Document:

Exhibit 10.5

                                 XENOMICS, INC.
                                 --------------

                          STOCK OPTION GRANT AGREEMENT
                         FOR NONSTATUTORY STOCK OPTIONS

         Xenomics, Inc., a Florida corporation (the "COMPANY") does hereby grant
to SAMUIL UMANSKY (the "Optionee"), subject to stockholder approval of an
amendment to the Plan (as defined herein) increasing the number of shares
issuable pursuant to the Plan, an option (the "OPTION"), that is NOT intended to
qualify as an incentive stock option ("ISO") pursuant to Section 422(b) of the
Internal Revenue Code, to purchase shares of the Company's common stock
("STOCK") in the number and subject to terms and conditions of this Stock Option
Grant Agreement (the "GRANT AGREEMENT"), the Company's 2004 Stock Option Plan
(the "PLAN") and the Terms of Option Agreement for Nonstatutory Stock Options
(the "OPTION AGREEMENT"). The provisions of the Plan and the Option Agreement
are incorporated herein by reference, and copies of the Plan and Option
Agreement have been given to Optionee. The following are the general terms of
the Option for shares of Stock ("OPTION SHARES") granted to Optionee by this
Grant Agreement.

         The grant date of the Option ("GRANT DATE") is MAY 24, 2005.

         The number of Option Shares granted to Optionee is 225,000 shares of
         Stock.

         The exercise price ("EXERCISE PRICE") at which Optionee can purchase
         Option Shares is $2.50 per share.

         This Option is not immediately exercisable ("IMMEDIATELY EXERCISABLE").

         The first day that Option Shares commence to vest is the Grant Date.
         Option Shares shall vest in accordance with the following schedule
         ("VESTING SCHEDULE"):

         75,000 Option Shares shall vest on the first anniversary of the Grant
         Date;

         75,000 Option Shares shall vest on the second anniversary of the Grant
         Date; and

         75,000 Option Shares shall vest on the third anniversary of the Grant
         Date.

         The Option shall expire, and be of no further force or effect, on the
         earlier of the tenth anniversary of the Grant Date or, except in the
         event of Involuntary Termination, four years after Optionee ceases to
         serve as an Executive to the Company under the Employment Agreement.

         Net Exercise is available to Optionee.

         Special Provisions are not set forth on Schedule A hereto.

<PAGE>

         The Optionee represents that he/she is familiar with the terms and
provisions of the Option Agreement, including the Unvested Share Repurchase
Option, and hereby accepts this Option subject to all of the terms and
provisions thereof. The Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Board upon any questions
arising under the Option. The Optionee acknowledges receipt of a copy of the
Plan.

OPTIONEE                                             XENOMICS, INC.

------------------------                             By:
                                                        ---------------
Address:                                             Its:
       -----------------                                 --------------

------------------------

                                       2Exhibit 10.6

                                 XENOMICS, INC.
                                 --------------

                          STOCK OPTION GRANT AGREEMENT
                         FOR NONSTATUTORY STOCK OPTIONS

         Xenomics, Inc., a Florida corporation (the "COMPANY") does hereby grant
to HOVSEP MELKONYAN (the "OPTIONEE"), subject to stockholder approval of an
amendment to the Plan (as defined herein) increasing the number of shares
issuable pursuant to the Plan, an option (the "OPTION"), that is NOT intended to
qualify as an incentive stock option ("ISO") pursuant to Section 422(b) of the
Internal Revenue Code, to purchase shares of the Company's common stock
("STOCK") in the number and subject to terms and conditions of this Stock Option
Grant Agreement (the "GRANT AGREEMENT"), the Company's 2004 Stock Option Plan
(the "PLAN") and the Terms of Option Agreement for Nonstatutory Stock Options
(the "OPTION AGREEMENT"). The provisions of the Plan and the Option Agreement
are incorporated herein by reference, and copies of the Plan and Option
Agreement have been given to Optionee. The following are the general terms of
the Option for shares of Stock ("OPTION SHARES") granted to Optionee by this
Grant Agreement.

         The grant date of the Option ("GRANT DATE") is MAY 24, 2005.

         The number of Option Shares granted to Optionee is 75,000 shares of
Stock.

         The exercise price ("EXERCISE PRICE") at which Optionee can purchase
Option Shares is $2.50 per share.

         This Option is not immediately exercisable ("IMMEDIATELY EXERCISABLE").

         The first day that Option Shares commence to vest is the Grant Date.
         Option Shares shall vest in accordance with the following schedule
         ("VESTING SCHEDULE"):

         25,000 Option Shares shall vest on the first anniversary of the Grant
         Date;

         25,000 Option Shares shall vest on the second anniversary of the Grant
         Date; and

         25,000 Option Shares shall vest on the third anniversary of the Grant
         Date.

         The Option shall expire, and be of no further force or effect, on the
         earlier of the tenth anniversary of the Grant Date or, except in the
         event of Involuntary Termination, four years after Optionee ceases to
         serve as an Executive to the Company under the Employment Agreement.

         Net Exercise is available to Optionee.

         Special Provisions are not set forth on Schedule A hereto.

<PAGE>

         The Optionee represents that he/she is familiar with the terms and
provisions of the Option Agreement, including the Unvested Share Repurchase
Option, and hereby accepts this Option subject to all of the terms and
provisions thereof. The Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Board upon any questions
arising under the Option. The Optionee acknowledges receipt of a copy of the
Plan.

OPTIONEE                                             XENOMICS, INC.

------------------------                             By:
                                                        ---------------
Address:                                             Its:
       -----------------                                 --------------

------------------------

                                       2<PAGE>

                                                                     EXHIBIT 4.6

                                                                        Redacted

[LOGO]

Technology Partnerships           Partenariat Technologique
Canada                            Canada

An Agency of                      Un organisme
Industry Canada                   d'Industrie Canada

                                                  "TPC" AGREEMENT NO. 710-488685

                         TECHNOLOGY PARTNERSHIPS CANADA

                 OPERATIONAL SITUATIONAL AWARENESS TECHNOLOGIES

THIS AGREEMENT MADE

BETWEEN:  HER MAJESTY THE QUEEN IN RIGHT OF CANADA
          as represented by the Minister of Industry
                                   (hereinafter referred to as "the MINISTER")

AND:      OFFSHORE SYSTEMS LTD., a corporation duly incorporated under the laws
          of British Colombia, having its head office located at 107 - 930 West
          1st Street, North Vancouver, B. C., V7P 3N4
                                  (hereinafter referred to as "the PROPONENT")

AND:      OFFSHORE SYSTEMS INTERNATIONAL LTD., a corporation duly incorporated
          under the laws of British Colombia, having its head office located at
          107 - 930 West 1st Street, North Vancouver, B. C., V7P 3N4
                                  (hereinafter referred to as "the INTERVENER")

WHEREAS in a context in which innovation is essential in an increasingly
knowledge-based economy, the Minister is charged with the achievement of
Canada's objectives of increasing economic growth, creating jobs and wealth, and
supporting sustainable development; and

WHEREAS the Technology Partnerships Canada ("TPC") Program is specifically
designed to promote the above objectives by means of strategically investing in
research, development and innovation in order to encourage private sector
investment, and so maintain and grow the technology base and technological
capabilities of Canadian industry throughout the country, and

WHEREAS the Minister agrees to make a TPC investment in the Proponent's project
described in this Agreement, considering that:

a)    the project will enhance Canadian technological capability in electronic
      marine navigational displays and information systems;

b)    the new technologies and resulting products are expected to offer
      significant performance advantages over existing software, hardware,
      display, integration and processing technologies;

[CANADA LOGO]                                                [LOGO]

<PAGE>
                                                                          Page 2

c)    the resulting products are expected to contribute to meeting a growing
      demand for high performance displays, software, hardware, electronic
      controls and processing products; and

d)    the project is expected to generate significant jobs and leverage
      additional R&D activity in Canada;

AND WHEREAS the entering into this Agreement is not contingent upon any export
performance on the part of the Proponent.

NOW, THEREFORE, in consideration of their respective obligations set out below,
the parties hereto agree as follows.

ARTICLE 1 - DEADLINE FOR RECEIPT OF SIGNED AGREEMENT

1.1   This Agreement must be signed by the Proponent and received by the
      Minister within thirty (30) days of its signature on behalf of the
      Minister, failing which it will be null and void.

ARTICLE 2 - DOCUMENTS FORMING PART OF THIS AGREEMENT

2.1   The following documents form an integral part of this Agreement:

            These Articles of Agreement
            Schedule 1 - TPC General Conditions
            Schedule 2 - The Project
            Schedule 3 - Claims and TPC Project Cost Principles
            Schedule 4 - Contractual Benefits
            Schedule 5 - Reporting Requirements
            Schedule 6 - Project Fact Sheet for News release

2.2   In the event of conflict or inconsistency, the order of precedence amongst
      the documents forming part of this Agreement shall be:

            These Articles of Agreement,
            Schedule 1 - General Conditions
            Schedule 2 - The Project
            Other Schedules

<PAGE>

                                                                          Page 3

ARTICLE 3 - THE PROPONENT'S OBLIGATIONS

3.1   The Proponent will carry out the OPERATIONAL SITUATIONAL AWARENESS
      TECHNOLOGIES Project ("the PROJECT") as described in Schedule 2, will make
      claims in accordance with Schedule 3, will provide the benefits mentioned
      in Schedule 4, will issue the reports required under Schedule 5 and will
      fulfil all of its other obligations hereunder, in a diligent and
      professional manner using qualified personnel.

3.2   The Proponent shall ensure that the Project is completed on or before
      March 31, 2007 ("PROJECT COMPLETION DATE"), unless otherwise agreed to in
      writing by the Minister.

ARTICLE 4 - THE CONTRIBUTION

4.1   Subject to all the other provisions of this Agreement, the Minister will
      make a Contribution to the Proponent in respect of the Project, of the
      lesser of:

      (a)   * % of the Eligible Costs; and

      (b)   $ 3,768,391.

4.2   The Minister will not contribute to any Eligible Costs incurred by the
      Proponent prior to * nor after the Project Completion Date, unless
      otherwise agreed to in writing by the Minister.

ARTICLE 5 - ENVIRONMENTAL ASSESSMENT

5.1   The Minister has assessed the Project under Canadian Environmental
      Assessment Act and is satisfied that any potentially adverse environmental
      effects that may be caused by the Project are insignificant.

ARTICLE 6- OTHER GOVERNMENT ASSISTANCE

6.1   The Proponent hereby acknowledges that, except for scientific research and
      experimental development tax credits, deductions or allowances, no other
      federal, provincial or municipal government financial assistance other
      than that described below has been requested or received by the Proponent
      for the Eligible Costs of the Project.

      Federal      *
      Provincial   *
      Municipal    *
      Total        *

* Material has been omitted and filed separately with the commission

<PAGE>

                                                                          Page 4

6.2   The Proponent will inform the Minister promptly in writing of any other
      federal, provincial or municipal government assistance (except for
      scientific research and experimental development tax credits, deductions
      or allowances) to be received for the Eligible Costs of the Project and
      the Minister will have the right to reduce the Contribution under this
      Agreement to the extent of any such assistance.

ARTICLE 7 - ADDRESSES

7.1   Any notice to the Minister will be addressed to:

            Director, Aerospace & Defence
            Technology Partnerships Canada
            10th Floor
            300 Slater Street
            Ottawa, Ontario K1A 0C8

            Fax No: (613) 954-9117

7.2   Any notice to the Proponent will be addressed to:

            Mr. Keith Johannson
            Director of Operations
            Offshore Systems Ltd.
            107-930 West 1st Street
            North Vancouver, B. C.
            V7P 3N4

            Fax No: 604-987-2555

7.3   Any notice to the Intervener will be addressed to:

            Mr. John Sentjens
            Controller
            Offshore Systems International Ltd.
            107-930 West 1st Street
            North Vancouver, B. C.
            V7P 3N4

            Fax No: 604-987-2555

<PAGE>
                                                                          Page 5

ARTICLE 8 - SPECIAL CONDITIONS

8.1   ALTERNATE DISPUTE RESOLUTION

      If a dispute arises concerning the application or interpretation of this
      Agreement, the parties will attempt to resolve the matter through good
      faith negotiation, and may, if necessary and the parties consent in
      writing, resolve the matter through mediation by a mutually acceptable
      mediator or arbitration in accordance with the Commercial Arbitration Code
      set out in the schedule to the Commercial Arbitration Act (Canada), and
      all regulations made pursuant to that Act.

8.2   REQUIRED GOVERNMENT APPROVALS

      All payments to be made by the Minister to the Proponent, pursuant to this
      Agreement, on or after December 31, 2005 are subject to the required
      Governmental approvals, including Treasury Board. In the event that the
      Minister is prevented from disbursing the full amount of the Contribution,
      the Parties agree to review the effects of such a shortfall in the
      Contribution on the implementation of the Agreement and to adjust, as
      appropriate, the Contractual Benefits specified therein.

8.3   VISIBILITY PROTOCOL

      (a) The following sub-articles concerning public announcements by the
      Proponent as well as the obligations set-out in Article 10 of the General
      Terms and Conditions are Material Undertakings under this Agreement:

            (i)   The Proponent shall obtain the prior consent of the Minister
                  prior to mentioning TPC in any of its public statements. The
                  Proponent shall mention TPC (name and logo) in its promotional
                  activities, in its publicities and in its public relations
                  when it mentions the Project. A qualifying statement shall be
                  added to underscore the importance of the TPC contribution.

            (ii)  The Proponent shall invite representatives of TPC to be
                  present at public activities involving the Project and shall
                  inform the public of TPC's collaboration in the Project.

      (b) For information purposes, the following Government of Canada URL
      provides protocol guidelines for use when planning public ceremonies
      related to the Project:

             (http://www.pch.gc.ca/progs/cpsc-ccsp/pe/index_e.cfm)

<PAGE>
                                                                          Page 6

8.4   INTERVENER'S OBLIGATIONS

      The Intervener shall at all times ensure that Offshore Systems Ltd. has
      sufficient financial resources to fund its share of the project.

8.5   SECURITY LAWS AND STOCK EXCHANGE RULES

      The Minister acknowledges the Proponent's responsibilities under both the
      security laws and stock exchange rules that may require it to divulge the
      nature of an Agreement with the Crown relating to this project.

8.6   SALES TO NON-ARMS LENGTH COMPANIES

      The proponent must report to TPC any sales to non-arms length companies
      and provide fair market value certificates. The royalty based repayment
      will be based on the fair market value.

ARTICLE 9 - ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties and
supersedes all previous documents, negotiations, arrangements, undertakings and
understandings related to its subject matter.

<PAGE>
                                                                          Page 7

IN WITNESS WHEREOF the parties hereto have executed this Agreement through duly
authorized representatives.

HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
as represented by the Minister of Industry

Per: /s/ Jeff Parker                                  26/04/04
     ---------------------------------------       ---------------
     Technology Partnerships Canada (TPC)               Date

     Jeff Parker - Executive Director

OFFSHORE SYSTEMS LTD.

Per: /s/ Ken Kirkpatrick                              26/04/04
     -----------------------                       ---------------
     Ken Kirkpatrick, COO                               Date
     -----------------------
          Name & Title

OFFSHORE SYSTEMS INTERNATIONAL INC.

Per: /s/ John Jacobson                                26/04/04
     ---------------------------------------       ---------------
     John Jacobson, CEO                                 Date          Date
     -----------------------
          Name & Title

<PAGE>
                                                                          Page 8

                      SCHEDULE 1 - TPC GENERAL CONDITIONS

                                TABLE OF CONTENTS

<TABLE>
<S>                                                   <C>
1. DEFINITIONS                                        8. DEFAULT AND RECOVERY

"Agreement"                                           8.1 Events of Default
"Background Intellectual Property"                    8.2 Remedies on Default
"Contribution"                                        8.3 Remedies Fair and Reasonable
"Eligible Costs"                                      8.4 No Waiver
"Fiscal Year"
"Intellectual Property"                               9. FORCE MAJEURE
"Interest Rate"
"Project"                                             9.1 Event of Force Majeure
"Project Completion Date"                             9.2 Definition of Force Majeure
"Schedule"
"Statement of Work"                                   10. ANNOUNCEMENTS

2. MATERIAL CHANGES                                   10.1 Consent to Public Announcement
                                                      10.2 Confidentiality Obligation
3. DISPOSAL OF ASSETS                                 10.3 Reporting under Security Laws

4. CLAIMS FOR PAYMENT                                 11. NOTICE

4.1 Payment of Claims                                 11.1 Form and Timing of Notice
4.2 Hold-back Rights                                  11.2 Change of Address
4.3 Overpayment by Minister
4.4 Set-off Rights of Minister                        12. COMPLIANCE WITH LAWS

5. MONITORING                                         13. MEMBERS OF PARLIAMENT

5.1 Minister's Right to Audit Accounts and Records    14. ANNUAL APPROPRIATIONS
5.2 Access to Premises
5.3 Access to Third-party Information                 14.1 Parliamentary Allocation
                                                      14.2 Lack of Appropriation

6. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
                                                      15. CONFIDENTIALITY

6.1 Power and Authority of Proponent
                                                      15.1 Consent Required
6.2 Authorized Signatories                            15.2 International Dispute
6.3 Binding Obligations                               15.3 Financing and Licensing
6.4 No Pending Suits or Actions
6.5 No Gifts or Inducements                           16. CONSENT OF THE MINISTER
6.6 Intellectual Property
6.7 Compliance with Environmental                     17. NO ASSIGNMENT OF AGREEMENT
      Protection Requirements
6.8 Other Agreements                                  18. COMPLIANCE WITH POST-EMPLOYMENT PROVISIONS
6.9 Dividend Restriction
6.10 Other Financing                                  19. CONTRIBUTION AGREEMENT ONLY
6.11 Lobbyist Act
                                                      20. BINDING AGREEMENT
7. TERM OF AGREEMENT
                                                      21. SEVERABILITY
7.1 Contractual Benefits
7.2 Advance Payment                                   22. APPLICABLE LAW
7.3 Audit
                                                      23. SIGNATURE IN COUNTERPARTS
</TABLE>
<PAGE>

                                                                          Page 9
                             TPC GENERAL CONDITIONS

1. DEFINITIONS

For the purposes of this Agreement,

"AGREEMENT" means the agreement to which these General Conditions relate,
consisting of Articles of agreement and the Schedules referred to in these
Articles.

"BACKGROUND INTELLECTUAL PROPERTY" means the intellectual property rights in the
technology developed prior to the beginning of the Project and required for the
carrying out of the Project or the exploitation of the Intellectual Property.

"CONTRIBUTION" means the funding, in Canadian dollars, payable by the Minister
under the Agreement.

"ELIGIBLE COSTS" means the project cost elements specified in the statement of
work in schedule 2 and incurred by the proponent in accordance with the TPC
Project Cost Principles, excluding those Project cost elements that may be
specifically mentioned in the Statement of Work as not being supported by the
Minister.

"FISCAL YEAR" means the federal government fiscal year beginning on April 1 and
ending on the following March 31.

"INTELLECTUAL PROPERTY" means all technical data, including, without limitation,
all designs, specifications, software, data, drawings, plans, reports, patterns,
models, prototypes, demonstration units, practices, inventions, methods,
applicable special purpose equipment and related technology, processes or other
information conceived, produced, developed or reduced to practice in carrying
out the Project, and all rights therein including, without limitation, patents,
copyrights, industrial designs, trade-marks, and any registrations or
applications (or the same and all other rights of intellectual property
therein, including any rights which arise from the above items being created by
the Proponent as trade secrets or confidential information.

"INTEREST RATE" means the Bank Rate, as defined in the Interest And
Administrative Charges Regulations, in effect on the due date, plus 300 basis
points, compounded monthly. The Interest Rate for a given month can be found at:
http:/www.pwgsc.gc.ca/recgen/text/podd-e.html

"PROJECT" means the project described in Schedule 2.

"PROJECT COMPLETION DATE" means the date set in the articles of agreement for
the completion of the project.

"SCHEDULE" means a schedule to the Agreement.

"STATEMENT OF WORK" refers to the document in Schedule 2 containing the
description of the Project.

2. MATERIAL CHANGES

No material changes will be made to the estimated total scope or nature of any
element of the Project without the prior written consent of the Minister.
Without limiting the generality of the foregoing, a material change will have
occurred if:

      (a)   a Project performance milestone is not expected to be achieved
            within six (6) months of the projected completion date mentioned in
            the Statement of Work for that element;

      (b)   the estimated Eligible Costs mentioned in the Statement of Work are
            expected to be exceeded by 20% or more;

      (c)   the Project is carried out at locations other than those mentioned
            in the Statement of Work;

      (d)   a change in respect of any other aspect of the Project (including
            but not limited to a change to key Project personnel, Project
            financing, or ownership of the Proponent) which has been
            specifically identified in another part of the Agreement as a
            "material change" for the purpose of this provision, has occurred.

3. DISPOSAL OF ASSETS

The Proponent shall retain possession and control of the Project assets, the
cost of which has been contributed to by the Minister under the Agreement, and
shall not dispose of the same until they are no longer required to complete the
Project.

4. CLAIMS FOR PAYMENT

4.1 PAYMENT OF CLAIMS

The Minister will pay the Contribution to the Proponent in respect of Eligible
Costs incurred on the basis of itemized claims submitted in accordance with the
procedures set out in Schedule 3.

4.2 HOLD-BACK RIGHTS

The Minister may withhold up to ten percent (10%) of the Contribution prior to
the completion of the Project or until such audit as he/she may require has been
performed, in the event that no audit has been performed eighteen months after
receipt of the final claim, any amount so withheld shall be released to the
Proponent.

4.3 OVERPAYMENT BY MINISTER

Where for any reason:

      (a)   the Proponent is not entitled to the Contribution; or

      (b)   the Minister determines that the amount of the Contribution
            disbursed exceeds the amount to which the Proponent is entitled,

the Proponent will repay to the Minister, promptly and no later than 30 days
from notice from the Minister, the amount of the Contribution disbursed or the
amount of the overpayment, as the case may be, together with interest at the
Interest Rate from the date of the notice to the day of repayment to the
Minister in full. Any such amount is a debt due to Her Majesty in Right of
Canada and is recoverable as such.

4.4 SET-OFF RIGHTS OF MINISTER

Without limiting the scope of the set-off rights provided for under the
Financial Administration Act, it is understood that the Minister may set off
against the Contribution, any amounts owed by the Proponent to Her Majesty in
Right of Canada under legislation or contribution agreements and the Proponent
shall declare to the Minister all amounts outstanding in that regard when making
a claim under Schedule 3.

<PAGE>

                                                                         Page 10

5. MONITORING

5.1 MINISTER'S RIGHT TO AUDIT ACCOUNTS AND RECORDS

The Proponent will, at its own expense, preserve and make available for audit
and examination by the Minister or the  Minister's representatives the books,
accounts and records of the Project and of the information necessary to ensure
compliance with the terms and conditions of this Agreement, including payment of
amounts to the Minister. The Minister will have the right to conduct such
additional audits at the Minister's expense as may be considered necessary using
the audit staff of the Minister, the Audit Services Group of Consulting and
Audit Canada, an independent auditing firm or the Proponent's external auditors.
The Proponent will ensure that any licence agreement it enters into for the
exploitation of the Intellectual Property will contain similar provisions to
permit the Minister to audit licensees' accounts and records in respect to the
calculation of amounts that may be payable by the Proponent to the Minister
under this Agreement.

5.2 ACCESS TO PREMISES

The Proponent will provide the representatives of the Minister reasonable access
to the Proponent's premises to inspect and assess the progress of the Agreement
or any element thereof and supply promptly on request such data as the Minister
may reasonably require for statistical or project evaluation purposes.

5.3 ACCESS TO THIRD-PARTY INFORMATION

The Proponent will, to the extent practicable, assist the Minister with the
implementation of the Agreement and facilitate access by the Minister to
information from third parties, relating to the Agreement.

6. REPRESENTATIONS WARRANTIES AND UNDERTAKINGS

6.1 POWER AND AUTHORITY OF PROPONENT

The Proponent represents and warrants that it is duly incorporated and validly
existing and in good standing and has the power and authority to carry on its
business, to hold property and to enter into this Agreement and undertakes to
take all necessary action to maintain itself in good standing and to preserve
its legal capacity.

6.2 AUTHORIZED SIGNATORIES

Each party represents and warrants that the signatories to the Agreement have
been duly authorized to execute and deliver the Agreement.

6.3 BINDING OBLIGATIONS

Each party represents and warrants that the execution, delivery and performance
of the Agreement have been duly and validly authorized and that when executed
and delivered, the Agreement will constitute a legal, valid and binding
obligation enforceable in accordance with its terms.

6.4 NO PENDING SUITS OR ACTIONS

The Proponent warrants that it is under no obligation or prohibition, nor is it
subject to or threatened by any actions, suits or proceedings which could or
would prevent compliance with the Agreement. The Proponent will advise the
Minister forthwith of any such occurrence during the term of the Agreement.

6.5 NO GIFTS OR INDUCEMENTS

The Proponent represents and warrants that it has not, nor has any person
offered or promised to any official or employee of Her Majesty the Queen in
Right of Canada, for or with a view to obtaining the Agreement, any bribe, gift
or other inducement, and it has not nor has any person on its behalf employed
any person to solicit the Agreement for a commission, contingency fee or any
other consideration dependant upon the execution of the Agreement.

6.6 INTELLECTUAL PROPERTY

(a)   The Proponent represents and warrants that it either owns the Background
      Intellectual Property or holds sufficient rights in the same to permit the
      Project to be carried out and the Intellectual Property to be exploited by
      the Proponent.

(b)   The Proponent will ensure that title to the Intellectual Property is to be
      vested, and unless otherwise agreed to in writing by the Minister, to
      remain, exclusively with the Proponent.

(c)   The Proponent shall take appropriate steps to protect the Intellectual
      Property and shall, upon request, provide information to the Minister in
      that regard.

6.7 COMPLIANCE WITH ENVIRONMENTAL PROTECTION REQUIREMENTS

The Proponent shall apply, in relation to the Project, in all material respects,
the requirements of all applicable environmental laws, regulations, orders and
decrees and of regulatory bodies having jurisdiction over the Proponent or the
Project.

6.8 OTHER AGREEMENTS

The Proponent represents and warrants that it has not entered, and undertakes
not to enter, without the Minister's written consent, into any agreement that
would prevent the full implementation of the Agreement by the Proponent.

6.9 DIVIDEND RESTRICTION

The Proponent will not make any dividend payments or other shareholder
distributions that would prevent it from implementing the Project and other
Proponent's obligations under the Agreement including the making of payments to
the Minister as required under the Agreement.

6.10 OTHER FINANCING

The Proponent remains solely responsible for providing or obtaining the funding,
in addition to the Contribution, required for the carrying out of the Project
and the fulfilment of the Proponent's other obligations under the Agreement.

6.11 LOBBYIST ACT

The Proponent represents and warrants that any person who lobbys on its behalf
to obtain the Agreement, or any benefit thereunder, and who is required to be
registered pursuant to the Lobbyists Registration Act R.S. 1985c. 44 (4th
Supplement), is registered pursuant to that Act.

7. TERM OF AGREEMENT

7.1 CONTRACTUAL BENEFITS

The Agreement will terminate when all of the Proponent's undertakings in regard
to the contractual benefits mentioned in Schedule 4 have been fulfilled.

7.2 ADVANCE PAYMENT

Any advance or accelerated payment by the Proponent of the amounts due to the
Minister under Schedule 4 shall not have the effect of shortening the period set
in Schedule 4 for the fulfilment of contractual benefits to Canada.

7.3 AUDIT

The audit rights of the Minister under section 5 above will survive for one year
the termination date established under subsection 7.1 above.

<PAGE>
                                                                         Page 11

8. DEFAULT AND RECOVERY

8.1 EVENTS OF DEFAULT

The Minister may declare that an event of default has occurred if:

      (a)   The Proponent is adjudged or declared bankrupt or if it goes into
            receivership or takes the benefit of any statute from time to time
            in force relating to bankrupt or insolvent debtors;

      (b)   an order is made which is not being contested or appealed by the
            Proponent or a resolution is passed for the winding-up of the
            Proponent or it is dissolved;

      (c)   the Proponent has intentionally submitted false or misleading
            information to the Minister or intentionally made a false or
            misleading representation;

      (d)   any material term, condition or undertaking in the Agreement is not
            complied with in any material respect; or

      (e)   the Proponent neglects or fails to pay to the Minister any amount
            due in accordance with this Agreement.

provided that the Minister will not declare an event of default has occurred by
reason of paragraphs (c), (d) or (e) unless the Minister has given notice to the
Proponent of the condition or event which in the Minister's opinion constitutes
an event of default and the Proponent has failed, within 30 days of receipt of
the notice, either to correct the condition or event complained of or to
demonstrate, to the satisfaction of the Minister, that it has taken such steps
as are necessary to correct the condition, and has notified the Minister of the
rectification.

8.2 REMEDIES ON DEFAULT

If the Minister declares that an event of default has occurred, the Minister may
exercise one or more of the following remedies:

      (a)   suspend any obligation by the Minister to contribute or continue to
            contribute to the Eligible costs including any obligation to pay any
            amount owing prior to the date of such suspension;

      (b)   terminate any obligation of the Minister to contribute or continue
            to contribute to the Eligible costs, including any obligation to pay
            any amount owing prior to the date of such termination;

      (c)   require the Proponent to repay to the Minister all or part of the
            Contribution paid by the Minister to the Proponent, and pay the
            Minister any amounts due under the Agreement, together with interest
            from the date of demand at the Interest Rate;

If an event of default has occurred in relation to paragraph 8.1(a) or (b), or
as a result of the failure of the Proponent to comply with subsection 6.6 of
these General Conditions (Intellectual Property), section A (Payments to
Minister) or subsection B.1 (Work in Canada) of Schedule 4 or the provisions
that may be part of the Agreement regarding the disposal of special purpose
equipment, the Minister may direct the Proponent to transfer and deliver to the
Minister title to, possession of, and all rights of the Proponent in the
intellectual Property, and the Proponent will immediately comply.

8.3 REMEDIES FAIR AND REASONABLE

The Proponent acknowledges that in view of the policy objectives served by the
Minister's agreement to make the contribution, the fact that the contribution
comes from public monies, and that the amount of damages sustained by the Crown
in the event of default is difficult to ascertain, that it is fair and
reasonable that the Minister be entitled to exercise any or all of the remedies
provided for in this section 8 and to do so in the manner provided for in that
section if an event of default occurs; provided that in exercising any remedy in
accordance with paragraph 8.2(c) other than for a breach of paragraph 8.1(e),
the Minister will credit the Proponent for any amounts paid to the Minister
under schedule 4 of this Agreement.

8.4 NO WAIVER

The fact that the Minister refrains from exercising a remedy he or she is
entitled to exercise under the Agreement will not constitute a waiver of such
right and any partial exercise of a right will not prevent the Minister in any
way from later exercising any other right or remedy under the Agreement or other
applicable law.

9. FORCE MAJEURE

9.1 EVENT OF FORCE MAJEURE

The Proponent will not be in default by reason only of any failure in
performance of the Project in accordance with Schedule 2 if such failure arises
without the fault or negligence of the Proponent and is caused by any event of
force majeure.

9.2 DEFINITION OF FORCE MAJEURE

Force majeure means any cause which is unavoidable or beyond the reasonable
control of the Proponent, including war, riot, insurrection, orders of
government, strikes or any Act of God or other similar circumstance which is
beyond the Proponent's control, and which could not have been reasonably
circumvented by the Proponent without incurring unreasonable cost.

10. ANNOUNCEMENTS

10.1 CONSENT TO PUBLIC ANNOUNCEMENTS

The Proponent hereby consents to public announcements by or on behalf of the
Minister containing any of the information contained in Schedule 6 entitled
"Project Fact Sheet for News Release".

10.2 CONFIDENTIALITY OBLIGATION

The Minister will inform the Proponent of the date on which the first public
announcement is to be made and the Proponent will not disclose the existence of
this Agreement until such date.

10.3 REPORTING UNDER SECURITY LAWS

Nothing in this Agreement shall be interpreted as preventing the fulfilment by
the Proponent of its reporting obligations under applicable security laws.

11.0 NOTICE

11.1 FORM AND TIMING OF NOTICE

Any notice, information or document provided for under the Agreement shall be
effectively given if delivered or sent by letter or facsimile, postage or other
charges prepaid. Any notice that is delivered shall have been received on
delivery; any notice sent by facsimile shall be deemed to have been received one
working day after having been sent, and  any notice mailed shall be deemed to
have been received eight(8) calendar days after being mailed.

<PAGE>

                                                                         Page 12

11.2 CHANGE OF ADDRESS

A party may change the address which that party has stipulated in the Agreement
by notifying in writing the other party of the new address.

12. COMPLIANCE WITH LAWS

In implementing the Agreement, the Proponent will comply with all applicable
federal, provincial and municipal laws, including but not limited to statutes,
regulations, by-laws, ordinances and decrees.

13. MEMBERS OF PARLIAMENT

No member of the House of Commons will be admitted to any share or part of this
Agreement or to any benefit to arise therefrom. No person who is a member of the
Senate will, directly or indirectly, be a party to or be concerned in the
Agreement.

14. ANNUAL APPROPRIATIONS

14.1 PARLIAMENTARY ALLOCATION

 Any payment by the Minister under this Agreement is subject to there being an
 appropriation for the Fiscal Year in which the payment is to be made; and to
 cancellation or reduction in the event that departmental funding levels are
 changed by Parliament.

14.2 LACK OF APPROPRIATION

 In the event that the minister is prevented from disbursing the full amount of
 the Contribution due to a lack or reduction of appropriation or departmental
 funding levels, the parties agree to review the effects of such a shortfall in
 the Contribution on the implementation of the Agreement and to adjust, as
 appropriate, the Contractual benefits specified in Schedule 4.

15. CONFIDENTIALITY

15.1 CONSENT REQUIRED

Subject to section 10 and the Access to Information Act, each party shall keep
confidential and shall not without the consent of all parties disclose the
contents of the Agreement and the documents pertaining thereto, whether provided
before or after the Agreement was entered into, or of the transactions
contemplated herein.

15.2 INTERNATIONAL DISPUTE

The Minister is hereby authorized to disclose any of the information referred to
in paragraph 15.1 above where, in the opinion of the Minister, such disclosure
is required to an international trade panel for the purposes of the conduct of a
dispute in which Canada is a party or a third party intervener. The Minister
shall give prior notice to the Proponent of such disclosure.

15.3 FINANCING AND LICENSING

The Minister hereby consents to the Proponent disclosing the Agreement or any
portion thereof for the purposes of securing additional financing or of
licensing for commercial exploitation, subject to the Proponent having the
person to whom the information is disclosed execute a non-disclosure agreement
prior to disclosure

16. CONSENT OF THE MINISTER

Whenever the Agreement provides for the proponent obtaining the consent or
agreement of the Minister, it is understood that such consent or agreement shall
not be unreasonably withheld and that the Minister may make the issuance of such
consent or agreement subject to reasonable conditions.

17. NO ASSIGNMENT OF AGREEMENT

The Proponent shall not assign the Agreement nor any part thereof without the
prior written consent of the Minister.

18. COMPLIANCE WITH POST-EMPLOYMENT PROVISIONS

The Proponent confirms that no individual for whom the post-employment
provisions of the CONFLICT OF INTERNET AND POST-EMPLOYMENT CODE FOR PUBLIC
OFFICE HOLDERS or the CONFLICT OF INTEREST AND POST-EMPLOYMENT CODE FOR THE
PUBLIC SERVICE apply, will derive a direct benefit from this Agreement unless
that individual is in compliance with the applicable post-employment provisions.

19. CONTRIBUTION AGREEMENT ONLY

 The Agreement is a contribution agreement only, not a contract for services or
 a contract of service or employment, and nothing in the agreement, the parties
 relationship or actions is intended to create, nor shall be construed as
 creating, a partnership, employment or agency relationship between them. The
 Proponent is not in any way authorized to make a promise, agreement or contract
 and to incur any liability on behalf of Canada, nor shall Canada make a
 promise, agreement or contract and incur any liability on behalf of the
 Proponent, and the Proponent shall be solely responsible for any and all
 payments and deductions required by the applicable laws.

20. BINDING AGREEMENT

This Agreement is binding on the parties and their successors and permitted
assigns.

21. SEVERABILITY

Any provision of this Agreement prohibited by law or otherwise ineffective will
be ineffective only to the extent of such prohibition or ineffectiveness and
will be severable without invalidating or otherwise affecting the remaining
provisions of the Agreement.

22. APPLICABLE LAW

The Agreement shall be interpreted in accordance with the laws in force in the
province where the Proponent's head office is located.

23. SIGNATURE IN COUNTERPARTS

This Agreement may be signed in counterparts, each of which when taken together,
will constitute an original Agreement.

<PAGE>
                                                                         Page 13

                            SCHEDULE 2 - THE PROJECT

           The Project is described in the attached Statement of Work

<PAGE>

                                                                         Page 14

                                STATEMENT OF WORK

OVERVIEW

Offshore Systems Ltd(OSL) with the support of Technologies Partnership Canada
will develop under this SOW (Statement of Work) Operational Situational
Awareness Technologies areas including the following products:

-     Warship Electronic Charting Display and Information System (WECDIS)

-     Common Operational Picture-Image Display Server (COP-IDS(TM))

-     Networked radar image overlay for ECDIS.

WECDIS PRODUCT

*

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 15

*

COP-IDS PRODUCT

*

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 16

*

NETWORKED RADAR IMAGE OVERLAY

*

* Material has been omitted and filed separately with the Commission

<PAGE>

                OFFSHORE SYSTEMS LTD PRODUCT ENGINEERING SCHEDULE

<TABLE>
<CAPTION>
                                     2003               2004               2005                  2006                 2007
TASK ID       TASK NAME
                            QTR1 QTR2 QTR3 QTR4  QTR1 QTR2 QTR3 QTR4  QTR1 QTR2 QTR3 QTR4  QTR1 QTR2 QTR3 QTR4  QTR1 QTR2 QTR3
<S>           <C>           <C>  <C>  <C>  <C>   <C>  <C>  <C>  <C>   <C>  <C>  <C>  <C>   <C>  <C>  <C>  <C>   <C>   <C> <C>

PROJECT NAME: WECDIS PRODUCT

A1

A2

A3                           *    *    *    *     *    *    *    *     *    *    *    *     *    *    *    *     *    *    *

A4

A5

A6

A7

A8

A9

PROJECT NAME: COP-IDS 2.0 PRODUCT

B1

B2

B3                           *    *    *    *     *    *    *    *     *    *    *    *     *    *    *    *     *    *    *

B4

B5

B6

B7

B8

PROJECT NAME: NETWORKED RADAR IMAGE OVERLAY

C1

C2                           *    *    *    *     *    *    *    *     *    *    *    *     *    *    *    *     *    *    *

C3

C4

C5

C6

C7

C8

C9

CA

CB
</TABLE>

* Material has been omitted and filed separately with the commission
<PAGE>
                                                                         Page 18

                                    ANNEX A

                              FORM B - MILESTONES

PROPONENT NAME: OFFSHORE SYSTEMS LTD.                 PROJECT NUMBER: 710-488685

<TABLE>
<CAPTION>
                KEY PROJECT MILESTONE                         DATE
--------------------------------------------------------      ----
<S>                                                           <C>
1     WECDIS certification under STANAG 4564                    *

2     Network radar image overlay (RIO) board completion        *

3     ARPA RIO functionality                                    *

4     COP-IDS 2.0 product completion                            *
</TABLE>

* Material has been omitted and filed separately with the Commission

<PAGE>
                                                                         Page 19

                                    ANNEX A

        FORM C - CURRENT FISCAL YEAR COST BREAKDOWN BY MAJOR ACTIVITIES

PROPONENT NAME: OFFSHORE SYSTEMS LTD.                 PROJECT NUMBER: 710-488685

                     FOR FISCAL YEAR ENDING MARCH 31, 2005

<TABLE>
<CAPTION>
DESCRIPTION OF ACTIVITY(1)                   ESTIMATED ELIGIBLE COSTS ($000)
--------------------------   -----------------------------------------------------------------
                             DIRECT             SUBCONTRACTS   OTHER
                             LABOUR    DIRECT       AND       DIRECT
                             COSTS   MATERIALS   CONSULTANTS   COSTS  EQUIPMENT  OVERHEAD  TOTAL
                             ------  ---------  ------------  ------  ---------  --------  -----
<S>                          <C>     <C>        <C>           <C>     <C>        <C>       <C>
1. WECDIS                      *         *          *            *        *          *       *

2. COP-IDS                     *         *          *            *        *          *       *

3. NETWORK RIO                 *         *          *            *        *          *       *

TOTAL                          *         *          *            *        *          *       *
</TABLE>

Notes:

1. Title of key project tasks enumerated and described in the SOW.

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 20

                                    ANNEX A

                     FORM D - COST BREAKDOWN BY FISCAL YEAR

PROPONENT NAME: OFFSHORE SYSTEMS LTD.                 PROJECT NUMBER: 710-488685

<TABLE>
<CAPTION>
FISCAL YEAR
  (ENDING
 MARCH 31)                          ESTIMATED ELIGIBLE COSTS ($000)
-----------  -------------------------------------------------------------------------
                                SUBCONTRACTS
             DIRECT   DIRECT         AND      OTHER DIRECT
             LABOUR  MATERIALS  CONSULTANTS      COSTS      EQUIPMENT  OVERHEAD  TOTAL
             ------  ---------  ------------  ------------  ---------  --------  -----
<S>          <C>     <C>        <C>           <C>           <C>        <C>       <C>
2005           *         *           *             *            *         *        *

2006           *         *           *             *            *         *        *

2007           *         *           *             *            *         *        *

TOTAL          *         *           *             *            *         *        *
</TABLE>

The above cost breakdown includes all estimated direct costs and associated
overhead costs for the Project. For claims purposes, these costs will be
determined using the applicable Public Works and Government Services Canada
(PWGSC) costing rates negotiated with the Proponent in accordance with the PWGSC
1031-2 Contract Cost Principles. For any period where the PWGSC rate
negotiations have not been completed at the time of claim preparation for the
period, the previous year's negotiated PWGSC costing rates will be used in the
interim.

* Material has been omitted and filed separately with the Commission

<PAGE>
                                                                         Page 21

                                    ANNEX A

                     FORM E-1 - PROJECT LOCATION AND COSTS

PROPONENT NAME: OFFSHORE SYSTEMS LTD.                 PROJECT NUMBER: 710-488685

<TABLE>
<CAPTION>
                    START PERIOD
                  (FISCAL YEAR AND                  COSTS
PROJECT LOCATION      QUARTER)      WORK PERFORMED  ($000)
----------------  ----------------  --------------  ------
<S>               <C>               <C>             <C>
*                        *               *            *

TOTAL                    *               *            *
</TABLE>

Note: Government fiscal year runs April 1 - March 31.

* Material has been omitted and filed separately with the Commission

<PAGE>
                                                                         Page 22

                                    ANNEX A

                      FORM E-2 - EQUIPMENT COST BREAKDOWN

PROPONENT NAME: OFFSHORE SYSTEMS LTD.                 PROJECT NUMBER: 710-488685

<TABLE>
<CAPTION>
                       PLANNED ACQUISITION
                             PERIOD         ESTIMATED
                        (FISCAL YEAR AND      COSTS
EQUIPMENT DESCRIPTION       QUARTER)         ($000)
---------------------  -------------------  ---------
<S>                    <C>                  <C>
*                              *                *

TOTAL                          *                *
</TABLE>

Notes:

1) For the purposes of this table, equipment includes all equipment with a unit
cost of more than $250K, or specific equipment essential to the project's
success, whose aggregate cost is significant, but whose unit cost is below
$250K.

2) Government fiscal year runs April 1 - March 31.

* Material has been omitted and filed separately with the Commission
<PAGE>

                                                                         Page 23

                                     ANNEX A

                       FORM E-3 - MATERIALS COST BREAKDOWN

PROPONENT NAME: OFFSHORE SYSTEMS LTD.                 PROJECT NUMBER: 710-488685

<TABLE>
<CAPTION>
                          PLANNED ACQUISITION     ESTIMATED
                             PERIOD (FISCAL         COSTS
MATERIALS DESCRIPTION      YEAR AND QUARTER)        ($000)
---------------------     -------------------     -----------
<S>                       <C>                     <C>
         *                         *                   *

TOTAL                                                  *
</TABLE>

Notes:

Government fiscal year runs April 1 - March 31.

Material costs include the development of prototype displays, test boards,
license fees for engineering and development tools, test equipment, jigs,
software and hardware.

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 24

                                     ANNEX A

                     FORM E-4 - SUB-CONTRACT COST BREAKDOWN

                PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685

<TABLE>
<CAPTION>
                                                                  ESTIMATED
                   ANTICIPATED            START PERIOD              COSTS
SUB-CONTRACTS     CONTRACTOR(S)     (FISCAL YEAR AND QUARTER)       ($000)
-------------     -------------     -------------------------     ---------
<S>               <C>               <C>                           <C>
                       *                        *                     *

TOTAL                                                                 *
</TABLE>

Notes:

1) Government fiscal year runs April 1 - March 31.

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 25

                                    ANNEX A

                        FORM E-5 - OTHER COSTS BREAKDOWN

                PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685

<TABLE>
<CAPTION>
                 START PERIOD       ESTIMATED
               (FISCAL YEAR AND       COSTS
OTHER COST         QUARTER)          ($000)
----------     ----------------     ---------
<S>            <C>                  <C>
    *                 *                 *

TOTAL                                   *
</TABLE>

Notes:

Government fiscal year runs April 1 - March 31.

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 26

              SCHEDULE 3 - CLAIMS AND TPC PROJECT COSTS PRINCIPLES

A-CLAIMS

1.    The Minister will pay the Contribution to the Proponent, in respect of
      Eligible Costs incurred, on the basis of claims which will:

      (a)   be submitted on a monthly basis ("CLAIM PERIOD"), except for the
            first claim which will cover a longer period going back to *

      (b)   be submitted on TPC claim forms, within forty-five (45) days of the
            end of each Claim Period;

      (c)   be accompanied with details of all costs being claimed, which will
            be substantiated by such documents as may be required by the
            Minister and presented in accordance with the structure and the
            milestones contained in the Statement of Work in Schedule 2.

      (d)   be certified by the chief financial officer of the Proponent or
            other person satisfactory to the Minister;

      (e)   be accompanied by a report on the progress made in carrying out the
            Project during the Claim Period, containing such information as
            mentioned in the section of Schedule 5 (Reporting Requirements)
            entitled Claim Reports;

      (f)   include a deduction for Eligible Costs included in a previous claim
            but which have not been paid by the Proponent within ninety (90)
            days of such claim.

2.    In regard to paragraph 1 (f) above, the Minister may request at any time
      that the Proponent provide satisfactory evidence to demonstrate that
      Eligible Costs have been paid.

3.    Within one hundred and twenty (120) days of the submission of the final
      claim, the Proponent shall submit an itemized statement certified by the
      Proponent's chief financial officer attesting to the Eligible Costs for
      the entire Project having been incurred and paid.

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 27

B - TPC PROJECT COST PRINCIPLES

1.    GENERAL PRINCIPLE

The total Eligible Costs of the Project shall be the sum of the applicable
direct and indirect costs which are, or are to be reasonably and property
incurred and/or allocated, in the performance of the Project, less any
applicable credits. These costs shall be determined in accordance with the
Proponent's cost accounting system as accepted by the Minister and applied
consistently over time.

2.    DEFINITION OF REASONABLE COST

(1)   A cost is reasonable if, in nature and amount, it does not exceed that
      which would be incurred by an ordinary prudent person in the conduct of a
      competitive business.

(2)   In determining the reasonableness of a particular cost, consideration
      shall be given to

      (a)   whether the cost is of a type generally recognized as normal and
            necessary for the conduct of the Proponent's business or performance
            of the Project;

      (b)   the restraints and requirements by such factors as generally
            accepted sound business practices, arm's length bargaining, federal,
            provincial and local laws and regulations, and Agreement terms;

      (c)   the action that prudent business persons would take in the
            circumstances, considering their responsibilities to the owners of
            the business, their employees, customers, the Government and public
            at large;

      (d)   significant deviations from the established practices of the
            Proponent which may unjustifiably increase the Eligible Costs; and

      (e)   the specifications, delivery schedule and quality requirements of
            the particular Project as they affect costs.

3.    DIRECT COSTS

There are three categories of direct costs:

      (a)   Direct Material Cost meaning the cost of materials which can be
            specifically identified and measured as having been used or to be
            used for the performance of the Project and which are so identified
            and measured consistently by the Proponent's cost accounting system
            as accepted by the Minister.

            (i.)  These materials may include, in addition to materials
                  purchased solely for the Project and processed by the
                  Proponent, or obtained from subcontractors, any other
                  materials issued from the Proponent's general stocks.

            (ii.) Materials purchased solely for the Project or subcontracts
                  shall be charged to the Project at the net laid down cost to
                  the Proponent before cash discounts for prompt payment.

            (iii.)Materials issued from the Proponent's general stocks shall be
                  charged to the Project in accordance with the method as used
                  consistently by the Proponent in pricing material inventories.

<PAGE>

                                                                         Page 28

      (b)   Direct Labour Cost meaning that portion of gross wages or salaries
            incurred for activities which can be specifically identified and
            measured as having been performed or to be performed on the Project
            and which is so identified and measured consistently by the
            Proponent's cost accounting system as accepted by the Minister.

      (c)   Other Direct Costs meaning those applicable costs, not falling
            within the categories of direct material or direct labour, but
            which can be specifically identified and measured as having been
            incurred or to be incurred in performance of Project activities and
            which are so identified and measured consistently by the Proponent's
            costing system as accepted by the Minister.

4.    INDIRECT COSTS

(1)   Indirect Costs (overhead) meaning those costs which, though necessarily
      having been incurred during the period of the performance of the Project
      activities for the conduct of the Proponent's business in general, cannot
      be identified and measured as directly applicable to the Project.

(2)   These Indirect Costs may include, but are not necessarily restricted to,
      such items as:

      (a)   indirect materials and supplies (*);

      (b)   indirect labour;

      (c)   fringe benefits (the Proponent's contribution only);

      (d)   service expenses: expenses of a general nature such as power, heat,
            light, operation and maintenance of general assets and facilities;

      (e)   fixed/period charges: recurring charges such as property taxes,
            rentals and reasonable provision for depreciation;

      (f)   general and administrative expenses: including remuneration of
            executive and corporate officers, office wages and salaries and
            expenses such as stationery, office supplies, postage and other
            necessary administration and management expenses;

      (g)   selling and marketing expenses associated with the products or
            services being acquired under the Agreement;

      (h)   general research and development expenses as considered applicable
            by the Minister.

*     For supplies of similar low-value, high-usage items the costs of which
      meet the above definition of Direct Material Costs but for which it is
      economically expensive to account for these costs in the manner prescribed
      for direct costs, then they may be deemed to be indirect costs for the
      purposes of the Project.

<PAGE>

                                                                         Page 29

5.    ALLOCATION OF INDIRECT COSTS

Indirect costs shall be accumulated in appropriate indirect cost pools,
reflecting the Proponent's organizational or operational lines and these pools
subsequently allocated to the Project or contracts, in accordance with the
following two principles:

      (a)   the costs included in a particular indirect cost pool should have a
            similarity of relationship with the Project or contracts, as
            applicable, to which that indirect cost pool is subsequently
            distributed; further, the costs included in an indirect cost pool
            should be similar enough in their relationship to each other that
            the allocation of the total costs in the pool provides a result
            which would be similar to that achieved if each cost within that
            pool were separately distributed;

      (b)   the allocation basis for each indirect cost pool should reflect, as
            far as possible, the causal relationship of the pooled costs to the
            Project to which these costs are distributed.

6.CREDITS

The applicable portion of any income, rebate, allowance, or any other credit
relating to any applicable direct or indirect costs, received by or accruing to
the Proponent, shall be credited to the Eligible Costs.

7.NON-APPLICABLE COSTS

Notwithstanding that the following costs may have been or may be reasonably and
properly incurred by the Proponent during the performance of Project activities,
they are considered non-applicable costs to the Project:

      (a)   allowance for interest on invested capital, bonds, debentures, bank
            or other loans together with related bond discounts and finance
            charges;

      (b)   legal, accounting and consulting fees in connection with financial
            reorganization, security issues, capital stock issues, obtaining of
            patents and licenses and prosecution of claims against the Minister;

      (c)   losses on investments, bad debts and expenses for the collection
            thereof;

      (d)   losses on other projects or contracts;

      (e)   federal and provincial income taxes, excess profit taxes or surtaxes
            and/or special expenses in connection therewith;

      (f)   provisions for contingencies;

      (g)   premiums for life insurance on the lives of officers and/or
            directors where proceeds accrue to the Proponent;

      (h)   amortization of unrealized appreciation of assets;

      (i)   depreciation of assets paid for by the Minister;

      (j)   fines and penalties;

      (k)   expenses and depreciation of excess facilities;

<PAGE>

                                                                         Page 30

      (l)   unreasonable compensation for officers and employees;

      (m)   product development or improvement expenses not associated with the
            product being acquired under the Project;

      (n)   advertising, except reasonable advertising of an industrial or
            institutional character placed in trade, technical or professional
            journals for the dissemination of information for the industry or
            institution;

      (o)   entertainment expenses;

      (p)   donations except those to charities registered under the Income Tax
            Act;

      (q)   dues and other memberships other than regular trade and professional
            associations;

      (r)   fees, extraordinary or abnormal for professional advice in regard to
            technical, administrative or accounting matters, unless approval
            from the Minister is obtained.

ADDENDUM TO TPC PROJECT COST PRINCIPLES

A     INTELLECTUAL PROPERTY PROTECTION

      Notwithstanding section 7(b) above, legal, accounting and consulting fees
      in connection with the obtaining of patents and statutory protection of
      other elements of the Intellectual Property are Eligible Costs.

<PAGE>

                                                                         Page 31

                       SCHEDULE 4 - CONTRACTUAL BENEFITS

A - PAYMENTS TO MINISTER

1.    DEFINITIONS

      "GROSS BUSINESS REVENUES" means all revenues, receipts, monies and other
      considerations of whatever nature received by the Proponent, whether in
      cash, or by way of benefit, advantage, or concession, and without
      deductions of any nature, but net of any returns or discounts actually
      credited and any sales, excise, ad valorem or similar taxes paid but
      without deduction for bad debts or doubtful accounts, as determined in
      accordance with generally accepted accounting principles, applied on a
      consistent basis.

      "ROYALTY PERIOD" means the period during which royalties will accrue, as
      specified in paragraph 2.2 below

2.    ROYALTY PAYMENTS

      2.1   ROYALTY RATES AND ROYALTY BASIS

            The Proponent will pay to the Minister a royalty of 1.4 % of annual
            Gross Business Revenues during the First Royalty Period of January
            01, 2006 to December 31, 2008 and a royalty of 2.5 % of annual Gross
            Business Revenues during the Second Royalty Period of January
            01, 2009 to December 31, 2013

      2.2   ROYALTY PERIODS

            The first Royalty Period will begin on January 01, 2006 and will end
            on December 31, 2008 and the second Royalty Period will begin on
            January 01, 2009 and end on December 31, 2013. If, however,
            cumulative royalties are less than $6,079,176 by December 31, 2013,
            then the Second Royalty Period will continue until the earlier of
            December 31, 2017 or until a cumulative royalty ceiling of
            $6,079,176 is reached.

      2.3   ROYALTY STATEMENTS AND PAYMENTS

            The Proponent will provide to the Minister an annual statement of
            the Gross Business Revenues, certified by the Proponent's Chief
            Financial Officer, within four (4) months of the end of each
            calendar year, together with the related royalty payment. The first
            statement and related royalty payment must be provided to the
            Minister by April 30, 2007 in respect of the calendar year ending
            December 31, 2006 and by April 30 each year thereafter in regard to
            the previous calendar year. Payments shall be made by cheque to the
            order of the Receiver General and sent

<PAGE>

                                                                         Page 32

            to the Minister.

      2.4   LATE PAYMENTS

            The Proponent will pay interest on overdue royalty payments, at the
            Interest Rate, from the date on which the royalty payment is due,
            until payment in full is received by the Minister. Such interest is
            payable without notice to the Proponent, and in addition to any
            remedies of the Minister for default by the Proponent.

3.    CHANGES IN REGARD TO COMPANY'S BUSINESS

      3.1   The Proponent shall notify the Minister should the business carried
            out by the Proponent be split so as to be carried out in part by
            other persons.

      3.2   In the event that part of the Proponent's business is carried out by
            related persons (subsidiaries or otherwise affiliated), the same
            royalty base shall continue to apply and the Proponent shall have
            the related persons involved report their gross revenues to the
            Minister and the Proponent shall make, or continue to make, as the
            case may be, payments to the Minister as if the Proponent's business
            had not been split. The audit rights of the Minister as mentioned in
            Section 5 of the General Conditions shall extend to these related
            persons and the Proponent shall ensure that such audit rights may be
            exercised by the Minister.

      3.3   In the event that part of the Proponent's business is carried out by
            an unrelated person, the royalty rate shall be increased so that the
            Minister is receiving comparable royalties as if that part of the
            Proponent's business had remained with the Proponent. After due
            consultation with the Proponent, the Minister shall make a
            determination as to the increased royalty rate. In the event that
            the Proponent disagrees with such increased rate, the Proponent may
            refer the matter to arbitration under the federal Commercial
            Arbitration Act, within 45 days of being notified of the new rate by
            the Minister.

B - CONTRACTUAL BENEFITS TO CANADA

1.    WORK IN CANADA

      (a)   Unless otherwise agreed to in writing by the Minister, the Proponent
            will ensure that the Intellectual Property is exploited through the
            production in Canada of resulting products until the end of the
            Royalty Period as set out in section 2.2 of this schedule.

      (b)   The Proponent will not, without the prior written consent of the
            Minister, grant

<PAGE>

                                                                         Page 33

            any right to the production of resulting products or transfer title
            to any of the Intellectual Property outside of Canada, except the
            licence or sublicence in conjunction with the sale of resulting
            products, and will impose the same restriction on all licensees or
            transferees.

      (c)   The expression "resulting products" as used in paragraph (a) and (b)
            above means products, including services, resulting from the use of
            the Intellectual Property.

<PAGE>

                                                                         Page 34

                      SCHEDULE 5 - REPORTING REQUIREMENTS

1.    CLAIM REPORTS

      Whenever the Proponent submits a claim, it shall attach to the claim a
      progress report containing:

      (a)   a description of the progress made in the fulfilment of the
            Statement of Work during the Claim Period, detailed by Activity as
            defined in the Statement of Work;

      (b)   a statement of milestones achieved, if any, during the Claim Period;

      (c)   an assessment of any significant delay in completing  the project or
            the attainment of any milestone identified in the Statement of Work,
            the reasons for such delay, and mitigation measures being taken;

      (d)   the Proponent's revised projections of Project cash flows for the
            current Fiscal Year, except that in cases where the Claim Period is
            monthly, this information is to be provided on March 31st, July 31st
            and November 30th of each year.

      No claim for the Contribution will be processed unless and until such
      report is provided to the Minister.

2.    ANNUAL REVIEW

      Unless otherwise agreed to, the parties shall meet at least once annually
      during the Project period, at a mutually agreeable time, to review the
      progress of the Project.

3.    PROJECT PROGRESS REPORTS

      At least one (1) month prior to the date set for the Annual Review meeting
      mentioned in section 2 above, the Proponent shall provide the Minister
      with a written progress report containing:

      (a)   a description of the progress in completion of the Project
            activities, in comparison with the schedule and milestones contained
            in the Statement of Work and the related Project expenditures for
            that segment of Project activities;

      (b)   the Proponent's revised cost breakdown for the Project, including an
            estimated cost breakdown by major activity and by Fiscal Year; and

      (c)   an indication of any delay in completing the Project and the reasons
            for such

<PAGE>

                                                                         Page 35

            delay, together with the Proponent's revised schedule and any
            proposed revisions to the Statement of Work;

4.    ANNUAL INFORMATION UPDATES

      By February 15, 2005 and by the same date each year thereafter until this
      agreement ends in accordance with section 7 of the General Conditions, the
      Proponent shall provide the following information updates to the Minister.

      (a)   an update of the projected and actual repayments to the Minister, as
            set out in Form TPC-1 (Report on Estimated & Actual Repayments to
            the Minister) attached hereto, together with an explanation of any
            significant changes from the last update.

            (Note: Once the repayment period starts, this update shall be
            provided annually at the time of making repayment, in accordance
            with the provisions entitled "Payments to Minister" in Schedule 4)

      (b)   an update of projected and actual person years (PYs), as set out in
            Form TPC-2 (Report on Job Creation and Maintenance) attached hereto,
            together with an explanation of any significant changes from
            the last update;

      (c)   an update of other representations and expected results as set out
            in Form TPC-3 (Report on Other Representations & Expected Results)
            attached hereto, together with an explanation of any significant
            changes from the last update;

      (d)   an update of investment leverage, as set out in Form TPC - 4 (Report
            on Investment Leverage) attached hereto, together with an
            explanation of any significant changes from the last update;

      (e)   an update on sustainable development impacts, as set out in Form TPC
            - 5 (Report on Sustainable Development Impacts) attached hereto,
            together with an explanation of any significant changes from the
            last update;

      (f)   a summary of the progress made in the fulfilment of specific
            commitments in regard to contractual benefits to Canada identified
            in Schedule 4.

      ANNUAL FINANCIAL STATEMENTS

      The Proponent shall provide the Minister with a copy of its annual audited
      financial statements within four (4) months of the end of each of the
      Proponent's fiscal years.

<PAGE>

                                                                         Page 36

                                   FORM TPC-1

             REPORT ON ESTIMATED & ACTUAL REPAYMENTS TO THE MINISTER

PROPONENT: OFFSHORE SYSTEMS LTD.

PROJECT NO.: 710-488685

<TABLE>
<CAPTION>
    1                 2                   3                4
---------     -----------------     --------------     ----------
   YEAR
  ENDING      ESTIMATED PAYMENT     ACTUAL PAYMENT      DUE DATE
(12/31/YY)        (in $000)          (in $000)         (04/30/YY)
----------    -----------------     --------------     ----------
<S>           <C>                   <C>                <C>

   *                 *                    *                *

Total

Run-on

  *                  *                    *                 *

</TABLE>

SIGNATURE OF AUTHORIZED OFFICER:_________________________________________

REPORT DATE: ___________

The Proponent certifies that the initial repayment projections provided at the
time of the Agreement, and as may be revised from time to time per the
requirements of Schedule 5, represent reasonable estimates of the repayment that
the Minister can expect from this Project, as they could be determined at any
particular time. The Minister recognizes that those estimates may vary through
time, due to factors over which the Proponent has little or no control.

* Material has been omitted and filed separately with the Commission

<PAGE>
                                                                         Page 37

                                   FORM TPC-2

                     REPORT ON JOB CREATION AND MAINTENANCE

                                                PROPONENT: OFFSHORE SYSTEMS LTD.

                                                         PROJECT NO.: 710-488685

GENERAL INSTRUCTIONS

THE INTENT OF THIS SCHEDULE IS TO IDENTIFY THE NUMBER OF PYs EXPENDED ON PROJECT
RELATED ACTIVITIES DURING ANY ONE YEAR OF THE DURATION OF THE AGREEMENT,
ACCORDING TO CATEGORY OF EMPLOYMENT. BOTH PART-TIME AND FULL-TIME EMPLOYEES
SHOULD BE CLAIMED, AS EMPLOYMENT OF ALL EMPLOYMENT TYPES REPRESENT A PROJECT
BENEFIT. PART-TIME WORK SHOULD BE CONVERTED INTO PY UNITS ON THE BASIS NORMALLY
USED BY THE PROPONENT PROVIDED IT IS BETWEEN 1800 AND 2000 HOURS OF WORK PAID IN
A GIVEN YEAR.

1.    DATA IS TO BE PROVIDED BASED ON A 52 WEEK CALENDAR YEAR AND SHOULD BE
      EXPRESSED IN PY UNITS.

2.    DIRECT PYS ARE TO BE COUNTED. THE TERM "DIRECT PY" RELATES TO THE WORK
      PERFORMED IN CANADA BY EMPLOYEES OF THE PROPONENT. ONLY THOSE DIRECT PYS
      WHICH RESULT FROM THE PROJECT ARE TO BE COUNTED. WORK PERFORMED OUTSIDE OF
      CANADA BY CANADIAN EMPLOYEES IS NOT TO BE INCLUDED EXCEPT FOR ELIGIBLE
      ACTIVITIES PERFORMED AS PART OF THE STATEMENT OF WORK DURING THE WORK
      PHASE. REPORTED PYS MAY BE PERFORMED BY EXISTING STAFF OR BY NEW HIRES.
      THESE PYS ARE NORMALLY LOCATED IN THE PROPONENT'S FACILITY AND INVOLVE AN
      ELIGIBLE OPERATION OR ACTIVITY SUPPORTED BY THE INDUSTRIAL ASSISTANCE
      PROGRAM. DURING THE BENEFITS PHASE, THESE PYs NORMALLY PERTAIN TO
      PRODUCTION/DISTRIBUTION ACTIVITIES ASSOCIATED WITH THE SUPPORTED FACILITY,
      PRODUCT OR PROCESSES OF THE PROPONENT.

3.    INDIRECT PYs REFER TO WORK PERFORMED IN CANADA AS A RESULT OF THE PROJECT
      BY EMPLOYEES WHO ARE NOT EMPLOYED BY THE PROPONENT, AND NORMALLY AT A
      LOCATION OTHER THAN THE PROPONENT'S FACILITY. APART FROM THE FOLLOWING TWO
      EXCEPTIONS, INDIRECT PYS ARE NEVER TO BE INCLUDED IN THE PY COUNT.

      1)    SUB-CONTRATCTED PYS IN THE WORK PHASE OF R&D/INNOVATION PROJECTS ARE
            INCLUDED IN THE PY COUNT, PROVIDED THAT THE RELATED ACTIVITY IS
            EXPLICITLY SET OUT IN THE STATEMENT OF WORK IN THE CONTRIBUTION
            AGREEMENT.

      2)    BENEFIT PHASE PRODUCTION PYS OF RELATED ENTITIES TO THE PROPONENT
            ARE INCLUDED IN THE PY COUNT, PROVIDED THAT THE CONTRIBUTION
            AGREEMENT EXPLICITLY INCLUDES PY REPORTING REQUIREMENTS ON THE
            PARTIES CONCERNED AND PROVIDES THE MINISTER ACCESS TO THE RELATED
            FACILITIES FOR MONITORING PURPOSES.

4.    REPORTING DURING THE WORK PHASE REQUIRES A YEARLY BREAKDOWN BY CATEGORY OF
      EMPLOYMENT. REPORTING DURING THE BENEFITS PHASE REQUIRES THE AVERAGE
      NUMBER OF PYs DURING THIS PHASE BY CATEGORY OF EMPLOYMENT.

<PAGE>

                                                                         Page 38

PART 1: WORK PHASE - DATA COMPILED AS OF : DECEMBER 31,

<TABLE>
<CAPTION>
                                    TOTAL NUMBER OF PERSON YEARS
                                    ----------------------------
CATEGORY OF EMPLOYMENT              ESTIMATE              ACTUAL
---------------------               --------              ------
<S>                                 <C>                   <C>
A]        *                            *

B]        *                            *

C]        *                            *

  TOTAL   *                            *
</TABLE>

PART 2 - BENEFIT PHASE - DATA COMPILED AS OF : DECEMBER 31,

<TABLE>
<CAPTION>
                               NUMBER OF PERSON YEARS
                         --------------------------------
                            ESTIMATED
                         AVERAGE NUMBER OF  ACTUAL PERSON
                         PERSON YEARS FOR     YEARS FOR
                            DURATION OF       REPORTING
CATEGORY OF EMPLOYMENT    BENEFIT PHASE         PERIOD
----------------------   -----------------  -------------
<S>                      <C>                <C>
A]        *                     *

B]        *                     *

C]        *                     *

    TOTAL                       *
</TABLE>

SIGNATURE OF AUTHORIZED OFFICER: _______________________________

REPORT DATE:__________________

The Proponent certifies that the initial employment projections presented at the
time of the Agreement, and as may be revised from time to time per the
requirements of Schedule 5, represent reasonable estimates of the employment
benefits that the Minister can expect from this Project, as they could be
determined at any particular time. The Minister recognizes that those estimates
may vary through time, due to factors over which the Proponent has little or no
control.

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 39

                                   FORM TPC-3

               REPORT ON OTHER REPRESENTATIONS & EXPECTED RESULTS

PROPONENT: OFFSHORE SYSTEMS LTD.

PROJECT NO.: 710-488685

OTHER REPRESENTATIONS AND EXPECTED RESULTS INCLUDE:

1.    PATENTS: [are there any patents that are expected to result from the
      development work of the project]

2.    ACQUISITION OF TECHNOLOGY: [is the Proponent planning to acquire
      intellectual property rights, technology, or know-how essential to the
      success of the Project]

3.    CORPORATE MANDATES: [specify any new or enhanced mandates expected]

4.    OTHER SIGNIFICANT REPRESENTATIONS/EXPECTED RESULTS: [strategic alliances
      or partnerships, new applications of technology, technology diffusion,
      etc.]

<TABLE>
<CAPTION>
DESCRIPTION OF EXPECTED RESULT     PLANNED / REVISED     STATUS / ACTUAL
       /REPRESENTATION                  DATE                  DATE
------------------------------     -----------------     ---------------
<S>                                <C>                   <C>
             *                             *
</TABLE>

SIGNATURE OF AUTHORIZED OFFICER:_________________________________________

REPORT DATE:_________________

The Proponent certifies that the initial projections presented at the time of
the Agreement, and as may be revised from time to time per the requirements of
Schedule 5, represent reasonable estimates of the benefits that the Minister can
expect from this Project as they could be determined at any particular time. The
Minister recognizes that those estimates may vary through time, due to factors
over which the Proponent has little or no control.

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 40

                                   FORM TPC-4

                          REPORT ON INVESTMENT LEVERAGE

PROPONENT: OFFSHORE SYSTEMS LTD.
PROJECT NO.:710-488685

This form estimates all costs incurred in Canada and investment that may be
leveraged by TPC funds. These include:

-     ELIGIBLE SUPPORTED COSTS: Those costs incurred by the Proponent and
      towards which TPC provides financial support.

-     OTHER PROJECT RELATED COSTS (INCLUDING POST WORK PHASE INVESTMENT): Other
      non-recurring costs incurred in Canada that are directly related to the
      project. This would include items such as cost overruns but would not
      include costs prior to the date indicated in Article 4.2. For example, a
      project may include capital costs (for land and building) that are not
      eligible for TPC support, but which the company will incur directly
      related to the project.

      Post work phase investment refers to any additional non-recurring, post
      work phase, project related investment in Canada by the Proponent (e.g.
      non-recurring related to production facilities, marketing and distribution
      activities, etc...). For example, a company may have to build new
      production lines, or create a new marketing team, or establish a new
      distribution line/network for the resulting product/technology.

-     OTHER INVESTMENT: Other investment unrelated to the specific project but
      included in the contractual commitments made by the Proponent. For
      example, a company may commit to construction of a building as a condition
      of receiving a TPC investment although the building is not directly part
      of the project.

<TABLE>
<CAPTION>
                  ESTIMATES ($000)                                  ACTUAL ($000)
-------------------------------------------------     --------------------------------------
                            (3)                                        (2)
  (1)           (2)        Other                         (1)          Other
 YEAR        Eligible     project         (4)          Eligible      Project          (3)
(Ending     Supported     Related         Other       Supported      Related         Other
Nov.31)       Costs        Costs       Investment       Costs         Costs       Investment
-------     ---------     --------     ----------     ---------     ---------     ----------
<S>         <C>           <C>          <C>            <C>           <C>           <C>
                *            *              *

                *
</TABLE>

SIGNATURE OF AUTHORIZED OFFICER: ___________________________________

REPORT DATE:_________________

The Proponent certifies that the initial projections presented at the time of
the Agreement, and as may be revised from time to time per the requirements of
Schedule 5, represent reasonable estimates of the benefits that the Minister can
expect from this Project, as they could be determined at any particular time.
The Minister recognizes that those estimates may vary through time, due to
factors over which the Proponent has little or no control.

* Material has been omitted and filed separately with the Commission

<PAGE>

                                                                         Page 41

                                   FORM TPC-5

                   REPORT ON SUSTAINABLE DEVELOPMENT BENEFITS

PROPONENT: OFFSHORE SYSTEMS LTD.

PROJECT NO.: 710-488685

On a full life cycle basis (from design through manufacture/operation and
decommissioning or disposal/recycling), the technologies that are to be
developed during the course of this R&D project are expected to provide the
following downstream Sustainable Development benefits (over existing industrial
practices) as they are incorporated into the commercial activities of the firm.

<TABLE>
<CAPTION>
              BENEFITS                         SIGNIFICANT     MODERATE     MINOR/NONE
              --------                         -----------     --------     ----------
<S>                                            <C>             <C>          <C>
Reduced energy consumption (i.e. efficiency                                      x
of use) or increased energy production
through sustainable means (i.e. efficiency
of generation)

Increased supply of energy from renewable                                        x
sources

Reduced water consumption or increased                                           x
supply of clean water

Reduced consumption of raw materials or                                          x
manufactured materials (reduced material
intensity)

Reduced production and/or release of                                             x
pollutant species of any kind to the
atmosphere

Reduced production and/or release of                                             x
pollutant species of any kind to receiving
waters

Reduced production and/or disposal of                                            x
solid wastes to the land

Reduced usage and/or production and/or                                           x
disposal of hazardous/toxic substances

Remediation or rehabilitation of                                                 x
contaminated land or water
</TABLE>

<PAGE>

                                                                         Page 42

                SCHEDULE 6 - PROJECT FACT SHEET FOR NEWS RELEASE

<TABLE>
<CAPTION>
PROGRAM: TECHNOLOGY PARTNERSHIPS CANADA                 PROJECT NO.: 710-488685
---------------------------------------        ---------------------------------------
<S>                                            <C>
NAME & ADDRESS OF PROPONENT:                   PROPONENT CONTACT:

OFFSHORE SYSTEMS LTD.                          Name: Keith Johannson
107-93- West 1st Street North                        Director of Operations
Vancouver, B.C.                                Telephone: 604-904-4650
V7P                                            Fax: 604-987-2555
3N4

Project Location:                              Project Type: Defence
North Vancouver, B.C.

Industrial Sector: Marine Defence              Project Purpose: To advance the
-navigation and control communications         company's capabilities and products for
                                               image display technology
</TABLE>

Authorized Assistance: $3,768,391

Project Description and Anticipated Results:

The project will enable the company to provide high performance products for the
integration and display of geographical data and images. The technology permits
the faster and more efficient exchange and display of data and information.
Military users will benefit from a common picture of the operational
environment. The project will enhance the company's current products, services
and capabilities and will allow them to continue to work with customers to meet
very high technical and operational requirements. The project will position the
company to meet emerging maritime performance specifications.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]