortgagee shall be named as a loss payee
                  pursuant to the terms of the standard Insurance Bureau of
                  Canada mortgage clause in such insurance policies,
            
         (v)      standard owners' form automobile insurance providing third
                  party liability insurance with $2,000,000.00 inclusive limits,
                  and accident benefits insurance, covering all licensed
                  vehicles owned, leased or operated by or on behalf of the
                  Tenant;

<PAGE>

                                     - 23 -
             
         (vi)     intentionally deleted; and

         (vii)    any other form or forms of insurance as the Tenant or the
                  Landlord or the Mortgagee may reasonably require from time to
                  time in amounts and for insurance risks against which a
                  prudent tenant would protect itself.
             
The Tenant shall be solely responsible for the payment of all deductibles in
the Tenant's insurance policies.
             
(b)      All policies required by this section shall:
             
         (i)      be in form and with reputable insurers licensed to do business
                  in the Province of Ontario and who are acceptable from time to
                  time to the Landlord;
             
         (ii)     contain an endorsement requiring the insurers under such
                  policies to notify the Landlord in writing at least 60 days
                  prior to any material change or cancellation thereof;
             
         (iii)    contain a waiver in favour of the Landlord and any Mortgagee
                  of any breach of warranty clause such that the insurance
                  policies in question shall not be invalidated in respect of
                  the interests of the Landlord and any Mortgagee by reason of a
                  breach by the Tenant of any warranty contained in such
                  policies; and
             
         (iv)     contain a clause stating that the Tenant's insurance policy
                  will be considered as primary insurance and shall not call
                  into contribution any other insurance that may be available to
                  the Landlord.
             
(c)      All property damage and public liability insurance required pursuant to
this section shall contain a severability of interest clause and cross liability
clause.
             
(d)      All property, boiler and machinery insurance required pursuant to this
section shall contain:
             
         (i)      a joint loss agreement endorsement;

         (ii)     a waiver of any rights of subrogation which the insurers of
                  the Tenant may have against the Landlord and the Landlord's
                  Employees whether the damage is caused by the act, omission or
                  negligence of the Landlord or the Landlord's Employees and
                  shall have attached thereto and forming part thereof the
                  Mortgagee's standard form of mortgage clause.
             
(e)      Prior to the Commencement Date, the Tenant shall furnish to the
Landlord certificates of insurance which shall:
             
         (i)      be signed by the Tenant's insurers or insurance broker,

         (ii)     contain sufficient particulars to enable the Landlord to
                  confirm that the Tenant has taken out the insurance required
                  by this Lease to be taken out by the Tenant; and
             
         (iii)    intentionally deleted.
             
The Tenant shall provide written evidence of the continuation of such policies
not less than 10 days prior to their respective expiry dates.
             
(f)      All insurance premiums for the insurance required by this section shall
be paid for by the Tenant.

(g)      If:
             
         (i)      the Tenant fails to take out or maintain any of the insurance
                  required by this section; or

         (ii)     any of the insurance required by this section is not approved
                  by the Landlord and the Tenant fails to rectify the situation
                  within 48 hours after written notice by the Landlord that it
                  does not approve of such insurance,
             
the Landlord shall have the right, but not the obligation, to effect the
insurance required by this section, and to pay the cost of premiums therefor. In
such event, the Tenant shall pay to the Landlord, as Additional Rent, the amount
so paid by the Landlord, plus 15% thereof as an administrative charge, forthwith
on demand.
             
<PAGE>
                                     - 24 -
            
(h)      Intentionally Deleted.
            
(i)      The Landlord acknowledges and agrees that the Tenant may carry blanket
insurance covering numerous premises owned or leased by the Tenant and the
Tenant's insurance obligations as contained in the Lease may be satisfied in
full by including the Premises within such blanket insurance coverage, provided
that such blanket insurance provides for the insurance coverage and endorsements
contemplated by this section.
            
(j)      In case of loss or damage, the proceeds of insurance for tenants'
improvements shall be and are hereby assigned and made payable to the Landlord
and the Tenant. Provided the Tenant is not in default of its obligations under
this Lease, the Landlord shall, upon the Tenant's written request, release such
proceeds to the Tenant in progress payments at stages determined by a
certificate of the Landlord's Expert stating that repairs to each such stage
have been satisfactorily completed free of liens by the Tenant. If the Tenant is
in default of its obligations under this Lease, the Landlord shall be entitled
to retain such proceeds without liability to the Tenant for interest or
otherwise until the default has been, in the opinion of the Landlord, remedied.
If the Tenant fails to make such repairs, the Landlord may perform the repairs
and apply the proceeds to the cost thereof. If the Lease is terminated upon the
happening of any damage or any destruction as provided for in Article 15.00 or
for any other reason, the proceeds of insurance shall be allocated between the
Landlord and the Tenant according to their respective insurable interest. The
Tenant shall cause all of its mortgagees, chargees and other encumbrancers of
its interest in the Premises, if any, to waive, if applicable, such Person's
rights under section 6 of the MORTGAGEE ACT (Ontario), as amended or replaced
from time to time, so that all insurance proceeds for tenant's improvements can
be dealt with in accordance with this section.
            
11.02    ADVERSE IMPACT ON INSURANCE
            
(a)      If any of the Landlord's insurance premiums are increased by reason of
anything done or omitted or permitted to be done by the Tenant or by anyone
permitted by the Tenant to be upon the Premises, the Tenant shall be responsible
for paying the full amount of such increase. The Tenant shall pay such increase
within 15 days after invoices for such additional premiums are rendered by the
Landlord. In determining the Tenant's responsibility for any increased cost of
insurance as aforesaid, a statement issued by the organization, company or
insurer establishing the insurance premiums or rates for the relevant insurance
policies stating the reasons for such increase shall be conclusive evidence in
determining the Tenant's responsibility for same.
            
(b)      If any insurance on the Building or any part thereof or on any building
connected to the Building shall be cancelled or threatened to be cancelled by
the insurer by reason of the use or occupation of the Premises or any part
thereof by the Tenant or by any Transferee or by anyone permitted by the Tenant
to be upon the Premises, and if the Tenant fails to remedy the condition giving
rise to the cancellation or threatened cancellation within 48 hours after notice
thereof by the Landlord, the Landlord may, at its option in addition to any
other remedy it may have, forthwith terminate this Lease by notice in writing
to the Tenant and thereupon Rent and any other payments for which the Tenant is
liable under this Lease shall be apportioned and paid in full to the date of
such termination and the Tenant shall immediately deliver up possession of the
Premises to the Landlord and the Landlord may re-enter and take possession of
same.
            
11.03    LANDLORD'S INSURANCE
            
(a)      Subject to its general availability on reasonable commercial terms the
Landlord shall effect and maintain during the Term:
            
         (i)      "all-risks" insurance on IBC Form 4036 or better which shall
                  insure the Building for an amount of not less than replacement
                  cost thereof from time to time (including foundations),
                  against loss or damage by perils or hereafter from time to
                  time embraced by or defined in the IBC Form 4036. Such
                  insurance policy may contain the standard IBC mortgage clause;
            
         (ii)     boiler, pressure vessels, air-conditioning equipment and
                  miscellaneous electrical apparatus and machinery insurance on
                  a broad form blanket cover repair and replacement basis for an
                  amount equal to the Building limit;
            
         (iii)    "all-risk" rent and rental value insurance in an amount
                  sufficient to replace all Rent recoverable by the Landlord
                  from tenants in the Building (assuming full occupancy of the
                  Building), including, without limitation, the Rent payable
                  under this Lease, for an indemnity period of not less than 12
                  months. However, this insurance shall not include coverage for
                  rental losses due to the failure of tenants to pay rent in
                  default of their obligations under their leases;
            
         (iv)     "all-risk" insurance on IBC Form 4036 or better against risk
                  of physical loss or damage to 
<PAGE>

                                     - 25 -
            
                  all property owned by the Landlord relative to the Building on
                  a replacement cost basis;
            
         (v)      commercial general liability insurance IBC Form 2100 or better
                  on an occurrence basis covering all authorized employees,
                  subcontractors and agents while working on behalf of the
                  Landlord. Such policy shall contain a limit of not less than
                  $5,000,000.00 per occurrence and in the aggregate; and
            
         (vi)     any other form or forms of insurance as the Landlord or its
                  Mortgagee may reasonably require from time to time for
                  insurance risks and in amounts against which a prudent
                  landlord would protect itself.
            
(b)      All such insurance policies may contain such deductibles as would be
carried by a prudent owner of a similar building.
            
(c)      Despite the Tenant's contributions towards the cost of the Landlord's
insurance, no insurable interest is conferred upon the Tenant under the
Landlord's insurance policies. The Tenant shall not be entitled to share in or
receive any portion of any insurance proceeds received by the Landlord. Except
as specifically provided for in this Lease, the Landlord shall not be
accountable to the Tenant regarding the use of the insurance proceeds arising
from any Claims. 
            
(d)      All property, boiler and machinery and rental insurance required by
section 11.03(a) shall be endorsed with a waiver of any subrogation rights which
the Landlord's insurers may have against the Tenant and the Tenant's Employees,
whether any such damage is caused by the act, omission or negligence of the
Tenant or the Tenant's Employees.
            
(e)      Intentionally Deleted.
            
11.04    LIMITATION OF THE LANDLORD'S LIABILITY
            
         Unless caused by the negligence of the Landlord or the Landlord's
Employees, the Landlord shall not be liable or responsible in any way to the
Tenant or to any other Person for and the Tenant hereby releases the Landlord in
respect of:
            
         (a)      any Injury arising from or out of any occurrence on, in or
                  relating to the Building or any loss or damage to property
                  (including loss of use thereof) of the Tenant or any other
                  Person located in, on or around the Building however caused;
            
         (b)      without limiting the generality of the provisions of section
                  11.03(a), any Injury to the Tenant or any other Person or loss
                  or damage to property resulting from: strikes; lockouts; war;
                  riots; insurrection; Acts of God; fire; smoke; explosions;
                  falling or defective plaster, ceiling tiles, fixtures or
                  signs; broken glass; steam; fumes; vapours; odours; dust;
                  dirt; cinders; grease; acid; oil; any noxious, offensive or
                  excessive liquids, solids or gases; any Hazardous Substance;
                  debris; vibration; radiation; air or noise pollution; theft;
                  vandalism; breakage; vermin; electricity; electrical or other
                  wiring, computer or electronic equipment or systems
                  malfunction or stoppage; water; rain; floods; flooding;
                  freezing; earthquake, tornado or hurricane; wind; snow; sleet;
                  hail; frost; ice; excessive heat or cold; sewage; sewer
                  backup; toilet overflow; leaks or discharges from any part of
                  the Building, or from any pipes, sprinklers, appliances,
                  equipment, electrical or other wiring, plumbing fixtures,
                  roof, windows, skylights, doors, trap doors or subsurface of
                  any floor or ceiling of any part of the Building or from the
                  street or any other place, or by dampness or climatic
                  conditions or from any other cause whatsoever;
            
         (c)      any Injury, loss or damage caused by other tenants or any
                  Person in the Building or by occupants of adjacent property
                  thereto, or by the public, or by construction or renovation,
                  or by any private, public or quasi-public work, or by
                  interruption, cessation or failure of any public or other
                  utility service or any other cause whatsoever; or
            
         (d)      any Injury to the Tenant or any other Person or any loss or
                  damage suffered to the Premises or the contents thereof by
                  reason of the Landlord or its representatives entering the
                  Premises to undertake any work therein, or to exercise any of
                  the Landlord's rights or remedies hereunder, or to fulfill any
                  of the Landlord's obligations hereunder, or in the case of
                  emergency.
            
All property of the Tenant kept or stored on the Premises shall be so kept or
stored at the risk of the Tenant only
            
<PAGE>

                                     - 26 -
             
and the Tenant shall hold the Landlord harmless from and against Claims arising
out of damages to same, including, but not limited to, any subrogation claims by
the Tenant's insurers.
             
11.05    INDEMNIFICATION

(a)      The Tenant shall indemnify the Landlord and save it harmless from and
against any and all Claims in connection with:

         (i)      any Injury referred to in section 11.04 or any loss or damage
                  to property referred to in section 11.04, unless arising as a
                  result of the negligence of the Landlord or the Landlord's
                  Employees;

         (ii)     the failure of the Tenant to observe and perform any of the
                  Tenant's Covenants;

         (iii)    the occupancy or use by the Tenant of the Premises, including,
                  without limitation, the conduct and operation by the Tenant of
                  its business on the Premises;

         (iv)     any Hazardous Substance being brought into, produced or
                  maintained in, or discharged from, the Premises during the
                  Term, unless brought on by the Landlord or the Landlord's
                  Employees; and 

         (v)      any occurrence on the Premises however caused, unless caused
                  by the negligence of the Landlord or the Landlord's Employees.
             
(b)      The Landlord shall indemnify the Tenant and save it harmless from and
against any and all Claims in connection with:
             
         (i)      any Injury, loss or damage to property arising from or out of
                  any occurrence upon or at any part of Lands or Building to the
                  extent occasioned wholly or in part by any fault, default,
                  negligence, act or omission by the Landlord or the Landlord's
                  Employees; and

         (ii)     the failure of the Landlord to observe and perform any of the
                  Landlord's Covenants.
             
(c)      In case either the Landlord or the Tenant, without actual fault on its
part, is made a party to any litigation commenced by or against the other, they
shall protect and hold the other harmless and shall pay all costs and expenses,
including legal fees on a solicitor and his own client basis, incurred or paid
by the other in connection therewith.
             
11.06    EMPLOYEES
             
(a)      It is agreed that every indemnity, exclusion or release of liability
and waiver of subrogation contained in this Lease or in any of the Tenant's
insurance policies shall extend to and benefit each and every of the Landlord,
the Landlord's Mortgagee, any management company employed by the Landlord to
manage the Property and all of their respective servants, agents, directors,
officers, employees and those for whom the Landlord is in law responsible
(collectively, the "Landlord Beneficiaries"), it being understood and agreed
that the Landlord is the agent or trustee of the Landlord Beneficiaries solely
to the extent necessary for the Landlord Beneficiaries to take the benefit of
this section. The Landlord shall be under no obligation whatsoever to take any
steps or actions on behalf of the Landlord Beneficiaries to enable them to
obtain the benefits of this section unless it chooses to do so in its sole and
absolute discretion.
             
(b)      It is agreed that every indemnity, exclusion or release of liability
and waiver of subrogation contained in this Lease or in any of the Landlord's
insurance policies shall extend to and benefit the Tenant and all of the
Tenant's Employees, it being understood and agreed that the Tenant is the agent
or trustee of the Tenant's Employees solely to the extent necessary for the
Tenant's Employees to take the benefit of this section. The Tenant shall be
under no obligation whatsoever to take any steps or actions on behalf of the
Tenant's Employees to enable them to obtain the benefits of this section unless
it chooses to do so in its sole and absolute discretion.
             
                          ARTICLE 12.00 - CONSTRUCTION
             
12.01    LANDLORD'S WORK
             
(a)      The Landlord shall, at its expense, perform the Landlord's Work in a
good and workmanlike manner.
             
<PAGE>

                                     - 27 -
            
The Landlord shall use reasonable commercial efforts to complete the Landlord's
Work on or prior to June 1, 1998. If the Tenant requires any changes to the
Landlord's Work then the Tenant's signature on the change order, or other
documentation evidencing the changes, shall be conclusive evidence of the
Tenant's agreement to (i) the making of such changes; and (ii) pay for the cost
of such changes to the extent that such changes result in an increase in the
cost of the Landlord's Work (the "Additional Costs"). The Additional Costs
shall be paid by the Tenant within 15 days of the Landlord providing the Tenant
with an invoice for the Additional Costs The Landlord shall not provide the
Tenant with an invoice until such time as it substantially completes the
Landlord's Work
            
(b)      If the Tenant requires the Landlord to carry out any work in or to the
Premises in addition to the Landlord's Work (the "Additional Work"), and the
Landlord agrees to carry out the Additional Work, then the Tenant's signature on
the documentation evidencing the nature of the Additional Work shall be
conclusive evidence of the Tenant's agreement to (i) the Landlord performing the
Additional Work; and (ii) pay for the cost of the Additional Work (the
"Additional Work Costs"). The Additional Work Costs shall be paid by the Tenant
within 15 days of the Landlord providing the Tenant with an invoice for the
Additional Work Costs.
            
(c)      If any changes are made to the Additional Work, then the Tenant's
signature on the change order, or other documentation evidencing the changes,
shall be conclusive evidence of the Tenant's agreement to (i) the making such
changes, which shall be deemed to form part of the Additional Work; and (ii) pay
for the cost of such changes, all of which shall be deemed to form part of the
Additional Work. Such additional costs shall be paid by the Tenant within 15
days of the Landlord providing the Tenant with an invoice for such costs.
            
12.02    TENANT'S WORK
            
         Commencing on the date that the Landlord delivers possession of the
Premises to the Tenant, the Tenant shall, at its own expense, diligently carry
out and complete the Tenant's Work. The Tenant will carry out the Tenant's Work
in such manner as will not interfere unreasonably with the performance by the
Landlord of the Landlord's Work and otherwise in accordance with the provisions
of this Lease, including, without limitation, the provisions of section 9.04 and
Schedule "D".
            
12.03    NO OBLIGATION TO PROCEED
            
Intentionally Deleted.
            
                    ARTICLE 13.00 - ASSIGNING AND SUBLETTING
            
13.01    CONSENT REQUIRED
            
(a)      The Tenant will not effect a Transfer without the prior written consent
of the Landlord in each instance, which consent shall not be unreasonably or
arbitrarily withheld or delayed. The consent by the Landlord to any Transfer to
a Transferee, if granted, shall not constitute a waiver of the necessity for
such consent to any subsequent Transfer. This prohibition against a Transfer is
to be construed so as to include a prohibition against any Transfer by operation
of law.
            
(b)      The Tenant may assign this Lease or sublet the Premises to a
         corporation which is:
            
         (i)      controlled (as defined in the BUSINESS CORPORATIONS ACT
                  (Ontario)) by the Tenant;

         (ii)     a holding body corporate (as defined in the BUSINESS
                  CORPORATIONS ACT (Ontario)) of the Tenant; or
            
         (iii)    a subsidiary or affiliate (as those terms are defined in the
                  BUSINESS CORPORATIONS ACT (Ontario)) of the Tenant,
            
(such Persons being called a "Permitted Transferee") without the Landlord's
consent (a "Permitted Transfer"), provided that:
            
         (A)      prior to the date of the Permitted Transfer:
            
                  (I)      the Tenant provides the following to the Landlord:
            
                           (1)      Written notice of its intention to effect a
                                    Permitted Transfer and the
            
<PAGE>
                                     - 28 -
            
                                    name of the Permitted Transferee to whom the
                                    Permitted Transfer is to be made;
            
                           (2)      evidence reasonably satisfactory to the
                                    Landlord that the Permitted Transferee
                                    qualifies as being a Permitted Transferee;
                                    and
            
                           (3)      a copy of the document giving effect to the
                                    Permitted Transfer;
            
                  (II)     the Permitted Transferee executes an agreement with
                           the Landlord in which the Permitted Transferee (1)
                           agrees to be bound by all of the Tenant's Covenants
                           as if such Permitted Transferee had originally
                           executed this Lease as tenant; and (2) grants the
                           Landlord a security interest in all of the Permitted
                           Transferee's personal properly on terms substantially
                           the same as those contained in section 20.08; and
            
                  (III)    the Tenant pays the Landlord the fees described in
                           section 13.03; and
            
         (B)      the provisions of sections 13.03(c), (e), (f) and (h) shall
                  apply.
            
13.02    FACTORS FOR CONSENT 
            
         Notwithstanding the fact that the Landlord may not unreasonably or
arbitrarily withhold its consent to a Transfer, the Landlord will be considered
to be reasonably withholding its consent if its reason or reasons for doing so
is or are based upon all or any of the following factors:
            
         (a)      any factor which a court of law would consider to be
                  reasonable;

         (b)      a proposed change in the use of the Premises to other than the
                  use specified in section 10.01;

         (c)      the Transferee not having a good credit rating,

         (d)      intentionally deleted;

         (e)      the Transferee, or any partnership or corporation in which the
                  Transferee or its principals was a member or a shareholder at
                  the time (other than a public corporation described in section
                  13.04) having become bankrupt or having materially defaulted
                  under the terms of any lease for commercial, office or
                  shopping centre premises whether leased from the Landlord or
                  other Persons;
            
         (f)      intentionally deleted;

         (g)      the Transferee does not intend to actually use and occupy the
                  Premises in accordance with the terms of this Lease;
            
         (h)      the Transferee being an existing tenant of the Landlord;

         (i)      the Landlord having available for leasing to the Transferee
                  other premises in the Building; or
            
         (j)      the giving of such consent would cause the Landlord to be in
                  breach of restrictive or exclusive use clauses granted by the
                  Landlord to other tenants in the Building.
            
13.03    TRANSFERS
            
(a)      If the Tenant intends to effect a Transfer, in whole or in part, the
Tenant will give prior written notice to the Landlord of such intent specifying
the proposed Transferee and providing the Landlord with information concerning
the identity of the principals of the Transferee, a detailed breakdown of the
proposed Transferee's, and its principals' 5-year prior business experience,
complete credit, financial and business information regarding the proposed
Transferee and its principals and an original copy of all documents and
agreements relating to the proposed Transfer. Further, such written request
shall also be accompanied by the sum $500.00, being the minimum amount payable
by the Tenant on account of all costs incurred by the Landlord in considering
and processing the request for its consent, which amount excludes any legal fees
and disbursements which the Landlord may incur in connection with a request for
its consent. The Landlord will, within 20 days after having received such
written notice and all such necessary information and monies, notify the Tenant
in writing either that:

<PAGE>
                                     - 29 -
           
         (i)      it consents (subject to the Tenant complying with all of the
                  provisions of this section 13.03 on its part to be complied
                  with) or does not consent to the Transfer, or
           
         (ii)     intentionally deleted.
           
If the Landlord fails to respond within such 20 day period, the Tenant may give
a second notice to the Landlord requesting the Landlord's consent and if the
Landlord fails to respond within 5 following the date that the Landlord receives
such second notice, then the Landlord shall be deemed to have given its consent
to the Transferee.
           
(b)      If there is a Transfer of this Lease, the Landlord may collect Rent
from the Transferee and apply the net amount collected to the Rent required to
be paid pursuant to this Lease, but no acceptance by the Landlord of any
payments by a Transferee shall be deemed a waiver of the obligation to obtain
the Landlord's consent to a Transfer, or the acceptance of the Transferee as
tenant, or a release of the Tenant from the further performance by the Tenant of
the Tenant's Covenants. Any document evidencing a Transfer and the Landlord's
consent thereto shall be prepared by the Landlord or its solicitors. All
reasonable legal and administrative costs incurred by the Landlord with respect
to a request by the Tenant for the Landlord's consent to a proposed Transfer
(including the costs of all examinations, the costs of preparing all requisite
documents, processing costs, the costs of all negotiations by the Landlord or
its solicitors) shall be paid by the Tenant to the Landlord forthwith upon
demand, and, in any event prior to the Landlord giving its consent. For greater
certainty, such costs shall be paid by the Tenant whether or not the Landlord
consents to the proposed Transfer. The Tenant shall provide to the Landlord such
deposit on account of the Landlord's legal fees as the Landlord or its
solicitors may require prior to the Landlord instructing its solicitors to
prepare such documentation. Any consent by the Landlord shall be subject to the
Transferee executing a security agreement with the Landlord, which security
agreement shall contain provisions substantially similar to those set out in
section 20.08, and subject to the Tenant and the Transferee executing an
agreement with the Landlord providing for the following:
           
         (i)      the Transferee's agreement to be bound by all of the Tenant's
                  Covenants as if such Transferee had originally executed this
                  Lease as tenant (including, without limitation, the provisions
                  of section 10.01 relating to the use of the Premises);
           
         (ii)     if the Transferee is a subtenant, the Transferee's agreement
                  that, at the Landlord's option, all of the Transferee's right
                  title and interest in and to the Premises absolutely
                  terminates upon the surrender, release, disclaimer or merger
                  of this Lease, notwithstanding the provisions of section 21 or
                  section 39(2) of the Act, unless the Transferee delivers a
                  security deposit to the Landlord equal to 3 times the monthly
                  amount of Minimum Rent payable under this Lease on the date of
                  the Transfer; and
           
         (iii)    intentionally deleted. 

(c)      If, as a result of any Transfer, the Tenant is entitled, directly or
indirectly, as a result of such Transfer to receive a rent, payment, fee or any
other consideration, in the form of cash, negotiable instrument, goods, services
or in other form whatsoever, which is greater than the Minimum Rent payable
hereunder to the Landlord, then the Tenant shall pay any such excess to the
Landlord forthwith within 10 days after receipt thereof by the Tenant from time
to time. The Tenant shall immediately make available to the Landlord upon
request all of the Tenant's books, records and documentation so as to enable the
Landlord to verify the receipt or the amount of any such excess.
           
(d)      All amounts payable by the Tenant pursuant to this Lease up to the
effective date of the Transfer, including, without limitation, all amounts
required to be paid by the Tenant pursuant to this section 13.03, shall be paid
in full to the Landlord prior to the Landlord executing the document affecting
the Transfer and evidencing its consent thereto, and until such time as the said
amounts are paid in full, the Landlord shall be under no obligation to give its
consent to the Transfer or execute the document effecting the Transfer and
evidencing its consent thereto. Where any such amounts cannot be finally
determined at that time, the Tenant shall deposit with the Landlord an amount
reasonably estimated by the Landlord to cover such undetermined amounts, such
amount to be held by the Landlord without any liability for interest thereon
until the estimated amounts become finally determined by the Landlord, at which
time the appropriate adjustments shall be made.
           
(e)      Notwithstanding the effective date of any permitted Transfer as between
the Tenant and the Transferee, all Rent for the month in which such effective
date occurs shall be paid in advance by the Tenant so that the Landlord shall
not be required to accept partial payments of Rent for such month from either
the Tenant or any Transferee.
           
(f)      If this Lease is disclaimed or terminated by any trustee in bankruptcy
of any Transferee or by the
<PAGE>

                                     - 30 -
           
Transferee in accordance with its rights under the Bankruptcy and Insolvency
Act, the Tenant shall not be released from its obligations under this Lease, as
amended by the document affecting the Transfer, and the Tenant shall, from the
date of such disclaimer or termination, continuously, actively and diligently
carry on business in the Premises pursuant to the terms of this Lease for the
balance of the Term. The Tenant's obligations under this section shall survive
any such disclaimer or termination.
           
(g)      Intentionally Deleted.
           
(h)      Notwithstanding any such Transfer permitted or consented to by the
Landlord, the Tenant shall not be released from its obligation to observe and
perform the Tenant's Covenants and the Tenant shall be jointly and severally
liable with the Transferee for the performance of the Tenant's Covenants.
           
13.04    CORPORATE OWNERSHIP
           
(a)      If the Tenant is a corporation or if the Landlord consented to a
Transfer of this Lease to a corporation, any transfer or issue by sale,
assignment, bequest, inheritance, operation of law or other disposition, or by
subscription, from time to time of all or any part of the corporate shares of
the Tenant or of any direct or indirect parent corporation of the Tenant which
results in any change in the present effective voting control of the Tenant by
the Person holding such voting control ,at the date of execution of this Lease
(or at the date a Transfer of this Lease to a corporation is permitted) shall,
for the purposes of this Article 13.00, be deemed a Transfer. If the Tenant does
not acquire the prior written consent of the Landlord as required by the
preceding provisions of this Article 13.00, which consent shall not be
unreasonably or arbitrarily withheld or delayed, the Landlord shall be entitled
to terminate this Lease upon 5 days' written notice to the Tenant given up to 60
days after the date the Landlord becomes aware of such Transfer. The Tenant
shall make available to the Landlord, or its lawful representatives, all
corporate books and records of the Tenant for inspection at all reasonable
times, in order to ascertain whether there has been any change in control.
           
(b)      This section 13.04 however, shall not apply to the Tenant if at such
time:
           
         (i)      the Tenant is a public corporation whose shares are traded and
                  listed on any recognized stock exchange in Canada or in the
                  United States; or
           
         (ii)     the Tenant is a private corporation but is controlled by a
                  public corporation defined as aforesaid,
           
so long as in either case prior to or as soon as reasonably possible thereafter,
the Landlord has received assurances satisfactory to the Landlord that there
will be a continuity of the existing management of the Tenant, and of its
business practices and policies notwithstanding any such sale, transfer or other
disposition of controlling shares.
           
(c)      Despite the foregoing provisions of this section 13.04, section
13.04(a) and (b) shall not apply as long as the Tenant is Catalina Lighting
Canada Ltd. or a Permitted Transferee.
           
13.05    NO ADVERTISING OF THE PREMISES
           
         The Tenant shall not print, publish, post, display or broadcast any
notice or advertisement to the effect that the Premises are for lease or for
sale or otherwise advertise the proposed sale or lease of the whole or any part
of the Premises and shall not permit any broker or other party to do any of the
foregoing, unless the complete text and format of any such notice, advertisement
or offer is first approved in writing by the Landlord. Without in any way
restricting or limiting the Landlord's right to refuse any text or format on
other grounds, no text proposed by the Tenant shall contain any reference to the
rental rate of the Premises.
           
13.06    ASSIGNMENT BY LANDLORD
           
         In the event of the sale or lease by the Landlord of the Building or
any part thereof, or the assignment by the Landlord of this Lease or any
interest of the Landlord hereunder, and to the extent that such purchaser or
assignee assumes the Landlord's Covenants, and provides a covenant to this
effect to the Tenant, the Landlord shall, thereupon and without further
agreement, be freed and relieved of all liability with respect to the Landlord's
Covenants.

<PAGE>

                                     - 31 -

                  ARTICLE 14.00 - CONSTRUCTION AND OTHER LIENS
           
14.01    DISCHARGE OF LIENS
           
         The Tenant shall promptly pay all of its contractors and suppliers and
shall do any and all things necessary so as to minimize the possibility of a
lien attaching to the Lands and should any such lien be made or filed, the
Tenant shall discharge it within 10 days following the date the Tenant becomes
aware of the registration of such lien, provided however that the Tenant may
contest the validity of any such lien and in so doing shall obtain an order of a
court of competent jurisdiction discharging the lien from the title to the Lands
by payment into Court or by furnishing to the Landlord security satisfactory to
the Landlord in nature and amount against all loss or damage which the Landlord
might suffer or incur thereby. If the Tenant shall fail to discharge any lien,
then in addition to any other right or remedy of the Landlord, the Landlord may,
but it shall not be so obligated, discharge the lien by paying the amount
claimed to be due into Court and the amount paid by the Landlord together with
all costs and expenses including solicitor's fees (on a solicitor and his client
basis) incurred for the discharge of the lien shall be due and payable by the
Tenant to the Landlord as Additional Rent on demand.
           
                       ARTICLE l5.00 - FIXTURES AND SIGNS
           
15.01    REMOVAL AND RESTORATION BY TENANT
           
(a)      All alterations, decorations, additions, fixtures (other than the
Tenant's trade fixtures and equipment) and improvements made to the Premises by
the Tenant, or made by the Landlord on the Tenant's behalf, whether before or
after the Commencement Date, shall immediately become the property of the
Landlord upon the expiration or earlier termination of the Term without
compensation to the Tenant. Such alterations, decorations, additions, fixtures,
or other improvements shall not be removed from the Premises except that the
Tenant:
           
         (i)      may, at the end of the Term, if not in default, remove its
                  trade fixtures;

         (ii)     shall, at the end of the Term, remove all leasehold
                  improvements from the Premises as the Landlord may require to
                  be removed;
           
         (iii)    may remove its trade fixtures during the Term in the usual and
                  normal course of its business if such trade fixtures have
                  become excess for the Tenant's purposes or the Tenant is
                  substituting new and similar trade fixtures, provided the
                  Tenant is not in default hereunder.
           
(b)      The Tenant shall, in the case of every such removal, either during or
at the end of the Term, make good any damage caused to the Premises or the
Building by the installation and removal of any such alteration, decoration,
addition, fixture or improvement and any such removal is to be done at the
Tenant's sole cost and expense.
           
(c)      Any goods, chattels, fixtures, trade fixtures, inventory, equipment and
other property of the Tenant not removed from the Premises on the expiration
of the Term shall be deemed to have been abandoned by the Tenant and the
Landlord may remove and dispose of them (by private or public sale and on such
terms as the Landlord in its sole and absolute discretion may choose to accept,
which teens need not be commercially reasonable), destroy them, retain them,
convey them to a new tenant or otherwise deal with them in such manner as the
Landlord determines in its sole and absolute discretion, all without any
obligation, compensation or duty to account to the Tenant. The Landlord may also
remove such items from the Premises and store them at the Tenant's risk and
expense. In all cases, the Tenant shall repair and restore and save the Landlord
harmless from all damage to the Premises caused by the removal of such items
from the Premises.
           
15.02    TENANT'S SIGNS 
           
         The Tenant shall not paint, affix or display any sign, fixture,
advertisement, notice, lettering or decoration on any part of the Lands or the
Building which is exterior to the Premises or in any part of the Premises which
is visible from the exterior of the Premises, without the prior written consent
of the Landlord. Any signs approved by the Landlord shall be installed in a
manner and at a location approved by the Land1ord and shall be in a design,
size, location and in all other respects satisfactory to the Landlord and all
applicable Authorities. The Landlord may institute a sign policy for tenants of
the Building from time to time and same shall be incorporated as an integral
part of this Lease. The Tenant shall have the right to erect a sign on the
outside of the Building and/or the lawn area of the Common Areas, at its own
expense, subject to the foregoing provisions of this section 15.02.
           
<PAGE>
                                     - 32 -
           
15.03    LANDLORD'S SIGNS
           
         The Landlord may at any time during the:
           
         (a)      last 6 months of the Term, place upon the exterior of the
                  Premises a sign stating that the Premises are "For Lease";
           
         (b)      Term, place upon the exterior of the Premises a sign stating
                  the Premises are "For Sale".
           
Such signs shall be of reasonable dimensions and shall be reasonably placed so
as not to interfere with the Tenant's business, and the Tenant shall not remove
such notice, or permit same to be removed.
           
           ARTICLE 16.00 - STATUS STATEMENT, ATTORNMENT AND SUBORDINATION
           
16.01    STATUS STATEMENT
           
         Within 10 days of demand being made by the Landlord from time to time,
the Tenant shall execute and deliver to the Landlord or its Mortgagee a
statement in writing, in the form supplied by the Landlord, certifying that the
Lease is unmodified and in full force and effect (or if modified, stating the
modification and that the Lease is in full force and effect as modified), the
Commencement Date, the amount of Rent then being paid hereunder, the dates to
which Rent has been paid, whether or not there is any existing default on the
part of the Landlord of which the Tenant is aware and any other particulars that
the Landlord or its Mortgagee may request.
           
16.02    ATTORNMENT
           
         The Tenant shall, if proceedings are brought for the foreclosure of, or
if there is exercise of the power of sale under any Mortgage made by or at the
direction of the Landlord, the Building and/or the Lands, attorn to the
Mortgagee or the purchaser upon any such foreclosure or sale and recognize such
Mortgagee or the purchaser as the Landlord under this Lease, provided that the
Mortgagee agrees to observe and perform the Landlord's Covenants. The Tenant
shall execute promptly such instruments or certificates to carry out the intent
of this section 14.02 as shall be requested by the Landlord, or such Mortgagee
or purchaser.
           
16.03    LEASE SUBORDINATION
           
         This Lease and all the rights of the Tenant hereunder are subject and
subordinate to all Mortgages which may now or hereafter affect the Building or
any part or parts thereof, and to all advances made or hereafter to be made upon
the security thereof and all renewals, modifications and extensions thereof. The
Tenant agrees to execute promptly whenever requested by the Landlord or the
Mortgagee an instrument or instruments confirming such subordination. In no
event, however, shall the Tenant be required to subordinate this Lease unless
the Mortgagee first provides the Tenant with a non-disturbance agreement of the
type described in section 14.04. 

16.04    NON-DISTURBANCE AGREEMENT
           
         On written demand being made by the Tenant, the Landlord will use its
reasonable best efforts to obtain a non-disturbance agreement from each of its
Mortgagees wherein the Mortgagee agrees that if it enforces its security, the
Tenant will be entitled to remain in possession of the Premises in accordance
with the terms of this Lease provided that no Event of Default occurs.
           
16.05    POWER OF ATTORNEY
           
Intentionally Deleted.
           
16.06    FINANCIAL INFORMATION
           
         The Tenant shall, upon request, provide the Landlord with information
similar to the information previously provided to the Landlord by the Tenant
prior to the execution of this Lease, as to the Tenant's or the Indemnifier's
financial standing and corporate organization as the Landlord or the Mortgagee
may require from time to time, which information shall be certified to be true
and correct by a senior officer of the Tenant, or the owner where the Tenant is
a sole proprietorship, or by a knowledgeable partner where the Tenant is a
partnership. Prior to the Tenant's execution of this Lease, the Tenant shall
provide the Landlord with a certificate (certified to be true and correct by a
senior of officer of the Tenant or by a knowledgeable partner where the Tenant
is a partnership) which shall:
           
           
<PAGE>

                                     - 33 -
           
         (a)      in the case where the Tenant is a corporation, name every
                  direct and indirect shareholder of the Tenant; or
           
         (b)      in the case where the Tenant is a partnership, name every
                  direct and indirect partner of the Tenant.
           
                           ARTICLE l7.00 - OVERHOLDING
           
17.01    OVERHOLDING
           
         Upon the expiration of this Lease by the passage of time and the Tenant
remaining in possession of the Premises:
           
         (a)      there shall be no implied renewal or extension of this Lease;

         (b)      if the Landlord consents in writing to the Tenant remaining in
                  possession, the Tenant shall be deemed, notwithstanding any
                  statutory provision or legal assumption to the contrary, to be
                  occupying the Premises as a monthly tenant;
           
         (c)      if the Landlord does not consent in writing to the Tenant
                  remaining in possession, the Tenant shall be deemed,
                  notwithstanding any statutory provision or legal assumption to
                  the contrary, to be occupying the Premises as a tenant at the
                  will of the Landlord, which tenancy may be terminated at any
                  time by the Landlord without the necessity of any notice to
                  the Tenant; and
           
         (d)      the Tenant shall occupy the Premises on the same terms and
                  conditions as are contained in this Lease (including, without
                  limitation, the obligation to pay Additional Rent), save and
                  except that:
           
                  (i)      the Term and the nature of the tenancy shall be as
                           set out in section 17.01(b) or (c), as the case may
                           be;
           
                  (ii)     the Minimum Rent payable by the Tenant shall be paid
                           monthly at a rate equal to twice the amount of
                           monthly Minimum Rent which it was responsible for
                           paying during the last 12 months of the Term; and
           
                  (iii)    the Tenant shall not be entitled to take the benefit
                           of any rights of renewal, rights of first refusal,
                           options to purchase, rights granting the Tenant
                           exclusive rights to carry on certain business
                           activities in the Building, or any other rights
                           personal to the Tenant and which may be contained in
                           this Lease.
           
The Tenant shall be estopped and forever barred from claiming any right to
occupy the Premises on terms other than as set out in ~is section and the
Landlord may plead this section in any court proceedings. The Tenant shall
indemnify and save harmless the Landlord from all Claims incurred by the
Landlord as a result of the Tenant remaining in possession of all or any part of
the Premises following the expiry of the Term. Nothing in this section shall be
interpreted as permitting or giving the Tenant an option to stay in possession
of the Premises following the expiry of the Term and the Tenant shall surrender
the Premises to the Landlord on the expiry of the Term.
           
              ARTICLE 18.00 - DAMAGE, DESTRUCTION AND EXPROPRIATION
           
18.01    DESTRUCTION
           
         Provided, and it is hereby expressly agreed, that, notwithstanding the
other provisions of this Lease, if whenever during the Term the Building is
damaged or destroyed by fire, lightning or tempest or by other casualty (the
date of such damage or destruction being called the "Damage Date"), then and in
every such event:
           
         (a)      if the damage or destruction renders 30% percent or more of
                  the Rentable Area of the Premises wholly unfit for occupancy
                  or it is impossible or unsafe to use and occupy it, or if in
                  the opinion of the Landlord's Expert the Building is damaged
                  or destroyed to such) a
           
<PAGE>

                                     - 34 -
           
                  material extent or the damage or destruction is of such a
                  nature that the Building must be or should be totally or
                  partially demolished, whether or not the Premises are damaged
                  or destroyed and whether the Premises are to be reconstructed
                  in whole or in part or not, the Landlord or the Tenant may at
                  its option terminate this Lease by giving to the other notice
                  in writing of such termination within 60 days of the Damage
                  Date, in which event this Lease and the Term hereby demised
                  shall cease and be at an end as of the Damage Date and the
                  Rent shall be apportioned and paid in full to the Damage Date;
           
         (b)      if the damage or destruction is such that the Premises are
                  rendered wholly unfit for occupancy or it is impossible or
                  unsafe to use and occupy them, and if in either event, the
                  damage, in the opinion of the Landlord's Expert cannot be
                  repaired with reasonable diligence within 180 days from the
                  Damage Date, then the Landlord or the Tenant may terminate
                  this Lease by giving to the other notice in writing of such
                  termination within 60 days of the Damage Date, in which event
                  this Lease and the Term hereby demised shall cease and be at
                  an end as at the Damage Date and the Rent shall be apportioned
                  and paid in full to the Damage Date. If neither the Landlord
                  nor the Tenant terminates this Lease, the Landlord will do the
                  Landlord's Reconstruction and the Rent will abate from the
                  Damage Date until the Landlord has completed the Landlord's
                  Reconstruction. The term "Landlord's Reconstruction" in this
                  Article 18.00 means the reconstruction or repair of the floor,
                  walls and roof of the Premises to the extent which the
                  Landlord's Expert determines is necessary to enable the Tenant
                  to commence its leasehold improvements and perform the repairs
                  and replacements described in Article 9.00;
           
         (c)      if the damage or destruction is such that the Premises are
                  wholly unfit for occupancy or if it is impossible or unsafe to
                  use or occupy it, but if in either event the damage, in the
                  opinion of the Landlord's Expert can be repaired with
                  reasonable diligence within 180 days from the Damage Date,
                  the Landlord will do the Landlord's Reconstruction and the
                  Rent will abate from the Damage Date until the Landlord has
                  completed the Landlord's Reconstruction;

         (d)      if the damage or destruction occurs during the last 2 years of
                  the Term and the Tenant has not exercised its right to extend
                  the Term, and the Landlord's Expert determines that the
                  Premises cannot be repaired with reasonable diligence within
                  75 days from the Damage Date, then the Tenant may elect to
                  terminate this Lease by giving written notice of such election
                  to the Landlord within 5 days following the date the Tenant
                  receives the Landlord's Expert's determination, in which case
                  this Lease and the Term hereby demised shall cease and be at
                  an end as at the Damage Date and the Rent shall be apportioned
                  and paid in full to the Damage Date;
           
         (e)      if in the opinion of the Landlord's Expert the damage or
                  destruction to the Building can be made good, as aforesaid,
                  within 180 days from the Damage Date and the damage or
                  destruction is such that a portion of the Premises is capable
                  of being partially used for the purposes for which it is
                  hereby demised, then the Landlord will do the Landlord's
                  Reconstruction and the Rent will abate proportionately to the
                  part of the Premises rendered unrentable from the Damage Date
                  until the Landlord has completed the Landlord's
                  Reconstruction;
           
         (f)      if the Landlord elects to repair, reconstruct or rebuild the
                  Building in accordance with the provisions of this Article
                  18.00, it is acknowledged and agreed by the Tenant that the
                  Landlord shall be entitled to use plans and specifications and
                  working drawings in connection therewith other than those used
                  in the original construction of the Building. However, the
                  rebuilt Premises shall be functionally the same as the
                  original Premises; and
           
         (g)      the decision of the Landlord's Expert as to the time in which
                  the Building and/or the Premises can or cannot be repaired,
                  the state of tenantability of the Premises and/or the Building
                  and as to the date on which the Landlord's Reconstruction is
                  completed, shall be final and binding on the parties. The
                  Landlord shall use reasonable efforts to cause its Expert to
                  advise the Landlord and the Tenant of the length of time it
                  will take to repair the damage to the Building and/or the
                  Premises as soon as possible following the Damage Date, and,
                  in any event, within 30 days following the Damage Date. 
<PAGE>


18.02    EXPROPRIATION OF PREMISES
           
         If during the Term all or any part of the Premises are taken or
expropriated by any lawful expropriating Authority, or purchased under threat of
such taking, this Lease shall automatically terminate on the date on which



<PAGE>

                                     - 35 -
           
the expropriating Authority takes possession of the Premises.
           
18.03    PARTIAL EXPROPRIATION OF BUILDING
           
         If during the Term, part of the Building is taken or purchased as set
out in section 18.02, and in the reasonable opinion of the Landlord substantial
alteration or reconstruction of the Building is necessary or desirable as a
result thereof, whether or not the Premises are or may be affected, the Landlord
shall have the right to terminate this Lease by giving the Tenant at least 60
days' written notice of such termination within 60 days of such taking or
purchase. If the Landlord exercises its right of termination hereunder, this
Lease shall terminate on the date stated in the notice.
           
18.04    SURRENDER
           
         On any such date of termination under sections 18.02 or 18.03, the
Tenant shall immediately surrender to Landlord the Premises and all interests
therein under this Lease. The Landlord may re-enter and take possession of the
Premises and remove the Tenant therefrom, and the Rent shall abate from and
after the date of termination, except that if the date of such taking differs
from the date of termination, Rent shall abate on the former date in respect of
the portion taken. After such termination, and on notice from the Landlord
stating the Rent then owing, the Tenant shall forthwith pay the Landlord such
Rent.
           
18.05    AWARDS
           
         Upon any such taking or purchase, the Landlord and the Tenant shall
each be entitled to pursue and recover such compensation as may be available to
them under the relevant Laws.
           
                   ARTICLE 19.00 - IMPOSSIBILITY OF PERFORMANCE

19.01    IMPOSSIBILITY 
           
         Whenever and to the extent that either party is unable to perform or is
delayed or restricted in performing any obligation under this Lease in respect
of the supply or provision of any service or utility or the doing of any work or
the making of any repairs by reason of:
           
         (a)      being unable to obtain the material, goods, equipment,
                  service, utiliy or labour required to enable it to perform
                  such obligation;
           
         (b)      any Laws;

         (c)      the order or direction of any administrator, controller or
                  board, or any governmental department or officer or other
                  Authority;
           
         (d)      not being able to obtain any required permission or authority;

         (e)      strikes, lock-outs, war, acts of God; or

         (f)      any other cause beyond its control, whether of the foregoing
                  character or not,
           
such party shall, so long as such impediment exists, be relieved from performing
such obligation and the other party shall not be entitled to any compensation
for any inconvenience, loss, damage, nuisance or discomfort thereby occasioned.
However, the financial inability of a party shall not entitle such party to the
benefit of this section and the provisions of this section do not operate to
excuse the Tenant from its obligation to pay Rent (which obligation only arises
upon the Commencement Date, which may be extended in accordance with section
3.01(b)).
           
                             ARTICLE 20.00 - DEFAULT
           
20.00    DEFAULT
           
(a)      If and whenever an Event of Default occurs, then the Landlord has to
the extent permitted by law, the immediate right of re-entry upon the Premises
and it may expel all Persons and remove all property from the
           
<PAGE>
                                     - 36 -
           
Premises and such property may be removed and sold or disposed of by the
Landlord in such manner as the Landlord in its sole and absolute discretion
deems advisable or may be stored in a public warehouse or elsewhere at the cost
and for the account of the Tenant, all without service of notice or resort to
legal process and without the Landlord being considered guilty of trespass or
becoming liable for any loss or damage which may be occasioned thereby, unless
caused by the negligence of the Landlord or the Landlord's Employees. In the
event the Landlord sells such property in accordance with the foregoing, the
Landlord shall be entitled to retain all proceeds received from such sale for
its own account, provided that the Landlord will apply such proceeds against the
damages suffered by the Landlord as a result of such re-entry and shall remit
the excess, if any, to the Tenant. Notwithstanding the foregoing, the Landlord
shall not sell such property for 10 Business Days following the date of its
re-entry and the Tenant shall be entitled to remove such property from the
Premises during such 5 day period under the Landlord's supervision. In addition
to any and all other rights of the Landlord, and at the option of the Landlord,
the full amount of the current month's Rent together with the next 3 month's
Rent will immediately become due and payable as accelerated Rent upon the
occurrence of an Event of Default.
           
(b)      If the Landlord elects to re-enter the Premises or if it takes
possession pursuant to legal proceedings or pursuant to any notice provided for
by law, it may either terminate this Lease or it may from time to time without
terminating this Lease, make any reasonable alterations and repairs which the
Landlord, in its sole and absolute discretion, deems necessary in order to
re-let the Premises, or any part thereof, for such term or terms (which may be
for a term extending beyond the Term) and at such rent and upon such other
terms, covenants and conditions as the Landlord in its sole and absolute
discretion considers advisable. Upon each such re-letting all rent received by
the Landlord will be applied, first to the payment of any indebtedness other
than Rent due hereunder; second, to the payment of any costs and expenses of
re-letting, including brokerage fees and solicitors' fees and the costs of all
alterations and repairs to the Premises which the Landlord, in its sole and
absolute discretion, deems necessary in order to re-let the Premises; third, to
the payment of Rent due and unpaid hereunder; and the residue, if any, will be
held by the Landlord and applied in payment of future Rent as same becomes due
and payable hereunder. If the rent received from such re-letting during any
month is less than that payable by the Tenant under the terms of this Lease, the
Tenant will pay any such deficiency in advance on the first day of each month.
In the event that the Landlord has other premises available in the Building for
lease, the Landlord shall be under no obligation whatsoever to first re-let, or
attempt to re-let, the Premises ahead of such other available premises and the
Landlord shall be entitled to lease all such other available premises prior to
re-letting the Premises, and in so leasing such other available premises the
Landlord will not be in breach of any obligation on its part, if any, to
mitigate its losses upon re-entering or taking possession of the Premises. The
Landlord shall in no way be responsible or liable for any failure to re-let the
Premises or any part thereof, or for any failure to collect any Rent due upon
any such re-letting. No re-entry or taking possession of the Premises by the
Landlord will be construed as an election on its part to terminate this Lease
unless a written notice of such intention is given to the Tenant.
Notwithstanding any re-letting without termination the Landlord may at any time
thereafter elect to terminate this Lease for the previous breach.
           
(c)      If the Landlord terminates this Lease, in addition to any other
remedies it may have, the Landlord may recover from the Tenant all damages it
incurs by reason of the Tenant's breach, including, without limitation, the cost
of recovering the Premises, reasonable brokerage fees and solicitors' fees, the
cost of all tenant inducements, alterations and repairs to the Premises which
the Landlord, in its sole and absolute discretion, deems necessary in order to
re-let the Premises and the worth at the time of such termination of the excess,
if any, of the amount of Rent required to be paid pursuant to this Lease for the
remainder of the Term (had this Lease not been terminated) over the then rental
value of the Premises, as determined by the Landlord, for the remainder of the
Term (had this Lease not been terminated), all of which amounts shall be
immediately due and payable by the Tenant to the Landlord. Upon any termination
of this Lease, the Landlord shall be entitled to retain all of the monetary
deposits provided by the Tenant as liquidated damages on account of the minimum
amount of damages which the parties agree the Landlord will suffer as a result
of such termination, all without the necessity for any legal proceedings. In no
circumstances whatsoever shall the Landlord be required to return the said
deposits or any part thereof to the Tenant.
           
20.02    LEGAL EXPENSES
           
         If the assistance of legal counsel shall be required to recover
possession of the Premises, re-let the Premises, recover Rent, or because of the
breach of any of the other Tenant's Covenants, or to advise the Landlord on any
of the foregoing matters, the Tenant shall pay to the Landlord all expenses
incurred therefor, including reasonable solicitor fees on a solicitor and his
client basis. If the Landlord institutes any action against the Tenant and a
court rules that the action of the Landlord is unfounded or if the Tenant is
successful in a court action against the Landlord for breach of the Landlord's
Covenants, the Landlord shall pay to the Tenant all expenses incurred by the
Tenant therefor including reasonable solicitor fees on a solicitor and his own
client basis and all related court costs and other reasonable expenses incurred
by the Tenant.
<PAGE>
                                     - 37 -

20.03    RIGHTS CUMULATIVE
           
         The rights and remedies given to the Landlord and the Tenant in this
Lease are distinct, separate and cumulative, and no one of them, whether or not
exercised by the Landlord or the Tenant shall be deemed to be in exclusion of
any other rights or remedies provided in this Lease or by law or in equity.
           
20.04    ACCEPTANCE OF RENT - NON-WAIVER
           
         No receipt of monies by the Landlord from the Tenant after the
cancellation of this Lease in any lawful manner shall reinstate, continue or
extend the Term, or affect any notice previously given to the Tenant or operate
as a waiver of the right of the Landlord to enforce the payment of Rent then due
or thereafter falling due, or operate as a waiver of the right of the Landlord
to recover possession of the Premises by proper suit, action, proceedings or
other remedy. After the service of any notice to cancel this Lease and the
expiration of any time therein specified or after the commencement of any suit,
action, proceeding or other remedy, or after a final order or judgment for
possession of the Premises, the Landlord may demand, receive and collect any
monies due, or thereafter falling due without in any manner affecting such
notice, suit, action, proceeding, order or judgment. Any and all such monies so
collected shall be deemed payments on account of the use and occupation of the
Premises or at the election of the Landlord on account of the Tenant's liability
hereunder.
           
20.05    NO WAIVER
           
         No condoning or waiver by either the Landlord or Tenant of any default
or breach by the other at any time or times in respect of any of the Landlord's
Covenants or the Tenant's Covenants, respectively, to be performed or observed
by the other shall be deemed or construed to operate as a waiver of the
Landlord's or Tenant's rights under this Lease, as the case may be, in respect
of any continuing or subsequent default or breach nor so as to defeat or affect
in any way the rights or remedies of the Landlord or Tenant under this Lease, as
the case may be, in respect of any such continuing or subsequent default or
breach. Unless expressly waived in writing, the failure of the Landlord or the
Tenant to insist in any one or more cases upon the strict performance of any of
the Landlord's Covenants or the Tenant's Covenants, respectively, to be
performed or observed by the other shall not be deemed or construed to operate
as a waiver for the future strict performance or observance of such Landlord's
Covenants or Tenant's Covenants, as the case may be. The subsequent acceptance
of Rent hereunder by the Landlord shall not be deemed to be a waiver of any
preceding breach by the Tenant of any of the Tenant's Covenants regardless of
the Landlord's knowledge of such preceding breach at the time of its acceptance
of such Rent.
           
20.06    ACCORD AND SATISFACTION
           
         No payment by the Tenant or receipt by the Landlord of a lesser amount
than the Rent herein stipulated shall be deemed to be other ~an on account of
the earlier stipulated Rent, nor shall any endorsement or statement on any
cheque or any letter accompanying any cheque or payment as Rent be deemed an
accord and satisfaction, and the Landlord may accept such cheque or payment
without prejudice to the Landlord's rights to recover the balance of such Rent
or pursue any other remedy provided in this Lease.
           
20.07    DISTRESS
           
(a)      The Tenant hereby waives and renounces the benefit of any present or
future laws, statutory or otherwise, limiting the goods upon which the Landlord
may exercise its right of distress and the Tenant hereby agrees with the
Landlord that, notwithstanding any such laws, all goods, chattels and inventory
(collectively, the "Goods
) from time to time on the Premises shall be subject
to distress for Rent and the fulfillment of all of the Tenant's obligations
under this Lease in the same manner as if such laws had not been made. Upon the
Landlord effecting a distress, this provision may be pleaded as an estoppel
against any Claims which the Tenant, or any Person claiming through the Tenant,
may bring against the Landlord in respect of any distress levied by the
Landlord.
           
(b)      In addition to any other rights of the Landlord to distrain, the
Landlord shall have the right to distrain on all of the Goods on the Premises,
including, without limitation, all heavy or connected machinery and equipment.
The Landlord may without notice to the Tenant exercise any right of distress on
the Premises and for such purpose the Tenant agrees that the Landlord may enter
the Premises by any means which the Landlord in its sole and absolute discretion
deems necessary in order to obtain possession, including, without limiting the
generality of the foregoing, by using any keys in the Landlord's possession to
unlock any locks preventing access to the Premises or by the use of such force
as the Landlord in its sole and absolute discretion deems necessary, including,
without limitation, the breaking of any lock, door or window or other point of
entry into the Premises. The Landlord shall have the right to lock the Premises,
change any locks on the Premises and by any means exclude the Tenant from all or
any parts of the Premises and the Landlord shall not thereby be terminating this
           
<PAGE>
                                     - 38 -

Lease in the absence of an express written notice terminating this Lease. The
Tenant hereby consents to being excluded by the Landlord from all or any parts
of the Premises for the purpose of the Landlord exercising its right of distress
and acknowledges and agrees that such exclusion shall not constitute a
termination of this Lease in the absence of an express written notice from the
Landlord terminating this Lease. The Landlord may exercise any right of distress
at any time during the day or night and on any day of the week whether or not
the Premises are occupied by any Person at the time.

(c)      The Tenant agrees that a distress of all of the Goods may be effected
by written notice posted in or on the Premises, whether or not the Landlord
locks or otherwise secures such Goods from the Tenant on the Premises or
elsewhere. If the Landlord effects a distress by written notice or by any other
means, the Tenant agrees not to use, remove or permit to be used or removed any
distrained Goods and not to interfere with the Landlord's exercise of its right
of distress.

(d)      The Tenant agrees that the Landlord's exercise of any right of distress
as permitted hereby or at law shall not:

         (i)      constitute a trespass or breach of any express or implied term
                  of this Lease or render the Landlord subject to any legal
                  proceeding; or

         (ii)     intentionally deleted.

(e)      In exercising any right of distress, the Landlord may distrain against
all or any Goods, irrespective of whether, or of the degree to which, the
distress may be excessive and the Tenant waives any and all rights and remedies
in respect thereof. In exercising any right of distress, tbe Landlord may hold
all distrained Goods without limit in time and the Tenant waives any and all
rights and remedies in respect thereof.

(f)      In addition to others entitled to do so, the Landlord and its agents
and employees shall have the right without notice to the Tenant to purchase any
Goods on the Premises distrained by the Landlord, provided that the price paid
is at least equal to the lowest of the 2 valuations which the Landlord is
required to obtain in connection with its distress proceedings.

(g)      Intentionally Deleted.

(h)      In the event there remains arrears of Rent following the completion of
a distress, the Landlord shall be entitled to levy a further distress on the
remaining Goods on the Premises.

(i)      The Tenant shall indenmify and hold harmless the Landlord from and
against any and all Claims arising out of the exercise by the Landlord of any of
its rights under this section.

(j)      The rights given to the Landlord pursuant to this section are in
addition to, and not in replacement of, its common law right to distrain upon
the Goods and this section shall in no way derogate from or in any way impair
the Landlord's common law right to distrain upon the Goods.

20.08    SECURITY INTEREST

(a)      The Tenant hereby grants to the Landlord a security interest (in this
section called the "Security Interest") in all of the Tenant's personal property
of every kind, including, without limitation, all goods, chattels, trade
fixtures, furniture, equipment, inventory, stock-in-trade, chattel paper,
accounts, instruments, money, documents of title, supplies, securities, accounts
receivable, book debts and intangibles (in this section collectively called the
"Collateral") which are or may at any time hereafter be on the Premises from
time to time, to secure the payment of all Rent and the fulfilment of all other
obligations of the Tenant under this Lease. The parties agree that the Security
Interest shall attach to the Collateral immediately upon the Tenant acquiring
any rights in the Collateral from time to time. Except for the Security Interest
and security interests granted by the Tenant to its lenders, or the lenders of a
Permitted Transferee, in connection with the Tenant's business operations on the
Premises, the Tenant will keep the Collateral free and clear of all other
security interests and encumbrances. The Tenant acknowledges and agrees that
this section is intended to constitute a security agreement as defined in the
PERSONAL PROPERTY SECURITY ACT (Ontario). This security agreement is separate
from and shall survive the termination, expiry or disclaimer of this Lease.

(b)      Upon the occunence of an Event of Default, the Landlord, by itself or
by a receiver or any replacement thereof appointed in writing by the Landlord,
may take possession of the Collateral and will have all the rights of a secured
party under the PERSONAL PROPERTY SECURITY ACT (Ontario). The Landlord shall be
entitled to recover the reasonable expenses of retaking, holding, repairing,
processing, repairing for disposition and disposing of the Collateral and all
other reasanable expenses, including, without limitation, legal costs, incurred
by the Landlord.

<PAGE>
                                     - 39 -

The Landlord may exercise any rights provided by this section on the Premises
and for such purpose may lock the Premises, change any locks on the Premises and
by any means exclude the Tenant from all or any part of the Premises and the
Landlord shall not thereby be terminating this Lease in the absence of express
written notice terminating this Lease.

(c)      This Security Interest shall not be deemed to have been satisfied,
discharged or redeemed by reason of the Tenant not being indebted to the
Landlord at any time or from time to time and no payments shall reduce the
amount secured by this Security Interest except to the extent expressly approved
by the Landlord in writing.

(d)      This Security Interest and the rights of the Landlord under this
section are additional security to the Landlord to secure the Tenant's
obligations under this Lease and are given in addition to and may be exercised
by the Landlord without prejudice to any other rights of the Landlord under this
Lease or at law, including, without limitation, the Landlord's right of
distress.

(e)      The Tenant shall not grant any security interests in the Collateral to
any Person other than:

         
         (i)      the Landlord;

         (ii)     an institutional lender providing financing to the Tenant in
                  respect of the Tenant's business operations in the Premises;
                  and

         (iii)    vendors of equipment sold to the Tenant, provided that any
                  such security interest is only given in respect of the
                  equipment purchased by the Tenant from such vendor,

and the Security Interest shall be deemed to be automatically postponed in
favour of the Persons described in sections 20.08(e)(ii) and (iii) and, if
requested by the Tenant in writing, the Landlord shall sign such reasonable
documentation as may be required in order to evidence and confirm such
subordination.

20.09    RESTRICTION ON RIGHT

         The Tenant shall not be entitled to exercise its right to terminate
this Lease in accordance with the provisions of the BANKRUPTCY AND INSOLVENCY
ACT (Canada) unless it first obtains the Landlord's written consent, which
consent may be unreasonably and arbitrarily withheld.

20.10    RIGHT TO PERFORM

         If the Tenant fails to comply with any of the Tenant's Covenants (the
"Unperformed Covenants") and such failure continues after the Landlord has given
the Tenant prior written notice of such failure aud the cure period set out in
such notice has expired, then the Landlord may, at its option, and without
waiving or releasing the Tenant from the strict performance of the Tenant's
Covenants, perform such of the Unperformed Covenants as the Landlord considers
desirable in such manner and to such extent as the Landlord considers desirable
and in doing so may pay any necessary and incidental costs and expenses. All
amounts paid by the Landlord in exercising its rights in this section, plus an
administrative fee equal to 15% of the amounts so paid by the Landlord, together
with interest thereon at the rate provided for in section 4.06 calculated from
the date of the making of the payment by the Landlord, shall be deemed
Additional Rent and shall be paid by the Tenant within 5 days of demand being
made on the Tenant for the payment of same.

                      ARTICLE 21.00 - ENVIRONMENTAL MATTERS

21.01    ENVIRONMENTAL LAWS AND POLICIES

         Without limiting the provisions of section 10.03, the Tenant shall, at
its sole cost, comply with:

         (a)      all Laws relating to environmental matters and the use,
                  treatment, handling, clean up and disposal of Hazardous
                  Substances (collectively, "Environmental Laws"); and

         (b)      all environmental policies which may be established by the
                  Landlord from time to time in respect of the use, treatment,
                  handling, clean up and disposal of Hazardous Substances.

21.02    USE OF HAZARDOUS SUBSTANCES

(a)      The Tenant shall not bring or allow to be present in the Premises any
Hazardous Substances, other than


<PAGE>
                                     - 40 -

those Hazardous Substances, if any, which:

         (i)      the Tenant requires for the proper operation of its business
                  operations in the Premises; and

         (ii)     the Landlord permits in writing to be on the Premises and used
                  by the Tenant, which permission may be arbitrarily and
                  unreasonably withheld.

(b)      The Tenant shall provide the Landlord with a written statement
describing:

         (i)      all of the Hazardous Substances used by the Tenant in its
                  business and which the Tenant requires to be located on the
                  Premises;

         (ii)     the procedures used by the Tenant to contain and handle such
                  Hazardous Substances; and

         (iii)    the procedures used by the Tenant to contain and deal with
                  spills of Hazardous Substances.

Such statement shall be provided to the Landlord prior to the Commencement Date
and within 20 days following the date that the Landlord requests such a report
from time to time during the Term.

(c)      The Tenant shall properly containiand handle all Hazardous Substances
within the Premises and dispose of same in accordance with all applicable
Environmental Laws.

(d)      In no event shall the Premises be used for the sale, transport,
transfer, production, storage, manufacture, processing, packaging of or other
dealing with any Hazardous Substance except if, and so long as, approved by the
Landlord in writing (which approval may be withdrawn at time regardless of any
other provision of this Lease to the contrary).

(e)      The Tenant shall inspect all goods delivered to the Premises and will
ensure that no Hazardous Substance is brought into the Premises or any other
part of the Building or the Lands by or for the Tenant, the Tenant's Employees
or any Transferee except in accordance with the preceding provisions of this
section 21.02. The Tenant shall, at its sole cost, cause any goods, the nature
of which is not known to the Tenant with certainty, to be tested by a qualified
Person to determine whether they are or contain any Hazardous Substance before
accepting same into the Premises or on the Lands.

21.03    NO ADVERSE IMPACT

         The Tenant shall not use any Hazardous Substances in a manner which may
cause or contribute to an adverse environmental effect upon the Premises, the
Lands, any other lands or to the environment.

21.04    TENANT'S RESPONSIBILITY

(a)      The Tenant shall be solely responsible and liable for any clean-up and
remediation required by the Landlord or any Authority having jurisdiction of any
Hazardous Substances which the Tenant, the Tenant's Employees or any Transferee
caused or allowed to be released onto or into the air, the Premises, other lands
and/or the groundwater or surface waters under or on the Lands or any other
lands. Upon the occurrence of any such release, the Tenant shall immediately
give written notice to the Landlord and take all steps necessary to remedy the
situation giving rise to such release.

(b)      If any such clean-up or remediation is required in accordance with
section 21.04(a), the Tenant shall, at its sole cost, prepare all necessary
studies, plans and proposals and submit them to the Landlord for approval,
provide all bonds and other security required by any lawful Authorities and
carry out the work required. In carrying out such work, the Tenant shall keep
the Landlord fully informed of the progress of the work. The Landlord may, in
its sole discretion, elect to carry out all such work, or any part of it, and,
if the Landlord does so, the Tenant shall pay for all costs in connection
therewith, together with an administrative fee equal to 15% of such costs,
within 15 days of written demand being made by the Landlord.

(c)      All Hazardous Substances brought or allowed onto the Lands during the
Term by the Tenant, the Tenant's Employees or a Transferee shall, despite any
other provision of this Lease to the contrary and any expiry, termination or
disclaimer of this Lease, be and remain the property and sole responsibility of
the Tenant regardless of the degree or manner of affixation of such Hazardous
Substances to the Premises.

(d)      If the Tenant is required by any applicable Environmental Laws to
maintain environmental and operating documents and records, including, without
limitation, permits and licenses (collectively, "Environmental Records"), the
Tenant shall maintain all requisite Environmental Records in accordance with all
applicable
<PAGE>

                                     - 41 -

Environmental Laws. The Landlord may inspect all Environmental Records at any
time during Term on 24 hours' prior written notice, but no prior notice shall be
required in the case of an emergency, real or apprehended.

(e)      The Tenant shall promptly notify the Landlord in writing of:

         (i)      any notice by any Authority alleging a possible violation of
                  or with respect to any Environmental Laws in connection with
                  operations or activities in the Premises;

         (ii)     any charges laid by any Authority alleging a violation by the
                  Tenant, the Tenant's Employees or a Transferee of any
                  Environmental Laws;

         (iii)    any orders made against the Tenant pursuant to any
                  Environmental Laws; and 

         (iv)     any notices received by the Tenant from any Person concerning
                  any release or alleged release of any Hazardous Substances
                  from the Premises.

(f)      The Tenant shall provide to the Landlord a copy of any environmental
site assessment of the Premises conducted by or for the Tenant at any time
during the Term within l0 days of the Tenant receiving same.

21.05    LANDLORD'S AUDIT RIGHT

(a)      The Landlord may, at any time during or after the Term, and upon not
less than l0 days' notice during the Term:

         (i)      require the Tenant to cause an environmental audit of the
                  Premises to be carried out; and

         (ii)     enter the Premises for the purpose of causing an environmental
                  audit of the Premises to be carried out.

The scope and breadth of stuch environmental audit shall be determined by the
Landlord in its sole discretion. The resulting environmental,audit report shall
be addressed to both the Landlord and the Tenant and copies given to both.

(b)      The Landlord shall be solely responsible for the cost of any such audit
except:

         (i)      if any such audit reveals a breach by the Tenant of the
                  Tenant's Covenants contained in this Lease; and

         (ii)     in the case of any such audit done in the last year of the
                  Term,

in which case the Tenant shall be responsible for the cost of such audit.
However, in the case of an audit done in the last year of the Term, the Tenant
shall only be required to pay for the cost of a Phase I Audit, unless the
results of such audit indicate that further inspections are required, in which
case the Tenant shall also be responsible for the cost of such further
inspections.

(c)      If any audit reveals any breach by the Tenant of the Tenant's Covenants
contained in this Lease, the Tenant shall:

         (i)      immediately take such steps as are necessary so as to rectify
                  such breach; and 

         (ii)     if required by the Landlord, in its sole discretion, obtain
                  and post a bond in the name of the Landlord as security for
                  the Tenant's obligations in section 2l.O5(i). The bond shall
                  be in such amount as the Landlord determines. If the Tenant
                  fails to comply with its obligations in section 21.05(i), the
                  Landlord may, in its sole discretion, exercise its rights in
                  section 17.lO and perform such work and draw upon the bond to
                  pay for the costs of such work.

(d)      Intentionally Deleted.

21.06    REMOVAL OF HAZARDOUS SUBSTANCES

         Upon the expiry of the Term, or at such other times as may be required
by any lawfu1 Authority, the Tenant shall remove all Hazardous Substances from
the Premises which were placed, brought or allowed onto the Premises during the
Term by the Tenant, the Tenant's Employees or any Transferee and carry out all
remediation work necessitated as a result of such removal, all at the Tenant's
sole cost and expense. If the


<PAGE>

                                     - 42 -

removal of any such Hazardous Substances from the Premises is prohibited by any
Environmental Laws, the Tenant shall take whatever action is required to ensure
compliance with any Environmental Laws.

21.07    LANDLORD'S RESPONSIBILITY

         The Landlord shall be solely responsible, at its expense, for the cost
or clean up or any other remedial measures for any Hazardous Substances located
on the Premises prior to the Commencement Date ("Existing Hazardous
Substances") or caused by any Person, other than the Tenant. The Landlord shall
indemnify and save harmless the Tenant from and against all such costs and fines
arising in connection with the Existing Hazardous Substances. The Landlord
warrants to the Tenant that, to the best of the Landlord's knowledge and belief,
it is not currently aware of any Hazardous Substances located on the Premises.

                             ARTICLE 22.00- GENERAL

22.01    QUIET ENJOYMENT

         Until such time as an Event of Default occurs, the Tenant shall and may
peaceably possess and enjoy the Premises for the Term without any hindrance,
interruption or disturbance from the Landlord or any other Person lawfully
claiming by, from or under it. If the Landlord is in breach of its obligations
under this section and the Tenant fails to pay Rent as a result, the Landlord
shall not be relieved of its obligations in this section.

22.02    NOTICE

         Any notice or other communication required or permitted to be given by
this Lease shall be in writing and shall be effectively given if:

         (a)      delivered personally;

         (b)      sent by prepaid courier service;

         (c)      sent by registered mail; or

         (d)      intentionally deleted;

in the case of notice to:

         (i)      the Landlord at:

                  3300 Highway #7
                  Suite 707
                  Concord, Ontario, L4K 4M3
                 
                  Attention: President
                  
                  Fax No. 905-761-6588

         (ii)     the Tenant at:

                  the Premises
                  
                  Attention: Don Planche

                  together with a copy to:

                  Catalina Industries
                  18191 Northwest 68th Avenue
                  Miami, Florida, 33015
                  Attention: Janet Ailstock

or at such other address as the party to whom such notice or other communication
is to be given shall have advised the party giving same in the manner provided
in this section. Any notice or other communication


<PAGE>

                                     - 43 -

delivered personally or by prepaid courier service shall be deemed to have been
given and received on the day it is so delivered at such address, provided that
if such day is not a Business Day such notice or other communication shall be
deemed to have been given and received on the next following Business Day. Any
notice or other communication sent by registered mail shall be deemed to have
been given and received on the date it is received or the date upon which notice
to collect registered msil at the post office is delivered. Regardless of the
foregoing, if there is a mail stoppage or labour dispute or threatened labour
dispute which has affected or could affect normal mail delivery by Canada Post,
then no notice or other communication may be delivered by registered mail. If
there has been a mail stoppage and if a party sends a notice or other
communication by fax, telex or other similar means of electronic communication,
such party shall be relieved from the obligation to mail the original document
in accordance with this section. If two or more Persons are named as Tenant,
such notice or other communication given hereunder shall be sufficiently given
if sent in the foregoing manner to any one of such Persons.

22.03    LEASE ENTIRE AGREEMENT

         This Lease constitutes the entire agreement between the parties
pertaining to the subject matter of this Lease and supersedes all prior
agreements, offers to lease, understandings, negotiations and discussions,
whether oral or written, of the parties. This Lease may not be modified or
amended except pursuant to an agreement in writing executed by the Landlord and
the Tenant. There are no representations, warranties, covenants, inducements,
conditions or other agreements, whether oral or written, express or implied,
forming part of or in any way affecting or relating to this Lease, the Building,
the Premises, the business which may be carried on in the Premises or the sales
which may be expected from such business, except as expressly set out in this
Lease. Without limiting the generality of the foregoing, the Tenant specifically
acknowledges and agrees that the Landlord has not made any representations or
warranties to the Tenant regarding whether the Tenant's intended use of the
Premises is permitted by the applicable zoning, the Tenant having independently
satisfied itself with respect to this matter prior to signing this Lease. All
representations, warranties, covenants, inducements, conditions and other
agreements made by either party or their representatives which are relied upon
by the other party are contained in this Lease and each party disclaims reliance
on any other representations, warranties, covenants, inducements, conditions or
agreements.

22.04    REGISTRATION

         The Tenant shall not register this Lease or permit anyone acting on the
Tenant's behalf to register it. The Tenant may, however, register any
registrable document which shall only disclose the Premises, the Term, the
Commencement Date, the renewal rights, if any, and the parties to this Lease,
but such document shall not exhibit the Lease or any part of it and the said
document shall be subject to the approval of the Landlord's solicitors, at the
Tenant's expense. Such approval shall be obtained prior to the document being
registered, and shall be prepared by the Tenant and registered at the sole cost
and expense of the Tenant. Any registrable document requested or registered by
the Tenant shall contain an irrevocable power of attorney by the Tenant in
favour of the Landlord, which power of attorney is also hereby irrevocably
granted by the Tenant to the Landlord under the Powers of Attorney Act (Ontario)
and which power of attorney shall survive and may be exercised during any
subsequent legal incapacity of the Tenant, authorizing the Landlord to execute
on behalf of and in the name of the Tenant such notices, agreements and
documents as shall be required or desired by the Landlord to expunge or
discharge from the Registrar of Title of the Lands any interest of the Tenant
therein after the expiry or earlier termination of this Lease. The said power of
attorney shall survive the expiry or earlier termination of this Lease.

22.05    APPLICABLE LAW

         This Lease shall be construed in accordance with the laws of the
Province of Ontario and the laws of Canada applicable in the Province of Ontario
and shall be treated in all respects as an Ontario contract. Each of the parties
irrevocably attorns to the exclusive jurisdiction of the courts of the Province
of Ontario.

22.06    INTERPRETATION

         In this Lease, "herein", "hereof", "hereunder", "hereafter" and similar
expressions refer to this Lease and not to any particular section, paragraph or
other portion thereof, unless there is something in the subject matter or
context inconsistent therewith. The parties agree that all of the provisions of
this Lease are to be construed as covenants and agreements as though the words
importing such covenants and agreements were used in each separate paragraph
hereof. In this Lease the term "however caused" shall include, without
limitation, the negligence of the Landlord and the Landlord's Employees.



<PAGE>

                                           - 44 -

22.07    HEADINGS AND CAPTIONS

         The Table of Contents, Article numbers, Article headings, section
numbers, section headings appearing within the body of this Lease have been
inserted as a matter of convenience and for reference only and in no way define,
limit or enlarge the scope or meaning of this Lease or of any provision hereof.

22.08    GENDER AND NUMBER

         The grammatical changes required to make the provisions of this Lease
apply in the plural sense, and to make the said provisions apply to
corporations, firms, partnerships or individuals, male or female, will be
assumed as though in each case fillly expressed. If the Tenant consists of more
than one Person, the covenants of the Tenant shall be deemed to be joint and
several and covenants of each such Person. If the Tenant is a partnership (the
"Tenant Partnership") each Person who is presently a member of the Tenant
Partnership, and each Person that becomes a member of any successor Tenant
Partnership, shall be and continue to be liable jointly and severally for the
performance of this Lease, whether or not such Person ceases to be a member of
such Tenant Partnership or successor Tenant Partnership.

22.09    PARTIAL INVALIDITY

         If for any reason whatsoever any term, covenant or condition of this
Lease, or the application thereof to any Person, firm or corporation or
circumstance, is to any extent held or rendered invalid, unenforceable or
illegal, then such term, covenant or condition:

         (a)      is deemed to be independent of the remainder of the Lease and
                  to be severable and divisible therefrom, and its validity,
                  unenforceability or illegality does not affect, impair or
                  invalidate the remainder of the Lease or any part thereof; and

         (b)      continues to be applicable to and enforceable to the fullest
                  extent permitted by law against any Person and circumstance
                  other than those as to which it has been held or rendered
                  invalid, unenforceable or illegal. 

22.10    COMPLIANCE WITH THE PLANNING ACT

         It is an express condition of this Lease that the provisions of section
50 of the PLANNING ACT (Ontario), as amended or replaced from time to time, be
complied with if applicable in law. Until any necessary consent to this Lease is
obtained, the Term (including any extensions or renewals thereof) and the
Tenant's rights and entitlement granted by this Lease shall be deemed not to
exceed a period of 21 years less a day from the Commencement Date. The Tenant
shall apply diligently to prosecute such application for such consent forthwith
upon the execution of this Lease by both the Landlord and the Tenant, and the
Tenant shall be responsible for all costs, expenses, taxes and levies imposed,
charged or levied as a result of such application and in order to obtain such
consent. The Tenant shall at all times keep the Landlord informed of its
progress in obtaining such consent and the Landlord shall cooperate with the
Tenant in regard to such application, but at the sole expense of the Tenant.
Notwithstanding the foregoing, the Landlord reserves the right at any time, at
the Tenant's expense, to apply for such consent in lieu of the Tenant and the
Tenant's application is hereby expressly made subject to any application which
the Landlord intends to make.

22.11    IDEMNIFICATION

         An Indemnification Agreement is attached to this Lease as Schedule "F"
and constitutes an integral part of this Lease.

22.12    SURVIVAL OF OBLIGATIONS

         If the Tenant is in default of any of its obligations under this Lease
at the time this Lease expires or is terminated:

         (a)      the Tenant shall remain fully liable for the performance of
                  such obligations; and

         (b)      all of the Landlord's rights and remedies in respect of such
                  failure shall remain in full force and effect,

all of which shall be deemed to have survived such expiration or termination of
this Lease. Every indemnity, exclusion or release of liability and waiver of
subrogation contained in this Lease or in any of the Tenant's or Landlord's
insurance policies shall survive the expiration or tennination of this Lease.

<PAGE>

                                          - 45 -

22.13    NO OPTION

         The submission of this Lease for examination does not constitute a
reservation of or option to lease for the Premises and this Lease becomes
effective as a lease only upon execution and delivery thereof by the Landlord
and the Tenant and the execution and delivery to the Landlord by the
indemnifier, if any, of the Indemnity Agreement.

22.14    REFERENCES TO STATUTES

         Any reference to a statute in this Lease includes a reference to all
regulations made pursuant to such statute, all amendments made to such statute
and regulations in force from time to time and to any statute or regulation
which may be passed and which has the effect of supplementing or superseding
such statute or regulations.

22.15    APPROVAL IN WRITING

         Wherever the Landlord's consent is required to be given under this
Lease or wherever the Landlord must approve any act or performance by the
Tenant, such consent or approval, as the case may be, shall not be effective
unless same is in writing.

22.16    TIME

         Time shall be of the essence of this Lease and every part of it, except
as may be expressly provided to the contrary in this Lease, and no extension or
variation of this Lease shall operate as a waiver of this provision.

22.17    CALCULATION OF TIME

         When calculating the period of time within which or following which any
act is to be done or step taken pursuant to this Lease, unless this Lease
provides to the contrary, the date which is the reference date in calculating
such period shall be excluded.

22.18    COUNTERPARTS

         This Lease may be executed by the parties in separate counterparts each
of which when so executed and delivered to all of the parties shall be deemed to
be and shall be read as a single Lease among the parties. In addition, execution
of this Lease by any of the parties may be evidenced by way of a faxed
transmission of such party's signature (which signature may be by separate
counterpart), or a photocopy of such faxed transmission, and such faxed
signature, or photocopy of such faxed signature, shall be deemed to constitute
the original signature of such party to this Lease.

22.19    NO CONTRA PROFERENTEM

         This Agreement may be executed by the parties in separate counterparts
each of which when so executed and delivered to all of the parties shall be
deemed to be and shall be read as a single agreement among the parties. In
addition, execution of this Agreement by any of the parties may be evidenced by
way of a faxed transmission of such party's signature (which signature may be
by separate counterpart), or a photocopy of such faxed transmission, and such
faxed signature, or photocopy of such faxed signature, shall be deemed to
constitute the original signature of such party to this Agreement.

22.20    BROKERAGE COMMISSIONS

         The Tenant shall not be responsible for the payment of any real estate
commission payable as a result of the Tenant entering into this Lease, nor shall
such commission be included in Operating Costs.

22.21    SUCCESSORS

          All rights and liabilities herein given to, or imposed upon, the
respective parties hereto shall extend to and bind the several respective heirs,
executors, administrators, successors and assigns of the said parties. No
rights, however, shall enure to the benefit of any Transferee of the Tenant
unless the Transfer to such Transferee


<PAGE>

                                     - 46 -

has been approved by the Landlord in writing as provided in Article 13.00.

                  IN WITNESS WHEREOF the parties have executed this Lease.

                                            TAG QUATTRO INC.

                                            Per: /s/  ILLEGIBLE
                                                --------------------------------
                                              Name: ILLEGIBLE
                                              Title: President

                                            Per: /s/ K.C. BUSHERT
                                                --------------------------------
                                              Name: K.C. Bushert
                                              Title: ASO


                                            CATALINA LIGHTING CANADA INC.

                                            Per: /s/ DEAN RAPPAPORT
                                                --------------------------------
                                              Name: Dean Rappaport
                                              Title: Executive Vice President

                                              Per: /s/ THOMAS M. [ILLEGIBLE]
                                                --------------------------------
                                              Name:
                                              Title: Secretary
          

<PAGE>

                                  SCHEDULE "A"
                         
                         LEGAL DESCRIPTION OF THE LANDS

Part of Block 3 on Registered Plan 43M-915, designated as Parts 1 and 2 on Plan
43R-2229, in the Land Titles Office for the Land Titles Division of Peel (No.
43), City of Mississauga.


<PAGE>








                                  SCHEDULE "B"
                        DIAGRAM OF THE PREMISES' LOCATION





<PAGE>

                                  SCHEDULE "C"

                                 LANDLORD'S WORK

1.       OFFICE AREA

(a)      The Landlord shall build out the office area of the Premises to
approximately 6,000 square feet using standard finishes and to a mutually
agreeable space plan. Such office area shall:

         (i)      be fully air-conditioned, heated and sprinklered, in
                  accordance with modern office building standards, with a clear
                  height of 9';

         (ii)     contain lighting to 55 foot candles by means of 2' x 4'
                  fluorescent fixtures, recessed in 2' x 4' suspended, acoustic
                  tile ceiling;

         (iii)    contain contiguous male and female washrooms for the office
                  and warehouse area, the location of which is to be determined
                  in accordance with a mutually agreed upon partitioning layout.

(b)      The finishes in the office area shall include floor coverings, steel
stud and drywall partitions, doors, frames, hardware and painting. All paint and
carpet shall be in the Tenant's choice of style and colour selected from the
Landlord's samples. The Landlord's carpet will consist of a minimum standard of
28 oz. looped pile, direct glue-down.

(c)      The Tenant will require 200 amp at 120/240 volts directed towards the
front office area to cover normal office and showroom operations.

2.       WAREHOUSE AREA

(a)      The Landlord shall provide approximately 42,700 square feet of
warehouse area that will have a clear height of at 28' under the structural
steel, 33' x 41' bays and a 6" granular subbase to the underside of concrete
floor (slab on grade), cured and sealed.

(b)      The initial lighting to be installed by the Landlord in the warehouse
area shall provide lighting to 30 foot candles by means of metal halide 400 watt
fixtures and heating with gas-fired unit heaters, suspended from joists. The
Landlord will reconfigure the warehouse lighting to accommodate the Tenant's
racking system, as outlined in Schedule "C- 1". If, as a resultof the Tenant's
racking, additional lighting is required to provide lighting to 30 foot candles
in the warehouse area of the Premises, the Tenant shall be responsible for the
cost of all such additional lighting, and shall pay such costs to the Landlord
within 20 days of the Landlord providing the Tenant with an invoice for such
costs.

(c)      The Landlord shall construct a shippers office, washroom and lunchroom
in the warehouse area of the Premises, near the shipping doors (the exact
location to be mutually agreed upon by the Landlord and the Tenant). Such work
shall be constructed by the Landlord on an open book basis. The Tenant shall
reimburse the Landlord for 50% of the cost of such work, plus GST, (which the
parties estimate to be $14,000.00, plus GST) within 20 days following the date
that the Landlord provides the Tenant with an invoice for such work.

(d)      If any applicable Laws require additional emergency lighting in the
warehouse area of the Premises as a result of the Tenant's racking layout, the
Landlord shall instal such additional emergency lighting and the Tenant shall
reimburse the Landlord for 50% of the cost of such work, plus GST, (which the
parties estimate to be $5,000.00, plus GST) within 20 days following the date
that the Landlord provides the Tenant with an invoice for such work.

(e)      The Tenant will require 60 amps at 600 volts to operate its electric
         lift truck.

3.       EXTERIOR SPECIFICATIONS

(a)      The Landlord shall, at its own expense, supply and install:

         (i)      heavy duty asphalt paving and base for trucking areas and
                  driveways;

         (ii)     a concrete dolly pad at shipping doors;

         (iii)    medium duty paving and base to car parking areas and related
                  driveways; and

<PAGE>

         (iv)     poured concrete curbs between paving and landscaped areas.

(b)      The balance of the Lands not covered by Building or paving will be
landscaped with arboreal treatments, topsoil and sod, concrete walkways and an
underground lawn watering system.



<PAGE>

                                  SCHEDULE "D"

                                  TENANT'S WORK

         The Tenant's Work shall consist of the installation of its racking in
the warehouse portion of the Premises.


<PAGE>



                                  SCHEDULE "E"

                              RULES AND REGULATIONS

1.       The Common Areas shall not be obstructed by the Tenant or occupants of
         the Building, or used by them for any other purpose than for ingress to
         and egress from the Premises, nor shall they sweep any dust, rubbish or
         other substance from the Premises into the Common Areas. Nothing shall
         be thrown by the Tenant or those for whom the Tenant is at law
         responsible, out of the windows or doors of the Building The Landlord
         may, but in no event shall be obligated to, remove at the expense of
         the Tenant any such obstruction without notice or obligation to the
         Tenant at the sole cost and expense of the Tenant.

2.       The Landlord shall have the right to control and operate the Building
         and the Common Areas in such manner as it deems best for the benefit of
         the tenants generally. The Landlord reserves the right to restrict or
         prohibit canvassing, soliciting or peddling in the Building.

3.       The toilets, urinals, sinks and other water apparatus shall not be
         used for any purposes other than those for which they were constructed,
         and no sweepings, rubbish, rags, ashes or other substances shall be
         thrown therein. Any damage resulting by misuse shall be borne by the
         Tenant.

4.       No showcases or other articles shall be put in front of or affixed to
         any part of the exterior of the Building, nor placed in any Common
         Areas without the prior written consent of the Landlord.

5.       The Tenant shall not make or commit any improper noises in the
         Building, or interfere in any way with other tenants.

6.       No birds or animals shall be kept in or about the Premises, nor shall
         radios, recordings or the like or other musical instruments be played
         in the Building so as to annoy other tenants, occupants or the
         Landlord.

7.       No space in the Building shall be used for lodging, sleeping, or any
         immoral or illegal purposes.

8.       If the Tenant desires telegraphic or telephonic connections, the
         Landlord will direct the electricians as to where and how the wires are
         to be introduced, and without such directions no boring or cutting for
         wires will be permitted. No pipes or wires or conduits will be
         permitted which have not been ordered or authorized in writing by the
         Landlord, and no outside radio or television aerials shall be allowed
         in the Building without authorization in writing by the Landlord. The
         Tenant shall not mark, drill into, bore or cut in any way damaging the
         walls, ceilings or floors of the Premises without the Landlord's prior
         written approval. No broadloom or carpeting shall be affixed to the
         Premises by means of a non-soluble adhesive or similar product.

9.       Intentionally Deleted.

10.      Intentionally Deleted.

11.      All glass and trimmings in, upon or about the doors and windows of the
         Premises shall be kept whole, and whenever any part thereof shall
         become broken, the same shall be immediately replaced or repaired under
         the direction and to the satisfaction of the Landlord and the cost
         thereof shall be paid for by the Tenant.

12.      Nothing shall be placed on the outside of window sills or projections
         of the Building. 

13.      The Tenant shall give the Landlord prompt notice of any accident to or
         any defect in the plumbing, heating, air-conditioning, mechanical or
         electrical apparatus or any other part of the Building.

14.      The Tenant shall not permit any cooking in the Premises without the
         written consent of the Landlord, but the use of microwave ovens is
         permitted

15.      The Tenant shall not hinder or prevent window cleaners from cleaning
         the windows of the Premises during normal business hours.

16.      The Tenant shall keep the Premises at a temperature sufficiently high
         to prevent freezing of water in pipes and fixtures.

17.      The delivery or shipping of merchandise, supplies and fixtures to and
         from the Premises shall be subject to such controls as in the judgment
         of the Landlord are necessary for the proper operation of the

<PAGE>

                                      - 2 -

         Premises and or the Building.

18.      All garbage end refuse shall be kept in the kind of containers
         specified by the Landlord and shall not be burned in or about the
         Premises.

19.      The Landlord shall have the right to make such other and further
         reasonable rules and regulations as in its judgment may from time to
         time be helpful for the safety, care, cleanliness and appearance of the
         Premises and the Building, and for the preservation of good order
         therein, and the same shall be kept and observed by the Tenant and
         those for whom the Tenant is at law responsible.


<PAGE>


                                  SCHEDULE "F"

to a Lease made as of March 19,1998, and made between TAG QUATTRO INC., as
landlord, and CATALINA LIGHTING CANADA INC., as tenant.

                            INDEMNIFICATTON AGREEMENT

         THIS AGREEMENT made as of March 19, 1998.

BETWEEN:

                       TAG QUATTRO INC.

                       (the "Landlord")


                       - and -



                       CATALINA LIGHTING INC.

                       (the "Indemnifier")

RECITALS:

1.       By a lease made as of March 19, 1998 (the "Lease") and made between the
         Landlord and Catalina Lighting Canada Inc. (the "Tenant"), the Landlord
         leased to the Tenant certain premises (the "Premises") described in the
         Lease and located in the building municipally known as 185 Courtney
         Park Drive, Mississauga, Ontario, as more particularly described in the
         Lease, for a term of 10 years commencing on July 1, 1998 and ending on
         June 30, 2008, both dates inclusive and subject to adjustment in
         accordance with the terms of the Lease, subject to the Tenant observing
         and performing all of the terms, covenants, conditions and provisions
         in the Lease on the part of the Tenant to be observed and performed
         (the "Covenants");

2.       The Landlord only entered into the Lease on the condition that the
         Indemnifier enter into this Agreement ninth the Landlord, which is
         attached as a schedule to the Lease;

         NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
Landlord entering into the foregoing Lease (the "Lease") and for other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged by each of the parties), the parties covenant and agree as follows:

                      ARTICLE 1.00 - AGREEMENT TO INDEMNIFY

1.01     INDEMNITY

         The Indemnifier covenants and agrees with the Landlord that at all
times during the Term and any extension or renewal of the Term that:

         (a)      the Tenant will observe and perform all of the Covenants; and

         (b)      it will indemnify, reimburse and hold harmless the Landlord
                  from and against any and all claims, damages (direct,
                  indirect, consequential or otherwise), losses, liabilities,
                  demands, suits, judgments, causes of action, legal
                  proceedings, penalties or other sanctions and any all costs
                  and expenses arising in connection therewith, including,
                  without limitation, legal fees and disbursements on a
                  solicitor and his own client basis (including, without
                  limitation, all such legal fees and disbursements in
                  connection with any and all appeals) which may in any way
                  result from or arise out of or be in relation to any
                  non-observance or non-performance of the Covenants in
                  accordance with the terms of the Lease.

Nothing in this section or elsewhere in this Agreement will be construed so as
to:

         (i)      release the Indemnifier or limit its obligations in a
                  situation where the Lease is terminated

<PAGE>

                                      -2 -

                  before the expiry of the Term by the passage of time; or

         (ii)     confer any rights on the Indemnifier to occupy or use the
                  Premises, or to claim any interest or rights in the Premises
                  or the Lease, whether or not the Indemnifier is required to
                  perform any Covenants under this Agreement or the Lease.

1.02     NO RELEASE

         The within indemnity is absolute and unconditional and the obligations
of the Indemnifier under this Agreement shall not be released, discharged,
mitigated, impaired or affected by any reason whatsoever, including, without
limitation, the following:

         (a)      any extensions of time, indulgences or modifications which the
                  Landlord may extend to or make with the Tenant in respect of
                  the performance of any of the Covenants,

         (b)      any waiver by or failure of the Landlord to enforce any of the
                  Covenants;

         (c)      any Transfer (as defined in the Lease) by the Tenant or by any
                  trustee, receiver or liquidator;

         (d)      any consent which the Landlord may give to a Transfer;

         (e)      any changes or amendments to the Lease;

         (f)      the release or discharge of the Tenant or any Transferee (as
                  defined in the Lease) in any receivership, bankruptcy,
                  winding-up or other creditors' proceeding or the rejection,
                  disaffirmance or disclaimer of the Lease in any such
                  proceeding;

         (g)      the expiration of the Term; or

         (h)      any exercise by the Landlord of any of its rights under the
                  Lease, including, without limitation, the right to re-enter
                  the Premises (as defined in the Lease) and terminate the
                  Lease. If in exercising its rights under the Lease the
                  Landlord repossesses and/or relets the Premises, the Landlord,
                  after deducting all costs and expenses of repossessing and/or
                  reletting the Premises, shall be credited from time to time by
                  the Landlord to the account of the Indemnifier, and the
                  Indemnifier shall pay any balance owing to the Landlord from
                  time to time, immediately upon demand by the Landlord.

1.03     WAIVER OF NOTICE

         Intentionally Deleted.

1.04     DEFAULTS

         In the event of the occurrence of an Event of Default under the Lease
or in the event of a default under this Agreement, the Indemnifier waives any
right to require the Landlord to:

         (a)      proceed against the Tenant or pursue any rights or remedies
                  with respect to the Lease;

         (b)      proceed against or exhaust any security of the Tenant or any
                  other Person and which is held by the Landlord; or

         (c)      pursue any other remedy whatsoever in the Landlord's power.

The Landlord has the right to enforce the within indemnity regardless of the
acceptance of additional security from the Tenant or any other Person and
regardless of the release or discharge of the Tenant, or any other Person who
has provided security to the Landlord, by the Landlord or by others or by
operation of any law. Upon the occurence of an Event of Default (as defined in
the Lease), the Landlord may proceed against the Indemnifier.

1.05     RECOVERIES

         No action or proceeding brought or instituted under this Agreement and
no recovery in pursuance of this Agreement shall be a bar or defence to any
further action or proceeding which may be brought under this Agreement by reason
of any further default or defaults in the performance and observance of the
Covenants or of this Agreement.


<PAGE>

1.06     EFFECT OF THIS AGREEMENT

         If two or more Persons execute this Agreement as Indemnifier, the
obligations of each such Person under this Agreement shall be joint and several.
In like manner, if the Indemnifier is a partnership or other business
association the members of which are by virtue of statutory or general law
subject to personal liability, the liability of each such member is joint and
several.

1.07     ENTER INTO LEASE

         Without limiting any other provision of this Agreement, the liability
of the Indemnifier under this Agreement shall continue in full force and effect
and shall not be, or be deemed to have bee4 waived, released, discharged,
impaired or affected by reason of the release or discharge of the Tenant in any
receivership, bankruptcy, winding-up or other creditors' proceedings, or the
rejection, disaffirmance, disclaimer, termination or surrender of the Lease
pursuant to any statute or otherwise and shall continue with respect to the
period prior thereto and thereafter for and with respect to the Term as if the
Lease had not been rejected, disaffirmed, disclaimed, terminated or surrendered,
and upon the happening of any of the foregoing, the Indemnifier shall:

         (a)      be deemed to be the tenant under the Lease as if it had
                  originally signed the Lease as tenant instead of the Tenant,
                  and

         (b)      upon written demand by the Landlord enter into a lease with
                  the Landlord on the same terms and conditions as the Lease.

                             ARTICLE 2.00 - GENERAL

2.01     ENTIRE AGREEMENT

         This Agreement, including any Schedules attached to this Agreement and
any agreements and documents to be delivered pursuant to terms of this
Agreement, constitutes the entire agreement between the parties pertaining to
the subject hlatter of this Agreement and supersede all prior agreements,
understandings, negotiations and discussions whether oral or written, of the
parties. There are no representations, warranties or other agreements, whether:
oral or written, between the parties in connection with the subject matter of
this Agreement except as specifically set out in this Agreement.

2.02     AMENDMENTS

         No amendment, supplement, modification, waiver or termination of this
Agreement shall be binding on the parties unless same is in writing and signed
by all of the parties.

2.03     WAIVER

         No waiver of any provision of this Agreement shall be deemed to
constitute a waiver of any other provision, whether or not similar, nor shall
such waiver constitute a continuing waiver unless otherwise expressly provided.
No forbearance by any party to seek a remedy for any breach by any other party
of any provision of this Agreement shall constitute a waiver of any rights or
remedies with respect to any subsequent breach.

2.04     INTERPRETATION

         In this Agreement, words importing the singular include the plural and
vice-versa, words importing gender include all genders and words importing
persons include corporations and vice-versa. All capitalized terms in this
Agreement shall have the meaning given to such terms in the Lease, unless the
context otherwise requires.

2.05     HEADINGS

         The division of this Agreement into Articles and sections and the
insertion of headings is for convenience of reference only and shall not affect
the construction or interpretation of this Agreement or any part of it.

2.06     REFERENCES TO ARTICLES

         Any reference to an Article, section or Schedule in this Agreement
shall be deemed a reference to the applicable Article, section or Schedule
contained in this Agreement and to no other agreement or document unless
specific reference is made to such other agreement or document.

<PAGE>

                                       -4-

2.07     APPLICABLE LAW

         This Agreement shall be construed in accordance with the laws of the
Province of Ontario and the laws of Canada applicable in the Province of Ontario
and shall be treated in all respects as an Ontario contract. Each of the parties
irrevocably attorns to the jurisdiction of the courts of the Province of
Ontario.

2.08     COUNTERPARTS

         This Agreement may be executed by the parties in separate counterparts
each of which when so executed and delivered to all ofthe parties shall be
deemed to be and shall be read as a single agreement among the parties. In
addition, execution of this Agreement by any of the parties may be evidenced by
way of a faxed transmission of such party's signature (which signature may be by
separate counterpart), or a photocopy of such faxed transmission and such faxed
signature, or photocopy of such faxed signature, shall be deemed to constitute
the original signature of such party to this Agreement.

2.09     ASSIGNABILITY

         Neither this Agreement nor any rights or obligations of the Indemnifier
may be assigned by the Indemnifier without the prior written consent of the
Landlord.

2.10     NOTICES

         Any notice or other communication which either party may wish to give
to the other shall be in writing and shall be effectively given if:

         (a)      delivered personally;

         (b)      sent by prepaid courier service;

         (c)      sent by, registered mail; or

         (d)      intentionally deleted,

in the case of notice to:

         (i)      the Landlord at:

                  3300 Highway #7
                  Suite 707
                  Concord, Ontario, L4K 4M3
                  Attention: President
                  Fax No. 905-761-6588

         (ii)     the Indemnifier at:

                  Catalina Industries
                  18191 Northwest 68th Avenue
                  Miami, Florida, 33015
                  Attention: Janet Ailstock

or at such other address as the party to whom such notice or other communication
is to be given shall have advised the party giving same in the manner provided
in this section. Any notice or other communication delivered personally or by
prepaid courier service shall be deemed to have been given and received on the
day it is so delivered at such address, provided that if such day is not a
Business Day such notice or other communication shall be deemed to have been
given and received on the next following Business Day. Any notice or other
communication sent by registered mail shall be deemed to have been given and
received on the date it is received or the date upon which notice to collect
registered mail at the post office is delivered. Regardless of the foregoing,
if there is a mail stoppage or labour dispute or threatened labour dispute which
has affected or could affect normal mail delivery by Canada Post, then no notice
or other communication may be delivered by registered mail. If there has been a
mail stoppage and if a party sends a notice or other communication by fax, telex
or other similar means of electonic communication, such party shall be relieved
from the obligation to mail


<PAGE>

                                      - 5 -

the original document in accordance with this section. If two or more Persons
are named as Indemnifier, such notice or other communication given hereunder
shall be sufficiently given if sent in the foregoing manner to any one of such
Persons.

2.11     RECITALS

         Each of the parties represents and warrants to the other that each of
the recitals set out above is true and correct in substance and in fact, as such
recital relates to such party, and such recitals are incorporated as an integral
part of this Agreement.

2.12     NO CONTRA PROFERENTEM

         This Agreement has been negotiated and approved by the parties and,
notwithstanding any rule or maxim of law or construction to the contrary, any
ambiguity or uncertainty will not be construed against either of the parties by
reason of the authorship of any of the provisions of this Agreement.

2.13     ENFORCEMENT

         The Indemnifier acknowledges and agrees that if the Landlord obtains a
judgment for breach of Lease by the Tenant or the Indemnifier, the Landlord may
encounter difficulties or obstacles in enforcing its judgment in various foreign
jurisdictions where the Indemnifier may have assets. As a result, if the
Landlord seeks to enforce any final judgement properly granted by an Ontario
court of competent jurisdiction which is not being appealed by the Tenant or the
Indemnifier to a higher court, then the Indemnifier hereby irrevocably (a)
grants its consent to the registration or enforcement of said judgement in any
jurisdiction, domestic or foreign, in which it is determined that the
Indemnifier has or may have assets; and (b) agrees that it shall not oppose or
otherwise resist such registration or challenge the validity of the said
judgement or the enforcement of same. This section may be pleaded as a
complete estoppel to any actions which the Tenant may take in resisting the
enforcement of any such judgement against it.

2.14     BINDING EFFECT 

         This Agreement shall enure to the benefit of and shall be binding upon
the parties and their respective heirs, executors, administrators, successors
and assigns.

         THIS AGREEMENT has been signed by the parties with effect on the date
first set out on the first page of this Agreement.

                                             TAG QUATTRO INC.


                                             Per: /s/ ILLEGIBLE
                                                 -------------------------------
                                                 Name: ILLEGIBLE
                                                 Title: ILLEGIBLE


                                             Per: /s/ K.C. BUSHERT
                                                 -------------------------------
                                                 Name: K.C. Bushert
                                                 Title: ASO

                                             CATALINA LIGHTING INC.

                                             Per: /s/ DEAN RAPPAPORT
                                                 -------------------------------
                                                 Name: Dean Rappaport
                                                 Title: Chief Operating Officer



<PAGE>
                                  SCHEDULE "G"

                            RIGHT TO EXTEND THE TERM

(a)      The Tenant may extend the Term for an additional period of 5 years
(such extended period being called the "Extended Term"), provided that the
Tenant:

         (i)      intentionally deleted;

         (ii)     is not in material default of any of the Tenant's Covenants;

         (iii)    is in possession of and is conducting its business in the
                  whole of the Premises; and

         (iv)     advises the Landlord in writing (an "Extension Notice") that
                  it wishes to extend the Term not more than 18 months and not
                  less than 9 months prior to the expiration of the original
                  Term, failing which this right to extend shall be rendered
                  null and void.

(b)      If the Tenant exercises its right to extend the Term in accordance with
the foregoing, the Lease shall be read as if the original Term was for a period
of 5 years commencing on the Commencement Date and:

         (i)      the Minimum Rent during the Extended Term shall be the then
                  current fair market rental value of the Premises, as
                  established by the mutual agreement of the Landlord and the
                  Tenant, but in no event shall the Minimum Rent payable during
                  the Extended Term be less than the Minimum Rent payable during
                  the last year of the Term. If the Minimum Rent for the
                  Extended Term has not been mutually agreed upon by the
                  Landlord and the Tenant within 30 days followiing the date
                  that the Tenant delivers an Extension Notice to the Landlord,
                  then the Tenant may at any time prior to the date which is 6
                  months prior to the expiration of the original term (the
                  "Decision Date"), advise the Landlord in writing either that:

                  (A)      it is cancelling its exercise of the within option
                           to extend, in which case this Lease shall expire on
                           the last day of the original Term; or 

                  (B)      it elects to submit the matter of determining the
                           Minimum Rent payable during the Extended Term to
                           arbitration in accordance with the provisions set out
                           below.

                  If the Tenant has not advised the Landlord of its decision by
                  the Decision Date, then the Tenant shall be deemed to have
                  made the election contemplated in paragraph (b)(i)(A) of this
                  Schedule. If the Tenant makes the election contemplated in
                  paragraph (b)(i)(B), then the Minimum Rent for the Extended
                  Term shall be determined by arbitration by a single arbitrator
                  chosen by the Landlord and the Tenant, and if they cannot
                  agree upon the arbitrator within 5 days after the Tenant
                  elects to submit this matter to arbitration, either party may
                  apply to a judge for the appointment of an arbitrator in
                  accordance with the provisions of the ARBITRATION ACT
                  (Ontario). The provisions of the ARBITRATION ACT shall govern
                  the arbitration and the decision of the arbitrator shall be
                  final and binding upon the parties. The arbitrator shall be
                  instructed to render its decision no later than 15 days prior
                  to the expiry of the original Term, but if the arbitrator
                  fails to do so:

                  (I)      the Tenant shall pay the same Minimum Rent it was
                           paying during the last 12 months of the Term; and

                  (II)     upon the arbitrator rendering its decision, any
                           adjustments in Minimum Rent shall be made effective
                           the commencement of the Extended Terrm and shall be
                           paid by the relevant party within 15 days of the
                           arbitrator rendering its decision.

                  All documents and proceedings with respect to the arbitration
                  are to be kept confidential by each of the parties; and

         (ii)     intentionally deleted.

(c)      For greater certainty, the parties acknowledge and agree that upon the
Tenant exercising its within right to extend the Term:

         (i)      the Tenant will not be entitled to further extend the Term;

         (ii)     the Landlord will not be required to perform the Landlord's
                  Work, if any, and the Tenant will
<PAGE>

                                      -2 -

                  not be required to perform the Tenant's Work; and

         (iii)    the Tenant will not be entitled to any leasehold improvement
                  allowance, tenant inducement or rent free period.

(d)      The exercise of the within right to extend is solely within the control
of the Tenant and nothing contained in this Lease, including, without
limitation, this Schedule, obligates or requires the Landlord to remind the
Tenant to exercise the within right to extend.