Document:

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                                                                   Exhibit 10.34

                           CHANGE IN CONTROL AGREEMENT

     This Change In Control Agreement is effective as of this 20th day of
August, 2002, by and between Successories, Inc., an Illinois corporation,
("Company") and Gregory J. Nowak ("Employee").

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Employee is now employed by Company; and

     WHEREAS, the Company has initiated a process in which there may be a Change
in Control (as defined below) of the Company; and

     WHEREAS, the Company desires to pay Employee additional compensation to
stay with the Company through a Change in Control.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, it is agreed as follows:

     1.   TERM. This Agreement shall be effective until the later of (i) June 1,
2003 or (ii) the date of a Change in Control provided the negotiations for such
Change in Control began before June 1, 2003. If Employee's employment is
terminated by the Company for other than Just Cause (as defined below), Employee
shall remain entitled and shall receive any payments hereunder in the event of a
Change in Control during the Term. In the event Employee's employment is
terminated voluntarily or for Just Cause prior to a Change in Control, Employee
shall not be entitled to nor receive any benefits hereunder.

     2.   PAYMENT AMOUNT. If there is a Change in Control, the Company shall pay
the Employee in cash, in one lump sum, and within five (5) days following such
Change of Control, the Payment Amount (as defined below). The Company may
withhold from the Payment Amount withholding taxes, other normal payroll
deductions and any other amounts required by law to be withheld from the Payment
Amount. Said Payment Amount is in addition to and not in lieu of the
compensation, benefits and/or other bonuses that the Employee earns or is
entitled to receive.

     Notwithstanding any language to the contrary, the Company shall first apply
the Payment Amount against (i) any debt owed to the Company by Employee and (ii)
any third party debt owed by the Employee which the Company has guaranteed.

     3.   FORMULA. The term Payment Amount shall mean an amount equal to the sum
of (i) Twenty One Thousand Four Hundred and Twenty Nine Dollars ($21,429) (the
"Fixed Payment Amount") plus (ii) an amount calculated by the following formula
(the "Variable Amount") if the Consideration (as defined below) for the Change
in Control is in excess of Twelve Million Five Hundred Thousand Dollars ($12.5
million):

                   Increase = (CSD-$12.5mm) x .078561 x .0909;

                                  Page 1 of 4
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                     wherein "CSD" is the Consideration; and

            wherein .0909 is defined as the "Employee Share Factor."

     Further, in the event the employment of an employee covered by this form of
agreement is terminated voluntarily or for Just Cause and there is a subsequent
Change of Control during the Term of the Agreement, the Company shall
redistribute the variable payment amount that said employee would have received
to Employee and any other eligible employee who was subject to a variable amount
payment. The redistribution amount shall be reapportioned based on said
individuals relative Employee Share Factors.

     4.  DEFINITIONS.

     The term "Change in Control" shall mean any transaction or series or
combination of transactions whereby, directly or indirectly, control of, or a
material interest in, the Company or any material portion of its businesses or
assets is transferred for Consideration, including, without limitation, a sale
or exchange of capital stock or assets, a merger or consolidation, a tender or
exchange offer, a leveraged buy-out, the formation of a joint venture, minority
investment or partnership, or any similar transaction. If a Change in Control is
accomplished whereby the Company's assets shall be sold, leased, conveyed or
otherwise disposed of, the person or entity purchasing the assets of the Company
shall become a party to this Agreement and shall assume all of Company's rights
and obligations under this Agreement. If the person or entity purchasing the
assets of the Company does not become a party to this Agreement and assume the
Company's rights and obligations hereunder, the Company shall not be released of
its obligations hereunder.

     The term "Consideration" shall mean the aggregate value of all cash,
securities and other property paid for the Company in connection with the Change
in Control. In the case of a sale of the Company's stock, by merger, tender
offer or other combination, the Consideration shall not include any interest
bearing indebtedness of the Company for borrowed money required to be repaid or
assumed by the Company, directly or indirectly, (by operation of law or
otherwise) in connection with the Change in Control. In the case of the sale of
the Company's assets, the Consideration shall be reduced by the amount of any
interest bearing indebtedness of the Company for borrowed money required to be
repaid by the Company in connection with the Change in Control. In the event
that the Consideration received in a Change in Control is paid in whole or in
part in the form of securities or other property, then, for purposes of
calculating the Employee's bonus hereunder, the value of such securities or
other property shall be the fair market value thereof on the day immediately
preceding the consummation of the Change in Control; provided, however, that if
such securities consist of securities with an existing public trading market,
the value thereof shall be determined by the average of the last sales prices of
such securities on the 30 trading days immediately preceding the consummation of
the Change in Control. Any amounts payable to the Company,

                                  Page 2 of 4
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any shareholder of the Company or any affiliate of the Company in connection
with a noncompetition, employment, consulting, licensing, supply or other
agreement shall be deemed Consideration except for payments to employees covered
under this form of Agreement and in the case of an employment or consulting
agreement to the extent such amounts represent the fair value of services to be
rendered. If all or a portion of the Consideration payable in connection with
the Change in Control includes contingent future payments, then the
Consideration related to such payments shall equal the present value of the
reasonably expected maximum amount of such payments (as such amount is
determined in good faith between the Company and Employee) using a discount rate
of eight percent (8%). If the Consideration to be paid is computed in a foreign
currency, the value of such foreign currency, for purposes of calculating
Employee's bonus hereunder, shall be converted into U.S. Dollars at the
prevailing exchange rate on the date on which the Change in Control is
consummated or on the date any contingent or escrowee Consideration is actually
paid.

     The term "Just Cause" shall mean (a) an act of fraud or dishonesty by
Employee that is intended to result directly or indirectly in gain or personal
enrichment of Employee at Employer's expense; (b) conduct on the Employee's part
which is intended to injure the Employer's business or reputation; or (c) a
felony crime or an act of moral turpitude committed by the Employee.

     5.   ARBITRATION. The Company and Employee agree to settle any controversy
or claim arising out of or relating to this Agreement or the breach thereof by
arbitration in DuPage County, Illinois, in accordance with the rules then
obtaining of the American Arbitration Association, and judgment upon the award
rendered may be entered in any court having jurisdiction thereof.

     6.   WAIVER OF BREACH. The waiver by the either party of a breach of any
provision of this Agreement by the other party shall not operate nor be
construed as a waiver of any subsequent breach by the other party.

     7.   BINDING EFFECT. This Agreement shall inure to the benefit of and shall
be binding upon the parties hereto and their respective successors, assigns,
heirs and legal representatives, including the person or entity purchasing the
assets or stock of the Company which causes a Change in Control. Insofar as the
Employee is concerned, this Agreement, being personal, cannot be assigned.

     8.   HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect the construction or interpretation of this
Agreement.

     9.   SEVERABILITY. Whenever possible each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

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     10.  COUNTERPARTS. This Agreement shall be executed in any number of
counterparts, each of which shall, when executed, be deemed to be an original,
but all of which together shall constitute one and the same instrument.

     11.  GOVERNING LAW. This Agreement shall be construed (both as to validity
and performance) and enforced in accordance with and governed by the laws of the
State of Illinois.

     12.  NOTICE. All notices which are required or may be given under this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered in person or three (3) days after being mailed by registered or
certified first class mail, postage prepaid, return receipt requested, if to the
Employee, at the address listed under his name, or if to the Company, at the
address listed under its name or to such other address as such party shall have
specified by notice to the other party hereto as provided in this Section.

     13.  ENTIRE AGREEMENT. Except as specifically provided for in this
Agreement, this Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and arrangements,
oral or written, between the parties hereto with respect to the subject matter
hereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and date first above written.

EMPLOYEE:                                    SUCCESSORIES, INC.

                                             By:_______________________________

_______________________________________      Name:_____________________________

Gregory J. Nowak                             Its:______________________________
610 W. Park                                  Address: 2520 Diehl Road
                                                      Aurora, IL  60504
Wheaton, Illinois 60187

                                  Page 4 of 4<PAGE>

                                  EXHIBIT 10.2

    LEASE AGREEMENT AS OF AUGUST 21, 2000 BETWEEN ORION PROPERTIES LTD.,
   AND ORLANDO CORPORATION AND HMV CANADA INC.  TOGETHER WITH, CONSENT TO
 ASSIGNMENT AS OF APRIL 5, 2002 BETWEEN THE COMPANY AND ORION PROPERTIES LTD.,
  AND ORLANDO CORPORATION AND HMV CANADA, INC.  TOGETHER WITH, ASSIGNMENT OF
     LEASE AS OF APRIL 10, 2002 BETWEEN THE COMPANY AND HMV CANADA, INC.

<PAGE>

DATED:           AUGUST 21, 2000

===============================================================================

                                    BETWEEN:

ORION PROPERTIES LTD., AND
ORLANDO CORPORATION

                                     - AND -

HMV CANADA INC.

===============================================================================

                                      LEASE

                           REGARDING 6291 ORDAN DRIVE
                              MISSISSAUGA, ONTARIO

===============================================================================

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                                INDUSTRIAL LEASE

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                              SECTION

                                          ARTICLE I - DEMISE & TERM
<S>                                                                                            <C>
Premises...............................................................................          1.01
Use of Common Areas....................................................................          1.02
Term...................................................................................          1.03
Early Access...........................................................................          1.05
Option to Extend.......................................................................          1.06
Acceptance of Premises.................................................................          1.07
Quiet Enjoyment........................................................................          1.08

                                              ARTICLE II - RENT

Intent of Lease........................................................................          2.01
Basic Rent.............................................................................          2.02
Calculation of Basic Rent..............................................................          2.03
Additional Rent........................................................................          2.04
Deposit................................................................................          2.05
Payments to Landlord...................................................................          2.06
Overdue Rent...........................................................................          2.07
Set-Off................................................................................          2.08
Review of Tenant's Financial Statements................................................          2.09
Pre-Authorized Bank Debit..............................................................          2.10

                                             ARTICLE III - TAXES

Taxes Payable by Landlord..............................................................          3.01
Taxes Payable by Tenant................................................................          3.02
Tenant's Business and Other Taxes......................................................          3.03
Payment of Taxes.......................................................................          3.04

                                        ARTICLE IV - OPERATING COSTS

Tenant's Covenant to Pay Operating Costs...............................................          4.01
Payment of Operating Costs.............................................................          4.02

                                            ARTICLE V - UTILITIES

Utility Charges........................................................................          5.01
Water Heaters..........................................................................          5.02
Heating................................................................................          5.03
Service Contracts......................................................................          5.04

                               ARTICLE VI - MAINTENANCE, REPAIR & ALTERATIONS

Tenant to Maintain and Repair..........................................................          6.01
Repair Where Tenant at Fault...........................................................          6.02
Alterations............................................................................          6.03
Landlord to Maintain and Repair........................................................          6.04
Construction Liens.....................................................................          6.05
Removal of Fixtures and Improvements...................................................          6.06
Repair on Termination..................................................................          6.07

</TABLE>

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<TABLE>
<CAPTION>

                                                                                                 SECTION

                                   ARTICLE VII - ASSIGNING AND SUBLETTING
                                                                                                    7.01
<S>                                                                                                 <C>
Assigning or Subletting...................................................................          7.02
Change of Control.........................................................................          7.03
Sublet of Part of Premises................................................................          7.04
Excess Rent...............................................................................          7.05
Mortgage of Leasehold.....................................................................          7.05
Advertising Premises......................................................................          7.06
Disposition by Landlord...................................................................          7.07

                                             ARTICLE VIII - USE

Use of Leased Premises....................................................................          8.01
Rules and Regulations.....................................................................          8.02
Observance of Law.........................................................................          8.03
Waste and Nuisance........................................................................          8.04
Signs.....................................................................................          8.05
Parking...................................................................................          8.06
Refuse and Garbage........................................................................          8.07
Overloading Floors........................................................................          8.08
Outside Storage...........................................................................          8.09

                                    ARTICLE IX - INSURANCE AND INDEMNITY

Tenant's Insurance........................................................................          9.01
Landlord's Insurance......................................................................          9.02
Not to Affect Landlord's Insurance........................................................          9.03
Limit of Landlord's Liability.............................................................          9.04
Limit of Tenant's Liability...............................................................          9.05
Indemnity.................................................................................          9.06

                                       ARTICLE X - CONTROL OF COMPLEX

Control of Complex........................................................................         10.01

                                     ARTICLE XI- DAMAGE AND DESTRUCTION

Abatement of Rent.........................................................................         11.01
Termination...............................................................................         11.02

                                            ARTICLE XII - DEFAULT

Events of Default.........................................................................         12.01
Right of Re-entry.........................................................................         12.02
Reletting.................................................................................         12.03
Distress..................................................................................         12.04
Right of Landlord to Cure Defaults........................................................         12.05
Remedies Not Exclusive....................................................................         12.06
Non-Waiver................................................................................         12.07
Recovery of Adjustments...................................................................         12.08
</TABLE>

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             THIS INDENTURE made as of the 21st day of August, 2000,

BETWEEN:

                    ORION PROPERTIES LTD., AND
                    ORLANDO CORPORATION,

                    (Hereinafter collectively called the "LANDLORD")

                                                               OF THE FIRST PART

                    -- and --

                    HMV CANADA INC.

                    (Hereinafter called the "TENANT")

                                                              OF THE SECOND PART

                            ARTICLE I - DEMISE & TERM

PREMISES
  1.01 WITNESSETH that in consideration of the rents, covenants and agreements
hereinafter reserved and contained on the part of the Tenant to be paid,
observed and performed, the Landlord does demise and lease unto the Tenant and
the Tenant leases from the Landlord, the Leased Premises.

USE OF COMMON AREAS
  1.02 The use and occupation by the Tenant of the Leased Premises includes the
non-exclusive right of the Tenant, its employees, agents and invitees and
persons having business with the Tenant, in common with the Landlord and all
others entitled thereto, to use the common areas on the Lands including the
driveways, sidewalks and entrances.

TERM
  1.03 To have and to hold the Leased Premises for and during the term of five
(5) years commencing on the 1st day of October, 2000 (the "Commencement Date")
and ending on the 30th day of September, 2005.

If the Leased Premises are not ready for occupation by the Tenant on the
Commencement Date by reason of a delay or delays not caused or contributed to by
the Tenant or anyone acting for or on behalf of the Tenant, then Rent shall
abate and shall not accrue or be payable until the Leased Premises are ready for
occupation by the Tenant provided that the expiry of the Term shall be adjusted
in order to provide for a period of five (5) years from the date the Leased
Premises are ready for occupation by the Tenant. Any such abatement of Rent
shall be accepted by the Tenant as full and final settlement of any and all
claims which the Tenant may have by reason of the Leased Premises not being
ready for occupancy on the Commencement Date. A certificate by the Landlord's
Architect certifying that the Leased Premises are ready for occupation shall be
conclusive and binding upon the Tenant.

EARLY ACCESS
  1.04 Subject to the execution and delivery by the Tenant to the Landlord of
this Lease in form acceptable to the Landlord, the Tenant shall be entitled to
have early access ("Early Access") to the Leased Premises for the period from
and including the lst day of September, 2000 to and including the 30th day of
September, 2000 for the purpose of installing telephones and complete wiring and
racking provided that such Early Access shall not interfere with or delay the
Landlord in the performance of the Landlord's Work failing which such Early
Access shall be denied. Upon taking such early access of all or any part of the
Leased Premises, the Tenant shall observe and perform all of the Tenant's
covenants and obligations set out in this Lease except that Basic Rent and Taxes
shall not be payable by the Tenant for the Early Access period prior to the
Commencement Date, provided that Additional Rent and Utilities shall be payable
by the Tenant during the Early Access period.

OPTION TO EXTEND
  1.05 Provided the Lease is then in good standing and there has not been an
Event of Default at any time during the Term, the Tenant or its permitted
assignee shall have the option to extend this Lease for a further term of five
(5) years upon the same terms and conditions contained in this Lease except:

         (a)      There shall be no Landlord's Work or Early Access;

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                                     - 2 -

         (b)      There shall be no further option to extend the Lease; and

         (c)      The Basic Rent payable by the Tenant during such extended term
                  shall be fair market rent as of the date of commencement of
                  the extended term based on similar term, premises and location
                  as for the Leased Premises, provided in no event shall the
                  Basic Rent for the extended term be less than as provided for
                  in the immediately preceding period. If the Landlord and the
                  Tenant cannot agree on the Basic Rent for the extended term at
                  least ninety (90) days prior to the commencement of the
                  extended term, the Basic Rent for such extended term shall be
                  determined by arbitration as hereinafter set out.

                  In the case of any dispute between the Landlord and the Tenant
                  with respect to the Basic Rent payable in any extended term,
                  each of the Landlord and the Tenant shall at once agree upon
                  the appointment of an arbitrator and shall submit the dispute
                  to the arbitrator for determination in accordance with the
                  provisions of the Arbitration Act, 1991 of Ontario. The
                  decision of the arbitrator so appointed shall be final and
                  binding upon the Landlord and the Tenant who covenant one with
                  the other that such dispute shall be decided by arbitration
                  alone and not by recourse to any court by action at law. If
                  within a reasonable time the Landlord and the Tenant do not
                  agree upon a arbitrator, the arbitrator may upon petition of
                  either the Landlord or the Tenant be appointed by a justice of
                  the Superior Court of Justice. The cost of arbitration shall
                  be apportioned between the Landlord and the Tenant as the
                  arbitrator may decide.

In order to exercise the extension option, the Tenant shall be required to give
written notice of such exercise to the Landlord not less than six (6) months
before the expiry of the initial Term of the Lease, failing which, this option
to extend will become null and void.

ACCEPTANCE OF PREMISES
  1.06 The Tenant shall examine the Leased Premises before taking possession
thereof and such taking of possession shall be conclusive evidence as against
the Tenant that at the time thereof the Leased Premises were in good order and
satisfactory condition and that all promises, representations and undertakings
by or binding upon the Landlord with respect to any alteration, remodeling or
decorating of or installation of fixtures in the Leased Premises, have been
fully satisfied and performed by the Landlord. The Tenant acknowledges that the
existing leasehold improvements, if any, are acceptable and that the Tenant is
taking possession of the Leased Premises as is, subject to the Landlord's Work
as set out in Schedule "D" attached hereto.

QUIET ENJOYMENT
  1.05 If the Tenant pays the Rent hereby reserved and observes and performs the
covenants on its part contained in this Lease, then the Tenant may peaceably
possess and enjoy the Leased Premises for the Term hereby granted without
disturbance from the Landlord or any other party lawfully claiming by, from or
under the Landlord.

                                ARTICLE II - RENT

INTENT OF LEASE
  2.01 The Tenant acknowledges that it is intended and agreed that this is a
completely carefree net lease for the Landlord except as expressly hereinafter
set out and it is the mutual intention of the parties hereto that the Basic Rent
herein provided to be paid shall be net to the Landlord clear of all taxes,
costs, charges, expenses and outlays arising from or relating to the Complex and
that the Tenant shall bear its Proportionate Share of all costs relating to the
operation, maintenance and repair of the Complex (save only as otherwise
specifically set out in this Lease) including, and without limiting the
generality of the foregoing, the Tenant's Proportionate Share of Taxes and
Operating Costs and all taxes, costs, charges, expenses and outlays of any
nature or kind whatsoever relating to the Leased Premises, the use and occupancy
thereof, the contents thereof and the business carried on therein. Any amount
and any obligation which is not expressly declared herein to be that of the
Landlord pertaining to the Complex or the Leased Premises shall be deemed to be
the obligation of the Tenant to be performed by or at the Tenant's expense.
Charges of a kind personal to the Landlord such as taxes assessed upon the
income of the Landlord and principal and interest payments to be made by the
Landlord in satisfaction of mortgages now or hereafter registered against the
Complex, shall not be the responsibility or obligation of the Tenant.

BASIC RENT
  2.02 Yielding and paying therefor yearly and every year during the Term unto
the Landlord as Basic Rent for the Leased Premises in lawful money of Canada:

         (a)      from and including the Commencement Date to and including the
                  30th day of September, 2002 (the "First Rental Period") the
                  sum of $157,500.00 per annum to be paid in advance, in equal
                  consecutive monthly installments of $13,125.00 on the first
                  day of each and every month during the First Rental Period to
                  the Landlord, the first of such payments to be made on the
                  Commencement Date; and

<PAGE>

                                      -3-

         (b)      from and including the 1st day of October, 2002 to and
                  including the 30th day of September, 2005 (the "Second Rental
                  Period") the sum of $165,375.00 per annum to be paid in
                  advance, in equal consecutive monthly installments of
                  $13,781.25 on the first day of each and every month of the
                  Second Rental Period to the Landlord, the first of such
                  payments to be made on the lst day of October, 2002.

If the Term commences on any day other than the first or ends on any day other
than the last day of a month, then Basic Rent for the fractions of a month at
the commencement and at the end of the Term shall be adjusted pro rata on a per
diem basis.

CALCULATION OF BASIC RENT
  2.03 The Basic Rent is calculated on the basis of the Rentable Area of the
Leased Premises being 31,500 square feet multiplied by: (a) $5.00 per square
foot per annum during the First Rental Period; and (b) by $5.25 per square foot
per annum during the Second Rental Period. The certificate of the Landlord's
Architect regarding the measurement of the Rentable Area of the Leased Premises
shall be conclusive and binding upon the Tenant. For purposes of calculating
Rent, the actual Rentable Area of the Leased Premises shall not exceed 32,000
square feet.

ADDITIONAL RENT
  2.04 The Tenant shall pay Additional Rent due and owing to the Landlord within
ten (10) days' of written demand therefor or as otherwise hereinafter expressly
set out and all other Additional Rent on the due date thereof.

DEPOSIT
  2.05   The Landlord acknowledges receipt of:

         (a)      $11,360.00 (exclusive of GST) to be held by the Landlord and
                  applied without interest on account of part of the Basic Rent
                  for the first month of the Term; and

         (b)      $13,781.25 to be held by the Landlord as security for the full
                  and faithful performance by the Tenant of all the agreements,
                  terms, covenants and conditions herein set forth and applied
                  against expenses or other costs or damages incurred by the
                  Landlord and to be payable as liquidated damages and not as
                  penalty, upon forfeiture, default or early termination,
                  without prejudice to any further claims by the Landlord for
                  damages and/or any remedy for recovery thereof. In the event
                  the Tenant observes and performs the terms and conditions on
                  its part under this Lease, such monies shall be applied
                  without interest on account of the Basic Rent for the last
                  month of the Term.

PAYMENTS TO LANDLORD
  2.06 All payments to be made by the Tenant to the Landlord under this Lease
shall be made at the address hereinafter designated or, at such other place or
places as the Landlord may designate in writing, or to such agent of the
Landlord as the Landlord may from time to time direct.

OVERDUE RENT
  2.07 The Tenant covenants to pay the Basic Rent and all other charges provided
for in this Lease on their respective due dates in full. The Tenant shall pay
the Landlord interest on all overdue Rent, all such interest to be calculated
from the date upon which the amount is first due hereunder until actual payment
thereof and at a rate being the lesser of (i) three percent (3%) per annum in
excess of the minimum lending rate charged to prime commercial borrowers by the
Landlord's bank from time to time; and (ii) the maximum rate permitted by law.

SET-OFF
  2.08 All Rent payable by the Tenant to the Landlord shall be paid without any
deduction, set-off or abatement whatsoever except as hereinafter expressly
provided.

REVIEW OF TENANT'S FINANCIAL STATEMENTS
  2.09 If the Tenant is late in the payment of any Rent (or any part thereof) in
any two (2) consecutive months or more than twice in any twelve (12) month
period, then the Tenant shall, at its own cost and expense, forthwith provide
the Landlord upon demand with current audited financial statements (provided
however that in the case of the Tenant in use and occupation of the Leased
Premises being HMV Canada Inc. such statements need only be certified by the
chief financial officer of HMV Canada Inc. as being correct and accurate) and
such other financial records and books of account of the Tenant as may be
required by the Landlord so as to adequately enable it to determine to its
satisfaction the financial status of the Tenant.

<PAGE>

                                      -4-

PRE-AUTHORIZED BANK DEBIT
  2.10 If the Tenant is late in the payment of any Rent (or any part thereof) in
any two (2) consecutive months' or more than twice in any twelve (12) month
period, then the Tenant shall forthwith provide the Landlord upon demand with
such written authorizations as may be required from time to time to debit the
Tenant's bank account in favour of the Landlord for outstanding amounts owing by
the Tenant to the Landlord under the Lease.

                               ARTICLE III - TAXES

TAXES PAYABLE BY LANDLORD
  3.01 The Landlord shall pay the Taxes charged on the Complex to the applicable
taxing authority, subject to reimbursement by the Tenant as hereinafter set out.
The Landlord shall have no obligation to contest or litigate the imposition of
any Taxes. The Landlord may defer payment of Taxes to the extent permitted by
law if it diligently pursues or causes to be pursued the contest or appeal of
the Taxes.

TAXES PAYABLE BY TENANT
  3.02   (a)      If there is no separate assessment for Taxes with respect to
                  the Leased Premises, or if there is a separate assessment, but
                  such separate assessment, together with all other separate
                  assessments relating to the Complex, do not aggregate the
                  total assessment for the Taxes for the Complex, then until
                  such time as there is a separate assessment for Taxes with
                  respect to the Leased Premises which, together with all other
                  such separate assessments, aggregate the total assessment for
                  Taxes for the Complex, and the Landlord so directs as set out
                  in paragraph (b) of this Section 3.02, the Tenant shall pay as
                  Additional Rent its Proportionate Share of the Taxes for the
                  Complex, adjusting the occupied tax rate for the Tenant's
                  specific use of the Leased Premises, provided that the
                  Landlord, at its option, may apportion the total assessment
                  for Taxes for the Complex amongst the leaseable premises of
                  the Complex, including the Leased Premises, based on generally
                  accepted real estate appraisal practices. If there is no
                  separate assessment for Taxes as herein provided and the
                  Complex is not fully assessed as a commercial or industrial
                  property for determination of Taxes in any Year, then the
                  Landlord shall adjust the Taxes to an amount that would have
                  been determined if the Complex were fully assessed as an
                  occupied commercial or industrial property. If the Leased
                  Premises are at any time during the Term assessed for the
                  support of Separate Schools or if the Taxes are increased by
                  reason of any installations made in or upon or any alterations
                  made in or to the Leased Premises by the Tenant or by the
                  Landlord on behalf of the Tenant, the Tenant shall pay the
                  amount of such increase forthwith to the Landlord upon receipt
                  of notice thereof.

         (b)      If there is a separate assessment for Taxes with respect to
                  the Leased Premises, (which separate assessment shall be
                  deemed to include the valuation of the Leased Premises as
                  determined, from time to time, by the assessor for realty
                  taxation purposes of the Complex, as evidenced by such
                  documentation (including, without limitation, the assessor's
                  valuation and/or working papers) that may be made available to
                  the Landlord, from time to time) and if such separate
                  assessment together with all other separate assessments for
                  the Complex aggregate the total assessment for Taxes for the
                  Complex, and if the Landlord so directs, the Tenant shall pay
                  as Additional Rent the amount calculated by multiplying the
                  assessment for the Leased Premises by the applicable tax rate
                  pertaining to the Tenant's use of the Leased Premises on an
                  occupied basis, which amount shall, for the purposes of this
                  paragraph only and notwithstanding anything else herein
                  contained, be the Tenant's "Proportionate Share" of Taxes for
                  the Complex.

         (c)      The Landlord estimates that the Taxes for the fiscal year 2000
                  will be approximately $1.85 per Rentable square foot.

TENANT'S BUSINESS AND OTHER TAXES
  3.03 In addition to the Taxes payable by the Tenant pursuant to Section 3.02,
the Tenant shall pay to the lawful taxing authorities or to the Landlord if the
Landlord so directs:

         (a)      all taxes, rates, duties, assessments and other charges that
                  are levied, rated, charged or assessed against or in respect
                  of all improvements, equipment and facilities of the Tenant on
                  or in the Leased Premises or the Complex or any part thereof;

         (b)      every tax and license fee which is levied, rated, charged or
                  assessed against or in respect of and every business carried
                  on in the Leased Premises or in respect of the use or
                  occupancy thereof or any part of the Lands by the Tenant and
                  every subtenant or licensee of the Tenant or against the
                  Landlord on account of its interest in the Complex, and
                  whether in any case, any such taxes, rates, duties,
                  assessments or license fees are rated, charged or assessed by
                  any federal, provincial, municipal, school or other body
                  during the Term;

<PAGE>

                                      -5-

         (c)      the full amount of any taxes in the nature of a business
                  transfer tax, value added tax, sales tax or any other tax
                  levied, rated, charged or assessed in respect of the Rent
                  payable by the Tenant under this Lease or in respect of the
                  rental of space under this Lease, whether characterized as a
                  goods and services tax, sales tax, value added tax, business
                  transfer tax or otherwise; and

         (d)      Capital Tax in respect of the Leased Premises.

PAYMENT OF TAXES;
  3.04   (a)      The Landlord shall be entitled at any time or times in any
                  Year, upon at least fifteen (15) days' notice to the Tenant to
                  require the Tenant to pay to the Landlord the Tenant's
                  Proportionate Share of the Taxes for such Year in equal
                  monthly installments. Such monthly amount shall be determined
                  by dividing the Tenant's Proportionate Share of Taxes by the
                  number of months for the period from January lst in each Year
                  of the Term until the due date of the final installment of
                  Taxes as established by the applicable taxing authority from
                  time to time in each Year ("Installment Period") and shall be
                  paid by the Tenant to the Landlord, monthly as Additional
                  Rent, on the date for payment of monthly rental payments
                  during the Installment Period. The Landlord shall be entitled
                  subsequently during such Year, upon at least fifteen (15)
                  days' notice to the Tenant, to revise its estimate of the
                  amount of increase in such Taxes and the said monthly
                  installment shall be revised accordingly. All amounts received
                  under this provision in any Year on account of the estimated
                  amount of such Taxes shall be applied in reduction of the
                  actual amount of such Taxes for such Year. If the amount
                  received is less than the Tenant's Proportionate Share of the
                  actual Taxes, the Tenant shall pay any deficiency to the
                  Landlord as Additional Rent within fifteen (15) days'
                  following receipt by the Tenant of notice of the amount of
                  such deficiency. If the amount received is greater than the
                  Tenant's Proportionate Share of the actual Taxes, the Landlord
                  shall either refund the excess to the Tenant as soon as
                  possible after the end of the Year in respect of which such
                  payments were made or, at the Landlord's option, shall apply
                  such excess against any amounts owing or becoming due to the
                  Landlord by the Tenant.

         (b)      Taxes payable pursuant to paragraphs (a) and (b) of Section
                  3.03 shall be paid by the Tenant when due if separate tax
                  bills are issued and otherwise shall be paid to the Landlord
                  within ten (10) days' written demand therefor.

         (c)      Taxes payable pursuant to paragraphs (c) and (d) of Section
                  3.03 shall be paid to the Landlord within ten (10) days'
                  written demand therefor or at such time or times as the
                  Landlord from time to time determines by notice in writing to
                  the Tenant.

         (d)      If the Term of this Lease commences or ends on any day other
                  than the first or last day, respectively, of a Year, the
                  Tenant shall be liable only for the portion of the Taxes for
                  such Year as falls within the Term, determined on a per diem
                  basis.

                          ARTICLE IV - OPERATING COSTS

TENANT'S COVENANT TO PAY OPERATING COSTS
  4.01 The Tenant covenants to pay to the Landlord as Additional Rent the
Tenant's Proportionate Share of the Operating Costs for the Year during each
Year of the Term in accordance with the provisions of Section 4.02.

The Landlord estimates that the Operating Costs for the fiscal year 2000 will be
approximately $1.00 per Rentable square foot.

PAYMENT OF OPERATING COSTS
  4.02 The Landlord shall be entitled at any time or times in any Year, upon at
least fifteen (15) days' notice to the Tenant to require the Tenant to pay to
the Landlord monthly, on the date for payment of monthly rental installments, as
Additional Rent, an amount equal to one-twelfth (1/12) of the amount estimated
by the Landlord to be the amount of the Tenant's Proportionate Share of the
Operating Costs for such Year. The Landlord shall be entitled subsequently
during such Year, upon at least fifteen (15) days' notice to the Tenant, to
revise its estimate of the amount of the Tenant's Proportionate Share of the
Operating Costs and the said monthly installment shall be revised accordingly.
All amounts received under this provision in any Year on account of the
estimated amount of the Tenant's Proportionate Share of the Operating Costs
shall be applied in reduction of the actual amount of the Tenant's Proportionate
Share of the Operating Costs for such Year. Within a reasonable time after the
end of the period for which the estimated payments have been made, the Landlord
shall deliver to the Tenant a written statement setting out in reasonable detail
the amount of the Operating Costs for such period calculated on the basis of a
calendar year and the Tenant's Proportionate Share thereof. If the amount
received is less than the actual amount of the Tenant's Proportionate Share of
the Operating Costs for such Year, the Tenant shall pay any deficiency to the
Landlord as Additional Rent within fifteen (15) days following receipt by the
Tenant of notice of the amount of such deficiency. If the amount received is
greater than the actual amount of the Tenant's Proportionate Share of the
Operating Costs, the Landlord shall either refund the excess to the Tenant as
soon as possible after the end of the Year in respect of which such payments
were made, or at the Landlord's option, shall apply such excess against any
amounts owing or becoming due to the Landlord by the Tenant.

<PAGE>

                                      -6-

The Tenant shall have sixty (60) days' after receipt of any such statement to
dispute such statement by way of notice in writing to the Landlord. Failing such
notice within such sixty (60) day period, such statement shall be conclusive and
binding upon the Tenant. In the event the Tenant disputes any such statement by
notice in writing to the Landlord within not more than sixty (60) days' after
receipt of such statement, then the Landlord shall have its accountant prepare a
report at the Tenant's sole cost and expense (to be added to Additional Rent
hereunder), in respect of the Operating Costs for the period dealt with in such
statement. Any such report shall be conclusive and binding upon the Tenant.

                              ARTICLE V - UTILITIES

UTILITY CHARGES
  5.01 The Tenant shall pay to the suppliers thereof on the due dates, all
charges for electric current and all other utilities supplied to or used in
connection with the Leased Premises.

WATER HEATERS
  5.02 In the event that the Tenant shall require a hot water heater or heaters,
the Tenant agrees to lease same from Consumers' Gas Company or Ontario Hydro and
to pay all charges as same become due for rental or work services required in
connection therewith.

HEATING
  5.03 The Tenant covenants and agrees to heat the Leased Premises at its own
expense to a reasonable temperature to prevent the occurrence of any damage to
the Leased Premises by cold or frost.

SERVICE CONTRACTS
  5.04 The Tenant covenants and agrees to take out a standard servicing contract
with a capable and reputable company for the service and maintenance of the
heating units and furnaces and air-conditioning equipment serving the Leased
Premises, such contract to include the monthly cleaning of exchangers and
replacement of filters, and to keep such contract in force at its own cost
throughout the Term. The Tenant agrees to provide the Landlord with a copy of
such servicing contract.

                 ARTICLE VI - MAINTENANCE, REPAIR & ALTERATIONS

TENANT TO MAINTAIN AND REPAIR
  6.01 Subject only to Section 6.04 hereof, the Tenant shall at its own cost
repair, replace, maintain and keep the Leased Premises and every part thereof,
including without limitation the Leasehold Improvements and the heating,
ventilating and air conditioning equipment serving the Leased Premises, fixtures
and furnishings (whether or not installed or furnished by the Tenant), in good
and substantial repair and condition as a prudent owner would do, damage by fire
and any other perils against which the Landlord is required under this Lease to
insure, only excepted. The Tenant agrees that the Landlord may enter and view
the state of repair and condition and that the Tenant shall repair in accordance
with notice in writing from the Landlord; provided that if the Tenant neglects
to so maintain or to make such repairs or replacements promptly after notice,
the Landlord may, at its option, do such maintenance or make such repairs or
replacements at the expense of the Tenant, and in any and every such case the
Tenant covenants with the Landlord to pay to the Landlord forthwith as
Additional Rent all sums which the Landlord may have expended in doing such
maintenance and making such repairs and/or replacements; provided further that
the doing of such maintenance or the making of any such repairs or replacements
by the Landlord shall not relieve the Tenant from its obligation to maintain,
repair and replace.

REPAIR WHERE TENANT AT FAULT
  6.02 If the Lands or any improvements thereto become damaged or contaminated
through the willful act, negligence, carelessness, misuse or any other fault of
the Tenant, its agents, employees, licensees or invitees, the expense of the
necessary repairs, replacements or alterations shall be borne by the Tenant who
shall pay the same to the Landlord forthwith upon demand. The obligations of the
Tenant set forth herein shall survive the expiry or other termination of the
Term.

ALTERATIONS
  6.03 The Tenant shall not, without the prior written approval of the Landlord
(which shall not be unreasonably withheld or delayed with respect to
non-structural Changes that do not directly affect or involve the Base Building
Systems and cost $10,000.00 or less), make any installations, alterations,
additions, partitions, repairs or improvements ("Changes") in or to the Leased
Premises, including, without limitation, doing anything which might affect the
structural portions of the Leased Premises or electrical, lighting, heating,
ventilating, air-conditioning, sprinkler, fire protection or other systems
therein (the "Base Building Systems"). The Tenant's request for approval shall
be in writing and accompanied by an adequate description of the contemplated
work, and where appropriate, working drawings and specifications therefor; the
Landlord's costs of having its architects, engineers or others examine such
drawings and specifications shall be payable by the Tenant upon demand as
Additional Rent; the Landlord may require that any or all such work be done by
the Landlord's

<PAGE>

                                      -7-

contractors or workmen or by contractors or workmen engaged by the Tenant but
first approved by the Landlord. All such work shall be subject to inspection by
and the reasonable supervision of the Landlord and shall be performed in
accordance with all applicable laws and any reasonable conditions (including but
not limited to a reasonable supervision fee of the Landlord to be paid by the
Tenant) and regulations imposed by the Landlord, and shall be completed in a
good and workmanlike manner and with reasonable diligence in accordance with the
approvals given by the Landlord. Any connections of apparatus to the base
electrical, plumbing, heating, ventilating or air-conditioning systems shall be
deemed to be an alteration within the meaning of this Section. The Tenant shall,
at its own cost and before commencement of any work, obtain all necessary
building or other permits and keep same in force.

LANDLORD TO MAINTAIN AND REPAIR
  6.04 The Landlord shall maintain and repair, as would a prudent owner, the
roof membrane of the Building (the "Roof Work") all at the Tenant's cost and
expense. The Tenant shall, forthwith upon demand, pay to the Landlord the costs
and expenses incurred by the Landlord from time to time in connection with the
Roof Work, plus a management fee of fifteen percent (15%) of such costs and
expenses.

CONSTRUCTION LIENS
  6.05 The Tenant covenants to pay promptly all its contractors and material men
and do any and all things necessary to minimize the possibility of a lien
attaching to the Leased Premises or the Lands or any part thereof and, should
any such lien be made or filed, the Tenant shall discharge the same forthwith
(after notice thereof is given to the Tenant) at the Tenant's expense. In the
event the Tenant shall fail to cause any such lien to be discharged as
aforesaid, then, in addition to any other right or remedy of the Landlord, the
Landlord may, but it shall not be so obligated, discharge same by paying the
amount claimed to be due into Court or directly to any such lien claimant and
the amount so paid by the Landlord and all costs and expenses including but not
limited to solicitor's fees (on a solicitor and client basis), incurred for the
discharge of such lien shall be due and payable by the Tenant to the Landlord as
Additional Rent on demand.

REMOVAL OF FIXTURES AND IMPROVEMENTS
  6.06 Leasehold Improvements shall immediately become the property of the
Landlord upon affixation or installation without compensation therefor to the
Tenant but the Landlord is under no obligation to repair, maintain or insure
Leasehold Improvements. Leasehold Improvements shall not be removed from the
Leased Premises either during or at the expiration or earlier termination of the
Term, except that the Tenant shall, at the end of the Term remove such Leasehold
Improvements installed or constructed by or on behalf of the Tenant as the
Landlord may require to be removed, provided that the Tenant shall not be
required to remove any Change made to the Leased Premises after the Commencement
Date which the Landlord has approved prior to their installation as not
requiring removal. The Tenant may, during the Term, remove its trade fixtures
provided that the Tenant is not in default under this Lease and such trade
fixtures are immediately replaced by trade fixtures of equal or better value.
The Tenant shall at the expiration or earlier termination of the Term remove its
trade fixtures as the Landlord may require. Any removal of Leasehold
Improvements and/or the Tenant's trade fixtures shall be done at the Tenant's
sole cost and expense and the Tenant shall forthwith repair at its own cost any
damage caused to the Leased Premises or the Building or any part thereof by the
installation or removal of Leasehold Improvements and/or trade fixtures. If the
Tenant does not remove its trade fixtures at the expiration or earlier
termination of the Term, then the trade fixtures shall, at the option of the
Landlord, become the property of the Landlord and may be removed from the Leased
Premises and/or sold or otherwise disposed of by the Landlord in such manner as
it deems advisable. For greater certainty, the Tenant's trade fixtures shall not
include any heating, ventilating or air-conditioning equipment or other building
services or floor covering affixed to the floor of the Leased Premises. The
obligations of the Tenant set forth in this Section shall survive the expiry or
other termination of the Term.

REPAIRS ON TERMINATION

  6.07 At the expiration or sooner termination of the Term the Tenant shall, at
its own expense:

         (a)      deliver up possession of the Leased Premises to the Landlord
                  in the same condition in which the Tenant is required under
                  this Lease to repair and maintain the Leased Premises,
                  together with all Leasehold Improvements which the Tenant is
                  required or permitted to leave therein or thereon free and
                  clear of all encumbrances and in a clean and tidy condition
                  and free of all rubbish and to deliver to the Landlord all
                  keys and security devices;

         (b)      remove from the Complex, at the option of and to the
                  satisfaction of the Landlord, all machine bases, cabling
                  (electrical or otherwise), piping (pneumatic, water or
                  otherwise) and wiring (electrical, computer or otherwise)
                  installed by or on behalf of the Tenant;

         (c)      remove any and all materials which may be deemed by any
                  applicable legislation as contaminated or hazardous (and which
                  have been brought onto the Complex by or on behalf of the
                  Tenant or which are a result of the Tenant's use or occupation
                  of the Leased Premises), and clean up any and all resultant
                  contamination in compliance with all applicable laws and
                  regulations; and

<PAGE>

                                      -8-

         (d)      remove from the Complex at the option of the Landlord, in
                  compliance with all applicable laws and regulations, any and
                  all storage and/or holding tanks (whether above or below
                  ground) installed by or on behalf of the Tenant and all pits
                  and trenches created by or on behalf of the Tenant.

        The covenants contained in this Section shall survive the expiry or
other termination of the Term.

                      ARTICLE VII - ASSIGNING & SUBLETTING

ASSIGNING OR SUBLETTING
  7.01   (a)      The Tenant shall not assign this Lease or sublet or franchise,
                  license, grant concessions in, or otherwise part with or share
                  possession of the Leased Premises, or any part thereof, (each
                  of the foregoing hereinafter referred to as a "Transfer")
                  without the prior written consent of the Landlord which shall
                  not be unreasonably withheld; at the time the Tenant requests
                  such consent the Tenant shall deliver to the Landlord such
                  information in writing (the "required information") as the
                  Landlord may reasonably require, including, without
                  limitation, a copy of the proposed offer or agreement, if any,
                  to Transfer and the name, address and nature of business and
                  evidence as to the financial strength of the proposed assignee
                  or subtenant or other user (any of the foregoing hereinafter
                  referred to as a "Transferee"); upon receipt of such request
                  and all required information, the Landlord shall have the
                  right, exercisable within fourteen (14) days' after such
                  receipt, to terminate this Lease if the request relates to all
                  of the Leased Premises or, if the request relates to a portion
                  of the Leased Premises only, the Landlord shall have the right
                  to terminate this Lease with respect to such portion and the
                  Rent payable by the Tenant under this Lease shall abate in the
                  proportion that the area of the portion of the Leased Premises
                  for which this Lease is terminated bears to the area of the
                  Leased Premises. If the Landlord exercises such right, the
                  Tenant shall surrender possession of the Leased Premises or
                  such portion thereof, as the case may be, not less than sixty
                  (60) days and not more than ninety (90) days following the
                  Landlord's notice of exercise of its right hereunder in
                  accordance with all the provisions of this Lease relating to
                  the surrender of the Leased Premises at the expiration of the
                  Term and all Rent and other charges shall be deemed to be
                  adjusted accordingly and the Lease shall be deemed to be
                  amended accordingly, as of the date of actual surrender. If
                  the Landlord does not exercise such right, then the Landlord's
                  prior written consent shall not be unreasonably withheld
                  provided that if the Landlord's consent is required within
                  fifteen (15) days from the date of the Tenant's request the
                  Landlord may unreasonably withhold its consent.

                  Notwithstanding anything else herein contained, in no event
                  shall any Transfer of this Lease release or relieve the Tenant
                  in any regard whatsoever from any of its obligations or
                  liabilities under or in respect of this Lease.

                  PROVIDED however, and it is made a condition to any Transfer
that:

         (i)      The proposed Transferee of this Lease shall agree in writing
                  to assume and perform all of the terms, covenants, conditions
                  and agreements by this Lease imposed upon the Tenant herein in
                  a form to be approved by the solicitor for the Landlord;

         (ii)     The Tenant shall pay the Landlord all legal fees in connection
                  with the Transfer;

         (iii)    The consent of the Landlord is not a waiver of the requirement
                  of the Landlord's consent for subsequent Transfers;

         (iv)     The acceptance by the Landlord of Rent from a Transferee
                  without the Landlord's consent shall not constitute a waiver
                  of the requirement of such consent nor shall it constitute an
                  acceptance of such party as the Tenant;

         (v)      The Landlord may, at its option, cancel (i) any options to
                  renew the Lease or extend the Term provided that in the case
                  of an assignment consented to by the Landlord, the Landlord
                  may not cancel such option; and/or (ii) any rights of first
                  refusal or first opportunity on additional space;

         (vi)     If the Transfer of the Leased Premises does not take place
                  within sixty (60) days of the giving of consent by the
                  Landlord the consent shall, at the Landlord's option, expire
                  and become null and void; and

         (vii)    If the Lease is disaffirmed, disclaimed or terminated by any
                  trustee in bankruptcy of a Transferee, the original Tenant
                  named in this Lease will be deemed on notice from the Landlord
                  given within sixty (60) days from the date of such
                  disaffirmation, disclaimer or termination to have entered into
                  a Lease with the Landlord containing the same terms and
                  conditions as in this Lease.

<PAGE>

                                      -9-

         (b)      If a Transfer occurs without the consent of the Landlord when
                  required, the Landlord may collect Rent from the party in
                  whose favour the Transfer was made and apply the net amount
                  collected to the Rent herein reserved but no such Transfer
                  will be considered a waiver of this covenant or the acceptance
                  of the party in whose favour the Transfer was made as a tenant
                  hereunder.

         (c)      The Landlord shall not be liable for any claims or actions by
                  or for any damages, liabilities, losses or expenses of the
                  Tenant arising out of the Landlord unreasonably withholding
                  its consent to any Transfer and the Tenant's only recourse
                  shall be to bring an application for a declaration that the
                  Landlord shall grant its consent to such Transfer.

         (d)      Notwithstanding anything to the contrary contained in this
                  Lease, the Tenant shall have the right, without consent but on
                  prior written notice to the Landlord, to effect a Transfer to
                  an affiliate of the Tenant (as that term is defined in the
                  Business Corporations Act (Ontario)) provided that such
                  Transferee signs and delivers to the Landlord prior to the
                  date of such Transfer, the Landlord's form of lease assumption
                  agreement (to be prepared by the Landlord's solicitor at the
                  reasonable cost of the Tenant) in accordance with the
                  provisions of this Lease. In no event shall such Transfer of
                  the Lease release or relieve the Tenant from any of its
                  obligations or liabilities under or in respect this Lease.

CHANGE OF CONTROL
  7.02 If the Tenant is a private corporation and any part or all of the
corporate shares shall be transferred by sale, assignment, amalgamation,
bequest, inheritance, operation of law or other disposition or dispositions so
as to result in a change in the control of the corporation, such change of
control shall be considered a Transfer of this Lease and shall be subject to the
provisions of Section 7.01 hereof. The Tenant shall make available to the
Landlord upon its request for inspection and copying, all books and records of
the Tenant, any assignee or subtenant and their respective shareholders which,
alone or with other data, may show the applicability or inapplicability of this
Section.

So long as the Tenant is HMV Canada Inc. and is not in default of this Lease, a
change in the effective voting control of the Tenant effected by a transfer of
shares of the Tenant in a recognized stock exchange in Canada or the United
States of America shall not require the consent of the Landlord however the
Tenant shall provide notice thereof to the Landlord.

SUBLET OF PART OF PREMISES
  7.03 Notwithstanding anything else to the contrary provided in this Lease
and/or any act or rule of law or regulation now or hereafter in force to the
contrary, the Landlord may in its sole and unfettered discretion refuse to give
its consent to any Transfer by the Tenant of less than the whole of the Leased
Premises resulting in more than two (2) separate premises therein.

EXCESS RENT
  7.04 In the event that the Basic Rent payable under any Transfer is in excess
of the Basic Rent reserved hereunder or is in excess of the proportionate Basic
Rent reserved in the event of a sublease of part of the Leased Premises, whether
the excess be in the form of cash, goods or services from the Transferee or
anyone acting on its behalf, the Tenant shall pay all of such excess to the
Landlord immediately upon receipt thereof and the Tenant shall have the right to
deduct and any brokerage fees incurred by the Tenant related to such sublease
prior to making payments to the Landlord; in the event that such excess is
represented by goods or services rendered to the Tenant or its nominee, the
value of those goods or services shall be determined by the Landlord and Tenant
and that value shall be paid in cash to the Landlord immediately upon such
determination.

MORTGAGE OF LEASEHOLD
  7.05 The Tenant shall not mortgage, pledge, hypothecate or otherwise encumber
all or any portion of the Tenant's interest in this Lease or the Leasehold
Improvements.

ADVERTISING PREMISES
  7.06 The Tenant shall not advertise or allow the Leased Premises or a portion
thereof to be advertised as being available for assignment, sublease or
otherwise without the prior written approval of the Landlord as to the form,
size, content and location of such advertisement, which approval shall not be
unreasonably withheld, provided that (i) no such advertising shall contain any
reference to the Rent for the Leased Premises and (ii) any such advertising
shall be on a standard ground-mounted real estate sign.

DISPOSITION BY LANDLORD
  7.07 If the Landlord sells or leases the Lands, the Building or any part
thereof, or assigns this Lease, and to the extent that the covenants and
obligations of the Landlord under this Lease are assumed by the purchaser,
lessee or assignee, the Landlord, without further written agreement, will be
discharged and relieved of liability under the said covenants and obligations.

<PAGE>

                                      -10-

                               ARTICLE VIII - USE

USE OF LEASED PREMISES
  8.01   (a)      Subject to paragraph (b) of this Section, the Tenant shall not
                  use the Leased Premises nor allow the Leased Premises to be
                  used for any purpose other than office and warehouse
                  distribution of non-hazardous and environmentally friendly
                  products, but only to the extent (i) in compliance with the
                  provisions of this Lease and (ii) permitted by all applicable
                  laws, by-laws and other governmental regulations from time to
                  time in force.

         (b)      The Tenant covenants to not use or permit the Leased Premises
                  to be used for any retail sales whatsoever.

RULES AND REGULATIONS
  8.02 The Tenant and its employees and all persons visiting or doing business
at the Leased Premises shall be bound by and shall observe and perform all rules
and regulations made by the Landlord from time to time in respect of the Lands.
All such rules and regulations shall be deemed to be incorporated into and form
part of this Lease.

OBSERVANCE OF LAW
  8.03 The Tenant shall comply promptly with and conform to the requirements of
all applicable statutes, by-laws, laws, regulations, ordinances and orders from
time to time or at any time in force during the Term and affecting the
condition, maintenance, repair, use or occupation of the Leased Premises (or
equipment therein) and with every applicable regulation, order and requirement
of the Insurance Advisory Organization or any body having similar functions or
of any liability or fire insurance company by which the Landlord and the Tenant
or either of them may be insured at any time during the Term and, in the event
of the default of the Tenant under the provisions of this Section, the Landlord
may itself comply with any such requirements as aforesaid and the Tenant will
forthwith pay all costs and expenses incurred by the Landlord in this regard and
the Tenant agrees that all such costs and expenses shall be recoverable by the
Landlord as if the same were Additional Rent reserved and in arrears under this
Lease.

WASTE AND NUISANCE
  8.04   (a)      The Tenant shall not do or suffer any waste, damage,
                  disfiguration or injury to the Leased Premises or the fixtures
                  and equipment thereof and shall not use or permit to be used
                  any part of the Leased Premises for any dangerous, noxious or
                  offensive trade or business and shall not do anything or
                  permit anything to be done upon or about the Leased Premises
                  nor permit anything to be brought thereon which may reasonably
                  be deemed to be a nuisance, annoyance, grievance, damage or
                  disturbance to the occupiers or owners of the Building and/or
                  the Lands, or of adjacent lands or premises, nor do or permit
                  anything to be done therein which, in the opinion of the
                  Landlord acting reasonably, is detrimental to the Building,
                  and the Tenant shall take every reasonable precaution to
                  protect the Leased Premises from danger of fire, water damage
                  or the elements and shall keep the Leased Premises and the
                  Lands free of hazardous waste and contamination.

         (b)      The Tenant covenants and agrees to utilize the Leased Premises
                  and operate its business in a manner so that no part of the
                  Leased Premises or surrounding lands are used to generate,
                  manufacture, refine, treat, transport, store, handle, dispose
                  of, transfer, produce or process any Hazardous Substances,
                  except in strict compliance with all applicable federal,
                  provincial and municipal statutes, by-laws and regulations,
                  including without limitation, environmental, land use and
                  occupational and health and safety laws, regulations,
                  requirements, permits, statutes, by-laws and regulations.
                  Further the Tenant hereby covenants and agrees to indemnify
                  and save harmless the Landlord and those for whom the Landlord
                  is in law responsible from any and all losses, costs, claims,
                  damages, liabilities, expenses or injuries caused or
                  contributed to by any Hazardous Substances which are at any
                  time located, handled, placed, stored or incorporated in any
                  part of the Leased Premises. The Tenant hereby agrees that the
                  Landlord or its authorized representatives shall have the
                  right at the Tenant's expense, payable as Additional Rent
                  within fifteen (15) days of receipt of an invoice therefore,
                  to conduct such environmental site reviews and Investigations
                  as it may deem necessary for the purposes of ensuring
                  compliance with this Section 8.04. The Tenant's obligations
                  pursuant to this Section 8.40 shall survive the expiration or
                  earlier termination of the Term.

SIGNS
  8.05 The Tenant covenants and agrees not to paint, affix, display or cause to
be painted, affixed or displayed any picture, advertisement, notice, lettering,
decoration or sign on any part of the exterior of the Leased Premises
(including, without limitation, the windows) without in each instance the prior
written approval of the Landlord. The cost of all such signage material and the
installation and erection thereof shall be borne by the Tenant and shall be
payable forthwith on demand. All such signage material shall be erected in
strict conformance with all applicable municipal regulations, requirements and
by-laws in existence from time to time. All such signage material shall be
removed by the Tenant at its own expense at the termination of this Lease and
the Tenant shall promptly repair at its own expense to the satisfaction of the
Landlord any and all damage caused by such removal and this covenant shall
survive the expiry or other termination of the Term.

<PAGE>

                                      -11-

PARKING
  8.06 The Tenant shall have the right to park approximately fifty (50) cars
belonging to its employees, servants, agents, contractors and invitees in those
areas on the Lands designated by the Landlord from time to time as parking areas
for the Leased Premises and shall not park nor permit its employees, servants,
agents, contractors or invitees to park in any other areas whatsoever. The
Tenant shall not park nor permit to be parked any vehicles (cars, trucks,
trailers, or otherwise) anywhere on the Lands at any time other than at such
areas so designated by the Landlord. The Tenant shall be allowed to park in the
areas directly in front and adjacent to the Leased Premises but in no event
shall the foregoing be construed as "reserved" parking and provided the Landlord
is making available approximately fifty (50) parking spaces for use by the
Tenant on the Lands, the Landlord shall have no obligation to police, patrol or
enforce the use of such parking spaces.

REFUSE AND GARBAGE
  8.07 The Tenant agrees that it will not allow any waste, refuse, garbage,
ashes or other loose or objectionable material to accumulate in or about the
Leased Premises and will provide covered metal receptacles for the same and will
at all times keep the Leased Premises in a clean and tidy condition.

OVERLOADING FLOORS
  8.08 The Tenant covenants that it will not bring upon the Leased Premises or
any part thereof any machinery, equipment, article or thing that, by reason of
its weight, size, configuration, operation or otherwise, might damage the Leased
Premises and will not at any time overload or damage the floors of the Leased
Premises. The Tenant shall remove any such machinery, equipment (including but
not limited to mobile equipment such as a forklift), article or thing within
five (5) days' written notice thereof and if any damage is caused to the Leased
Premises by any machinery, equipment, article or thing or by overloading, the
Tenant shall forthwith repair such damage at its own expense to the satisfaction
of the Landlord.

OUTSIDE STORAGE
  8.09 The Tenant agrees that it will not store any goods or matter of any kind
whatsoever outside the Leased Premises without the express written consent of
the Landlord first had and obtained.

                      ARTICLE IX - INSURANCE AND INDEMNITY

TENANT'S INSURANCE
  9.01 The Tenant shall, at its expense, maintain in force during the Term in
the name of the Tenant (with the Landlord and the Landlord's mortgagee, if any,
as additional insureds) the following insurance:

         (a)      comprehensive general liability insurance against claims for
                  personal injury, death or property damage (including but not
                  limited to tenants' legal liability, personal injury
                  liability, products liability, property damage and contractual
                  liability to cover all indemnities) with respect to the
                  business or operations carried on in and from the Leased
                  Premises, in amounts required by the Landlord and any
                  mortgagee of the Building or any part thereof from time to
                  time but in no event less than Five Million Dollars
                  ($5,000,000.00) per occurrence;

         (b)      insurance covering all contents of the Leased Premises and all
                  other property for which the Tenant is responsible pursuant to
                  this Lease and/or which has been installed by or on behalf of
                  the Tenant (including without limitation all chattels,
                  equipment, machinery, furniture, inventory, fixtures and all
                  Leasehold Improvements) in an amount equal to the full
                  replacement value thereof; and

         (c)      such other forms of insurance as may be reasonably required by
                  the Landlord and its mortgagee from time to time.

Any policy written pursuant to paragraph (a) of this Section shall contain a
severability of interest clause and a cross liability clause. All policies shall
contain an undertaking by the insurers to notify the Landlord and its mortgagee,
if any, in writing not less than thirty (30) days prior to any material change,
cancellation or termination thereof and shall be subject only to such
deductibles and exclusions as the Landlord may approve, acting reasonably. The
Tenant shall promptly furnish upon request from the Landlord verification of
compliance with the provisions of this Section.

LANDLORD'S INSURANCE
  9.02 Throughout the Term of this Lease the Landlord shall provide and keep in
force property insurance in respect of the Building (but not including the
property of the Tenant which the Tenant is required to insure for pursuant to
paragraph (b) of Section 9.01 hereof) against fire and such other perils as are
normally insured against in the circumstances by prudent landlords of similar
buildings and loss of rental income insurance, subject to reasonable deductions
and exceptions as the Landlord may determine and to amounts which the Landlord
shall from time to time determine as being reasonable or sufficient.
Notwithstanding any contribution by the Tenant to the cost of any insurance
effected by the Landlord, no insurable interest is conferred upon the Tenant
under any such policies of insurance and the Tenant has no right to receive any
proceeds under any such insurance.

<PAGE>

                                      -12-

NOT TO AFFECT LANDLORD'S INSURANCE
  9.03 Neither the Tenant nor its officers, directors, agents, servants,
licencees or concessionaires, assignees or subtenants shall bring onto the
Leased Premises or do or omit or permit to be done or omitted to be done upon or
about the Leased Premises anything which shall cause the rate of insurance upon
the Leased Premises or any part thereof or its contents to be increased, and if
the said rate of insurance shall be increased by reason of the use made of the
Leased Premises even though such use may be a permitted use hereunder or by
reason of anything done or omitted or permitted to be done or omitted to be done
by the Tenant or its officers, directors, agents, servants, licensees,
concessionaires, assignees or subtenants or by anyone permitted by the Tenant to
be upon the Leased Premises, the Tenant shall pay to the Landlord forthwith upon
demand the amount of such increase.

LIMIT OF LANDLORD'S LIABILITY
  9.04 The Landlord shall not be responsible in any way for any injury to any
person (including but not limited to death) or for any loss of or damage to any
property belonging to the Tenant or to other occupants of the Leased Premises or
to their respective employees, agents, invitees, licensees or other persons from
time to time attending at the Leased Premises while such person or property is
in or about the Lands, the Leased Premises, or any areaways, parking areas,
lawns, sidewalks, steps, truckways, platforms, corridors, stairways, elevators
or escalators in connection therewith, including without limiting the foregoing,
any loss of or damage to any property caused by theft or breakage, or by steam,
water, rain or snow or for any loss or damage caused by or attributable to the
condition or arrangements of any electrical or other wiring or for any damage
caused by smoke or anything done or omitted to be done by any other tenant of
the Complex or for any other loss whatsoever with respect to the Leased
Premises, goods placed therein or any business carried on therein.

LIMIT OF TENANT'S LIABILITY
  9.05 The Tenant shall not be liable to the Landlord for any direct injury,
loss or damage required to be insured by the Landlord pursuant to Section 9.02
to the extent of the proceeds actually recovered by the Landlord under such
policies of insurance.

INDEMNITY
   9.06 The Tenant shall promptly indemnify and save the Landlord harmless from
any and all liabilities, damages, costs, expenses, claims, suits or actions
arising out of any breach, violation or non-observance by the Tenant of any of
its obligations under the Lease; from any damage to property while such property
shall be in or about the Leased Premises including but not limited to the
systems, furnishings and amenities thereof, as a result of the willful or
negligent act or omission of the Tenant, its employees, agents, invitees or
licensees; and from any injury to any employee, agent, invitee or licensee, of
the Tenant, including but not limited to death resulting at any time therefrom,
occurring on or about the Complex or any part thereof. Notwithstanding anything
else herein contained, this indemnity shall survive the expiry or earlier
termination of the Term.

                         ARTICLE X - CONTROL OF COMPLEX

CONTROL OF COMPLEX
  10.01  (a)      The Complex shall, at all times, be subject to the exclusive
                  control of the Landlord and, without limiting the generality
                  of the foregoing, the Landlord shall have the right from time
                  to time throughout the Term:

                  (i)      to construct in, to or on the Complex, to make
                           alterations, additions and subtractions thereto and
                           therefrom to erect new buildings on the Complex;

                  (ii)     to monitor access to any of the parking areas by
                           means of barriers, control booths or any other method
                           which the Landlord deems proper;

                  (iii)    to change the location of driveways and sidewalks and
                           the location, layout or size of the parking area; and

                  (iv)     to do or perform such other acts in and to the
                           Complex as the Landlord, acting as a prudent owner,
                           deems advisable for the more efficient and proper
                           operation of the Complex.

         (b)      The Landlord will operate and maintain the Complex in such a
                  manner as the Landlord in its sole discretion shall determine
                  from time to time. Without limiting the scope of such
                  discretion, the Landlord shall have the full right and
                  authority to employ all personnel and to make all rules and
                  regulations pertaining to and necessary for the proper
                  operation and maintenance of the Complex.

         (c)      The Landlord shall not be liable for any diminution or
                  alteration of the common area of the Complex resulting from
                  the exercise of the Landlord's rights under this Section and
                  the Tenant shall not be entitled to a reduction or abatement
                  of Rent or to compensation therefor.

<PAGE>

                                      -13-

                        ARTICLE XI - DAMAGE & DESTRUCTION

ABATEMENT OF RENT
  11.01 If the Leased Premises or any portion thereof is damaged or destroyed by
fire or by other casualty against which the Landlord is required to insure under
this Lease, Rent shall abate in proportion to the area of that portion of the
Leased Premises which, in the reasonable opinion of the Landlord, is thereby
rendered unfit for the purposes of the Tenant bears to the area of the entire
Leased Premises (but only to the extent to which the Landlord actually receives
proceeds under its loss of rental income insurance or which would have been
received if the Landlord had complied with its obligations under Section 9.02)
until the Leased Premises are repaired and rebuilt as certified by the
Landlord's Architect and the Landlord agrees that it will, with reasonable
diligence, repair and rebuild the Leased Premises, subject to Section 11.02. The
Landlord's obligation to rebuild and restore the Leased Premises shall not
include the obligation to rebuild, restore, replace or repair any chattel,
fixture or Leasehold Improvements or any other thing that is the property of the
Tenant and/or for which the Tenant is to maintain insurance under paragraph (b)
of Section 9.01 (in this Section collectively called "Tenant's Improvements");
the Building shall be deemed repaired and rebuilt when the Landlord's Architect
certifies that it has been substantially repaired and rebuilt to the state where
the Tenant could occupy it for the purpose of rebuilding, restoring, replacing
or repairing the Tenant's Improvements. The issuance of the certificate of the
Landlord's Architect shall not relieve the Landlord of its obligation to
complete the repairing and rebuilding as aforesaid, but the Tenant shall
forthwith after issuance of such certificate proceed to rebuild, restore,
replace and repair the Tenant's Improvements, and the provisions of Section 6.03
shall apply to such work, MUTATIS MUTANDIS.

TERMINATION
  11.02  (a)      Notwithstanding the provisions of Section 11.01 hereof, if the
                  Leased Premises or any portion thereof are (i) damaged or
                  destroyed by any cause whatsoever and cannot in the reasonable
                  opinion of the Landlord be rebuilt or made fit for the
                  purposes of the Tenant as aforesaid within one hundred and
                  eighty (180) days of the date of such damage or destruction,
                  or (ii) the Leased Premises are damaged or destroyed by an
                  uninsured peril, the Landlord may, at its option, terminate
                  this Lease by giving to the Tenant, within sixty (60) days
                  after the date of such damage or destruction, notice of
                  termination and thereupon Rent shall be apportioned and paid
                  to the date of such damage or destruction and the Tenant shall
                  immediately deliver up possession of the Leased Premises to
                  the Landlord.

         (b)      If the Landlord does not elect to terminate the Lease pursuant
                  to paragraph (a) of this Section, it shall, with reasonable
                  diligence, repair and restore the Building in accordance with
                  the provisions of Section 11.01.

                              ARTICLE XII - DEFAULT

EVENTS OF DEFAULT
  12.01  An "Event of Default" shall occur whenever:

         (a)      the Tenant fails to pay the Rent hereby reserved or any part
                  thereof within five (5) business days from the giving of
                  written notice by the Landlord to the Tenant in respect
                  thereof (provided that if the Landlord is required to give the
                  notice hereunder on two (2) occasions during any twenty-four
                  (24) month consecutive period, the Landlord shall thereafter
                  have no further obligation to give notice hereunder and an
                  Event of Default shall be deemed to occur on the date the
                  Tenant fails to pay Rent on the due date as provided for in
                  the Lease);

         (b)      the Tenant shall have breached or failed to comply with any of
                  its covenants and agreements contained in this Lease (save for
                  non-payment of Rent) and shall have failed to remedy such
                  breach or non-compliance within fifteen (15) days (or such
                  longer period as the Landlord may reasonably determine, having
                  regard to the nature of the default) after written notice
                  thereof given by the Landlord to the Tenant;

         (c)      the Tenant shall make any assignment for the benefit of
                  creditors or become bankrupt or insolvent or take the benefit
                  of any Act now or hereinafter in force for bankrupt or
                  insolvent debtors;

         (d)      the Tenant is a corporation and any order shall be made for
                  the winding-up of the Tenant or other termination of the
                  corporate existence of the Tenant;

         (e)      the Tenant makes or attempts to make a bulk sale of assets not
                  in the ordinary course of the Tenant's business;

         (f)      a trustee, receiver, interim receiver, receiver and manager,
                  custodian or liquidator is appointed for the business,
                  property, affairs or revenue of the Tenant;

         (g)      this Lease or any of the Tenant's assets on the Leased
                  Premises are taken or seized under writ of execution, an
                  assignment, pledge, charge, debenture or other security
                  instrument;

<PAGE>

                                      -14-

         (h)      the Tenant abandons or attempts to abandon the Leased
                  Premises;

         (i)      the Leased Premises shall be used by any person other than the
                  Tenant or the Tenant's permitted assignees or permitted
                  Transferees or for any purpose other than as set out in
                  Section 8.01;

         (j)      any insurance policy on the Building or any part thereof shall
                  be cancelled or shall be threatened by the insurer to be
                  cancelled or the coverage thereunder reduced in any way by the
                  insurer by reason of the use or occupation of the Leased
                  Premises or any part thereof by the Tenant and the Tenant
                  shall have failed to remedy the condition giving rise to such
                  cancellation, threatened cancellation or reduction of coverage
                  within forty-eight (48) hours written notice given by the
                  Landlord to the Tenant;

         (k)      the Tenant sells or disposes of the goods, chattels or
                  equipment in the Leased Premises or removes, commences or
                  threatens to remove them from the Leased Premises so that in
                  the opinion of the Landlord there would not, in the event of
                  such sale, disposal or removal, be sufficient goods on the
                  Leased Premises subject to distress which would satisfy all
                  Rent due or accruing hereunder for a period of six (6) months;

         (1)      the Tenant shall at any time during the Term use the Leased
                  Premises, whether within the use permitted by Section 8.01 or
                  not, in a manner which imposes upon the Landlord any
                  obligation to modify, extend, alter or replace any part of the
                  Leased Premises or any of the machinery, equipment or other
                  facilities used in connection with the Leased Premises, which
                  obligation is not fulfilled by the Tenant at its own cost in a
                  timely manner; or

         (m)      the Leased Premises are vacant for any period in excess of
                  fifteen (15) days other than during repairs or renovations.

         Notwithstanding the BANKRUPTCY AND INSOLVENCY ACT (Canada) or
         otherwise, upon the occurrence of an Event of Default, the then current
         month's Rent and next ensuing three (3) months' Rent shall immediately
         become due and be paid by the Tenant to the Landlord as accelerated
         Rent and the Landlord may immediately distrain for the same together
         with any Rent arrears then unpaid.

RIGHT OF RE-ENTRY
12.02
         (a)      Upon the occurrence of an Event of Default, the Landlord may
                  at any time thereafter, without notice to the Tenant, re-enter
                  the Leased Premises or any part thereof in the name of the
                  whole and terminate this Lease and all the rights of the
                  Tenant thereunder.

         (b)      If and whenever the Landlord exercises its option to re-enter
                  the Leased Premises and terminate this Lease pursuant to
                  paragraph (a) of this Section:

         (i)      the Tenant shall immediately vacate the Leased Premises and
                  the Landlord may remove or cause to be removed from the Leased
                  Premises the Tenant and/or any other occupant or occupants
                  thereof and may remove all property therefrom and sell or
                  dispose of such property as the Landlord considers appropriate
                  without liability for loss or damage and without prejudice to
                  the rights of the Landlord to recover arrears of Rent or
                  damages incurred by the Landlord;

         (ii)     the Landlord shall be immediately entitled to the payment of
                  Rent up to the date of termination together with all expenses
                  incurred by the Landlord in respect of such termination and
                  the value of the Rent, calculated at the date of termination,
                  for the unexpired portion of the Term.

RELETTING
  12.03 At any time when the Landlord is entitled to re-enter the Leased
Premises or terminate this Lease, the Landlord may without notice to the Tenant
and without terminating the Lease enter upon and take custody of the Leased
Premises in the name of and as agent of the Tenant, together with all the
Tenant's improvements, fixtures and furnishings, and sublet the Leased Premises
in the name of and as the agent of the Tenant on whatever terms the Landlord may
deem appropriate but no such action by the Landlord shall waive any of the
obligations of the Tenant or limit the subsequent exercise of any of the
Landlord's remedies for default. If the Landlord shall sublet the Leased
Premises as aforesaid, the Landlord shall be entitled to receive all sublease
rent and apply the same in its discretion to any indebtedness of the Tenant to
the Landlord under this Lease and/or to the payment of any costs and expenses of
reletting, and the Landlord shall be liable to account to the Tenant only for
the excess, if any, of monies actually received by it. If the sublease rent is
less than is necessary to pay and discharge all the then existing and continuing
obligations of the Tenant hereunder, the Tenant shall pay such deficiency to the
Landlord upon demand from time to time. Notwithstanding any such re-entry and
subletting without termination, the Landlord may at any time thereafter
terminate this Lease by reason of the previous or any other default under the
Lease and the provisions of Section 12.02 shall apply.

<PAGE>

                                      -15-

DISTRESS
  12.04 The Tenant waives and renounces the benefit of any present or future
statute taking away or limiting the Landlord's right of distress, and covenants
and agrees that notwithstanding any such statute, none of the goods and/on
chattels of the Tenant on the Leased Premises at any time during the Term shall
be exempt from levy by distress for rent in arrears.

RIGHT OF LANDLORD TO CURE DEFAULTS
  12.05 After the provision of any notice and/or applicable cure period as may
be provided for in this Lease if any, if the Tenant fails to perform or cause to
be performed any of the covenants or obligations of the Tenant herein, the
Landlord shall have the right (but shall not be so obligated) to perform or
cause to be performed and to do or cause to be done such things as may be
necessary or incidental thereto (including without limiting the foregoing, the
right to make repairs, installations, erections and expend monies), and all
payments, expenses, charges, fees and disbursements incurred or paid by or on
behalf of the Landlord in respect thereof shall be paid by the Tenant to the
Landlord within ten (10) days' written demand therefor together with all
reasonable legal and administrative costs of the Landlord in respect thereof.

REMEDIES NOT EXCLUSIVE
  12.06 Mention in this Lease of any particular remedy or remedies in respect of
any default or threatened default by the Tenant in the performance of its
obligations shall not preclude the Landlord from exercising, or limit the extent
of, any other remedy in respect thereof, whether at law, in equity or pursuant
to any express provision hereof. No remedy shall be interpreted as exclusive or
dependent upon any other remedy, and the Landlord may from time to time exercise
any one or more of such remedies independently or in combination.

NON-WAIVER
  12.07 No condoning, excusing or overlooking by the Landlord of any default,
breach or non-observance by the Tenant at any time or times in respect of any
covenant, proviso or condition herein contained shall operate as a waiver of the
Landlord's rights hereunder in respect of any continuing or subsequent default,
breach or non-observance, or so as to defeat or affect in any way the rights of
the Landlord herein in respect of any such continuing or subsequent default or
breach, and no waiver shall be inferred from or implied by anything done or
omitted by the Landlord, save only an express waiver by the Landlord in writing.

RECOVERY OF ADJUSTMENTS
  12.08 The Landlord shall have (in addition to any other right or remedy of the
Landlord) the same rights and remedies in the event of default by the Tenant in
payment of any amount payable by the Tenant hereunder as the Landlord would have
in the case of default in payment of Rent.

                 ARTICLE XIII - SUBORDINATION & ACKNOWLEDGEMENTS

MORTGAGES
  13.01 At the option of the Landlord or the applicable mortgagee, chargee or
trustee (as the case may be), this Lease shall be subject and subordinate to any
and all mortgages, charges and deeds of trust (and instruments supplemental
thereto), which may now or at any time hereafter affect the Leased Premises in
whole or in part, or the Lands, or the Building whether or not any such
mortgage, charge or deed of trust affects only the Leased Premises or the Lands
or the Building or affects other premises as well. The Tenant acknowledges and
agrees that any such mortgagee, chargee or trustee may unilaterally postpone and
subordinate its mortgage, charge or deed of trust to this Lease and any
renewals, modifications, consolidations, replacements or extensions thereof to
the intent that this Lease and all right, title and interest of the Tenant in
the Leased Premises shall be prior to the rights of such mortgagee, chargee or
trustee as fully as if such Lease had been executed and registered before the
registration of the mortgage, charge or deed of trust, as applicable. On request
at any time and from time to time of the Landlord or of the mortgagee, chargee
or trustee under any such mortgage, charge or deed of trust, the Tenant shall
promptly, at no cost to the Landlord or mortgagee, chargee or trustee:

         (a)      attorn to such mortgagee, chargee or trustee and become its
                  tenant of the Leased Premises or the tenant of the Leased
                  Premises of any purchaser from such mortgagee, chargee or
                  trustee in the event of an exercise of any permitted power of
                  sale contained in any such mortgage, charge or deed of trust
                  for the then unexpired residue of the Term on the terms herein
                  contained; and/or

         (b)      postpone and subordinate this Lease to such mortgage, charge
                  or deed of trust to the intent that this Lease and all right,
                  title and interest of the Tenant in the Leased Premises shall
                  be subject to the rights of such mortgagee, chargee or trustee
                  as fully as if such mortgage, charge or deed of trust had been
                  executed and registered and the money thereby secured had been
                  advanced before the execution of this Lease (and
                  notwithstanding any authority or consent of such mortgagee, or
                  trustee, express or implied, to the making of this Lease).

<PAGE>

                                      -16-

Any such attornment or postponement and subordination shall extend to all
renewals, modifications, consolidations, replacements and extension of any such
mortgage, charge or deed of trust and every instrument supplemental or ancillary
thereto or in implementation thereof. The Tenant shall forthwith execute any
instruments of attornment or postponement and subordination which may be so
requested to give effect to this Section.

CERTIFICATES
  13.02 The Tenant shall, within not more than ten (10) days' written request
therefor, execute and return to the Landlord as required by the Landlord from
time to time and without cost to the Landlord, a statement in writing certifying
that this Lease is unmodified and in full force and effect (or if modified,
stating the modifications and that the Lease is in full force and effect as
modified), the amount of the annual Basic Rent then being paid hereunder, the
dates to which the same, by installment or otherwise, and other charges
hereunder have been paid, whether or not there is any existing default on the
part of the Landlord of which the Tenant has notice, and any other information
reasonably required.

                        ARTICLE XIV - ACCESS BY LANDLORD

EXHIBITING LEASED PREMISES
  14.01 The Tenant shall permit the Landlord or its agents to exhibit the Leased
Premises to prospective tenants during the last six (6) months of the Term
during normal business hours upon at least 24 hours advance notice.

EXPANSION, ALTERATION
  14.02 The Landlord shall have the right to enter into the Leased Premises and
to bring its workmen and materials thereon to inspect the Leased Premises and to
make additions, alterations, improvements, installations and repairs to the
Leased Premises, the Lands and the common areas and services thereof as such may
exist from time to time. The Landlord may cause such reasonable obstructions and
interference with the use and enjoyment of the Lands, the common areas and the
Leased Premises as may be necessary for the purposes aforesaid and may interrupt
or suspend the supply of electricity, water or other utilities or services when
necessary and until the additions, alterations, improvements, installations or
repairs have been completed, and there shall be no abatement in Rent nor shall
the Landlord be liable by reason thereof, provided all such work is done as
expeditiously as reasonably possible. The Landlord shall have the right to use,
install, maintain and repair pipes, wires, ducts, shafts or other installations
in, under or through the Leased Premises for or in connection with the supply of
any services to the Leased Premises.

                           ARTICLE XV - MISCELLANEOUS

NOTICE
  15.01           (a) Any notice, request, statement or other writing pursuant
                  to this Lease shall be deemed to have been given if mailed by
                  registered prepaid post or by facsimile transmission as
                  follows:

                  In the case of the Landlord, to:

                  ORLANDO CORPORATION
                  6205 Airport Road, 5th Floor
                  Mississauga, Ontario
                  L4V IE3

                  Attention:   President

                  Facsimile # (905) 677 2824

                  In the case of the Tenant, to:

                  HMV CANADA INC.
                  5401 Eglinton Avenue West
                  Suite 110
                  Etobicoke, Ontario
                  M9C 5K6

                  Attention:  Real Estate Department

                  Facsimile #

                  and such notice shall be deemed to have been received by the
                  Landlord or the Tenant (as applicable) on the third business
                  day after the date on which it shall have been so mailed
                  (provided that in the event that there is an interruption of
                  postal service, the aforesaid period shall be extended for a
                  period equivalent to the period of such interruption) or on
                  the day of facsimile transmission if made before 5:00 p.m.
                  Eastern Time on a business day, otherwise on the business day
                  next following, as evidenced by a written confirmation of such
                  facsimile transmission.

<PAGE>

                                      -17-

         (b)      Notice shall also be sufficiently given if and when the same
                  shall be delivered, in the case of notice to the Landlord, to
                  an executive officer of the Landlord, and in the case of
                  notice to the Tenant, to him personally or to an officer or
                  manager of the Tenant if the Tenant is a corporation. Such
                  notice, if delivered, shall be conclusively deemed to have
                  been given and received at the time of such delivery. If in
                  this Lease two or more persons are named as Tenant, such
                  notice shall also be sufficiently given if and when the same
                  shall be delivered personally to any one of such persons.

                  Either the Landlord or the Tenant may from time to time, by
                  notice to the other as aforesaid, designate another address in
                  Canada and/or facsimile number to which notices issued more
                  than ten (10) days thereafter shall be addressed.

REGISTRATION
  15.02 The Tenant covenants and agrees with the Landlord that the Tenant will
not register or record this Lease or any part thereof against the title to the
Lands or any part thereof except by way of notice which shall be subject to the
prior written approval of the Landlord not to be unreasonably withheld or
delayed and which shall only describe the parties, the Leased Premises the Term.
The Tenant covenants to execute and return to the Landlord such notice, prepared
by the Landlord in registrable form setting out the aforesaid details within ten
(10) days' written request therefor.

PLANNING ACT
  15.03 Where applicable, this Lease shall be subject to the condition that it
is effective only if the PLANNING ACT (Ontario) is complied with. Pending such
compliance, the Term and any extension periods shall be deemed to be for a total
period of one (1) day less than the maximum lease term permitted by law without
such compliance.

OBLIGATIONS AS COVENANTS
  15.04 Each obligation or agreement of the Landlord or the Tenant expressed in
this Lease, even though not expressed as a covenant, is considered to be a
covenant for all purposes.

SEVERABILITY
  15.05 Any provision of this Lease that is determined to be illegal or
unenforceable at law shall be considered separate and severable from the
remaining provisions which shall remain in force and be binding upon the
Landlord and the Tenant.

UNAVOIDABLE DELAYS
  15.06 Whenever and to the extent the Landlord is unable to fulfill or shall be
delayed or restricted in the fulfillment of any obligation hereunder by reason
of being unable to obtain the material, goods, equipment, service, utility or
labour required to enable it to fulfil such obligation or by reason of any
statute, law, regulation, by-law or order or by reason of any other cause beyond
its reasonable control, whether of the same nature as the foregoing or not, the
Landlord shall be relieved from the fulfillment of such obligation for so long
as such cause continues and the Tenant shall not be entitled to compensation for
any inconvenience, nuisance or discomfort thereby occasioned. There shall be no
deduction from the Rent or other monies payable under this Lease by reason of
any such failure or cause.

EVIDENCE OF PAYMENTS
  15.07 The Tenant shall produce to the Landlord upon request, satisfactory
evidence of due payment by the Tenant of all payments required to be made by the
Tenant under this Lease.

OVERHOLDING
  15.08 If the Tenant shall continue to occupy all or part of the Leased
Premises after the expiration of the Term with the consent of the Landlord, and
without any further written agreement, the Tenant shall be a monthly tenant at
one hundred and twenty five percent (125%) of the monthly Basic Rent payable
during the last year of this Lease and otherwise on the terms and conditions
herein set out except as to length of tenancy.

LIEN
  15.09 As security for the due payment by the Tenant of the Rent reserved
hereunder and the performance by the Tenant of all covenants, agreements,
provisos and conditions of the Tenant to be performed hereunder, the Tenant
hereby grants to the Landlord a first lien and charge on all goods, chattels,
trade fixtures, furniture, equipment and inventory of the Tenant situate on, in
or about the Leased Premises or elsewhere. Such lien and charge shall constitute
a security agreement within the meaning of the PERSONAL PROPERTY SECURITY ACT
(Ontario) and on default of the Tenant hereunder the Landlord shall have, in
addition to any other rights and remedies it may be entitled to under this Lease
or otherwise, all the rights and remedies of a secured party under such Act.

<PAGE>

                                      -18-

TIME OF ESSENCE
  15.10  Time shall be of the essence of this Lease and every part thereof.

LAW
  15.11 This Lease shall be governed by and construed in accordance with the
laws of the Province of Ontario.

CAPTIONS/HEADINGS
  15.12 The captions appearing in the margin of this Lease and in the headings
to the Articles of this Lease have been inserted as a matter of convenience of
reference only and do not in any way whatsoever define, limit or enlarge the
scope or meaning of this Lease or any part thereof.

JOINT AND SEVERAL LIABILITY
  15.13 If the Tenant shall be comprised of more than one (1) party, the
liability of each such party under this Lease shall be joint and several.

TENANT PARTNERSHIP
  15.14 If the Tenant shall be a partnership, each person who shall be a member
of such partnership or successor thereof shall be and continue to be jointly and
severally liable for the performance and observance of all covenants,
obligations and agreements of the Tenant under this Lease even if such person
ceases to be a member of such partnership or successor thereof.

ENVIRONMENTAL ASSESSMENTS
  15.15           (a) The Landlord or its agent shall have the right to enter
                  upon the Complex (including but not limited to the Leased
                  Premises) and conduct environmental assessment audits from
                  time to time during the Term.

         (b)      The Tenant covenants and agrees to execute, forthwith upon
                  demand therefor, at its own cost and expense, the complete
                  remediation/clean-up of any and all contamination of the
                  Complex arising out of the Tenant's use or occupation of the
                  leased premises. The aforesaid covenant in this paragraph (b)
                  shall survive the expiry or other termination of the Term.

ENVIRONMENTAL MATTERS
  15.16 The Landlord shall be responsible, at its own cost, for the removal and
clean-up of any Hazardous Substance existing on the Leased Premises prior to the
earlier of: (i) the Commencement Date, or (ii) the date the Tenant occupies the
Leased Premises. The Tenant shall be responsible, at its own cost, for the
removal and clean-up of any Hazardous Substance existing or found on the Leased
Premises after the earlier of the Commencement Date or the date the Tenant
occupies the Leased Premises.

EASEMENTS
  15.17 The Tenant acknowledges that the Lands are subject to such rights-of-way
and other easements as are designated, if any, in Schedule "B" hereto. The
Tenant agrees to postpone this Lease, upon demand by the Landlord, to:

         (i)      such further easements in favour of adjoining lands for
                  purposes of ingress and egress as may be requested by the
                  Landlord from time to time; and

         (ii)     easements regarding utilities as may be required from time to
                  time.

ENTIRE AGREEMENT
  15.18 The Tenant acknowledges that there have been no representations made by
the Landlord which are not set out in the Lease. The Tenant further acknowledges
that the Lease constitutes the entire agreement between the Landlord and Tenant
and may not be modified except as herein explicitly provided or by subsequent
agreement in writing duly signed by the Landlord and the Tenant.

<PAGE>

                                      -19-

EFFECT OF LEASE
  15.19 This Indenture and everything herein contained shall extend to and bind
and may be taken advantage of by the respective heirs, executors,
administrators, successors and assigns, as the case may be, of each of the
parties hereto, subject to the granting of consent by the Landlord as provided
herein to any assignment or sublease, and where there is more than one tenant or
there is a female party or a corporation, the provisions hereof shall be read
with all grammatical changes thereby rendered necessary and all covenants shall
be deemed joint and several.

                  IN WITNESS WHEREOF the parties hereto have duly executed this
Lease.

LANDLORD:                     ORLANDO CORPORATION

                              Per: /s/ Doug Kilner
                                  ---------------------------------------
                                  Authorized Signing Officer
                                  Name:  DOUG KILNER
                                  Title:  PRESIDENT

                              Per: /s/ William O'rourke
                                  ---------------------------------------
                                   Authorized Signing Officer
                                   Name:   WILLIAM O'ROURKE
                                   Title: VICE PRESIDENT, FINANCE

                              WE HAVE AUTHORITY TO BIND THE CORPORATION.

LANDLORD:                     ORION PROPERTIES LTD. (BY ITS AUTHORIZED
                              PROPERTY MANAGER ORLANDO CORPORATION)

                              Per: /s/ Doug Kilner
                                  ---------------------------------------
                                   Authorized Signing Officer
                                   Name:  DOUG KILNER
                                   Title: Authorized Signing Officer

                              Per: /s/ William O'Rourke
                                  ---------------------------------------
                                   Authorized Signing Officer
                                   Name:   WILLIAM O'ROURKE
                                   Title: AUTHORIZED SIGNING OFFICER

                              WE HAVE AUTHORITY TO BIND THE CORPORATION.

TENANT:                       HMV CANADA INC.

                              Per: /s/ Harvey Berkley
                                  ---------------------------------------
                                   Authorized Signing Officer
                                   Name:  HARVEY BERKLEY
                                   Title: VICE PRESIDENT, FINANCE

                              Per: /s/ Peter Luckhurst
                                 ---------------------------------------
                                  Authorized Signing Officer
                                  Name:   PETER LUCKHURST
                                  Title:   PRESIDENT

                              I/WE HAVE AUTHORITY TO BIND THE CORPORATION.

<PAGE>

                                  SCHEDULE "B"

                               DESCRIPTION OF LAND

  ALL AND SINGULAR that certain parcel or tract of land and premises situate,
lying and being in the City of Mississauga, in the Regional Municipality of Peel
(formerly in the Township of Toronto, County of Peel) and being composed of part
of the East half of Lot 7, Concession 3, East of Hurontario Street and being
designated as Parts 1, 2, 3 and 4 on Plan of Survey of Record deposited in the
Land Registry Office for the Registry Division of Peel (No. 43) as 43R-6672.

<PAGE>

                                  SCHEDULE "C"

                                   DEFINITIONS

For the purpose of this Lease:

(a)      "ADDITIONAL RENT" means all amounts payable by the Tenant under the
         provisions of this Lease, whether payable to the Landlord or otherwise,
         over and above Basic Rent.

(b)      "BASIC RENT" means those amounts set out as Basic Rent in Section 2.02
         of this Lease.

(c)      "BUILDING" means the building erected on the Lands and municipally
         known as 6291 Ordan Drive in the City of Mississauga, in the Regional
         Municipality of Peel.

(d)      "BUILDINGS" means all of the buildings erected on the Lands.

(e)      "CAPITAL TAX" means the taxes or excises, imposed by any and all taxing
         authorities having jurisdiction, upon the Landlord and/or the owners of
         the Building based upon or computed by reference to the capital
         employed or invested by the Landlord and/or the owners of the Building
         on the Lands, the Building and improvements thereto.

(f)      "COMPLEX" means the Lands and the Buildings.

(g)      "HAZARDOUS SUBSTANCES" means, without limitation, any and all hazardous
         substances, hazardous waste, toxic waste, dangerous goods, toxic
         substance, contaminants, pollutants or related materials, including
         without limitation, heavy oil, pesticides, flammables, explosives,
         radioactive materials, asbestoses, urea formaldehyde foam insulation,
         radon gas, PCB, any products of waste, or any other contaminants,
         pollutants, substances or products declared to be hazardous or toxic
         under the Applicable Laws. "Applicable Laws" means any statutes, laws,
         by-laws, regulations, ordinances, and requirements of governmental and
         other public authorities having jurisdiction over or in respect of the
         Leased Premises or Building, or any portion thereof, and all amendments
         thereto at any time and from time to time, and including but not
         limited to the Environmental Protection Act, R.S.0.1990, c.E.l9, as
         amended, and the Canadian Environmental Protection Act, R.S.C. 1985.

(h)      "LANDLORD'S ARCHITECT" means a qualified architect, engineer or Ontario
         Land Surveyor from time to time chosen by the Landlord.

(i)      "LANDS" means the parcel of land described in Schedule "B" hereto as it
         may be added to or subtracted from and the boundaries thereof as varied
         from time to time.

(j)      "LEASE" means this Lease and any schedules annexed hereto and any
         amendments from time to time made to this Lease in accordance with the
         provisions herein set out.

(k)      "LEASED PREMISES" means the Building.

(1)      "LEASEHOLD IMPROVEMENTS" means all fixtures (save for trade fixtures),
         installations, additions, improvements and alterations made, erected or
         installed on the Leased Premises by or on behalf of the Tenant.

(m)      "OPERATING COSTS" means the aggregate of all costs, expenses or amounts
         incurred, whether by the Landlord or others on behalf of the Landlord
         in connection with the complete maintenance, operation, management and
         repair of the Lands and improvements thereon (save for the Buildings)
         and components thereof, including without limiting the generality of
         the foregoing and without duplication: the cost of snow, ice and refuse
         clearance and removal; gardening, landscaping, repaying, line painting,
         lighting signs, sanitary control, insurance (including but not limited
         to liability and property insurance, the amount of the deductible
         portion of any liability policy in the event of any claim thereunder
         and the costs of independent adjusters and insurance consultants
         retained by the Landlord); electricity; any business taxes imposed on
         the Landlord by reason of its operation of the Lands or any part
         thereof;

<PAGE>

         amounts paid on service contracts; the amount of all salaries, wages
         and benefits paid to or on behalf of persons engaged in cleaning,
         supervision, maintenance, operation, management and repair; the cost of
         consultants retained with intent of saving or reducing costs; the cost
         of all rental equipment and supplies used by the Landlord for all such
         operations and maintenance or any other purpose; and a management fee
         of fifteen percent (15%) of the foregoing amounts incurred.

         In computing Operating Costs there shall be credited as a deduction the
         amounts of proceeds of insurance actually recovered by the Landlord in
         respect of the cost of repairs of such damage included in Operating
         Costs. Operating Costs shall not include interest on Landlord's debt or
         capital retirement of debt or amounts directly chargeable to capital
         account, save as otherwise herein provided for.

         Any report of the Landlord's auditor or other public accountant
         appointed by the Landlord for the purpose shall be conclusive as to the
         amount of Operating Costs for any period to which such report relates.

(n)      "PROPORTIONATE SHARE" means that fraction having as its numerator the
         area of the Building and having as its denominator the Rentable Area of
         the Buildings.

(o)      "RENT" means Basic Rent and Additional Rent.

(p)      "RENTABLE AREA OF THE BUILDINGS" means the area of the Buildings
         measured in accordance with the SIOR standard of measurement for
         industrial buildings.

(q)      "SIOR" means the Society of Industrial and Office Realtors (Canada).

(r)      "TAXES" means all taxes, rates, duties, levies and assessments
         whatsoever (imposed by any and all taxing authorities having
         jurisdiction) levied, charged or assessed upon the Complex or upon any
         part or parts thereof and all improvements now or hereafter erected or
         placed on the Lands, or charged against the Landlord on account
         thereof, including but not limited to local improvement charges (but
         excluding profit and excess profit taxes and taxes assessed upon the
         income of the Landlord). In addition to the foregoing, Taxes shall
         include any and all taxes, charges, levies or assessments which may in
         the future be levied, charged or assessed in lieu thereof or in
         addition thereto. Taxes shall also include all costs and expenses
         incurred by the Landlord in obtaining or attempting to obtain a
         reduction or prevent an increase in the amount thereof and the cost of
         all consultants, solicitors and accountants retained by the Landlord
         with respect thereto. Taxes shall also include a management fee of up
         to fifteen percent (15%) per annum of the foregoing amounts incurred
         for the Landlord's services in administering, determining and appealing
         the Taxes, as may be applicable.

(s)      "TERM" means that period of time set out in Section 1.03 of this Lease
         (and any and all extensions or renewals thereof, as may be applicable).

(t)      "TRANSFER" has the meaning ascribed thereto in paragraph (a) of Section
         7.01 of this Lease.

(u)      "TRANSFEREE" has the meaning ascribed thereto in paragraph (a) of
         Section 7.01 of this Lease.

(v)      "YEAR" means each calendar year, the whole or part of which is included
         within the Term.

<PAGE>

                                  SCHEDULE "D"

                                 LANDLORD'S WORK

The Landlord shall, at its own cost in a good and workmanlike manner, complete
the following work prior to the Commencement Date unless otherwise noted below:

(a)      Paint the existing walls of the warehouse portion of the Leased
         Premises. Colours to be chosen by the Tenant from the Landlord's
         standard samples.

(b)      Ensure all shipping/receiving doors of the warehouse portion of the
         Leased Premises are in good working order as at the date the Tenant
         takes occupancy of the Leased Premises including dock levellers.

(c)      Ensure that all base building mechanical and electrical equipment
         serving the Leased Premises are in good working order as at the date
         the Tenant takes occupancy of the Leased Premises.

(d)      Approximately 28,700 square feet of the warehouse floor of the Leased
         Premises to be sealed with penetrating sealer. The existing painted
         floor remains as is.

(e)      Provide the Leased Premises in a clean and tidy condition as at the
         date the Tenant takes occupancy of the Leased Premises.

(f)      Repair any existing damage as determined by the Landlord, acting
         reasonably.

<PAGE>

                              CONSENT TO ASSIGNMENT

              THIS AGREEMENT made as of the 5th day of April, 2002.

B E T W E E N:

                           ORION PROPERTIES LTD., AND
                               ORLANDO CORPORATION
                (hereinafter collectively called the "Landlord")

                                                             OF THE FIRST PART

                                     - and -

                       THE CHILDREN'S PLACE (CANADA), LP,
                       (hereinafter called the "Assignee")

                                                            OF THE SECOND PART

                                     - and -

                                 HMV CANADA INC.
                       (hereinafter called the "Assignor")

                                                             OF THE THIRD PART

         WHEREAS:

         (a)      the Landlord and the Assignor as tenant entered into a lease
                  dated as of the 21st day of August, 2000 (the "Lease") of
                  certain premises municipally known as 6291 Ordan Drive,
                  Mississauga, Ontario and being more particularly described
                  therein ("Leased Premises"); and

         (b)      the Assignor is assigning the Lease to the Assignee pursuant
                  to an assignment dated April 10, 2002 (the "Assignment") which
                  provides for a transfer of possession and Commencement Date of
                  May 15, 2002 ("Effective Date") as more particularly defined
                  in the Assignment and has requested the consent of the
                  Landlord to such Assignment.

                  NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the Landlord's consent herein contained and other good and valuable
consideration, the parties agree as follows:

1.       The Landlord hereby consents to the assignment of the Lease by the
         Assignor to the Assignee subject to the payment of the rent reserved by
         and the performance and observance of the covenants, conditions and
         agreements in the Lease and subject to the Assignee using the Leased
         Premises only for the purposes permitted in the Lease. This consent is
         given upon the basis that the Landlord does not acknowledge or approve
         of any of the terms of the said assignment between the Assignee and the
         Assignor except for the said assignment itself.

2.       This consent shall in no way affect or release the Assignor from its
         liabilities and responsibilities under the Lease notwithstanding the
         assignment and is given without prejudice to the Landlord's rights
         under the Lease.

3.       This consent shall not be deemed to authorize any further assignments
         or subletting or parting with or sharing possession of all or part of
         the Leased Premises, which may only be done in full compliance with the
         Lease.

<PAGE>

                                       2

4.       In consideration of the Landlord consenting to the Assignment, the
         Assignee hereby covenants and agrees with the Landlord to observe,
         comply with and perform all terms, conditions and covenants in the
         Lease and to pay all sums of any kind whatsoever and perform all
         obligations of any kind whatsoever as and when the same are due to be
         paid or performed by the tenant pursuant to the terms of the Lease
         during all of the term of the Lease and any renewals or extensions
         thereof. The Assignee acknowledges that it has received a copy of the
         Lease and is familiar with all terms, covenants, agreements and
         obligations set out therein.

5.       The Assignee covenants and agrees with the Landlord that prior to
         taking possession of the Leased Premises it shall obtain all necessary
         occupancy approvals from the local fire department and building
         department and will provide copies thereof to the Landlord.

6.       All elections and notices hereunder shall be in writing and delivered
         in the manner prescribed by the Lease to the following addresses:

         If to the Landlord, to:
                  ORLANDO CORPORATION
                  6205 Airport Road
                  Suite 500
                  Mississauga, Ontario
                  L4V 1E3

                  Attention:  President

         And to:
                  ORION PROPERTIES LTD.
                  10250 101 Street
                  AT & T Tower, Suite 920
                  Edmonton, Alberta
                  T5J 3P4

                  Attention:  President

         If to the Assignor, to:
                  HMV CANADA INC.
                  5401 Eglinton Avenue West
                  Suite 110
                  Etobicoke, Ontario
                  M9C 5K6

                  Attention:  Real Estate Department

         If to the Assignee, to:
                  THE CHILDREN'S PLACE (CANADA), LP
                  c/o THE CHILDREN'S PLACE RETAIL STORES, INC.
                  915 Secaucus Road
                  Secaucus, New Jersey 07094
                  USA

         With a copy to:
                  THE CHILDREN'S PLACE (CANADA), LP
                  THE CHILDREN'S PLACE RETAIL STORES, INC.
                  915 Secaucus Road
                  Secaucus, New Jersey 07094
                  USA

                  Attention:  Senior Vice President of Real Estate

<PAGE>

                                       3

7.       The Assignor hereby acknowledges and agrees with the Landlord that it
         shall continue to remain liable on all the terms and covenants in the
         Lease on the part of the tenant to be observed and performed during the
         initial term (specifically excluding) any renewal or extension thereof,
         and only to the extent the Lease remains unamended or, if a monetary
         obligation under the Lease is increased by way of an amending
         agreement, to the extent such increased obligation is consented to by
         the Assignor.

8.       The Assignor shall be liable for and shall indemnify the Landlord
         against all legal costs incurred by the Landlord with respect to the
         assignment referred to herein and the Landlord's consent with respect
         thereto.

9.       This Agreement shall enure to the benefit of and be binding upon the
         parties hereto and their respective successors and permitted assigns.

         IN WITNESS WHEREOF the parties hereto have executed this Agreement.

ORLANDO CORPORATION                        ORION PROPERTIES LTD. (By its
                                           Authorized Property Manager
                                           Orlando Corporation

Per:     /s/  DOUG KILNER                   Per:  /s/  DOUG KILNER
         -----------------------------            ----------------------
         Authorized signing officer                Authorized signing officer
Name:    Doug Kilner                        Name:  Doug Kilner
Title:   President                          Title: Authorized Signing Officer

Per:     /s/  WILLIAM O'ROURKE              Per:   /s/  WILLIAM O'ROURKE
         -----------------------------           ------------------------
         Authorized signing officer                Authorized signing officer
Name:    William O'Rourke                   Name:  William O'Rourke
Title:   Senior Vice President, Finance     Title: Authorized Signing Officer

We Have Authority to Bind the               We Have Authority to Bind the
Corporation                                 Corporation

THE CHILDREN'S PLACE (CANADA) LP            HMV CANADA INC.
By its general partner,
TCP Investment Canada II Corp.

Per:     /s/  MARIO CIAMPI                  Per:  /s/  HARVEY BERKLEY
         ------------------------------           -----------------------------
         Authorized signing officer                Authorized signing officer
Name:    Mario Ciampi                       Name:  Harvey Berkley
Title:   Vice President                     Title: Vice President, Finance

Per:     /s/  STEVEN BALASIANO              Per:   /s/  ANDREW POLLOCK
         ------------------------------            ----------------------------
         Authorized signing officer                Authorized signing officer
Name:    Steven Balasiano                   Name:  Andrew Pollock
Title:   Secretary                          Title: Vice President, Marketing

I/We Have Authority to Bind the              I/We Have Authority to Bind the
Corporation                                  Corporation

<PAGE>

                               ASSIGNMENT OF LEASE

                                   A M O N G:

                                HMV CANADA INC.,

                                     - and -

                       THE CHILDREN'S PLACE (CANADA), LP,

                                LEASED PREMISES:

                                6291 Ordan Drive
                              Mississauga, Ontario
                                     L5T 1G9

<PAGE>

                              ASSIGNMENT AGREEMENT

               THIS AGREEMENT made as of and effective from the 10th day of
April, 2002.

A M O N G:

                             HMV CANADA INC.,

                             (the "Assignor")

                                                         OF THE FIRST PART;

                             - and -

                             THE CHILDREN'S PLACE (CANADA), LP,

                             (the "Assignee")

                                                         OF THE SECOND PART.

               WHEREAS:

         A. By a lease dated the 21st day of August, 2000 (the "Lease"), Orion
Properties Ltd., and Orlando Corporation (collectively the "Landlord") leased to
the Assignor, as Tenant, that certain building (the "Leased Premises"), erected
on the lands and municipality known as 6291 Ordan Drive, in the City of
Mississagua, in the Regional Municipality of Peel, in the Province of Ontario,
and shown outlined in Schedules "A" and "A-1" attached to the Lease, for and
during a term (the "Term") of five (5) years, commencing on the 1st day of
October, 2000, and expiring on the 30th day of September, 2005;

         B. The Lease contains a covenant on the part of the Tenant not to
assign the Lease or sublet the Leased Premises without the Landlord's consent
which shall not be unreasonably withheld;

         C. The Assignor has agreed to assign the Lease to the Assignee subject
to obtaining the Landlord's consent to such assignment;

         D. The Assignor has applied to the Landlord for the Landlord's consent
to assign the Lease to the Assignee, subject to and upon the terms and
conditions herein set out; and

         E. This Assignment shall become effective, in accordance with its
terms, upon delivery of the consent of the Landlord (the "Effective Date").

         1. CONSIDERATION - The consideration for this Agreement is the mutual
covenants and agreements between the parties to this Agreement and the sum of
One Dollar ($1.00) that has been paid by each of the parties to each of the
others, the receipt and sufficiency of which is acknowledged.

         2. RECITALS - The parties hereby agree that the foregoing recitals are
true in substance and in fact.

         3. ASSIGNMENT - The Assignor hereby transfers, sets over and assigns
unto the Assignee, as of and from the Commencement Date (defined in Section 4(i)
below), the Leased Premises, and all privileges and appurtenances thereto
belonging, together with the unexpired residue of the Term, and the Lease and
all benefits and advantages to be derived therefrom.

         TO HAVE AND TO HOLD the same unto the Assignee.

         For the purpose of this Agreement, "Rent" has the same meaning as
ascribed to it in the Lease and includes Basic Rent and Additional Rent.

         4. ASSIGNOR'S - The Assignor covenants and agrees with the Assignee
that:

               (a) The Lease is a good, valid and subsisting Lease and that (i)
               the Rent thereby reserved has been duly paid up to the Effective
               Date, (ii) as of the Effective Date, there are no Events of
               Default and the covenants and conditions therein contained on the
               part of

<PAGE>

                                      -2-

               Landlord and Assignor have been duly observed and performed and,
               to the knowledge of the Assignor, the covenants and conditions
               therein contained on the part of the Landlord have been duly
               observed and performed, and (iii) the Basic Rent shall not be
               increased as a result of any of the transactions consented to by
               the Landlord pursuant to this Agreement.

               (b) The Assignor has good right, full power and absolute
               authority to assign the Leased Premises and the Lease in the
               manner aforesaid, according to the true intent and meaning of
               this Agreement.

               (c) Subject to the consent of the Landlord, the payment of Rent
               to Landlord and to the observance and performance of the terms,
               covenants and conditions contained in the Lease on the part of
               the Tenant therein to be observed and performed, the Assignee may
               enter into and upon and hold and enjoy the Leased Premises for
               the residue of the Term granted by the Lease (and any renewals)
               for its own use and benefit without any interruption by the
               Assignor, or by any person whomsoever or entity whatsoever
               claiming through or under the Assignor.

               (d) The Assignor will, from time to time hereafter, at the
               request of and cost to the Assignee, promptly execute such
               further assurances with respect to this Agreement, the Lease and
               the Leased Premises as the Assignee reasonably requires.

               (e) Any brokerage fees or commissions with respect to this
               assignment shall be borne exclusively by the Assignor and the
               Assignor shall indemnify and hold harmless the Assignee from any
               and all claims with respect thereto.

               (f) The Assignor shall indemnify and hold harmless the Assignee
               from all actions, suits, costs, losses, charges, demands and
               expenses for and in respect of: (i) any non-payment of Rent; and
               (ii) any non-observance or non-performance of any covenants and
               conditions to be observed and performed by the Assignor pursuant
               to the Lease up to the Effective Date.

               (g) The Assignor shall deliver vacant possession of the Leased
               Premises to the Assignee in a neat, clean and tidy condition and
               in the state of repair required pursuant to the Assignor's
               obligations, as Tenant, under the Lease. The Assignee shall be
               deemed to have accepted the condition and state of repair of the
               Leased Premises unless it shall have notified the Assignor of any
               deficiencies in writing within ten (10) business days of taking
               possession.

               (h) The Assignor warrants that, as of the Effective Date, there
               are no registered mortgages, charges, deeds of trust or other
               registered liens granted or incurred by Assignor on the Leased
               Premises.

               (i) Delivery of the Leased Premises by Assignor to the Assignee
               shall occur on May 15, 2002 or such later date as the Assignor
               may deliver the Leased Premises (the "Commencement Date"). In no
               event, shall delivery of the Leased Premises by Assignor occur
               after May 24, 2002. Subject to the adjustment in this
               subparagraph and in subparagraph (k) below, the payment of Basic
               Rent by the Assignee shall commence on July 1, 2002 (the "Rent
               Commencement Date"). The Payment of Additional Rent by the
               Assignee shall commence on August 1, 2002. The dates for the
               payment of Basic and Additional Rent are different so as to give
               the Assignor credit for the Deposit that the Assignor has paid to
               the Landlord pursuant to Section 2.05(b) of the Lease. If
               Assignor should fail to deliver the Leased Premises on May 15,
               2002, then the Rent Commencement Date and the date that the
               Additional Rent becomes payable shall be extended one (1) day for
               each day of delay caused by Assignor.

               (j) Assignor shall leave on the Leased Premises the existing
               metal racks used for storing product and existing telephone
               switch(es) for use by Assignee in an "as is" condition as of the
               Effective Date. The Assignor shall be permitted to remove any of
               its trade fixtures not specifically required herein to remain
               under the terms hereof, prior to the possession date.

               (k) except as specifically provided otherwise, the Assignee and
               the Assignor shall adjust all items on account of Rent, taxes and
               any subsequent adjustments by the Landlord provided for under the
               Lease as of the date immediately preceding the date on which
               Additional Rent becomes due. The Assignee shall pay for utilities
               consumed on the Leased Premises from and after the Commencement
               Date.

<PAGE>

               (l) The Assignor hereby assigns the Deposit under Section 2.05(b)
               of the Lease to the Assignee.

         5.       ASSIGNEE'S COVENANTS -

         (a) The Assignee covenants with the Assignor that: (i) It will at all
times during the balance of the Term of the Lease pay the Rent and observe and
perform the terms, covenants and conditions contained in the Lease respectively
reserved and contained on the part of the Tenant therein to be observed and
performed, including, without limitation, the provisions of the Lease relating
to the permitted use of the Leased Premises; (ii) It will indemnify and save
harmless the Assignor from all actions, suits, costs, losses, charges, demands
and expenses for and in respect of any such non-payment, non-observance or
non-performance; and (iii) It has not retained or used any agent or broker in
connection with this assignment herein of the Leased premises such that there
are no commissions or fees owing to any person with respect to this Agreement or
the assignment.

         (b) The Assignee hereby covenants and agrees with the Landlord that:
(i) It will at all times during the balance of the Term of the Lease pay the
Rent reserved by the Lease and all other payments covenanted to be paid by the
Tenant therein and at the times and in the manner provided for in the Lease, and
will observe and perform all of the terms, covenants and conditions contained in
the Lease on the part of the Tenant therein to be observed and performed as and
when the same are required to be observed and performed as provided by the
Lease, including, without limitation, the provisions of the Lease relating to
the permitted use of the Leased Premises; and (ii) It will indemnify and save
harmless the Landlord from all actions, suits, costs, losses, charges, demands
and expenses for and in respect of any such non-payment, non-observance or
non-performance in accordance with Section 9.06 of the Lease.

         The Assignee acknowledges that it has received a copy of the executed
Lease and is familiar with the terms, covenants and conditions contained
therein.

         6. CONFIRMATION - The parties in all other respects hereby confirm that
the Lease is in full force and effect, unchanged and unmodified except in
accordance with this Agreement. It is understood and agreed that all terms and
expressions when used in this Agreement have the same meaning as they have in
the Lease.

         7. LANDLORD'S CONSENT - This assignment is conditional upon obtaining
the Landlord's consent which, when obtained shall be attached hereto. The
Assignee shall not be entitled to enter into and take possession of the Leased
Premises until it shall deliver to the Landlord (with a copy to the Assignor) a
certificate of insurance which the Tenant is required to take out pursuant to
the Lease, and if specifically requested by the Landlord in writing in advance.

         8. NOTICES - All Notices required by the terms of the Lease or this
Agreement shall be delivered, in accordance with the terms of the Lease,

         (a) to the Assignor at:

                           HMV CANADA INC.
                           Attention:  Real Estate Department
                           5401 Eglinton Avenue West
                           Suite 110
                           Toronto, Ontario, Canada, M9C 5K6

         (b) to the Assignee at:

                           THE CHILDREN'S PLACE (CANADA), LP
                           c/o THE CHILDREN'S PLACE RETAIL STORES, INC.
                           915 Secaucus Road
                           Secaucus, New Jersey 07094 USA
                           Attention:  Senior Vice President of Real Estate

                  With a copy to:

                           THE CHILDREN'S PLACE (CANADA), LP
                           c/o THE CHILDREN'S PLACE RETAIL STORES, INC
                           915 Secaucus Road
                           Secaucus, New Jersey 07094 USA
                           Attention: General Counsel's office.

<PAGE>

         9. ASSIGNMENT - Assignee may assign its rights and obligations under
this Agreement to a wholly owned affiliate on five (5) days written notice to
the Assignor. Such assignment shall not relieve The Children's Place (Canada),
LP from its obligations to comply with its obligations as Tenant under the Lease
as assigned herein.

         10. BINDING EFFECT - This Agreement shall enure to the benefit of and
be binding upon the Assignor, and the Assignee, and each of their heirs,
executors, administrators, successors and assigns, respectively.

               IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement by affixing their respective corporate seals under the hands of their
proper signing officers duly authorized in that behalf or by setting their
respective hands and seals in their personal capacity, as the case may be.

SIGNED, SEALED and DELIVERED       )    HMV CANADA INC.
     in the presence of            )                             (Assignor)
                                   )
                                   )    Per:  /s/  HARVEY BERKLEY
                                   )          ----------------------------------
                                   )          Harvey Berkley

                                   )
                                   )    Per:  /s/  ANDREW POLLOCK
                                   )          ----------------------------------
                                   )          Andrew Pollock

                                   )    THE CHILDREN'S PLACE (CANADA), LP
                                   )    by its general partner, TCP Investment
                                   )    Canada II Corp.               (Assignee)
                                   )
                                   )    Per:  /s/  MARIO CIAMPI
                                   )          ---------------------------------
                                   )          Mario Ciampi

                                   )    Per:  /s/  STEVEN BALASIANO
                                   )          ----------------------------------
                                   )          Steven Balasiano

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