Document:

Exhibit 10.9
                              CONSULTING AGREEMENT

      This  Agreement  is  entered  into and is  effective  this  second  day of
October,  2000  by and  between  Alloy  Steel  International,  Inc,  a  Delaware
corporation, having its principal place of business at 42 Mercantile Way Malaga,
P.O. Box 3087, Malaga D C 6945,  Western Australia (the "Company"),  and Ragstar
Investments, Ltd., an Australian company.

      WHEREAS,  the Company desires to retain  Consultant to provide services to
the Company.

      NOW THEREFORE,  in  consideration of the premises and the mutual covenants
and agreements  herein  contained,  the parties hereto do covenant and agree, as
follows:

      1.  Retention.  The Company  hereby  retains  Consultant to render certain
advisory services (the "Services") with regard to corporate development and such
other related  activities as the Board of Directors of the Company may from time
to time direct,  and consulting with the Board of Directors from time to time as
requested  by the Company.  Consultant  agrees to use its best efforts to supply
the Services in a professional and diligent manner.

      2. Term. The Term of this  Agreement  shall be twelve (12) months from the
date hereof,  but within the 12-month  period,  the Company may,  without cause,
elect to terminate the  Agreement by giving  thirty (30) days'  written  notice.
Upon such termination, Consultant shall be relieved of any further obligation of
performance  to  the  Company;  provided,   however,  that  all  obligations  of
confidentiality,  non-disclosure and non-competition will continue in full force
and effect for one (1) year from the effective date of any termination.  If this
agreement shall be terminated prior to the end of the Term, the Consultant shall
not, in any event, be liable to return any pre-payment. The parties hereby agree
that any pre-payment  made to Consultant  shall be fully earned by Consultant at
the time such  pre-payment is made and shall be in consideration of Consultant's
agreement  to expend  time,  effort  and  energy on  behalf  of  Company  to the
exclusion of other clients.

      3. Compensation.  The Company acknowledges that it does not currently have
the financial ability to pay for Consultant's Services in cash.  Therefore,  the
Company shall, in consideration of Services to be performed,  and for other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged by the Company,  concurrently with the execution hereof, pay to the
Consultant a total of Ninety  Thousand  (90,000) shares of the common stock (the
"Shares") of the Company.

      4. Consultant's Non-Disclosure of Information/Non-Competition.

            a. The Consultant  acknowledges that in the course of its engagement
it may become  familiar  with trade secrets and other  confidential  information
(collectively,   "Confidential   Information"   )  concerning  the  Company  and
Consultant shall hold in a fiduciary capacity for the

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benefit  of  the  Company  all  secret,  confidential  proprietary  information,
knowledge or data  relating to the Company that shall have been  obtained by the
Consultant  during its engagement by the Company and that shall have not been or
now or  hereafter  have  become  public  knowledge  (other  than  by acts by the
Consultant or its  representatives  in violation of this Agreement).  Consultant
agrees  that  it  shall  not  disclose  to  any  third  party  any  Confidential
Information  for any purpose other than the performance of its duties under this
Agreement. During the Term and at all times thereafter, regardless of the reason
for the termination of this Agreement,  Consultant  shall not, without the prior
written  consent of the Company or as otherwise  may be required by law or legal
process,  communicate  or divulge  any such  information,  knowledge  or data to
anyone other than the Company and those designated by the Company.

            b.  Upon  completion  of the  Term or  earlier  termination  of this
Agreement for any reason, Consultant will return to the Company any confidential
materials or information  which the Company may have supplied to the Consultant.
Consultant may retain a copy of such materials or information  for  Consultant's
own due diligence file.  However,  Consultant hereby agrees not to distribute or
release such confidential materials or information without giving the Company at
least five (5) days' written notice so that Company shall have the  opportunity,
at Company's sole cost and expense, to move to prevent Consultant's distribution
or release of the confidential material or information.

            c. Subject to the  limitations set forth herein,  Consultant  agrees
that  during  the Term and for a period  of one  year  thereafter  it shall  not
directly or indirectly,  own,  manage,  control,  participate  in, consult with,
render services for, or in any manner engage in any business  competing with the
business of the Company as such business exists within any geographical  area in
which the Company  conducts  its  business.  In addition,  Consultant  shall not
solicit,  interfere  with or conduct  business  with any  vendors,  customers or
employees  of the Company  during the term of this  Agreement or for a period of
one year after the termination  hereof. In the event the Company breaches any of
its  duties or  obligations  under  this  Agreement,  the  Company  agrees  that
Consultant  shall not be bound by the provisions of this  Agreement,  except for
the provisions concerning Confidential Information.

      5. Restrictions on Transfer

      The  Consultant  understands  and  agrees  that the  Securities  purchased
pursuant to this  Agreement  are being  offered  pursuant to Section 4(2) of the
Securities Act of 1933, as amended, (the "Securities Act"), and that such shares
and any interests therein,  may not be offered,  sold,  transferred,  pledged or
otherwise disposed of except pursuant to (i) an effective registration statement
under the  Securities Act and any applicable  state  securities  laws or (ii) an
exemption from  registration  under such act and such laws which, in the opinion
of counsel  for the holder of the  Securities,  which  counsel  and  opinion are
reasonably satisfactory to counsel for the Company, is available. The Consultant
represents  that he is an "accredited  investor" as such term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act. The Consultant also
understands and agrees that the following  legend shall appear on Securities and
that the Company may give appropriate

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instructions   to  the  transfer  agent  for  the  Securities  to  enforce  such
restrictions:

            THESE SECURITIES REPRESENTED BY THIS CERTIFICATE
            HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES
            ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.
            THESE  SECURITIES  HAVE NOT BEEN ACQUIRED WITH A
            VIEW TO DISTRIBUTION  OR RESALE,  AND MAY NOT BE
            SOLD,   MORTGAGED,   PLEDGED,   HYPOTHECATED  OR
            OTHERWISE   TRANSFERRED   WITHOUT  AN  EFFECTIVE
            REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE
            SECURITIES ACT OF 1933 AND ANY APPLICABLE  STATE
            SECURITIES   LAWS,  OR  AN  OPINION  OF  COUNSEL
            SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
            NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 OR
            UNDER APPLICABLE STATE SECURITIES LAWS.

      6. Arbitration.  Any dispute, controversy or claim between the Company and
the Consultant  arising out of or related to this  Agreement  shall be conducted
solely  in a  proceeding  held in  accordance  with the  rules  of the  American
Arbitration Association then in effect. This Agreement, or breach thereof, shall
be settled by arbitration, and any award shall be binding and conclusive for all
purposes thereof,  may include injunctive relief (but only as ordered by a Court
of competent  jurisdiction),  as well as orders for specific performance and may
be  entered  as a final  judgment  in any court of  competent  jurisdiction.  No
arbitration  arising out of or  relating to this  Agreement  shall  include,  by
consolidation or joinder or in any other manner,  parties other than the Company
and the Consultant and other persons  substantially  involved in common question
of fact or law whose  presence is required if complete  relief is to be afforded
in  arbitration.  The cost and  expenses of such  arbitration  shall be borne in
accordance with the  determination of the arbitrator and may include  reasonable
attorney's  fees,  provided,  however,  that if either party shall  commence any
action or  proceeding  against  the  other in order to  enforce  the  provisions
hereof,  or to recover  damages  resulting from the alleged breach of any of the
provisions hereof, the prevailing party therein shall be entitled to recover all
reasonable costs incurred in connection  therewith,  including,  but not limited
to, reasonable attorneys' fees. Each party hereby further agrees that service of
process may be made upon it by registered or certified mail, express delivery or
personal service at the address provided for herein.

      7.  Remedies.  In the  event of the  actual  or  threatened  breach of the
provisions of this Agreement by a party, the other party shall have the right to
obtain  injunctive  relief  and/or  specific  performance  and to seek any other
remedy available to it.

      8. Law,  Venue,  Jurisdiction.  This  agreement and all matters and issued
collateral  thereto shall be governed by the laws and the courts of the State of
New York without regard to the principles of conflicts of laws.

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      9. Severability. If any provision of this Agreement becomes or is found to
be illegal or unenforceable for any reason,  such clause or provision must first
be modified to the extent necessary to make this Agreement legal and enforceable
and then if  necessary,  second,  severed from the remainder of the Agreement to
allow the remainder of the Agreement to remain in full force and effect.

      10. Counterparts.  This Agreement may be executed in several counterparts,
and all of such counterparts taken together shall be deemed to be one Agreement.

      11.  Attorneys'  Fees.  If  either  party  shall  commence  any  action or
proceeding  against the other in order to enforce the provisions  hereof,  or to
recover  damages  resulting  from the  alleged  breach of any of the  provisions
hereof, the prevailing party therein shall be entitled to recover all reasonable
costs  incurred  in  connection  therewith,   including,  but  not  limited  to,
reasonable attorneys' fees.

      12.  Waiver  of  Breach..  The  waiver  by any  party of a  breach  of any
provision  of this  Agreement  shall not operate be construed as a waiver of any
subsequent breach by any party.

      13.  Notices.  Each notice,  demand,  request,  approval or  communication
("Notice")  which is or may be  required  to be given by any  party to any other
party in  connection  with  this  Agreement  and the  transactions  contemplated
hereby,  shall be in writing,  and given by personal  delivery,  certified mail,
return receipt  requested,  prepaid,  or by overnight  express mail delivery and
properly addressed to the party to be served at such address as set forth above.
Notices  shall be effective on the date  delivered  personally,  the next day if
delivered  by  overnight  express  mail or three days  after the date  mailed by
certified mail.

      14. Entire Agreement. This Agreement contains the entire agreement between
Consultant  and Company,  and correctly sets forth the rights and duties of each
of the  parties  to each  other  concerning  such  matter as of this  date.  Any
agreement or  representation  concerning the subject matter of this Agreement or
the duties of Consultant in relation to Company not set forth in this  Agreement
is null and void.

      15. Binding  Effect.  The rights created by this Agreement  shall inure to
the benefit of, and the  obligations  created  hereby  shall be binding upon the
parties, their heirs, successors, assigns and personal representatives.

      IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement the
day and year first hereinabove written.

                                     ALLOY STEEL INTERNATIONAL, INC.

                                     By:   ____________________________________

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                                           Name:
                                           Title:

                                     RAGSTAR INVESTMENTS, LTD.

                                     By:   __________________________________
                                           Name:
                                           Title:

                                        5Exhibit 10.17

THIS LEASE is made on the 1st day of July 2000

BETWEEN

RAGLAN  SECURITIES PTY LTD ACN 008 996 852 of 42 Mercantile  Way,  Malaga in the
State of Western Australia ("the Lessor").

AND:

ALLOY STEEL  INTERNATIONAL  INCORPORATED of care of Winduss & Cook  Proprietary,
108 Brighton Road, Scarborough in the said State ("the Lessee");

WHEREAS:

A.    The Lessor is the registered  proprietor of an estate in fee simple in the
      Land on which is constructed the Premises.

B.    At the  request of the  Guarantor  and the Lessee the Lessor has agreed to
      lease and the Lessee has agreed to take on lease the Premises for the Term
      on the terms and conditions contained herein.

NOW THIS DEED WITNESSES

1.    INTERPRETATION

1.1   In this Lease unless the context  otherwise  requires the following  terms
      shall have the following meanings:

      "Air-Conditioning  Plant"  means any plant,  machinery  or  equipment  for
      heating,  cooling or circulating air or water provided or installed in the
      Premises by the Lessor,

      "Building"  means any  building in which the  Premises  are located on the
      Land;

      "Commencement Date" means the date specified in Item 2 of the Schedule;

      "Corporation" means any body corporate;

      "Current  Market  Rental  Value"  means the current  market  rental  value
      specified in Item 8 of the Schedule;

      "Expiration Date" means the date specified in Item 2 of the Schedule;

      "Institute of Valuers" means the Australian  Institute of Valuers and Land
      Economists  (Inc.)  (Western  Australian  Division) or if that body should
      cease to exist any other  body  which the  Lessor may notify the Lessee in
      writing  from  time to  time is to be the  Institute  of  Valuers  for the
      purposes of this Lease;

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      "Land" means the land specified in Item 1 of the Schedule;

      "Lease" means this lease and the Schedule;

      "Lessee"  if a  natural  person  includes  the  Lessee  and the  executors
      administrators  and  permitted  assigns of the Lessee and if a Corporation
      includes the Lessee and its successors and permitted assigns and in either
      case where not repugnant to the context includes the Lessee's Employees or
      Visitors;

      "Lessee's  Covenants"  means the  covenants  terms and  conditions  herein
      expressed or implied to be observed or performed by the Lessee;

      "Lessee's  Employees or Visitors"  means every  employee of the Lessee and
      the  Lessee's  agents  customers  clients  visitors   invitees   licensees
      contractors and any other person at any time upon the Premises;

      "Lessor" means the Lessor and its  successors  and  assigns  and where not
      repugnant to the context its employees and agents;

      "Lessor's Agent" means any Person or Corporation which the Lessor may from
      time to time notify the Lessee in writing is an agent of the Lessor;

      "Lessor's  Expenses" means the Lessor's expenses of operating,  repairing,
      or maintaining the building of which the Premises form a part or where the
      Premises are in a retail  shopping  centre,  that  building and the Common
      Areas thereof;

      "Lessor's   Purposes"  means  the  passage  or  flow  of  water  gas  fuel
      electricity  sewerage garbage sullage air conditioning hearing cooling and
      ventilation  telephone  public  address fire  detection and protection and
      other services in or about or through above or below the Premises;

      "Local or Public Authority" means every Governmental or  Semi-Governmental
      body,  authority or commission,  Municipal Council,  Health Board,  Health
      Commissioner,   Water  Authority,   Water  Sewerage  and  Drainage  Board,
      Metropolitan Water Board, Fire Brigades Board, Insurance Council and every
      and any  other  board  person or  authority  whatsoever  now or  hereafter
      exercising  under any Act or by-law any  control or  jurisdiction  over or
      power in  connection  with the  Premises  or any part  thereof or with any
      business  now or  hereafter  carried on thereon or with any water gas fuel
      electricity  sewerage garbage sullage hearing cooling ventilation or other
      services in or about the Premises and every officer or person acting under
      the authority of any Act by-law or Local or Public Authority;

      "Method of Review"  means the means of  reviewing  rent set against a Rent
      Review Date specified in Item 5 of the Schedule;

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      "Premises" means the premises  specified in Item 1 of the Schedule erected
      on the Land together with the fixtures fittings chattels furnishings plant
      machinery  and  equipment of the Lessor (if any) therein from time to time
      details of which or some of which are specified in Item 1 of the Schedule;

      "Prescribed  Rate" means the rate of interest  specified  in Item 4 of the
      Schedule;

      "Rent" means the rent specified in Item 3 of the Schedule as  subsequently
      reviewed and varied pursuant to the provisions of this Lease;

      "Rent  Review  Date"  means each of the dates  specified  in item 5 of the
      Schedule;

      "Schedule" means the schedule to this Lease;

      "Term"  means the term of this Lease  specified  in Item 2 of the Schedule
      which  term  shall  commence  of the  Commencement  Date and expire on the
      Expiration Date and includes any extension or renewal of the Term;

      "Valuer"  or  "Valuers"  mean a valuer  of not less  then  five (5)  years
      experience  in  valuing  commercial  properties  who  is a  member  of the
      Australia Property Institute Inc. (Western Australian  Division) nominated
      by the President for the time being of the Institute at the request of the
      Lessor;

1.2   In this Lease unless the context otherwise requires:

      1.2.1 a reference to any Act shall include all amendments or re-enactments
            thereof for the time being in force;

      1.2.2 any covenant entered into by more than one person shall be deemed to
            have been  entered  into by them and any two or more of them jointly
            and by each of them severally; and

      1.2.3 the  captions  and the headings to the clauses of this Lease are for
            index  purposes  only and this Lease is to be read and  construed as
            though  the  captions  and  heading  were not part of this Lease and
            without reference to the captions and headings.

1.3   The  covenants  herein  on the  part of the  Lessee  to be  performed  and
      observed  shall be deemed to be made by the Lessee to the intent that such
      obligations  may continue  throughout the whole of the Term and during any
      period  of  holding  over and be  binding  upon and  enforceable  not only
      against the Lessee but also against any occupier  whomsoever  for the time
      being of the Premises or any part thereof.

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1.4   The  covenants  herein  on the  part of the  Lessor  to be  performed  and
      observed  shall be deemed to be made by the Lessor with intent to bind the
      reversion  immediately  expectant  hereon  and the  registered  proprietor
      thereof  for the time being but not so a to render  the Lessor  personally
      liable for performance or damages or otherwise except for the Lessor's own
      willful  acts  and  defaults  whilst  the  Lessor  remains  as  registered
      proprietor of the Premises.

1.5   The  Lessee  expressly  acknowledges  and  agrees  that if the  Lessor has
      entered into this Lease as trustee of a trust and in no other capacity the
      Lessor will not be  personally  liable to the Lessee for any breach of the
      covenants,  conditions and stipulations contained or implied in this Lease
      and that in  respect of any such  breach  the Lessee  will only be able to
      claim  damages from the Lessor to the extent that the Lessor is able to be
      reimbursed  from the net assets of that trust and further that no officers
      of the Lessor shall be personally liable to the Lessee.

1.6   The Lessee  hereby  covenants and agrees with the Lessor that in the event
      that the Lessee  shall enter into this Lease in its capacity as trustee of
      a trust  then  both the  Lessee  in its own  right  and the  Lessee in its
      capacity as trustee of the trust will be  personally  liable to the Lessor
      for any  breach  of the  terms,  covenants,  conditions  and  stipulations
      contained  in this Lease and on the part or the Lessee to be  performed or
      observed.

1.7   Unless the context otherwise requires the words and expressions defined in
      the Retail Shops Act shall have the same meaning in this Lease.

2.    LEASE AND RENT

2.1   Lease

      The  Lessor  leases  to and the  Lessee  takes the  Premises  for the Term
      subject to the  covenants  implied by the Transfer of Land Act 1893 except
      as  herein  amended  or  negatived  and upon  and  subject  to the  terms,
      covenants,  conditions and  stipulations  contained  herein  PROVIDED THAT
      (without limiting any other right hereby granted or becoming vested in the
      Lessor) the Lessor shall be entitled to access to and the rights  reserved
      in respect of the Premises in the terms hereof.

2.2   Rent

      The Lessee shall pay the Rent for the Premises to the Lessor in the manner
      provided in clause 3.1.

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2.3   Rent Review -- Market Rent

      2.3.1 The Rent shall be  reviewed  in respect of the period  from the Rent
            Review Date to the next Rent Review Date and in calculating the Rent
            payable from a Rent Review Date the following shall apply:

            2.3.1.1 Not less than  three (3)  months  prior to each Rent  Review
                    Date the Lessor  shall give to the Lessee  notice in writing
                    of the annual Rent proposed by the Lessor to become  payable
                    from that Rent Review Date ("the Lessors Proposed Rent").

            2.3.1.2 Within  fourteen  (14) days of service of that notice on the
                    Lessee  (time  being of the  essence)  the  Lessee  shall be
                    entitled to give the Lessor notice in writing  disputing the
                    amount of the Lessor's  Proposed Rent and stating the amount
                    which the Lessee  considers to be the correct Current Market
                    Rental  Value that  should be payable  from that Rent Review
                    Date ("the Lessee's Proposed Rent").

            2.3.1.3 If the Lessee  gives the  notice  referred  to in  paragraph
                    2.3.1.2.  above within the time therein specified the Lessor
                    may accept the Lessee's Proposed Rent as the Rent payable by
                    the Lessee to the Lessor on and from that Rent Review  Date.
                    If the Lessor does not accept the Lessee's Proposed Rent the
                    Lessor  shall  give  notice in  writing  of that fact to the
                    Lessee  ("the  Non-Acceptance  Notice").  If the annual Rent
                    payable from a Rent Review Date (the "Reviewed Rent") is not
                    otherwise  agreed by the Lessor and the Lessee  prior to the
                    relevant  Rent  Review Date the  Reviewed  Rent shall be the
                    then Current  Market  Rental Value  determined in the manner
                    specified in  paragraph  2.3.1.4 and  subsequent  paragraphs
                    below.

            2.3.1.4 The Reviewed Rent shall be determined by two (2) Valuers one
                    (1)  appointed by the Lessor and  (subject to the  following
                    provisions)  one  appointed  by the  Lessee  (together  "the
                    Appointed Valuers"). The Lessor and the Lessee shall appoint
                    their respective Valuers within fourteen (14) days after the
                    date the Lessee receives the Non-Acceptance Notice and shall
                    each notify the other within that period of their  appointed
                    Valuer.  If the  Appointed  Valuers  fail  to  agree  on the
                    Reviewed  Rent then the Reviewed Rent shall be determined by
                    a third Valuer ("the

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                    Arbitrator")   appointed  by  the  Appointed  Valuers.   The
                    Arbitrator  shall act as an umpire  in  accordance  with the
                    provisions of the  Commercial  Arbitration  Act 1985 and his
                    decision  shall be final and  binding on both the Lessor and
                    the Lessee.

            2.3.1.5 If either  the  Lessor or the  Lessee do not  appoint  their
                    respective  Valuers  or if  the  Appointed  Valuers  do  not
                    appoint the Arbitrator then any of those  appointments shall
                    be made on  behalf  of the  party  which  did not  make  the
                    appointment  by the  President  of the  Institute of Valuers
                    upon the  request  of either the Lessor or the Lessee as the
                    case may be.

            2.3.1.6 The  costs  of the  determination  of each of the  Appointed
                    Valuers shall be borne by the party which  appointed them or
                    on whose  behalf they were  appointed  pursuant to subclause
                    2.3.1.5  and the  costs  of the  Arbitrator  shall  be borne
                    equally by the Lessor and the Lessee.

      2.3.2 Until  the  annual  Rent  from a  Rent  Review  Date  is  agreed  or
            determined the Lessee shall pay to the Lessor a rental equivalent to
            the Rent  payable  immediately  prior to the Rent Review  Date,  Any
            further  sum which  shall be  payable  by the  Lessee  from the Rent
            Review Date as a result of agreement or  determination  (as the case
            may be) shall be paid in full to the Lessor  immediately that sum is
            known.

      2.3.3 Notwithstanding the failure by the Lessor for any reason to give the
            notice  referred  to in  paragraph  2.3.1.1  above  within  the time
            therein specified the right to give the notice and the effect of the
            notice  (whenever given) shall remain in full force and effect as if
            it had been given within the specified time.

      2.3.4 In no event  shall the Rent be less than  that  payable  immediately
            before the relevant Rent Review Date.

3.    LESSEE'S COVENANTS

The Lessee COVENANTS with the Lessor that:

3.1   Payment of Rent

      The Rent shall be paid by the Lessee free of  deductions  to the Lessor at
      the times,  in the manner and at the address  referred to in Item 3 of the
      Schedule  or to such other place or to such agent or to such bank or other
      financial  institution  account  as the  Lessor  shall  from  time to time
      specify by notice in writing to the Lessee.

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3.2   Operating Expenses

      The Lessee  shall pay to the Lessor the Lessee's  Proportion  of Operating
      Expenses in the manner provided in this clause 3.2:

      3.2.1 In this clause 3.2 the following terms have the following  meanings:

            "Accounting  Period" means the  Preliminary  Period or Lease Year as
            the case may be;

            the  Aggregate  Operating  Expenses  shall  mean  the  total  amount
            expended  by  the  Lessor   including   provisions  and  adjustments
            appropriate  for the  Preliminary  Period or any Lease  Year (as the
            case may be) on the following items:

            (a)   all rates and charges  payable to the relevant Local Authority
                  Metropolitan  Authority  Water and sewerage  rates and charges
                  for excess  water and any other rates and  charges  payable to
                  any other  Local or Public  Authority  in  respect of both the
                  Building and/or the Land (other than those assessed in respect
                  of the Premises);

            (b)   all Land Tax  Metropolitan  Improvement Tax or any similar tax
                  and  other  taxes  rates  charges  and  assessments  and other
                  outgoings of a like nature now or hereafter imposed payable or
                  charged upon the Land or the Building or otherwise  chargeable
                  against    or   to   the    Lessor    whether    Governmental,
                  semi-Governmental,  Municipal  or otherwise  (other than those
                  payable  in  respect of the  Premises)  PROVIDED  THAT for the
                  purpose of this clause Land Tax and  Metropolitan  Improvement
                  Tax shall be  calculated  on the basis  that the land on which
                  the tax is  assessed  is the only land of which the  Lessor is
                  the  owner  within  the  meaning  of that term in the Land Tax
                  Assessment Act 1976;

            (c)   all costs including  electricity and any other source of power
                  used or associated with the running  maintenance and repair of
                  all plant machinery end equipment including the fire sprinkler
                  system Air  Conditioning  Plant lifts  elevators  and lighting
                  installed by the Lessor in and including but without  limiting
                  the generality  aforesaid the fees and/or premiums  payable to
                  specialist  contractors  and/or  the wages  paid to  permanent
                  staff employed and the cost of materials used by the Lessor in
                  or about  the  maintenance  and  servicing  of such  plant and
                  equipment;

            (d)   insurance  including  insurance on  structures  and  breakdown
                  insurance  in  respect  of  machinery  therein;   Public  Risk
                  insurance  effected  by the Lessor on behalf of the Lessor and
                  the Lessee and all other Lessees or occupiers of the Building;
                  Workers'  Compensation,  Common  Law and  Statutory  Liability
                  insurance in respect of employees  employed on in or about the
                  Common Areas;  loss of rent insurance and any other  insurance
                  effected by the Lessor in relation

                                       7
<PAGE>

                  to any risk relation to the Lessor's  ownership or interest in
                  the Building the Common Areas or the Land;

            (e)   cleaning of the Common Areas and signs;

            (f)   lighting of the Common Areas and signs  including  replacement
                  of light globes and fluorescent tubes;

            (g)   gardening and landscaping  expenses reasonably incurred by the
                  Lessor;

            (h)   caretaking expenses reasonably incurred by the Lessor;

            (i)   maintenance and repairs of the Building and the Common Areas;

            (j)   garbage and waste disposal:

            (k)   cost of administration of the Building;

            (l)   any other expenditure  reasonably and properly incurred by the
                  Lessor in the  operation and promotion of the Building and any
                  additions thereto;

            (m)   such sum (but in any year not exceeding FIVE PERCENTUM (5%) of
                  all other operating expenses of that Lease Year) in each Lease
                  Year as the  Lessor  may  reasonably  decide to set aside as a
                  fund to cover repairs renovations replacements and maintenance
                  of a substantial  but  infrequent  or irregular  nature of the
                  Building  PROVIDED  ALWAYS THAT any  expenditure of the nature
                  aforesaid  shall  only be deemed as an  operating  expense  as
                  otherwise  herein  provided  to the  extent  to which the fund
                  shall not be sufficient at that time when such  expenditure is
                  actually made;

            (n)   all taxes and statutory  charges  associated  with the matters
                  mentioned  in  this  clause   including  but  not  limited  to
                  payroll-tax, financial institutions duty, bank debits tax, tax
                  on goods and  services  and taxes of a type not charged at the
                  Commencement  Date but excluding  only income tax or other tax
                  imposed upon the Lessor otherwise than in respect of ownership
                  or operation of the building;

            (o)   management  fees  payable  by  the  Lessor  to any  agent  for
                  managing this Lease or the Premises;

                  but  excludes if the Premises do not comprise the whole of the
                  Land:

                  (i)   any item of  expenditure  incurred  as a result  of some
                        only of the  premises  in the  Building  or on the  Land
                        being open  outside the  standard  trading  hours if the
                        Premises were not so open;

                                       8
<PAGE>

                  (ii)  any item of  expenditure  that is not  referable  to the
                        Premises;

                  (iii) any item of  expenditure  that is assessed in respect of
                        other  premises in the Building or on the Land and which
                        is payable by the occupier of that other premises;

            "Lease  Year" shall mean each twelve  month  period from 1st July to
            30th June  inclusive  in each year  during  the term of this  lease.
            "Lease Year" also  includes the period from the 1st July to the date
            the Lease expires or is otherwise terminated;

            "Lessee's  Proportion of Outgoing  Expenses"  means the whole of the
            Aggregate Operating Expenses.

            "Operating  Expenses Statement" means the written statement required
            to be given by the Lessor to the Lessee  pursuant to  s12(d)(ii)  of
            the Retail Shops Act.

            "the Preliminary  Period" shall mean the period commencing  midnight
            on the  day  preceding  the  Commencement  Date of  this  Lease  and
            terminating  at  midnight  on  the  30th  June  next  following  the
            Commencement Date;

      3.2.2 Prior to the  Commencement  Date of this Lease and prior to the 30th
            June in each Lease  Year or as soon as  practicable  thereafter  the
            Lessor shall notify the Lessee in writing of the estimated amount of
            the Aggregate  Operating Expenses for the Preliminary Period and for
            each succeeding  Lease Year (as the case may be) and of the Lessee's
            Proportion of Operating expenses.

      3.2.3 The  Lessee  shall pay to the  Lessor  on  account  of the  Lessee's
            Proportion  of  Operating  Expenses  an amount to be  calculated  as
            follows:

            (a)   for the Preliminary  Period the Lessee shall pay to the Lessor
                  the Lessee's  Proportion of Operating  Expenses as notified to
                  the Lessee pursuant to clause 3.2.2 for the Preliminary Period
                  by equal calendar  monthly  payments in advance payable on the
                  days on which Rent is payable as herein provided;

            (b)   for the residue of the Term the Lessee shall pay to the Lessor
                  the Lessee's  Proportion of Operating  Expenses as notified to
                  the Lessee  pursuant to clause  3.2.2 for the  relevant  Lease
                  Year by equal calendar monthly  instalments in advance payable
                  on the days on which Rent is payable as herein provided.

                                       9
<PAGE>

3.3   Goods and Services Tax

      3.3.1 In this clause:

            3.3.1.1 "the  Act"   means  all  acts,   statutes   or  other   laws
                    implementing the GST including all amendments thereto;

            3.3.1.2 if the expressions (or any of them) "Goods",  "Services" and
                    "Taxable  Supply" are defined in the Act, they will have the
                    same meaning assigned to them by Act;

            3.3.1.3 "Lease  Payments"  means any payment  required to be made by
                    the lessee to the Lessor  pursuant  to this Lease  including
                    but not limited to Rent and Lessee's Proportion of Operating
                    Expenses (if applicable).

      3.3.2 If a GST applies or may apply to impose tax on the Lease Payments or
            any part  thereof,  then with effect as and from such date as may be
            nominated in writing by the Lessor in its absolute  discretion,  the
            following will apply:

            3.3.2.1 this Lease will be treated as taxable;

            3.3.2.2 the Lessee must do  everything  reasonably  requested by the
                    Lessor  including the making of any election  required under
                    the Act to ensure  that this Lease is treated as taxable for
                    GST purposes from the nominated date:

            3.3.2.3 the Lease Payments are not inclusive of GST:

            3.3.2.4 despite any other  provision  contained in this Lease to the
                    contrary:

                    3.3.2.4.1 the Lessor can either require the Lessee to pay or
                              may recover  from the  Lessee,  in addition to the
                              Lease  Payments,  the  amount  of any GST which is
                              Chargeable on any Lease Payments or Taxable Supply
                              under or in connection with this Lease;

                    3.3.2.4.2 unless  the  Lessor,  in its  absolute  discretion
                              otherwise directs (which direction the Lessee must
                              promptly observe),  the Lessee must pay any amount
                              payable under this clause on the date on which the
                              Lease

                                       10
<PAGE>

                              Payments  or  the  relevant   portion  thereof  is
                              payable;

            3.3.2.5 if the  Lessee  defaults in  payment on  the due date of any
                    amount under the preceding paragraph then, without prejudice
                    to the Lessor's  other rights and remedies,  the Lessee must
                    pay to the Lessor upon demand an amount  equal to the amount
                    of any  additional  tax,  fine or  penalty  that has  become
                    chargeable   or  payable   under  the  Act  plus  an  amount
                    sufficient to provide for any further GST chargeable on such
                    payment;

            3.3.2.6 as  between  the Lessor  and the  Lessee,  the Lessor is not
                    obliged  to pay  for  any  GST or  additional  tax,  fine or
                    penalty  or to take any  other  steps to  minimize  the same
                    until the corresponding payment is received from the Lessee.

      3.3.3 To the extent,  if any,  to which the  previous  provisions  of this
            clause or other  provisions of this Lease do not already require the
            Lessee  to pay to the  Lessor  an  amount  equal to any GST which is
            charged  or  levied  or paid by the  parties  ("Additional  GST") in
            connection with procuring the goods, services and other things which
            the Lessor in turn  provides  to the Lessee  under or in  connection
            with this Lease,  then so much of the  Additional  GST for which the
            Lessor  cannot  or does not  obtain a credit  against  the  Lessor's
            liability to pay GST, as may be  attributed  to the goods,  services
            and other things  provided  under or in  connection  with this Lease
            will be paid by the Lessee to the Lessor upon demand.

3.4   Power Telephone and Other Services

      The  Lessee  shall pay not later than seven (7) days prior to the due date
      for payment  specified in the first account or demand  received in respect
      thereof all charges  for water,  excess  water,  gas,  electricity,  fuel,
      telephone or other services,  utilities or facilities (in respect or meter
      rental use or  consumption  calls  reconnection  relocation  or otherwise)
      relating to the Premises or the use or occupation thereof.

3.5   Payment of Costs

      The Lessee shall pay on demand to the Lessor.

      3.5.1 all  reasonable  legal costs  charges and  expenses  incurred by the
            Lessor as a result of or  attributable  to any  default  or  alleged
            default by the Lessee in observing or performing any of the Lessee's
            Covenants  including  without  limitation all costs charges expenses
            and fees relating to the preparation and service of a notice under

                                       11
<PAGE>

            Section  81 of the  Property  Law Act 1969  requiring  the Lessee to
            remedy any breach of any of the Lessee's  covenants  notwithstanding
            that  forfeiture  for the breach shall be avoided  otherwise than by
            relief granted by the Court;

      3.5.2 the  costs  of the  Lessor's  solicitors  of and  incidental  to the
            instructions  for  and  drawing  and  engrossing  and  stamping  and
            registering  this  Lease  and  all  counterparts   thereof  and  all
            negotiations and drafts in respect thereto;

      3.5.3 interest at the Prescribed Rate on all Rent and other monies payable
            by the  lessee to the  Lessor  under  this Lease but unpaid for more
            than seven (7) days from the  respective  due date computed on daily
            basis on the  amount  from  time to time  remaining  owing  from and
            including the due date until the date of payment.

3.6   Indemnities

      The  Lessee  shall use  occupy  and keep the  Premises  at the risk of the
      Lessee in all respects  and  releases to the full extent  permitted by law
      the Lessor its  employees  agents and  contractors  from all costs  claims
      actions  proceedings  demand expenses  judgments  damages or losses of any
      kind whatever  resulting from or  attributable to any accident damage loss
      death or injury  occurring  at in or on or in the vicinity of the Premises
      except to the extent that the same is caused by the negligence on the part
      of the Lessor its employees  agents or contractors.  Without  limiting the
      generality  of  the   foregoing  the  Lessee  shall   indemnify  and  keep
      indemnified the Lessor from and against:

      3.6.1 all costs claims  actions  proceedings  demands  expenses  judgments
            damages and losses  suffered or incurred by the Lessor in connection
            with or resulting from the loss of life of or personal injury to any
            person or damage to any property wherever  occurring arising from or
            out of or  attributable  to any  occurrence in or about the Premises
            occasioned  wholly or in part by any act neglect default or omission
            by the Lessee or any of the Lessee's  Employees or Visitors at in or
            on or in the vicinity of the Premises; and

      3.6.2 any damage to the  Premises  or any other land or  building or other
            property arising from or attributable to;

            3.6.2.1 the  negligent  use or  misuse  by the  Lessee or any of the
                    Lessee's  Employees or Visitors of any fixtures and fittings
                    furnishings   plant  or   equipment   used  or  required  in
                    connection  with the Lessor's  Purposes or to the  negligent
                    use,  misuse,  waste  or  abuse  of the  water,  gas,  fuel,
                    electricity, or other services or utilities or facilities in
                    the Premises; or

                                       12
<PAGE>

            3.6.2.2  the escape  overflow  or  leakage of water or other  fluids
            having origin within the Premises or of rain water.

3.7   Insurance

      3.7.1 Notwithstanding anything appearing in clause 3.2 the Lessee shall at
            the Lessee's  expense effect and at all times maintain with a public
            Insurance  office approved by the Lesser on behalf of the Lessee end
            the Lessor for their respective rights and interests:

            3.7.1.1 a policy to cover all plate  glass (if any) in the  Premises
                    against damage or  destruction  to the full insurable  value
                    thereof and

            3.7.1.2 a public liability policy with a cover of not less than FIVE
                    MILLION DOLLARS  (S5,000,000.00) or any increased  sum which
                    the  Lessor  may from time to time  specify  in  respect  of
                    anyone  occurrence.  The policy of Insurance shall cover all
                    claims  demands  proceedings  judgments  damages  costs  and
                    losses of any nature whatsoever in connection with  the loss
                    of life  of and or  personal  injury  to any  person  and or
                    damage to any property (wheresoever  occurring) arising from
                    or out  of  any  occurrence  at or in  the  vicinity  of the
                    Premises or any part thereof or occasioned wholly or in part
                    by an act  neglect  default or  omission by the Lessee or by
                    the Lessee's Employees or Visitors.

      3.7.2 All monies  recovered in  respect of any insurance under  paragraphs
            3.7.1.1 and 3.7.1.2 above shall be forthwith  expended by the Lessee
            in the satisfaction  reinstatement or replacement of those items for
            which the monies are  received to the extent  that those  monies are
            sufficient  for  the  purpose  and  the  Lessee  shall  make  up any
            deficiency from the Lessee's own monies.

3.8   Evidence of Insurance and Renewal

      The  Lessee  shall pay not later than seven (7) days prior to the date for
      payment  specified  in the first  premium  notice or  demand  received  in
      respect  thereof all premiums in respect of the  insurances to be effected
      and  maintained  by the  Lessee as  herein  provided  and on demand  shall
      produce any evidence of the policies and of  the renewal thereof which the
      Lessor may from time to time require.

                                       13
<PAGE>

3.9   Voiding Insurance Policies

      The Lessee  shall not at any time during the Term do,  permit or suffer to
      be done any act matter or thing upon the Premises  whereby any  insurances
      in respect of the Premises may be vitiated or rendered void or voidable or
      whereby  the  rate of  premium  on any  insurance  shall be  liable  to be
      increased.  If the Lessee  shall do or permit to be done any act matter or
      thing  which has the  effect of  invalidating  or  avoiding  any policy of
      insurance  taken out by the Lessor or the Lessee then the Lessee  shall be
      responsible  for any  damage or loss  which  they may suffer or incur as a
      result thereof and shall pay to the Lessor any increased amount of premium
      over the existing  premium which may be charged on any insurance  covering
      the Premises  (or the  Building of which the Premises  forms a part if the
      Premises are only part of the Building) (and anything  contained  therein)
      if the increased amount is used by the nature of the business from time to
      time  carried on by the Lessee or other  occupier  on the  Premises  or by
      reason  of any act or  omission  of the  Lessee or other  occupier  of the
      Premises

3.10  Hazards

      The Lessee shall not without obtaining the Lessor's prior written  consent
      bring  onto or keep or permit to be  brought  onto or kept in or about the
      Premises  any article  thing or  substance  of a  dangerous  hazardous  or
      inflammable  nature or permit any conduct in or about the  Premises  which
      shall or may  increase  the rate of any premium  payable in respect of any
      policy of insurance in relation to the Premises. If:

      3.10.1  in   contravention  of  the  above  any  policy  of  insurance  is
              invalidated  avoided  or  the  payment  of any  monies  thereunder
              refused  then  without  prejudice to any other claims or rights of
              the Lessor: and

      3.10.2  as a result of a  contravention  of the  above  any extra  premium
              shall be payable in  respect  of any  insurance  policy the Lessee
              shall forthwith pay all extra premiums.

3.11  Repairs and Maintenance

      The Lessee shall at the Lessee's expense:

      3.11.1  keep the  Premises  and all  additions  thereto the  exterior  and
              interior  entrances  thereto  and all  plate  glass  (if  any) all
              sewerage water electrical and plumbing  installations fixtures and
              fittings  all  Air-Conditioning   Plant  floor  coverings  windows
              partitions  fixtures  fittings  plant  equipment  and  furnishings
              including doors door locks and fittings  therein clean and in good
              substantial and functional  repair order and condition  (damage by
              any risk  insured  against to the  extent of the monies  recovered
              under any insurance cover excepted):

                                       14
<PAGE>

      3.11.2  repair and make good any damage to the  premises  or any  fixtures
              and  fittings   furnishings   plant  and  equipment   respectively
              comprised  therein  resulting from or  attributable to the want of
              care  negligence  misuse  or  abuse  by the  Lessee  or any of the
              Lessee's  Employees  or  visitors or from any breach of any of the
              Lessee's Covenants; and

      3.11.3  replace forthwith in the Premises an electric light fittings light
              bulbs globes and fluorescent tubes which may become damaged broken
              or which shall fail to function.

3.12  Painting

      Unless  specified  to the  contrary in item 9 of the  Schedule  during the
      final two (2) months of the Term or upon the earlier  determination of the
      Term and if the Term Is extended or renewed during the last two (2) months
      or any extended or renewed term or upon the earlier  determination thereof
      the Lessee shall paint, paper and decorate all those parts of the interior
      and exterior of the Premises as have been  previously  painted  papered or
      decorated  in a good and  tradesmanlike  manner and with good  quality and
      suitable  materials in colours and designs  previously  approved of by the
      Lessor.

3.13  Cleaning

      The Lessee shall at the Lessee's expense;

      3.13.1  Keep the Premises end its  entrances  and  surrounds in a thorough
              state of cleanliness and not allow to accumulate or remain therein
              or  thereabouts   any  discarded   rubbish  papers  cartons  boxes
              containers or other waste products and shall leave such rubbish or
              containers  outside the Premises  only in those areas and at those
              times and for those periods from time to time  prescribed for that
              purpose by the Lessor:

      3.13.2  Keep the  Premises  free and clear of all rodents  vermin  insects
              birds animals  termites and other pests end if the Lessee fails to
              do so the Lessee  shall if and so often as  necessary  employ pest
              exterminators  approved  by the Lessor to carry out the  necessary
              work: and

      3.13.3  If required by the Lessor permit access by any cleaning contractor
              and its employees and  sub-contractors  nominated by the Lessor to
              the Premises at all necessary times for cleaning purposes.

                                       15
<PAGE>

3.14  Further Repairs and Maintenance

      The Lessee shall at the Lessee's expense:

      3.14.1  keep and  maintain  all fixtures  fittings  furnishings  plant and
              equipment  in  the  Premises  in  a  clean  and  fully  functional
              condition (damage by any risk insured against to the extent of the
              monies recovered under any insurance cover excepted);

      3.14.2  employ  forthwith upon the same becoming  necessary such qualified
              tradesmen  or  contractors  approved  by the  Lessor to remedy any
              malfunction  in  any  fixtures  fittings   furnishings  plant  and
              equipment;

      3.14.3  clean  regularly any grease traps (whether  within the Premises or
              not) serving the Premises;

      3.14.4  keep and maintain  all gardens,  lawns,  court yards,  grounds and
              yards (if any) in a good, clean, neat and tidy state of repair and
              condition; and

      3.14.5  keep the Lessor indemnified in respect of all the matters referred
              to in paragraphs 3.14.1, 3.14.2 and 3.14.3 above.

3.15  Malfunctions in the Premises

      The  Lessee  shall pay to the  Lessor  forthwith  upon  demand the cost of
      remedying  any  malfunction  in or damage to any of the  Lessors  fixtures
      fittings  furnishings  plant and  equipment in the  Premises  caused by or
      contributed  to by any act neglect or default on the part of the Lessee or
      the Lessee's Employees or Visitors.

3.16  No Alterations or Additions

      3.16.1  The Lessee shall not without  obtaining the prior written approval
              of the Lessor:

              3.16.1.1  make or permit to be made any  alterations  or additions
                        in the  construction  or  arrangement  of  the  Premises
                        (including  without  limitation  any  partitions  or any
                        major plumbing electrical  airconditioning  emergency or
                        other installations or services in or used in connection
                        with the Premises):

              3.16.1.2  cut maim or injure  any of the walls  proofs  partitions
                        Umbers doors or floors of the Premises; or

                                       16
<PAGE>

              3.16.1.3  erect or install  any  internal  partitions  fixtures or
                        fittings  in the  Premises.

      3.16.2  Any works approved by the Lessor shall be carried out:

              3.16.2.1  only by  contractors  or  tradesmen  approved  of by the
                        Lessor and in accordance with plans  specifications  and
                        schedules of works  materials  and finishes  approved in
                        writing  by the Lessor  before any works are  commenced:
                        and

              3.16.2.2  at the Lessee's  expense in all respects  including  the
                        costs of any  architects  builders  or  other  qualified
                        persons  consulted  by the  Lessor  in  considering  any
                        proposals and in examining  the progress and  completion
                        thereof and all costs in relation to the  relocation  or
                        alteration  of  or  adjustment  to  any  major  plumbing
                        electrical    air-conditioning    emergency   or   other
                        installations and services affected by those works.

     3.16.3   At the expiration or sooner  determination  of the Term the Lessee
              shall if so  required  by the Lessor and at the  Lessee's  expense
              restore the Premises to their  condition  as existed  prior to the
              carrying  out  of any  works  and  make  good  to  the  reasonable
              satisfaction  of the Lessor all damage to the Premises  occasioned
              thereby.

3.17  Legislation Orders and Regulations

      3.17.1  The  Lessee  shall at the  Lessee's  expense  duly and  punctually
              comply with and observe and indemnify the Lessor in respect of all
              present  and future  Acts  (State or  Federal)  ordinances  orders
              regulations  and by-laws and all orders  requirements  and notices
              from or by any Local or Public  Authority which relate or apply to
              the Premises or any part  thereof or the use or occupancy  thereof
              or the number or sex of the  persons  working in or from or at any
              time occupying or visiting the Premises including the carrying out
              of any repairs  alterations  or works to or the  provision of fire
              alarms or other emergency services in or for the Premises.

      3.17.2  If  any  compliance  or  observance  includes  a  requirement  for
              structural  alterations  or additions to the Premises the Lessee's
              obligations  hereunder shall in respect thereof only apply thereto
              insofar  as they  relate to the  Lessee's  business  or the use to
              which the  Premises  are put by the Lessee or the number or sex of
              the Lessee's Employees or Visitors.

      3.17.3  All works  which  the  Lessee  is  required  to carry out shall be
              carried out only by

                                       17
<PAGE>

              contractors  and  tradesmen  approved  of by  the  Lessor  and  in
              accordance  with  plans  specifications  and  schedules  of  works
              materials  and finishes  approved in writing by the Lessor  before
              any works are commenced.

3.18  Permitting Lessor to Enter and Inspect

      When and so often as the Lessor shall require the Lessor may by itself and
      or any  person so  authorised  by the  Lessor  enter the  Premises  at all
      reasonable  times and upon giving  reasonable prior notice (except in case
      of  emergency)  to the  Lessee to view the state of repair  and  condition
      thereof  and to make any  reasonable  investigations  which the Lessor may
      deem  necessary to  ascertain  whether or not there has been any breach of
      any of the  Lessee's  Covenants  and to serve  upon the Lessee a notice in
      writing of any  default  there  found  requiring  the Lessee to remedy the
      default in accordance with any covenant.

3.19  Lessor's Rights to Repair

      3.19.1  If the Lessee  fails to remedy  any breach of any of the  Lessee's
              obligations  to  repair  under  the  terms  of this  Lease  within
              fourteen  (14) days of the date of  service  of a notice  upon the
              Lessee  requiring  the  Lessee to remedy  the  breach  the  Lessor
              without  being under any  obligation so to do may itself or by its
              employees agents and contractors  without further notice enter the
              Premises at any time and to any extend  necessary  remain  thereon
              with all necessary plant equipment and materials and carry out any
              repairs which the Lessor shall think fit.

      3.19.2  If in the  Lessor's opinion  any  repairs  for which the Lessee is
              liable are  required  to be carried out as  emergency  repairs the
              Lessor  and the  Lessor's  employees  agents and  contractors  may
              without any prior notice enter and to any extent  necessary remain
              on the Premises at any time to carry out any of those  repairs and
              in respect of any work carried out by the Lessor  pursuant to this
              subclause  or the  preceding  subclause  the  Lessee  shall pay on
              demand to the Lessor or the cost and expenses  (Including interest
              at the  Prescribed  Rate) incurred in making the repairs and shall
              indemnify  the  Lessor  from and  against  any  loss or  liability
              incurred by the Lessor in respect of the default.

3.20  Air-Conditioning Plant

      Where any Air-Conditioning  Plant is provided or installed in the Premises
      by the Lessor:

      3.20.1  the  Lessee  shall  at all  times  comply  with  and  observe  the
              reasonable   requirements   of  the  Lessor  in  relation  to  the
              Air-Conditioning Plant and shall not do. or permit or

                                       18
<PAGE>

              suffer to be done,  anything in relation to the same or  otherwise
              which might  interfere  with or impair the efficient  operation of
              the Air-Conditioning Plant;

      3.20.2  if the  Air-Conditioning  Plant fails to function  for any reason,
              the  Lessee  shall not by reason of any  failure  be  entitled  to
              determine  this  Lease,  nor  shall the  Lessee  have any right to
              abatement of Rent or any right of action or claim for compensation
              or damages against the Lessor in respect thereof;

      3.20.3  the  Lessee  shall  allow the Lessor and the  Lessor's  engineers,
              mechanics,  consultants  and workmen at reasonable  times and upon
              giving  reasonable  prior notice to the Lessee to enter and to the
              extent  necessary  to remain on the Premises to examine all or any
              of the  Air-Conditioning  Plant  but  that in  carrying  out  such
              examination  the Lessor shall not cause any undue  interference to
              the Lessee in the Conduct of business in the Premises;

      3.20.4  the  Lessee  shall  at  all  times  during  the  Term,   keep  the
              Air-Conditioning  Plant in good working order and shall repair and
              maintain  the   Air-Conditioning   Plant   whenever   required  in
              accordance with the manufacturer's  specifications relating to the
              same; and

      3.20.5  the Lessee shall not cover or obstruct any ducts inlets or outlets
              of the Air-Conditioning Plant.

3.21  No Auction Sales

      The Lessee shall not hold nor permit any auction fire or  bankruptcy  sale
      in the Premises without obtaining the prior written consent of the Lessor.

3.22  Keeping Authorised Signs In Good Order

      The Lessee shall at all times maintain in good order  condition and repair
      (damage  by  any  risk  insured  against  to  the  extent  of  the  monies
      recoverable under any insurance cover excepted) and if appropriate pay all
      monies payable under and comply with all licence or leasing  agreements in
      respect of any television or radio antenna or mast or other apparatus sign
      awning canopy  decoration  lettering  advertising  device notice matter or
      thing approved by the Lessor pursuant to clause 3.24.

3.23  Nuisance

      The Lessee shall not do or permit to be done in or about the Premises;

                                       19
<PAGE>

      3.23.1  anything  which  may  be  a  nuisance  grievance   disturbance  or
              annoyance  to the  Lessor or to any  tenant or  occupier  of other
              premises in the vicinity of the Premises: or

      3.23.2  any act matter or thing  whereby a  nuisance  or  anything  in the
              nature of or which may be deemed to be a nuisance  by any Local or
              Public  Authority  body or person or within the meaning of any Act
              (State or Federal) now or hereafter in force or any regulations or
              by-laws  made  thereunder  may exist arise or Continue  upon or in
              connection with the Premises or any business carried on therein or
              therefrom or the use or occupation  thereof and to abate forthwith
              any nuisance or alleged nuisance and carry out and comply with the
              provisions  of every Act  regulations  and  by-laws and with every
              order notice or  requirement  of any Local or Public  Authority in
              reference thereto.

3.24  Use of Premises

      The Lessee shall:

      3.24.1  use the Premises  only for the purpose of  conducting  therein the
              business described in Item 6 of the Schedule and shall not without
              obtaining the prior written consent of the Lessor use the Premises
              for any other purpose;

      3.24.2  obtain from any Local or Public  Authority any  approvals  permits
              consents  or  licenses  required  by law to carry on the  Lessee's
              business from the Premises;

      3.24.3  not use or permit to be used the Premises for any unlawful immoral
              noxious noisy offensive trade business occupation or calling; and

      3.24.4  not use or  permit  to be used the  Premises  for any  residential
              purposes.

3.25  Town Planning

      The  Lessee  shall not do or permit  to be done  anything  in breach of an
      applicable  town  planning  scheme  or  zoning or  whereby  the  zoning or
      permitted  use of the Premises for their  present  purposes  under any Act
      bylaw  order or scheme  relating to town  planning  may be  prejudiced  or
      altered.

3.26  Lessee's Representative

      The Lessee shall notify the Lessor and the Lessor's  Agent (if any) of the
      name address and business and after hours telephone  number of a person to
      be authorised by the Lessee to

                                       20
<PAGE>

      control any  internal  security  system  within the Premises to enable the
      Lessor  or the  Lessor's  agents  or  contractors  to gain  access  to the
      Premises  whenever  pursuant to the terms of this Lease access is required
      or permitted  and to advise the Lessor  forthwith in writing of any change
      of the nominated person or other particulars.

3.27  Access to Premises

      The Lessor  shall be entitled by itself and by its  employees  consultants
      inspectors agents and contractors  whenever deemed necessary by the Lessor
      to enter (and to the extent  necessary  to remain on) the  Premises at all
      reasonable  times and upon giving  reasonable  prior  notice to the Lessee
      with all  necessary  plant  equipment and materials to erect make excavate
      lay or  install  in on over or under the  Premises  and to make use of any
      pipe wire amplifier  light alarm channel drain sump vent duct inlet outlet
      plant or machinery or other thing  requisite  for or in addition to any of
      the  Lessor's  Purposes  and to enter upon the Premises at those times for
      the  purpose  of  inspecting  removing  maintaining   replacing  repairing
      servicing altering or adding thereto in or about the Premises or the walls
      floors  and   ceilings   thereof.   The  Lessor   shall  cause  as  little
      inconvenience  disruption  or damage to the  Lessee  as  possible  and the
      Lessee  shall have no right to any  abatement of Rent or  compensation  or
      damages in respect thereof.

3.28  Assignment and Subletting

      3.28.1  The  Lessee  shall  not  assign  sublet   transfer  or  part  with
              possession  of  or  mortgage  charge  or  otherwise  encumber  the
              Premises  or any part  thereof or the benefit of this Lease or any
              estate or interest  therein or herein without  obtaining the prior
              written  consent of the Lessor and the  provisions  of Sections 80
              and 82 of the  Property  Law Act  1969  shall  not  apply  to this
              Lease. The Lessor's consent shall not be unreasonably withheld if:

              3.28.1.1  the Lessee shall prove to the satisfaction of the Lessor
                        that  the   proposed   sub-lessee   or   assignee  is  a
                        respectable  responsible  and  solvent  person  of sound
                        financial standing capable of adequately carrying on the
                        business to be carried on by him in the Premises;

              3.28.1.2  all Rent  and other monies (and  interest)  then due and
                        payable by the Lessee  pursuant to this Lease shall have
                        been paid;

              3.28.1.3  there  shall not be at the time the consent is sought or
                        at the date any sublease or assignment is to take effect
                        any subsisting breach of any of the Lessee's Covenants;

                                       21
<PAGE>

              3.28.1.4  In the case of an  assignment  the  assignee  executes a
                        Deed whereby the assignee  covenants  with the Lessor to
                        observe and perform all of the  Lessee's  Covenants  and
                        the Lessee releases the lessor from all claims which the
                        Lessee may then have or may thereafter  have against the
                        lessor in  respect  of or in any way  arising  from this
                        Lease the Deed to be prepared by the Lessor's solicitors

              3.28.1.5  In the case of a  mortgage  charge  or  encumbrance  the
                        encumbrancer  enters  into a Deed  with the  Lessor in a
                        form reasonably  required by the Lessor's  solicitors to
                        protect  the  Lessor  In case of  default  powers  being
                        exercised;

              3.28.1.6  where  any   proposed   sub-lessee   or  assignee  is  a
                        Corporation  the  directors  and  principal  shareholder
                        thereof at their expense  execute and complete a Deed of
                        Guarantee  and  Indemnity  in a  form  approved  by  the
                        Lessor's  solicitors  in favour of the Lessor in respect
                        to the  payment  of all  Rent  and  the  observance  and
                        performance of all of the Lessee's Covenants;

              3.28.1.7  the Lessee pays to the Lessor all  reasonable  costs and
                        expenses  including  legal  costs  administrative  costs
                        stamp  duty and other  disbursements  incurred  or to be
                        incurred  by the Lessor in  respect  of a Deed  executed
                        pursuant to clause 3.34.1.4 or 3.34.1.5 or 3.34.1.6;

              3.28.1.8  the  Lessee has  delivered  to the  proposed  assignee a
                        completed disclosure statement in the form prescribed by
                        Section 6 of the Retail Shops Act (if applicable) signed
                        by or on behalf of the Lessee;

      3.28.2  Where  the  Lessee is a  corporation  (not  being a company  whose
              shares are listed on any Stock  Exchange in Australia)  any change
              of the beneficial  ownership or substantial  shareholding  (within
              the  meaning  of  Part  6.7  of  the  Corporations   Law)  in  the
              corporation  or any  related  corporation  (within  the meaning of
              Section  50 of the  Corporations  Law)  shell be  deemed  to be an
              assignment of the Premises and the benefit of this Lease and shall
              be subject to the terms specified above.

3.29  Lessee's Liabilities to Continue

      The  covenants  and  agreements  on the part of any assignee or sub-lessee
      with the Lessor expressed or implied in any Deed evidencing any assignment
      or sub-lease shall be deemed

                                       22
<PAGE>

      to be  supplementary to those contained In this Lease and shall not in any
      way  relieve  or be  deemed  to  relieve  the  Lessee  from  the  Lessee's
      liabilities hereunder during tile Term and the Extended Term (if any).

3.30  Caveats

      The Lessee may during the Term lodge a subject to claim caveat against the
      Land.  The Lessee shell not at any time lodge an absolute  caveat  against
      the Land.  The Lessee shall at the expiration or sooner  determination  of
      the Term or upon assigning this Lease or at any time at the request of the
      Lessor  sign  and  lodge at the  Lessee's  expense  a  proper  registrable
      withdrawal of any subject to claim caveat  lodged  against the Land by the
      Lessee.  If the Lessee lodges an absolute  caveat or falls to withdraw any
      subject to claim caveat the Lessee in consideration of the Lessor granting
      this Lease to the  Lessee  irrevocably  APPOINTS  the Lessor the agent and
      attorney of the Lessee to Sign and lodge any withdrawal of caveat the cost
      of which shall be borne and paid by the Lessee forthwith upon demand.

3.31  Give Notices

      The Lessee shall forthwith:

      3.31.1  on  receipt  thereof  give  to the  Lessor  copies  of any  notice
              received by the Lessee from any court or Local or Public Authority
              relating  to  the  Premises  or any  part  thereof  or the  use or
              occupation thereof;

      3.31.2  upon any person dying or receiving  any injury in the  Premises or
              upon  any  accident  occurring  to or  defect  being  found in any
              sanitary water gas or electric  pipes or wires  fixtures  fittings
              plant or equipment  or  furnishings  in the  Premises  give to the
              Lessor written notice and those full particulars  thereof known to
              the Lessee; and

      3.31.3  give to the Lessor and any appropriate  Local or Public  Authority
              written notice of any infectious illness occurring on the Premises
              and  shall  at  the  Lessee's  expense  thoroughly   fumigate  and
              disinfect the Premises to the satisfaction of the Lessor and those
              authorities   and   otherwise   comply   with   their   reasonable
              requirements in regard thereto.

3.32  Permit Intending Tenants or Purchasers to Inspect

      3.32.1  At all times  within the  period of three (3)  months  immediately
              prior to the  expiration or sooner  determination  of the Term the
              Lessee  shall  permit  the  Lessor  and the  Lessors  Agent at all
              reasonable  times and upon giving  reasonable  prior notice to the
              Lessee  to  enter  the  Premises  with  and  exhibit  the  same to
              prospective tenants and

                                       23
<PAGE>

              the Lessee  shall allow the Lessor to affix and exhibit  where the
              Lessor  shall  think  fit any  notice  or sign for  reletting  the
              Premises.

      3.32.2  The  Lessee  shall  allow the  Lessor  and the  Lessor's  Agent at
              reasonable  times and upon giving  reasonable  prior notice to the
              Lessee  during the Term to enter the Premises with and exhibit the
              same to  prospective  purchasers  and the Lessee  shall  allow the
              Lessor to affix and exhibit  where the Lessor  shall think fit any
              notice or sign for selling the  Premises  and the Lessee shall not
              without  obtaining the Lessor's  consent  remove deface or obscure
              any notice or sign nor  permit  the same to be removed  defaced or
              obscured.

3.33  Remove Fixtures and Fittings

      Before the expiration or sooner determination of the Term the Lessee shall
      remove  from the  Premises  all items  which  shall  have been  erected or
      installed by the Lessee or any previous tenant or occupier of the Premises
      during the Term (other than any fixtures and fittings plant  equipment and
      furnishings which in the reasonable opinion of the Lessor from an integral
      part of the Premises  Including  without  Illumination  all light fittings
      located in or affixed to the Premises)  and make good to the  satisfaction
      of the  Lessor  any  damage  whatsoever  caused  to the  Premises  by such
      erection  installation  or  removal,  If required by the Lessor the Lessee
      shall also re-alter any  alterations  made to the Premises during the Term
      so  that  the  Premises  are  restored  to  their   condition  as  at  the
      Commencement  Date. Any fittings  fixtures plant equipment and furnishings
      not  removed by the  Lessee  either as of right or by  requirement  of the
      Lessor after the  expiration or other  termination  of this Lease shall be
      deemed to have been  abandoned  by the  Lessee and shall be and become the
      property  of the Lessor  without any right by the Lessee to make any claim
      whatever against the Lessor in respect thereof.

3.34  Keep Secure

      The Lessee shall:

      3.34.1  use its best  endeavors  to protect and keep safe the Premises and
              any property contained therein from theft or robbery: and

      3.34.2  keep all doors  windows  and other  openings  closed and  securely
              fastened when the Premises are not in use.

3.35  Yield Up

      At the  expiration  or sooner  determination  of the Term the Lessee shall
      yield and deliver up  possession  of the  Premises to the Lessor in a good
      and  substantial  repair order and condition and state or cleanliness  and
      decoration consistent with the due and punctual observance and

                                       24
<PAGE>
      performance by the Lessee of the Lessee's Covenants and shall surrender to
      the  Lessor or the  Lessor's  Agent  all keys  cards  switching  equipment
      combinations  identification  cards or other  devices for or enabling  the
      Lessee  or the  Lessee's  Employees  or  Visitors  to gain  access  to the
      Premises or any part thereof.

4.    LESSOR'S COVENANTS

      The Lessor  COVENANTS with the Lessee to the intent to bind the registered
      proprietor  from  time to time of the  Land  but not so as to  render  the
      Lessor  personally  liable for any breach of any of the  covenants  on the
      Lessor's  part  herein  expressed  or  implied  unless  arising  from  the
      negligent acts of tie Lessor or the Lessor's agents or employees while the
      Lessor remains the registered  proprietor of the Land that the Lessee duly
      paying  the Rent and  other  moneys  hereby  reserved  and  observing  and
      performing the other Lessee's  Covenants  shall peaceably and quietly hold
      and enjoy the  Premises  during the Term without any  interruption  by the
      Lessor or any person rightfully claiming through under or in trust for the
      Lessor except as herein authorised.

5.    MUTUAL COVENANTS

      The Lessor and the Lessee MUTUALLY COVENANT that:

5.1   Damages

      5.1.1 The  Lessee's   obligations  to  observe  or  perform  the  Lessee's
            Covenants shall survive the expiration or other  termination of this
            Lease and if the Lessee shall not have  observed and  performed  the
            same The Lessor may In  addition  to any other  rights at its option
            cause or do all things  necessary for the observance and performance
            and the Lessor may  recover  from the  Lessee as a  liquidated  debt
            payable  on demand  the costs and  expenses  thereof  together  with
            interest at the  Prescribed  Rate on the amount thereof from time to
            time remaining  owing from the date at the  expenditure of the costs
            to the date of repayment thereof by the Lessee to the Lessor.

      5.1.2 In  respect  of each day  following  the date of the  expiration  or
            sooner  determination  of this  Lease  until  the date on which  the
            Lessee  shall  complete  the  observance  and   performance  of  the
            obligations  of the Lessee's  Covenants or any earlier date on which
            the Lessor  shall in exercise of its powers  conferred by this Lease
            cause any default by the Lessee in the  observance or performance of
            its  obligations  to be remedied  the Lessee shall pay to the Lessor
            and  the  Lessor  may  recover  from  the  Lessee  as  and by way of
            liquidated  damages a daily sum equal to 1/365th of the aggregate of
            the Rent and Lessee's  Proportion of Operating  Expenses  payable by
            the Lessee for or in respect  of the  Premises  for the twelve  (12)
            months immediately

                                       25
<PAGE>

            preceding  the date of expiration  or sooner  determination  of this
            Lease.

5.2   Default Provisions

      If:

      5.2.1 the Rent or any part  thereof  shall at any time be unpaid for seven
            (7) days after becoming due (whether formally demanded or not); or

      5.2.2 the Lessee  breaches or fails to observe or perform any other of the
            Lessee's Covenants and the breach  non-observance or non-performance
            shall continue  alter the expiration of fourteen (14) days (or, such
            further  time as the  Lessor  may in any case  specify)  of  written
            notice to the Lessee to remedy the same; or

      5.2.3 the Lessee  shall go into  liquidation  or become  bankrupt or enter
            into any composition  arrangement with or assignment for the benefit
            of the Lessee's creditors; or

      5.2.4 the Lessee shall have  appointed  under any Act or  instrument or by
            order of any court a manager an administrator, a trustee, a receiver
            or a receiver and manager or  liquidator  in relation to any part of
            the Lessee's undertakings assets or property: or

      5.2.5 the Premises shall be abandoned.

      THEN and in any such case (but  subject to and this clause shall not apply
      to the extent of  inconsistency  with the  Bankruptcy Act 1966) the Lessor
      may at its option re-enter occupy and resume possession of the Premises or
      any part thereof  (with or without  re-entering  the  Premises) by written
      notice to the Lessee  terminate this Lease and thereupon this Lease (other
      than the  provisions  hereof  applying for the benefit of the Lessor after
      the expiration of the Term) the Term shall cease and determine but without
      releasing  the Lessee  from the  obligation  to pay the Rent and  Lessee's
      Proportion  of Operating  Expenses  accrued up to the time of the re-entry
      and without  prejudice  to the right of action of the Lessor in respect of
      any breach of the Lessee's Covenants.

5.3   Essential Term

      The Lessee's covenants:

      5.3.1 to pay the Rent and the Lessee's  Proportion of Operating  Expenses;
            and

      5.3.2 not to  assign,  sublet,  transfer  or part with  possession  of the
            Premises or any part thereof or of the benefit of this Lease without
            obtaining the prior written consent of

                                       26
<PAGE>

            the Lessor.

      are essential terms of this Lease and any breach of any of those covenants
      shall be regarded by the Lessor and the Lessee as a fundamental breach and
      repudiation  by the Lessee of this Lease.  If the Lessor  determines  this
      Lease following such a breach and repudiation then (without prejudicing or
      limiting  any other right or remedy of the Lessor  arising from the breach
      or  otherwise  under this  Lease) the Lessor  shall be entitled to recover
      from the Lessee and the  Lessee  covenants  to pay to the Lessor as and by
      way of liquidated  damages for the breach and repudiation the aggregate of
      the Rent and Lessees  Proportion  of Operating  Expenses  which would have
      been payable by the Lessee for the unexpired residue of the Term remaining
      after the  determination  after  making  allowances  for Rent end Lessee's
      Proportion  of Operating  Expenses  which the Lessor by taking  reasonable
      steps to re-let the Premises  obtains or could  reasonably  be expected to
      obtain by reletting  the Premises  for the  unexpired  residue of the Term
      PROVIDED THAT:

      5.3.3 any  reletting  shall not be  required  to be on terms as are herein
            expressed and implied:

      5.3.4 the  acceptance by the  Lessor of arrears or any late payment of the
            Rent  or  Lessee's   Proportion  of  Operating  Expenses  shall  not
            constitute a waiver he essentiality  of the Lessee's  obligations to
            make these payments;

      5.3.5 the Lessors  entitlement to recover damages as specified above shall
            not be prejudiced or limited if:

            5.3.5.1 the Lessee abandons or vacates the Premises;

            5.3.5.2 the Lessor  elects to re-enter  the Premises or to determine
                    this Lease;

            5.3.5.3 the Lessor  accepts the Lessee's  repudiation of this Lease;
                    or

            5.3.5.4 the parties' conduct constitutes a surrender by operation of
                    law;

      5.3.6 the Lessor  shall be entitled to  institute  proceedings  to recover
            damages as specified  above either before or after any of the events
            or matters referred to in paragraph 5.3.6 above;

      5.3.7 any  conduct by the Lessor to mitigate  damages  shell not of itself
            constitute  acceptance of the Lessee's  breach or  repudiation  or a
            surrender by operation of law: and

                                       27
<PAGE>

      5.3.8 nothing herein  expressed or implied shall be construed to mean that
            none of the other Lessee's Covenants may be an essential term,

5.4   Damage to the Premises

      If the Premises or any part thereof at any time during the Term is resumed
      or taken for any public purpose by any competent  authority or is declared
      unfit  for  occupation  or  ordered  to be  demolished  by  any  competent
      authority or is destroyed or damaged by any risk insured  against so as to
      render  the same  substantially  unfit for the use and  occupation  of the
      Lessee or so as (in either case) to deprive the Lessee of substantial  use
      of the same or so as (in the case of damage or  destruction)  to render In
      the opinion of the Lessor the rebuilding or reconstruction of the Premises
      in its previous form impracticable or impracticable, THEN;

      5.4.1 this  Lease may be  terminated  without  compensation  by either the
            Lessor or the Lessee by notice in writing to the other PROVIDED THAT
            the Lessee  shall only be  entitled to  terminate  this Lease if any
            policy of insurance effected in respect of any damage or destruction
            shall not have been vitiated or payment of the policy moneys refused
            in  consequence  of some act or  default of the Lessee or any of the
            Lessee's  Employees  or Visitors and if the Lessor shall have failed
            to rebuild or reinstate the Premises  within a reasonable time after
            notice in writing from the Lessee having regard to the extent of the
            damage and the work required to rebuild or reinstate the Premises;

      5.4.2 any termination  shall be without  prejudice to the rights of either
            party in respect of any antecedent breech matter or thing;

      5.4.3 nothing  herein  expressed or implied  shall be deemed to impose any
            obligation  upon the Lessor to rebuild or reinstate  the Premises or
            to make the same fit for use and occupation of the Lessee;

      5.4.4 if the  provisions  of the Retail Shops Act apply to this Lease then
            unless approval has been obtained from tile Commercial Registrar for
            the termination of the Lease pursuant to the preceding provisions of
            this clause  pursuant to Section  13(7) of the Retail Shops Act, the
            Lessor may only terminate this Lease pursuant to this  sub-clause at
            a time after the day  mentioned  in Section  13(1)(a) or (b) (as the
            case may be) of that Act; and

      5.4.5 if any such resumption  damage or destruction of the Premises occurs
            the Rent or a proportionate  part thereof depending on the nature or
            extent of the resumption destruction or damage shall abate until the
            Premises shall have been rebuilt or

                                       28
<PAGE>

            reinstated or made fit for the  occupation  and use of the Lessee or
            until  the  Lease  shall  have  been  terminated   pursuant  to  the
            provisions of paragraph 6.4.1 above as the case may be. Until mutual
            agreement  between the Lessor and the Lessee as to the extent of the
            abatement or until  determined  as provided  herein the Lessee shall
            continue  to pay  the  Rent  In  full  and  upon  any  agreement  or
            determination the Lessor shall refund free of interest to the Lessee
            any Rent which according to the agreement or determination  has been
            overpaid.  If any dispute  arises with  respect to the extent of the
            abatement  it shall be  determined  by  arbitration  as  provided in
            Clause 5.14;

      5.4.6 notwithstanding anything in this sub-clause expressed or Implied the
            Lessee shall have no right of  termination  and Rent shall not abate
            if the  destruction  or  damage  or the fact of the  Premises  being
            declared unfit for occupation or ordered to be demolished was caused
            or  contributed  to by the  Lessee  or  the  Lessee's  Employees  or
            Visitors.

5.5   Exclusion of Warranties

      The  Lessee  acknowledges  and  declares  that no  promise  representation
      warranty  or  undertaking  has been  made or given by or on  behalf of the
      Lessor in regard to the suitability of the Premises for any business to be
      carried on  therein or  therefrom  or in regard to any  fixtures  fittings
      furnishings  finish plant  machinery or equipment of or in the Premises or
      as to the management or security of the Premises  otherwise than as herein
      expressly contained.

5.6   Ownership of Fixtures and Fittings

      Any fixtures  fittings  chattels plant equipment and furnishings and other
      material or articles  installed  or left by the Lessor in the  Premises at
      the  Lessor's  cost  shall be deemed  for all  purposes  to be pert of the
      Premises arid shall remain the property of the Lessor and the Lessee shall
      not at any time remove damage  destroy  alter or otherwise  dispose of the
      same without the prior written consent of the Lessor.

5.7   Exclusion of Liability

      Notwithstanding  any implication or rule of law to the contrary the Lessor
      shall not in any circumstances be liable to the Lessee:

      5.7.1 for any loss or damage  suffered by the Lessee In  consequence of or
            attributable   in  any  way  to  any  malfunction  or  breakdown  in
            interference  or  interruption of or to the water gas electricity or
            telephone  services   Air-Conditioning   Plant  emergency  equipment
            emergency or security  procedures or any pipe wire  amplifier  light
            alarm

                                       29
<PAGE>
            channel  drain sump vent duct inlet  outlet plant or machinery in or
            connecting  to the  Premises or the Building or the Land or from the
            breakage blockage or overflow of any sewer waste-drain conduit cable
            wire gutter pipe or storm water drain from any cause whatsoever; or

      5.7.2 for any  damage or loss that the  Lessee may suffer by reason of the
            neglect  or  omission  of the Lessor to do any act or thing to or in
            respect  of the  Premises  or the  Building  or the Land  which  (as
            between  the Lessor  and the  Lessee)  the  Lessor  might be legally
            liable to do unless the Lessee shall have given to the Lessor notice
            in writing of the act or thing and the Lessor has without reasonable
            cause failed within a reasonable  time after to take proper steps to
            rectify the act or omission.

5.8   Holding Over

      If the Lessee  continues to occupy the Premises  after the  expiration  or
      sooner  determination  of the Term with the consent of the Lessor then the
      Lessee  shall  become a monthly  tenant  only of the  Lesser  but  (unless
      otherwise  agreed) at a rent equal to one twelfth of the  aggregate of the
      Rent and Lessee's  Proportion of Operating  Expenses payable by the Lessee
      immediately preceding the expiration or sooner determination and otherwise
      on and subject to the same  covenants and conditions  mutatis  mutandis as
      are herein  expressed  or implied  except that the monthly  tenancy may be
      determined by one month's notice in writing by the Lessor to the Lessee to
      the other expiring at any time.

5.9   Moratorium

      The  application  to this Lease of any  moratorium  or  Statute  (State or
      Federal)  having the effect of extending  the Term  reducing or postponing
      the payment of the Rent or any part  thereof or  otherwise  affecting  the
      operation of the Lessee's  Covenants or providing for compensation  rights
      or  privileges at the expense of the Lessor in favour of the Lessee or any
      other person Is expressly excluded.

5.10  Severance

      If any condition  covenant or stipulation of this Lease or the application
      thereof  to any  person or  circumstances  shall be or become  invalid  or
      unenforceable the remaining  covenants  conditions and stipulations  shall
      not be affected  thereby and each covenant  condition and  stipulation  of
      this Lease shall be valid and enforceable to the fullest extent  permitted
      by law.

5.11  Waiver

      5.11.1  The Lessor's failure to take advantage of any default or breach of
              covenant on the part of the Lessee shall not be or be construed as
              a waiver thereof, nor shall any

                                       30
<PAGE>

              custom or  practice  which may grow up between  the parties in the
              course of administering this Lease be construed to waive or reduce
              the  right  of  the  Lessor  to  insist  upon  the  observance  or
              performance by the Lessee of any of the Lessee's Covenants.

      5.11.2  No  consent  or waiver  expressed  or  implied by the Lessor or on
              behalf of the Lessor to or in respect of any particular  breach of
              any of the Lessee's  Covenants  shall be construed as a consent or
              waiver to or of any  other  breach of the same or any other of the
              Lessee's Covenants.

      5.11.3  The  acceptance by the Lessor of Rent or any other monies  payable
              by the Lessee  hereunder shall not be nor be deemed to be a waiver
              of any  default  or  breach by the  Lessee of any of the  Lessee's
              Covenants  or  the  Lessor's  knowledge  thereof  at the  time  of
              acceptance thereof.

5.12  Service of Notices

      Any notice demand or request required to be made or given pursuant to this
      Lease  shall be in  writing  signed by the party  giving the notice or its
      agent or solicitors and may be served personally or may be served by being
      delivered or by being sent by prepaid certified post:

      5.12.1  to the address specified herein of the party unless that party has
              given notice of a  substituted  address for service of notices and
              then at that substituted address; or

      5.12.2  in the case of a person to the usual place of abode or business of
              the person; or

      5.12.3  in the case of a corporation  to its registered  office  principal
              place of business or principal office;

      and shall be deemed to have been served

      5.12.4  on the day of delivery if delivered before 5:00 p.m. on a business
              day, and otherwise on the business day next following; or

      5.12.5  on the business day next following the day of posting.

5.13  Option of Renewal

      If the Lessee has duly and  punctually  observed and  performed all of the
      Lessee's  Covenants  during  the Term then on the  written  request of the
      Lessee  made at least  three  (3)  months  before  the  expiration  of the
      relevant Term the Lessor shall grant to the Lessee an extension

                                       31
<PAGE>

      of the Term for the  extended  term or terms  referred to in item 7 of the
      Schedule  (together the "Extended  Term")  containing  like  covenants and
      provisos  as are  herein  expressed  and  implied  (save  for the right of
      extension  the  subject of this  Clause  which  right  shall be  expressly
      excluded  from the Lease for the  extended  Term or from the Lease for the
      last  extended  term if there shall be more than one extended  term as the
      case may be) and reserving to the Lessor a rent from the commencement date
      of and during  each  Extended  Term to be  calculated  and  determined  in
      accordance with the rent review provisions contained herein.

5.14  Arbitration

      If any difference or dispute shall arise between the Lessor and the Lessee
      as to the  interpretation  of this Lease or  concerning  any act matter or
      thing to be  performed  or  observed  hereunder  and if there  shall be no
      express  provision in this Lease for resolving  the  difference or dispute
      then the  difference or dispute  shall,  subject to the  provisions of the
      Retail Shops Act (if  applicable)  be determined by the  arbitration  of a
      single arbitrator nominated by the President for the time being of the Law
      Society of Western  Australia  (Inc.) and otherwise in accordance with the
      provisions  of the  Commercial  Arbitration  Act 1985 and the award of the
      arbitrator shall be final and binding upon the Lessor and the Lessee.  The
      Lessor  and  the  Lessee  may be  represented  by a duly  qualified  legal
      practitioner in any arbitration proceedings.

5.15  Consent or Approval

      Where the  Lessee is  required  by this  Lease to obtain  the  consent  or
      approval of the Lessor,  approval or consent  requested  by the Lessee may
      (unless otherwise expressly provided in this Lease) be given or refused by
      the  Lessor or given  subject  to  whatever  conditions  the Lessor in its
      absolute discretion determines.

5.16  Special Conditions

      This Lease shall be subject to the special  conditions  (if any) specified
      in Item 10 of the Schedule.

5.17  State Planning Commission Approval

      If the  aggregate of the Term exceeds  twenty one (21) years or if for any
      other  reason this Lease shall  require the consent of the State  Planning
      Commission of Western  Australia  then this Lease shall be subject to that
      consent being given.

                                       32
<PAGE>

5.18  Governing Law

      The laws of the State of  Western  Australia  (and  where  applicable  the
      Commonwealth of Australia) shall apply to this Lease.

EXECUTED as a Deed.

                                       33
<PAGE>

                                  THE SCHEDULE

Item I

Land:                   All  that  land  commonly  known as 42  Mercantile  Way,
                        Malaga in the State of Western  Australia and being more
                        particularly  described  as Lot 345 on Plan  22732,  the
                        whole of the land in  Certificate  of Title  Volume 2135
                        Folio 471.

Premises:               The whole of the Land.

Lessors chattels:       All  chattels,  plant and  equipment of the Lessor in or
                        about the Premises.

Item 2

The term of this Lease: Five years

Commencement Date:      1 July 200

Expiration Date:        30 June 2005

Item 3

Rent:                   The Australian  Dollar  equivalent of  US$85,000.00  per
                        annum determined as at the Commencement Date.

Address for payment     To the Lessor at its  address  herein  unless  otherwise
of Rent:                specified in writing by the Lessor.

Dates  for  payment     The Lessee  shall pay the annual rent by equal  calendar
of Rent:                monthly  instalments  in  advance  on  and  by 12  equal
                        calendar  monthly  instalments  on the first day of each
                        and every month with the first calendar  monthly payment
                        to be made on the Commencement Date.

                                       34
<PAGE>

Item 4

Prescribed Rate:        The higher of:

                        (a)   Ten per centum (10%) per annum; or

                        (b)   Two per centum (2%) more than the maximum  rate of
                              interest  (expressed as a rate per annum)  charged
                              from  time  to  time  by  BankWest  on   overdraft
                              accounts of less than ONE HUNDRED THOUSAND DOLLARS
                              ($100,000.00).

Item 5

Rent Review Dates:      Each anniversary of the Commencement Date

Item 6

Permitted Business:     Office and Workshop

Item 7

The Extended Term:      Not Applicable

Current Market Rental   The best annual Rent that can be reasonably obtained for
Value                   the  Premises in a free and open market and on the basis
                        of the Premises being  available for leasing with vacant
                        possession by a willing lessor to a willing lessee for a
                        period equal to the Term and:

                        (a)   assuming  that  the  Premises  are  available  for
                              leasing for a term equal to the Term;

                        (b)   on the terms and  conditions and for the permitted
                              use  contained  in this Lease and any other use to
                              which the Premises may be lawfully put;

                                       35
<PAGE>

                        (c)   assuming that all of the covenants and obligations
                              on the part of the Lessee and the Lessor contained
                              in  this  Lease  have  been  fully  performed  and
                              observed at the relevant Rent Review Date;

                        (d)   having regard to the current  market rental values
                              of  comparable  premises  of a  similar  size  and
                              location to the Premises in the Perth Metropolitan
                              Area;

                        (e)   making no  reduction  on  account of any period of
                              rent abatement  financial  contribution  rent free
                              concessions or any reduction otherwise customarily
                              required  or likely to be required to secure a new
                              lessee of the  Premises  or any  actual  period of
                              rent abatement  reduction or concession granted to
                              the Lessee to secure the  tenancy  the  subject of
                              this Lease;

                        (f)   if at the  relevant  Rent Review Date the Premises
                              have been wholly or partially damaged or destroyed
                              assuming  that the Premises  have been  reinstated
                              pursuant to clause 5.4;

but disregarding:

                        (g)   any  increase  or  decrease  in the  value  of the
                              Premises  as  lettable  premises  by reason of the
                              occupancy  or use of the same by the Lessee or any
                              sub-lessee assignee or transferee of the Lessee or
                              any  other  person  deriving  an  interest  in the
                              Premises through the Lessee;

                        (h)   any value  attaching  to  goodwill  created by the
                              Lessee's  occupation  of  the  Premises  or to any
                              licence  or  permit  belonging  to the  Lessee  in
                              respect of the  business  carried on by the Lessee
                              at the Premises;

                        (i)   any  deleterious  condition of the Premises if the
                              condition results from any work carried out on the
                              Premises  by the  Lessee  or by any  breach of any
                              term of this Lease by the Lessee; and

                        (j)   the Lessee's  trade  fixtures and fittings and any
                              improvements  racking or installations  erected or
                              installed  at the  Lessee's  expense and which the
                              Lessee is permitted to remove at the expiration of
                              this  Lease  but  taking  into  account  permanent
                              structural  improvements installed at the Lessee's
                              expense and which the Lessee may not remove at the
                              expiration of this Lease.

                                       36
<PAGE>

Item 9 (Clause 3.11)

Painting Obligations    As specified in Clause 3.1
of Lessee:

Item 10 (Clause 5.16)

Special Conditions:     Nil

EXECUTED as a Deed

The COMMON SEAL of                   )
RAGLAN SECURITIES PTY LTD            )
was hereunto affixed by authority    )
of its Directors in the presence of: )

------------------------                ------------------------
Director                                Director/Secretary

The COMMON SEAL of                   )
ALLOY STEEL INTERNATIONAL INC        )
was hereunto affixed by authority    )
of its Directors in the presence of: )

------------------------                ------------------------
Director                                Director/Secretary

                                       37

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