Document:

Exhibit 10.2

                         EXECUTIVE EMPLOYMENT AGREEMENT

         This EXECUTIVE EMPLOYMENT  AGREEMENT  ("Agreement") is made and entered
into as of this 15th day of August 2003, by and between Alpha  Virtual,  Inc., a
Delaware  corporation  (the  "Company"),  and  Paul  Mann,  an  individual  (the
"Executive").  Company or Executive are sometimes  referred to herein as "party"
or collectively "parties."

         WHEREAS,  the Company and Cavio Corporation have entered into a binding
letter of intent  whereby  Cavio will become a wholly  owned  subsidiary  of the
Company (the "Transaction");

         WHEREAS,  Company and Executive now mutually  desire to enter into this
Agreement,  to  become  effective  upon  the  closing  of  the  Transaction,  in
consideration of the mutual covenants and agreements hereinafter contained,  and
for other good and valuable  consideration,  it is hereby  agreed by and between
the parties hereto as follows:

1.       Employment and Duties
         ---------------------
         1.1 Employment.  Company hereby employs  Executive as the President and
             ----------
Chief Executive Officer of the Company and its subsidiaries and Executive hereby
accepts  such  employment  as of the  Effective  Date  pursuant  to  the  terms,
covenants and conditions set forth herein.

         1.2 Duties.  While  serving in these  corporate  capacities,  Executive
             ------
shall have the  responsibilities,  duties,  obligations,  rights,  benefits  and
requisite  authority as is customary  for his positions and as may be determined
by the Company's Board of Directors (the "Board") and as may be set forth in the
Bylaws of the Company and/or those of its subsidiaries.  Executive shall perform
said  duties  to the best of his  ability  and in a manner  satisfactory  to the
Company.

         1.3 Time and Efforts. Executive shall devote his professional full-time
             ----------------
efforts,  attention, and energies exclusively to the business of the Company and
its subsidiaries.

         1.4 Place of  Employment.  Executive  and the Company agree that during
             --------------------
the  Term  (as  defined  below),   his  services  will  be  performed  at  Cavio
Corporation's  principal offices in Vancouver,  British Columbia,  or such other
place as agreed  to  between  the  Executive  and the  Company,  subject  to any
necessary travel requirements of his position and duties hereunder.

                                     10.2-1
<PAGE>
2.       Term
         ----
         Except  as  otherwise  provided  in this  Agreement,  the  term of this
Agreement  (the "Term")  shall be for a period of one year  commencing  upon the
closing of the Transaction and shall  automatically renew for successive periods
of one year unless either party gives notice of the termination of the Agreement
to the other not fewer than 30 days prior to the  expiration  of the  applicable
yearly period.

3.       Compensation
         ------------
         3.1 Compensation.  As the total consideration for Executive's  services
             ------------
rendered  hereunder,  Executive  shall be  entitled  to annual  compensation  of
$175,000 ("Base  Salary"),  payable in accordance with ordinary  Company payroll
procedures  and  subject  to  applicable  withholding.  Executive  shall also be
eligible  to earn an annual  bonus of $20,000  for every  $1.5  million in gross
consolidated  revenue of the  Company  for said  year,  said bonus to be paid no
later than ninety (90) days  following the and of said calendar  year. The bonus
shall be net of any amounts required to be withheld by the Company in respect to
taxes.

         3.2 Stock  Options.  Executive  shall be  entitled  to a ten year Stock
             --------------
Option under the Company  Stock Option Plan for 150,000  shares of the Company's
Common  Stock at an  exercise  price of $3.50 per  share to be vested  over a 24
month  period.  The  Stock  Option  shall  vest in full  if  this  Agreement  is
terminated Without Cause further to Section 5.2 herein.

         3.3 Expenses. During employment, Executive is entitled to reimbursement
             --------
for  reasonable  and  necessary  business  expenses  incurred  by  Executive  in
connection with the performance of Executive's duties and pursuant to applicable
Company policy.

         3.4 Vacation.  Executive  shall be entitled to receive twenty (20) days
             --------
of paid  vacation  each year.  Executive's  vacation  shall be  governed  by the
Company's usual policies applicable to all executives.

         3.5 Benefits. Executive shall be entitled to participate in and receive
             --------
all benefits made available by the Company, subject to and on a basis consistent
with  the  terms,  conditions  and  overall  administration  of such  plans  and
arrangements,  including without limitation,  medical,  dental, vision, life and
disability insurance plans and coverage.

         3.6 Work Permits.  The Company shall use  reasonable  efforts to secure
             ------------
all work permits and visas required by the Executive in those  geographic  areas
where Executive is required to work to fulfill his duties hereunder.

                                     10.2-2
<PAGE>
4.       Proprietary Information
         -----------------------
         Executive  shall  execute the  Company's  Confidentiality,  Proprietary
Information, and Assignment of Inventions Agreement.

5.       Termination
         -----------
         Executive's employment shall terminate upon the happening of any of the
following:

         5.1 Termination For Cause. The Company may terminate this Agreement for
             ---------------------
Cause if the Board of Directors  determines  that Cause exists.  For purposes of
this Agreement, "Cause" shall mean:

             (a)  A  proven  act  of   dishonesty,   fraud,   embezzlement,   or
misappropriation  of proprietary  information in connection with the Executive's
responsibilities as an Executive;

             (b)  Executive's  conviction  of, or plea of nolo  contendere to, a
felony;

             (c)   Executive's   willful   misconduct  in  connection  with  his
employment  duties that is  detrimental to the Company and which cannot be cured
on reasonable notice to Executive; or

             (d) Executive's failure or refusal to perform his employment duties
under this Agreement if such failure or refusal is not cured by Executive within
twenty (20) days after receiving written notice thereof from the Company.

             (e) In the event of Executive's  termination  for Cause pursuant to
this section 5.1,  Executive  shall not be entitled to severance  pay or further
salary.

         5.2  Termination  Due to  Disability or Death.  Executive's  employment
              ----------------------------------------
hereunder may be terminated by the Company as follows:

             (a) To the extent  permitted by law,  upon thirty (30) days' notice
to  Executive  in  the  event  that   Executive   has  been  unable  to  perform
substantially all of his duties under this Agreement for an aggregate of 90 days
(inclusive of weekends and holidays) within any 12-month  period,  as the result
of Executive's incapacity to perform the essential functions of his job due to a
physical or mental  disability and after  reasonable  accommodation  made by the
Company, and within thirty (30) days of receipt of such notice,  Executive shall
not  have  returned  to the  full-time,  continuing  performance  of his  duties
hereunder; or

             (b) Immediately upon the death of Executive.

             (c) In the event of  Executive's  termination  due to disability or
death pursuant to this section 5.2, Executive shall not be entitled to severance
pay or further salary.

                                     10.2-3
<PAGE>
         5.3  Voluntary  Termination.  Executive's  employment  hereunder may be
              ----------------------
terminated  by  Executive  for any  reason  (other  than by  Termination  Due to
Disability  or Death) upon  Executive  providing  Company with thirty (30) days'
notice  of  Executive's  voluntary  termination.  In the  event  of  Executive's
voluntary  termination  pursuant to this  section  5.3,  Executive  shall not be
entitled to severance pay or further salary.

6.       Non-Solicitation
         ----------------
         During Executive's  employment with Company and for a period of six (6)
months following  termination for any reason,  Executive shall not,  directly or
indirectly,  solicit business from,  divert business from, or attempt to convert
to other  methods of using the same or similar  products or services as provided
by Company, any client,  account or location of Company with which Executive has
had any contact as a result of his engagement by Company.

7.       Assignment
         ----------
         This  Agreement is personal in nature,  and neither this  Agreement nor
any part of any obligation herein shall be assignable by Executive.  The Company
shall be entitled to assign this  Agreement to any affiliate of the Company that
assumes the ownership and control of the business of the Company.

8.       Severability
         ------------
         Should any term, provision,  covenant or condition of this Agreement be
held to be void or invalid, the same shall not affect any other term, provision,
covenant or condition of this  Agreement,  but such remainder  shall continue in
full force and effect as though each such voided  term,  provision,  covenant or
condition is not contained herein.

9.       Governing Law
         -------------
         This  Agreement  shall be governed by and construed in accordance  with
the laws of the  State of  California  applicable  to  contracts  made and to be
carried out in California.

10.      Arbitration Agreement
         ---------------------
         Both Executive and the Company mutually agree that any and all disputes
between  Executive  and the  Company  (including  any of the  Company's  related
entities, employees,  officers, directors, agents or assigns), that arise out of
or relate to Executive's  employment  with,  recruitment  to,  investment in, or
termination  from the  Company  shall be  resolved  through  final  and  binding
arbitration,  pursuant to the Federal Arbitration Act and applicable  California
law. This shall include any  controversy,  claim or dispute of any kind relating
to employment,  including,  without  limitation,  claims for breach of contract;
claims for wages, benefits or compensation; claims based on tort, public policy,
emotional distress,  defamation,  fraud or misrepresentation;  claims for unfair
competition  or  concerning  the  unauthorized  use  and/or  disclosure  of  any
confidential information, trade secret or any other intellectual property right;
and any  statutory  claims  relating to  employment,  including  discrimination,
harassment,  or retaliation under Title VII of the Civil Rights Act of 1964, the

                                     10.2-4
<PAGE>
Age  Discrimination  in Employment Act, the Americans with Disabilities Act, the
Family and Medical Leave Act, the  California  Fair  Employment and Housing Act,
the  California  Labor  Code,  or any  other  federal,  state  or  local  law or
regulation now in existence or hereinafter enacted relating to employment.

         The only  claims not  covered  by this  Arbitration  Agreement  are (a)
claims for workers' compensation benefits,  unemployment insurance, or state and
federal  disability  insurance,  which  shall  be  brought  according  to  their
applicable  laws,  and (b) any other  dispute or claim  that has been  expressly
excluded from arbitration by statute.

         Either  party may  initiate  the  arbitration  process by  submitting a
written demand letter to the other party briefly setting forth the nature of the
claim  or  dispute,   including  a  short  factual  summary  of  the  supporting
allegations. To be timely, the letter demand must be received by the other party
within the time limits established by any applicable statute of limitations with
respect to the  asserted  claims.  Any  disputes  and/or  claims  required to be
submitted to arbitration  under this  Agreement  shall be conducted by a neutral
arbitrator  pursuant  to  the  applicable  rules  of  the  American  Arbitration
Association,  subject to any  applicable  discovery  or other rules  required by
California  law,  and  also  subject  to the  right  of  either  party  to  seek
provisional  remedies  as  provided by the  California  Code of Civil  Procedure
ss.1281.8.

         The arbitration shall be held in Los Angeles,  California.  The Company
shall  pay  the  costs  directly  related  to  the  arbitration,  including  the
arbitrator's fees and any  administrative  fees. Each party shall otherwise bear
their own  respective  attorneys'  fees and  costs,  including  the costs of any
expert  witnesses,  depositions,  travel or similar costs,  unless an applicable
contract or statute  provides  otherwise to the prevailing  party, in which case
the arbitrator shall make such determinations as required or permitted by law.

         The arbitrator  shall issue a written decision or award that sets forth
the  essential  findings  and  conclusions  on which  the  award is  based.  The
arbitrator  shall  have the  authority  to award  all of the  types of relief or
damages that would otherwise be available in a civil court proceeding.

         THE ARBITRATION SHALL BE INSTEAD OF ANY CIVIL LITIGATION,  MEANING THAT
THE  EXECUTIVE  AND THE COMPANY  ARE WAIVING ANY RIGHT TO A JURY TRIAL,  AND THE
ARBITRATOR'S DECISION SHALL BE FINAL AND BINDING TO THE FULLEST EXTENT PERMITTED
BY LAW,  SUBJECT ONLY TO ANY LIMITED JUDICIAL REVIEW AS REQUIRED OR PERMITTED BY
APPLICABLE LAW.

11.      Binding Agreement
         -----------------
         This Agreement  shall inure to the benefit of and shall be binding upon
the Company, its successors and assigns.

12.      Captions
         --------
         The  Section   captions  herein  are  inserted  only  as  a  matter  of
convenience  and reference and in no way define,  limit or describe the scope of
this Agreement or the intent of any provisions hereof.

                                     10.2-5
<PAGE>
13.      Entire Agreement
         ----------------
         This Agreement contains the entire agreement of the parties relating to
the  subject  matter  hereof,  and the parties  hereto have made no  agreements,
representations  or warranties  relating to the subject matter of this Agreement
that are not set forth  otherwise  herein.  In this regard,  each of the parties
represents and warrants to the other party that such party is not relying on any
promises or representations that do not appear in writing herein. This Agreement
supersedes the prior Letter  Agreement with the Company,  except as specifically
referenced herein.  Each of the parties further agrees and understands that this
Agreement can be amended or modified only by a written  agreement  signed by all
parties.

14.      Notice
         ------
         All notices and other  communications  under this Agreement shall be in
writing and mailed, telegraphed, telecopied, or delivered by hand (by a party or
a recognized courier service) to the other party.

15.      Attorneys' Fees
         ---------------
         In the event  that any party  shall  bring an action or  proceeding  in
connection with the  performance,  breach or  interpretation  of this Agreement,
then the prevailing party in any such action or proceeding, as determined by the
court or other body having  jurisdiction,  shall be entitled to recover from the
losing party all  reasonable  costs and  expenses of such action or  proceeding,
including  reasonable  attorneys'  fees,  court costs,  costs of  investigation,
expert  witness  fees and  other  costs  reasonably  related  to such  action or
proceeding.

                                     10.2-6
<PAGE>
         IN WITNESS  WHEREOF,  this Agreement is executed as of the day and year
first above written.

                                      "COMPANY"

                                      ALPHA VIRTUAL, INC.,
                                      a Delaware corporation

                                      By:      /s/ Charles Lesser
                                         -------------------------------------
                                               Name:    Charles Lesser
                                               Title:   President

                                      And

                                      "EXECUTIVE"

                                              /s/ Paul Mann
                                      ----------------------------------------
                                              Paul Mann

                                     10.2-7Exhibit 10.3

                               LEASE - COMMERCIAL

THIS LEASE made the 20th day of February, 2004,

BETWEEN:

         GASTOWN INVESTMENT 21 LTD., a body corporate having
         Its offices at Suite 600 - 21 Water Street, In the
         City of Vancouver, British Columbia VSB 1A1
         (hereinafter called the "Landlord")                  OF THE FIRST PART
AND:
         Veridicom International (Canada) Inc,
         #501 - 21 Water Street, Vancouver, British
         Columbia, V60 1A1 (hereinafter called the `Tenant")  OF THE SECOND PART
AND:
         ---------------------------------------------------
         ---------------------------------------------------  OF THE THIRD PART

     WITNESS 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 has demised and leased and by these
presents does demise and lease to the Tenant the demised premises as hereinafter
described, all on the terms, Conditions and covenants as hereinafter set forth.

A.       DEFINITIONS
         -----------

         In this Lease:

         1.       "Area of Leased Premises" means the area of the floor space of
                  the Leased Promises in square feet measured from the centre of
                  partition walls and from the exterior surface of the exterior
                  walls, and for the purposes of this Lease is 8,200 square feet
                  more or less;

         2.       "Building" means the building located on the Lands, and
                  Includes all fixtures, machinery and equipment situate
                  therein:

         3.       "Leased Premises" means that portion of the Building having a
                  civic address of 21 Water Street, Vancouver, British Columbia
                  shown outlined in red on the plan attached hereto as schedule
                  A;

         4.       "Lands" means the lands situate in Vancouver, British
                  Columbia, having a civic address of 21 Water Street,
                  Vancouver, British Columbia, arid, more particularly described
                  as:

                                     10.3-1

<PAGE>

                           City of Vancouver
                           Lots 12 and 13
                           Block 1 Old Granville Townsite
                           Plan 168

         5.       "Real Property Taxes" means ail real property, sewer,
                  municipal and other property taxes and rates, whether general
                  or special, of any nature whatsoever, including assessed by
                  any lawful authority, and any other taxes, assessments or
                  duties levied, rated, charged or assessed in substitution for
                  any of the foregoing taxes, against or with respect to the
                  Lands or the Building;

         6.       "Tenant's Proportionate Share" means a fraction, having as its
                  numerator the Area of the Leased Premises and as its
                  denominator the Total Rentable Area; and

         7.       "Total Rentable Area" means the area in square feet of all
                  floor space in the Building, including the Leased Premises,
                  which are teased or occupied, or which the Landlord Intends to
                  be leased or occupied, by tenants or licensees.

1.       DEMISED PREMISES
         ----------------
1.1 The demised premises when referred to in this Lease shall mean the premises
at 21 Water Street, Vancouver, British Columbia, Unit 501, 502, 503 & 504 being
comprised of 8,200 square feet more or less on the 5th floor of the building
located on the lands known as 21 Water Street, Vancouver, British Columbia ("the
lands"), more particularly shown outlined in red on the plan attached hereto as
Schedule A. Civic address being Unit 501, 21 Water Street, Vancouver, British
Columbia V88 1A1.

2.       TERM
         ----
2.1 TO HAVE AND TO HOLD the demised premises for and during the term of Three
(3) Years commencing on the 1st day of March, 2004 and terminating on the 28th
day of February, 2007, subject to earlier termination in accordance with the
provisions hereof.

3.       BASIC RENT AND OPERATING EXPENSES
         ---------------------------------
         3.1 Yielding and paying therefor during the said term of the Rent of
THREE HUNDRED SIXTY NINE THOUSAND ($369,000.00) plus GST of Lawful money of
Canada at the office of Pacific Asset Management Corp., Suite 410, 145 Chadwick
Court, North Vancouver, British Columbia, V7M 3K1, or at such other place as the
Landlord may designate in writing.

         If the commencement date does not foil upon the first day of a month,
the first payment shall be adjusted according to the portion of the month
included in the term. All rent and additional rent (as hereinafter described)
shall bear interest at the rate of 1-1/2% per month (18% per annum) from the
date upon which it becomes payable by the Tenant until paid.

                                     10.3-2

<PAGE>

         3.2 Yielding and paying therefore to the Landlord a basic monthly rent
and estimated operating expenses for the demised premises in advance without
deductions an the 1st day of each and every month as follows:

                  Commencing March 1st, 2004 the sum of $9,908.33 on account of
                  rent and $4,954.17 towards estimated operating expenses plus
                                             ---------
                  GST on the first day of each and every month up to and
                  including the first day of February, 2005.

                  Commencing March 1st, 2005 the sum of $10,250.00 on account of
                  rent and shall pay estimated operating expenses plus GST in
                                     ---------
                  accordance with Clause 12.5 of the Lease on the first day of
                  each and every month up to and including the first day of
                  February, 2008.

                  Commencing March 1st, 2006 the sum of $90,591.67 on account of
                  rent and shall pay she estimated operating expenses plus GST
                                         ---------
                  in accordance with Clause 12.5 of the Lease on the first day
                  of each and every month up to and Including the first day of
                  February, 2007.

         3.3 The Tenant will provide to the Landlord post-dated rent cheques for
each year on the first day of each year.

4.       SECURITY DEPOSIT
         ----------------
         4.1 The Landlord acknowledges receipt of $ 30,916.14 plus GST of $
2,164.13 totaling $33,080.27 from the Tenant, $14,862.50 plus GST of which shall
be applied towards payment of the rent for the 1st day of March, 2004 and the
remainder shall be held by the Landlord, without liability for interest, as
security for the faithful performance by the Tenant of all the terms, covenants
and conditions contained herein. If during the term any payment by the Tenant is
overdue then the Landlord may apply any portion of the security deposit toward
such overdue payment and if any portion of the security deposit is not so
applied then it shall be applied toward payment of the rent for the last one (1)
month of the term. If all or any portion of the security deposit is applied
toward an overdue payment then the Tenant will forthwith remit to the Landlord a
sum sufficient to restore the security deposit to the original sum deposited,

5.       USE OF THE DEMISED PREMISES
         ---------------------------
         5.1 The Tenant shall use the demised premises for general office
purposes and for no other purpose. The Tenant covenants and agrees that it will
commence to carry on its business on the commencement date of the lease
specified in paragraph 2.1 hereof and will carry on its business in the demised
premises continuously during the term of this Lease.

6.       TENANT'S COVENANTS
         ------------------
         The Tenant covenants with the Landlord

                                     10.3-3

<PAGE>

         6.1 To pay rent and to pay all sums payable herein as additional rent,
without any abatement, set-off, compensation or deduction whatsoever.

         6.2 To pay all charges for the installation of telephone and other
communications and office equipment and all charges for the maintenance thereof
and relamping of lighting fixtures within the demised premises.

         6.3 To pay all rates and charges for pas, electric light and/or power,
fuel, telephone service end other utilities supplied to or used by the Tenant in
respect of the demised premises.

         6.4 To take good and reasonable care of the demised promises and of the
improvements, fixtures and equipment now or hereafter located thereon and
therein and of every part thereof, and at its sole cost and expense to manage,
operate, maintain and keep them in good order, repair and condition; and to
promptly make all required or necessary repairs and replacements thereof,
reasonable wear and tear excepted, and to keep and leave all brass, copper or
other metals and all windows in, on or attached to the demised premises cleaned
and polished. All repairs and replacements shall be of a quality and class at
least equal to the original and shall become the property of the Landlord
absolutely and a part of the demised premises.

         6.5 That the Landlord and its agents may at all reasonable times upon
giving reasonable notice enter the demised premises and view the state of
repair, and the Tenant Shall within thirty (30) days after the receipt of
written notice thereof commence and diligently proceed to make such repairs and
replacements as the Landlord may reasonably require and in the event of the
Tenant's failure or neglect to do so within the time herein specified the
Landlord and its agents may enter the demised promises and at the Tenant's
expense perform and carry out such repairs or replacements and the Landlord in
so doing shall not be liable for any inconvenience, disturbance or loss of
business.

         6.6 That the Tenant will leave the promises in good repair, in
accordance with the standards set forth in paragraph 6.4 herein.

         6.7 To restore forthwith at the Tenant's expense from time to time any
glass on the demised premises broken or damaged as a result of any cause save
for the negligence of the Landlord, its servants or agents.

         6.8 Not to do or suffer any waste or damage, disfiguration or injury to
the demised premises or the fixtures and equipment therein nor to permit or
suffer any overloading of the floors thereof; and not to use or permit the use
of any part of the demised premises for any unlawful purpose or for any
dangerous, noxious or offensive trade or business and not to permit, cause or
maintain any nuisance or interference with the comfort of any of the occupants
of the building.

         6.9 Not to exhibit signs of any nature on walls, doors or windows not
to install any window coverings without the prior written approval of the
Landlord, such approval not to be unreasonably withheld. If any sign,
advertisement, or notice is inscribed, painted or affixed by the Tenant on or to
any part of the building whatsoever without the consent of the Landlord in
writing having first been obtained, then the Landlord or its agents shall be at

                                     10.3-4

<PAGE>

liberty to enter and pull down and take away any such sign, advertisement or
notice at the expense of the Tenant. Any signs, which shall be in the complete
control of the Landlord, or the interior or exterior of the building, shall be
arranged for the Tenant by the Landlord or its agents; the cost shall be charged
to the Tenant and shall be payable and recoverable as rent.

         6.10 Not to do or permit anything to be done whereby any policy of
insurance on the building or any part thereof may become void or voidable or
whereby the premium thereon may be increased. In addition to any other rights
under this Lease the Landlord may, if the tenant does or permits anything to be
done whereby the premium for any insurance policy in respect of the building is
Increased, require the Tenant to pay to the Landlord an amount equal to the
whole of such increase.

         6.11 Not in any circumstances to assign or transfer this Lease or the
term of any portion thereof or let or sublet or grant any license for occupation
in respect of all or any part of the demised promises without the written
consent of the Landlord first being had and obtained, which consent may not be
unreasonably withheld, provided that such assignment, transfer, subletting or
granting of license with the Landlord's consent shall not affect the obligation
of the Tenant to perform the covenants contained in this Lease. If the Tenant is
a private corporation and is not a reporting corporation and if by the sale or
other disposition of its securities the control or beneficial ownership of such
Corporation is changed at any time after the execution of this Lease, or during
the term hereof, or during the term of any renewal hereof, if any, without the
Landlord's prior written consent first being had, the Landlord may, at its
option, cancel this Lease and the term hereby granted upon the giving of thirty
(30) days' notice to the Tenant of its intention to cancel this Lease and the
term shall thereupon be cancelled.

         6.12 To keep the demised premises free of rubbish and debris at all
times and to provide proper receptacles for waste and rubbish.

         6.13 To abide by and comply and use reasonable efforts to cause its
employees to abide and comply with all laws, rules and regulations of every
municipal or other authority which in any manner relate to or affect the
business or profession of the Tenant or the use of the demised premises by the
Tenant and to save harmless the Landlord from all costs, charges or damages to
which the Landlord may be put or suffer by reason of the breach by the Tenant of
any such law, rule or regulation.

         6.14 That the Landlord or its agents may at any time enter upon the
demised premises for the purpose of examining them, or for the making of any
repairs to the premises or alterations, improvements or additions to the
building of which the same form a part, which the Landlord shall deem necessary
or desirable.

         6.15 To permit the Landlord or its agents to show the demised premises
at any reasonable time upon giving reasonable notice to any prospective
purchaser or purchasers of the demised premises or any lands of which the
demised premises form a part or, within the six (6) months immediately preceding
the expiry of this Lease, any prospective tenant, and in either case to allow
the exhibiting of the usual for sale or leasing notices on the exterior of the
demised premises.

                                     10.3-5

<PAGE>

         6.16 Notwithstanding any other provisions of this Lease, to indemnify
and save harmless the Landlord from any and all liabilities, damages, costs,
claims, suits or actions arising out of:

         (a)      Any breach, violation or non-performance of any covenants,
                  condition or agreements in this Lease set forth and contained
                  on the part of the Tenant to be fulfilled, kept, observed and
                  performed;

         (b)      Any damage to property occasioned by the Tenant's use and
                  occupation of the demised premises except where such damage is
                  caused by an act or default of the Landlord or its agents;

         (c)      Any injury to a person or persons, including death resulting
                  at any time therefrom, occurring in or about the demised
                  premises.

         6.17 To take out and keep in full force and effect throughout the term
and during such other time as the Tenant occupies the demised premises or any
part thereof:

         (a)      Comprehensive liability insurance against claims for personal
                  injury, death or property damage or loss upon, in or about the
                  demised premises or otherwise howsoever arising out of the
                  operations of the Tenant or any person conducting business
                  from the demised premises, to the combined limit as may be
                  reasonably required by the Landlord from time to time but, in
                  any case, of not less than $3,000,000.00 in respect of any one
                  occurrence concerning property damage;

         (b)      The policy of insurance required of the Tenant as aforesaid
                  shall name the Landlord and any persons or corporations
                  designated by the Landlord as additional named insureds as
                  their interest may appear and, as appropriate, a
                  cross-liability and/or severability of interest clause
                  protecting the Landlord against claims by the Tenant as if the
                  Landlord were separately insured and protecting the Tenant
                  against claims by the Landlord as if the Tenant were
                  separately insured as well as a clause that the insurer will
                  not cancel or change or refuse to renew the insurance without
                  first giving the Landlord thirty (30) days' prior written
                  notice. All such policies will be with insurers acceptable to
                  the Landlord and in a form satisfactory to the Landlord and
                  the Tenant will deliver to the Landlord a copy of all such
                  policies or certificates of such insurance.

         6.18 And will not bring upon the demised premises or the building or
any part thereof any machinery, equipment, article or thing that by reason of
the weight, size or use might damage any floor in the demised premises or the
building and that if any floor in the demised premises or the building and that
if any damage is caused to the demised premises or to the building by any
machinery, equipment, article or thing, or by overloading or by any act,
neglect, misuse on the part of the Tenant or any of its servants, agents or
employees or any person having business with the Landlord, the Tenant shall
forthwith repair such damage or pay the cost of repair to the Landlord.

                                     10.3-6

<PAGE>

         6.19 And will comply promptly at his own expense with all applicable
laws, ordinances, regulations, requirements of any and all Federal, Provincial,
Municipal and other authorities, or Association of Fire Insurance Underwriters
or Agents and all notices in pursuance of same whether served upon the Landlord
or the Tenant, and will indemnify and save harmless the Landlord from and
against any and all manner of actions or causes of action, damage, loss, costs
or expenses, which he may sustain, incur or be put to by reason of any neglect
of same or noncompliance therewith or by reason of any defect, deficiency,
disrepair, depreciation, damage or change in or to the premises, or any injury
or damage to any person or to any goods and chattels contained in, upon or about
the premises, resulting from the Tenant's use and occupancy thereof.

         6.20 At the termination of this Lease, whether by effluxion of time or
otherwise, the Tenant shall vacate and deliver up possession of the Premises in
the same condition as the Premises were in upon delivery of possession to the
Tenant and shall surrender all keys to the Premises to the Landlord at the place
then fixed for payment of rent and shall inform the Landlord of all combinations
on locks, safes and vaults, iv any, in the Premises.

         (a)      And so long as the Tenant is not in default hereunder at the
                  expiration of the Term, the Tenant shall then have the right
                  to remove its trade fixtures.

         (b)      If the Tenant fails to remove its trade fixtures and restore
                  the Premises as aforesaid, all such trade fixtures shall
                  become the property of the Landlord.

         (c)      If the Tenant, after receipt of a notice from the Landlord
                  fails to promptly remove any trade fixtures, furnishing,
                  alterations, additions, improvements and fixtures in
                  accordance with such notice, then the Landlord may enter into
                  the Premises and remove therefrom all or par of such trade
                  fixtures, furnishings, alterations, additions, improvements
                  and fixtures without any liability and at the expense of the
                  Tenant, which expense shall forthwith be paid by the Tenant to
                  the Landlord.

7.       LANDLORD'S COVENANTS
         --------------------
         The Landlord covenants with the Tenant:

         7.1 If the Tenant pays the rent and additional rent hereby reserved,
and performs the covenants on its part contained herein, the Tenant shall and
may peaceably possess and enjoy the demised premises for the term hereby
granted, without any interruption or disturbance from the Landlord or any other
persons lawfully claiming by, from, through or under the Landlord, subject,
nevertheless, to the terms, covenants and conditions of this Lease.

         7.2 To pay or cause to be paid all taxes, rates and assessments now or
hereafter levied, rated or assessed against the demised premises or the lands of
which they form a part and improvements thereto, including without limiting the
generality of foregoing, water and sewer rates and real property taxes, but this
paragraph 7.2 does not alter any obligations of the Tenant under any provisions
of Article 12.

                                     10.3-7

<PAGE>

         7.3 To provide access to the demised premises for the Tenant, its
employees and agents, and all other persons lawfully requiring communication
with it during normal business hours and at other times subject to each security
and control measures as the Landlord may from time to time institute.

         7.4 To keeping good and reasonable state of repair:

         (a)      the building (other than the demised premises and premises of
                  other tenants) including the foundation, roof, exterior walls
                  including glass portions thereof, the elevators, entrances,
                  stairways, corridors, lobbies and washrooms from time to time
                  provided for use in common by the Tenant and other tenants of
                  the building and the systems provided for bringing utilities
                  to the demised premises; and

         (b)      the structural elements of the demised premises.

         The cost of such repairs, except structural repairs, shall be borne by
the Tenant as provided in Article 12 hereof.

         7.5 To insure the building to its full insurable replacement value
against loss or damage by fire. The expense of such insurance shall be borne as
provided in paragraphs 12.1 and 12.2 hereof. To the extent that any loss or
damage to the building is covered by insurance maintained by the Landlord
hereunder, the Landlord releases the Tenant from any and all liability for such
loss or damage whether or not the same is caused by or contributed to by or
through the negligence of the Tenant or its servants and agents.

8.       ALTERATIONS AND INSTALLATIONS
         -----------------------------
         8.1 The Tenant shall make no alterations, installations, removals,
additions or improvements in or about the demised premises without the
Landlord's prior written consent, such consent not to be unreasonably withheld,
and in the event of such consent the Tenant shall have such work performed at
the Tenant's sole expense by contractors or tradesmen or mechanics and at such
times and in such manner as may be approved in writing by the Landlord.

         8.2 The Tenant shall and does hereby indemnify and save the Landlord
harmless from and against claims which might arise pursuant to the Builders Lien
Act of British Columbia as it may from time to time be amended in respect of any
materials or services supplied in respect of the demised premises at the
Tenant's request and the Tenant shall forthwith remove any builders liens placed
against the lands of which the demised premises is a part.

         8.3 Except as provided herein, all improvements, installations,
alterations, additions, partitions, build in cabinet-work, wall to wall
carpeting and fixtures, whether placed there by the Tenant or the Landlord,
shall at the expirations or earlier termination of this Lease become the
Landlord's property without compensation therefore to the Tenant and shall not
be removed from the premises by the Tenant at any time. All articles of personal
property and all furniture, machinery and equipment, owned or installed by
Tenant at the expense of the Tenant in the demised premises shall remain the
property of the Tenant and may be removed by the Tenant at its expense; provided
that the Tenant shall repair any damage to the demised premises or the building

                                     10.3-8

<PAGE>

in which the demised premises are located caused by the aforesaid removal. If
the Tenant does not remove its property forthwith after written demand by the
Landlord, such property shall if the Landlord elects be deemed to become the
Landlord's property or the Landlord may remove the same at the expense of the
Tenant, the cost of such removal to be paid by the Tenant forthwith to be
Landlord on written demand, the Landlord not to be responsible for any loss or
damage to such property because of the removal.

9.       LIABILITY FOR PROPERTY DAMAGE AND/OR PERSONAL INJURY
         ----------------------------------------------------
         9.1 The Landlord shall not be responsible for any damage which may be
caused, nor shall the Tenant be entitled to claim any diminution of rent or
other compensation, for stoppage of any heating apparatus or any air
conditioning apparatus or any electric light or water service, or any of the
engines, boilers or machinery appertaining thereto, but in such case the
Landlord shall use its best efforts to recommence any such operations as may
have been affected and the Landlord shall not be liable for any damage or loss
which may be caused to the Tenant or to the employees of the Tenant as a result
of such stoppages. The Landlord shall not be liable for any damage in or upon
the demised premises, arising form any reason or cause whatever, or for any
personal injury including death sustained by the Tenant, its officers or
employees, or other persons, or for any property loss, howsoever occurring, and
the Tenant shall have no right to any diminution of rent in any of such cases;
and, without restricting the generality of the foregoing, the Landlord shall not
be liable for any injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam gas, electricity, water, rain or snow or leaks
from any part of the building or from pipes, appliances or plumbing works or
from the roof, street or sub-surface, or from any other place, or by dampness,
or for any injury or damage by any cause of whatsoever nature, provided such
injury or damage is not caused by the negligence of the Landlord or its servants
or agents.

         9.2 The Tenant shall reimburse the Landlord for all expenses, damages,
losses or fines incurred or suffered by the Landlord for any reason of any
breach, violation or non-performance by the Tenant of any covenant or provision
of this Lease or by reason of damage to persons or property caused by the
Tenant, its servants or agents.

         9.3 The Tenant shall give the Landlord immediate notice in case of fire
or accident in the demised premises or in the building of which the demised
premises forms a part.

10.      DAMAGE TO OR DESTRUCTION OF THE DEMISED PREMISES
         ------------------------------------------------
         10.1 Should the demised premises or the building containing them be
damaged by fire or other casualty so as to render the premises partially or
wholly unfit for occupancy:

         (a)      If the damage cannot reasonably be repaired within one hundred
                  twenty (120) days after the date thereof, either party may
                  terminate this lease as of the said date by notice to the
                  other given within thirty (30) days after such damage, and in
                  that case the Tenant shall immediately surrender the demised
                  premises to the Landlord and shall pay rent accrued to the

                                     10.3-9

<PAGE>

                  date on which the said damage occurred but shall not be
                  entitled to any damages or compensation;

         (b)      If the damage can reasonably be repaired within one hundred
                  twenty (120) days after the date thereof or if neither the
                  Tenant nor the Landlord shall have given notice of termination
                  pursuant to the provisions of subparagraph (a) the Landlord
                  shall forthwith commence and carry out with due diligence the
                  repair thereof, and this Lease shall continue in full force
                  and effect save that the rent hereby reserved shall abate
                  proportionately, having regard to such part of the demised
                  premises as has been rendered unfit for occupancy, until the
                  repairs have been completed; provided that there shall be no
                  abatement of rent for any time required for the replacement or
                  repair of any time required for the replacement or repair of
                  any property of the Tenant.

         (c)      If there is a dispute between the parties as to whether the
                  damage can reasonably be repaired within the said period of
                  one hundred twenty (120) days the certificate of a
                  professional engineer or architect agreed upon by both parties
                  as to whether or not the said damage can be reasonably
                  repaired within a period of one hundred twenty (120) days form
                  the commencement of repairs shall be binding on both the
                  Landlord and Tenant. If the Landlord and Tenant are unable to
                  agree upon such engineer or architect within thirty (30) days
                  after the date of such damage, the question which otherwise
                  would be the subject of such certificate shall be settled by
                  arbitration by a single arbitrator if the parties can agree on
                  one or by three arbiters otherwise and subject to the
                  provisions of the Commercial Arbitration Act of British
                  Columbia. --------------------------

11.               EXPROPRIATION
                  -------------

         11.1 If the demised premises are acquired or condemned by any authority
having the power for such acquisition or condemnation for any public or
quasi-public use or purpose then and in that event the term of this Lease shall
cease from the date of entry by such authority. If only a portion of the demised
premises are so acquired or condemned, this Lease shall cease and terminate at
the Landlord's option and if such option is not exercised by the Landlord an
equitable adjustment of rent payable by the Tenant for the remaining portion of
the demised premises shall be made. If only a portion of the demised premises is
expropriated so that the Tenant is no longer able to carry on its business in
the demised premises remaining, this Lease shall cease and terminate at the
option of the Tenant. In either event, however, and whether all or only a
portion of the demised premises are so acquired or condemned, nothing herein
contained shall prevent the Landlord or the Tenant or both from recovering
damages from such authority for the value of their respective interests or for
such other damages and expenses allowed by law.

                                    10.3-10

<PAGE>

12.      OPERATING EXPENSES AND ADDITIONAL RENT
         --------------------------------------
         12.1 The term operating expenses as used herein shall mean and include
all expanses incurred and payable by the Landlord in the operation, maintenance,
repair and management of the lands being expenses which are ordinarily
chargeable against income in accordance with good accounting practice and
without restricting the generality of the foregoing shall include:

         (a)      All taxes, rates and assessments, whether general or special,
                  levied or assessed for municipal, school or other purposes or
                  levied or assessed by any lawful government authority for any
                  purposes with respect to the said lands and including all
                  sales taxes on rents or other taxes imposed on the Landlord in
                  respect of the rents payable to the Landlord by tenants of the
                  building or in respect of the rental of space in the building
                  to quote tenants but excluding those taxes and rates referred
                  to in paragraph 12.3;

         (b)      Electric power and lighting expenses, other then those
                  referred to in paragraph 6.2 and 6.3 hereof;

         (c)      Salaries and wages (including employer benefits and workers'
                  compensation) and the cost of independent service contracts
                  incurred in the cleaning, maintenance, management and
                  operation of the building and grounds;

         (d)      All expenses including administration, management, audit and
                  miscellaneous general expenses related to the lands and
                  building, but excluding debt interest, debt repayment and
                  depreciation charges;

         (e)      All charges incurred as a result of the Landlord obtaining
                  insurance against loss or damage by fire or other casualties
                  and against loss of rentals;

         (f)      Expenses incurred in loaning and repainting the exterior of
                  the building or the common area of the building;

         (g)      Expenses incurred in keeping free of litter, dirt, snow and
                  ice the sidewalks adjacent to the building;

         (h)      All repairs performed in accordance with paragraph 7.4 herein,
                  except for structural repairs.

         12.2 The Tenant shall pay as additional rent his proportionate share of
the operating expenses for each calendar year, such share being that proportion
of the operating expenses which the area of the demised premises bears to the
rentable area (excluding parking) of the building; PROVIDED THAT for the years
in which the term commences and terminates a proportionate adjustment shall be
made according to the proportion of the year included in the term.

         12.3 The Tenant shall pay as additional rent any and all license fees
and taxes imposed in connection with the occupancy of the demised premises, or
with the particular business of the Tenant, or in connection with any form of

                                    10.3-11

<PAGE>

equipment used by the Tenant In the demised premises or brought onto the demised
premises by or on behalf of the Tenant.

         12.4 The Tenant shall pay as additional rent any and all additional
costs and expenses of the landlord which may arise in respect of the use by the
Tenant of the demised premises for business hours that do not coincide with
normal business hours for the building generally or that may arise in respect of
extra heating or air conditioning, electricity and other services required to be
provided to the Tenant as a result of its activities over and shove those
normally provided to tenants of the building or outside of normal business
hours.

         12.5 Any amount payable by the Tenant under this Article 12 shall be
deemed to be rent and shall be collectible and be paid as additional rent within
thirty (30) days after demand by the Landlord. The Landlord may estimate for any
calendar year or fiscal year of the Landlord the amount payable by the Tenant
and the Tenant shall upon demand pay to the Landlord on the 1st day of each
month, one twelfth (1/12) of the Landlord's estimate. The Landlord shall then
account to the Tenant for such amounts within two (2) months after the end of
such calendar of fiscal year.

         12.6 Notwithstanding the provisions of paragraph 12.6 and with respect
to the Tenant's proportionate share of realty, school and local improvement
taxes, the Landlord may at its option estimate the amount of such taxes one year
before the date upon which the said taxes become due and the Tenant shall on
demand pay its proportionate share of such estimated taxes in equal monthly
installments on the first day of each month as additional rent during the year
preceding such due date, PROVIDED THAT any overpayment shall be rebated by the
Landlord and any deficiency shall be paid to the Landlord once the actual taxes
are known. A demand pursuant to this paragraph shall preclude the Landlord from
including the amount demanded in any amount demanded under paragraph 12.6.

         12.7 In the event of a dispute as to any amount payable under this
Article 12, the certificate of a Chartered Accountant selected in the following
manner shall be conclusive and binding upon the Landlord and Tenant. Any party
wishing to dispute any amount payable or alleged to be payable under this
paragraph shall nominate a Chartered Accountant by notice to the other party. If
the Parties cannot agree to the appointment of the nominated Chartered
Accountant within ten (10) days of such notice then the Landlord shall have the
right to appoint an independent Chartered Accountant to make the determination
contemplated by this paragraph and the decision of such Chartered Accountant so
appointed shall be final. The fee of the Chartered Accountant shall be paid
equally by the Landlord and the Tenant.

13.      DEFAULT
         -------
         13.1 The Tenant further covenants with the Landlord that if:

         (a)      Any payments or rent, or additional rent as herein described,
                  or any part thereof, are not paid when they become due;

         (b)      The Tenant violates any covenant, agreement or stipulation
                  herein contained on its part to be kept, performed or observed
                  and any such default on the part or the Tenant shall continue

                                    10.3-12

<PAGE>

                  for seven (7) days after written notice thereof to the Tenant;
                  or

         (c)      In case the demised promises are vacated or become vacated or
                  remain unoccupied for seven (7) days;

then and in any such case the Landlord in addition to any ether remedy now or
hereafter provided by law may at its option cancel and annul this Lease
forthwith and re-enter and take possession immediately by force if necessary
without any previous notice of intention to re-enter and may remove all persons
and property therefrom and may use such force and assistance in making such
removal as the Landlord may deem advisable to recover at once full and exclusive
possession of the demised premises and such re-entry shall not operate as a
waiver or satisfaction in whole or in part of any covenant or agreement on the
Tenant's part to be performed.

         13.2 if the Tenant fails to perform any of the covenants or obligations
of the Tenant under or in respect of this Lease, the Landlord may from time to
time, in its discretion, and in addition to and without prejudice to any other
rights it may have as a result of such failure, perform or cause to be performed
such covenants or obligations or any part thereof and for such purpose may do
such things as may be requisite, including without limiting the generality of
foregoing, entering upon the demised premises and doing such things upon or in
respect of the demised premises or any part thereof as the landlord may deem
necessary or requisite and all reasonable expenses incurred and reasonable
expenditures made by or on behalf of the Landlord under this paragraph shall be
forthwith due and be paid by the Tenant to the Landlord as additional rent.

         13.3 If the term hereby granted or any of the goods or chattels of the
Tenant are at any time seized or taken in execution or attachment by any
creditor of the Tenant or if the Tenant makes any assignment for the benefit of
creditors or becoming bankrupt or insolvent takes the benefit of any Act for
bankrupt or insolvent debtors the then current month's rent together with the
rent owing for the next three months shall immediately become due and payable
and it shall be lawful for the Landlord at any time thereafter to re-enter into
or upon the demised premises or any part thereof in the name of the whole and
the same to have again, repossess and enjoy as of its former estate anything
herein contained to the contrary notwithstanding.

14.      DISTRESS
         --------
         14.1 Whensoever the Landlord is entitled to levy distress against the
goods and chattels of the Tenant it may use such force as it may deem necessary
for the purpose and for gaining admission to the demised premises without any
liability whatsoever including, without limitation, liability for any loss or
damage occasioned thereby and the Tenant hereby expressly releases the Landlord
from all actions, proceedings, claims or demands whatsoever for or on account or
in respect of any such forcible entry or any loss or damage sustained by the
Tenant in connection therewith.

15.      LANDLORD'S EXPENSES ENFORCING LEASE
         -----------------------------------
         15.1 In the event that it is necessary for the Landlord to retain the
services of a solicitor or any other proper person for the purpose of assisting

                                    10.3-13

<PAGE>

the Landlord in enforcing any of its rights hereunder in the event of default on
the part of the Tenant, the Landlord shall be entitled to collect from the
Tenant the reasonable cost of all such services on a solicitor and his own
client basis as if the same were rent reserved and in arrears hereunder.

16.      WAIVER
         ------
         16.1 The failure of either party to insist upon strict performance of
any covenant or condition contained in this Lease or in any rule or regulation
attached hereto shall not be construed as a waiver or relinquishment for the
future of any such covenant, condition, rule or regulation. The acceptance of
any rent or the performance of any obligation hereunder by a person other than
the Tenant shall not be construed as an admission by the Landlord of any right,
title or interest of such person as a sub-tenant, assignee, transferee or
otherwise in the place and stead of the Tenant.

17.      HOLD OVER
         ---------
         17.1 If the Tenant holds over after the expiration of the term granted
and the Landlord accepts rent, the new tenancy hereby created shall be deemed a
monthly tenancy and not a yearly tenancy and shall be subject to the covenants
and conditions contained herein insofar as they are applicable to a tenancy from
month to month.

18.      RULE AND REGULATIONS
         --------------------
         18.1 The Tenant and its servants, employees and agents shall observe
faithfully and comply strictly with such reasonable rules and regulations as the
Landlord may from time to time adopt. Written notice of any rules and
regulations shall be given to the Tenant as set out in Schedule B. Nothing
contained in this Lease shall be construed to impose upon the Landlord any duty
or obligation to enforce the rules and regulations or the terms, covenants or
conditions in any other lease against any other Tenant of any building of which
the demised premises form a part, and the Landlord shall not be liable to the
Tenant for violation of the same by any other Tenant or its servants, employees,
agents, visitors or licensees.

19.      INABILITY TO PERFORM
         --------------------
         19.1 The Landlord does not warrant that any service or facility
provided by it hereunder will be free from Interruptions caused or required by
maintenance, repairs, renewals, modifications, strikes, riots, insurrections,
labour controversies, accidents, fuel shortages, Government intervention, force
majeure, acts of God or other cause or causes. No such interruption shall be
deemed an eviction or disturbance of the Tenant's enjoyment of the demised
premises nor render the Landlord liable in damages to the Tenant nor relieve the
Tenant from its obligations under this Lease.

20.      NOTICES
         -------
         20.1 Any notice, demand or other communication required or contemplated
by any provision of this Lease shall be given in writing, and if to the
Landlord, either delivered to or mailed by prepaid registered mail addressed to
the Landlord as follows:

                                    10.3-14

<PAGE>

                  Gastown Investment 21 Ltd.
                  #600 - 21 Water Street
                  Vancouver, British Columbia
                  V6B 1A1

and if to the Tenant, either delivered to the demised premises or mailed by
prepaid registered mail addressed to the Tenant at the demised premises. Every
such notice shall be deemed to have been given when delivered, or, if mailed as
aforesaid, upon the third business day after the day of mailing thereof in
Canada provided that if mailed, should there be between the time of mailing and
the actual receipt of the notice, a mail strike, slowdown or other labour
dispute which might affect delivery of such notice, then such notice shall only
be effective if actuary delivered. The Landlord may from time to time by notice
in writing to the Tenant designate another address in Canada as the address to
which notices are to be delivered or mailed to it.

21.      INTERPRETATION
         --------------
         21.1 Where required, the singular number shall be deemed to Include the
plural, and the neuter gender the masculine or feminine. Where there is more
than one Tenant, they shall be jointly and severally bound to the fulfillment of
their obligations hereunder.

22.      ADDITIONAL COVENANTS
         --------------------
         22.1 Registration of Lease. The Landlord shall not be obliged to
execute or deliver this Lease in form registrable under the Land Title Act and
the tenant shall not register this Lease against the title to the lands.

         22.2 Estoppel Certificate Clause. The Tenant shall from time to time at
the request of the Landlord, execute and deliver to any proposed purchaser or
proposed or existing mortgagee of the demised premises a certificate
acknowledging the following:

         (a)      That the Tenant is in possession of the demised premises;

         (b)      That this Lease is in full force and effect and unamended, or
                  if the same has been amended specifying such amendments;

         (c)      That the Landlord is not currently in default under any term,
                  condition or covenant required to be performed by the Landlord
                  hereunder, or if the Landlord is in default under one or more
                  of such terms, conditions or covenants specifying the nature
                  of each such default;

         (d)      The date of which rents hereunder have been paid;

         (e)      The amount of any deposit hereunder;

         (f)      That there is no right of set-off against any rents due
                  hereunder.

         22.3 Attornment and Non Disturbance Clause. The Tenant shall, if
requested to do so by the Landlord, agree with any mortgagee of the whole or any

                                    10.3-15

<PAGE>

portion of the lands to attorn to and become tenant of such mortgagee if the
mortgagee shall become a mortgagee in possession, if such mortgagee shall agree
that so long as the Tenant pays the rent and observes and performs its covenants
and provisos herein contained on its part to be performed, the Tenant shall be
entitled to hold, occupy and enjoy the demised premises, subject to any rights
the mortgagee may have as a lessor, free from any interference by the mortgagee
or any person claiming by or through the mortgagee.

         22.4 Headings. The headings in this Lease form no part of this Lease
and shall be deemed to have been inserted for convenience of reference only.

         22.5 Lease Subordinate Charge Against Land. If required by the holder
of any charge or charges from time to time created by the Landlord by Mortgage
or Charge on the lands, this Lease shall be deemed to be subordinate to such
charge or charges, and the Tenant shall promptly at any time as required by the
Landlord execute all documents and give such further assurances as may be
reasonably required to postpone its rights and privileges to the holder of any
Charge or Mortgage provided that such Mortgage or Charge shall permit the Tenant
to continue in quiet possession of the demised premises in accordance with the
terms and conditions of this Lease so long as the Tenant is not in default
hereunder, whether such Mortgage or Charge is in good standing or not.

         22.6 Triple Net Lease. Subject to the terms herein, the parties agree
that it is their purpose, intent and agreement that rent aforementioned stall be
absolutely net to the Landlord so that this Lease shall yield net to the
landlord the amount specified in paragraph 3.1 hereof free of any charges,
assessments, impositions or deductions of any kind and without abatement,
deductions or set-off.

         22.7 Relief of Landlord on Sale. If the Landlord sells the Landlord's
interest in the lands and building the Landlord shall be released from all
obligations, responsibilities and liabilities under this lease to the extent
that the purchaser of the Landlord's interest assumes them from the Landlord.

         22.8 Additional Covenants. Any additional covenants, conditions or
agreements set forth in writing and attached hereto whether at the commencement
of the term or at any subsequent time and signed or initialed by the parties
hereto shall be read and construed together with and as part of this lease;
PROVIDED ALWAYS THAT when they are at variance with any written paragraph in
this Lease such additional covenants, conditions, and agreements shall be deemed
to supersede such paragraph.

         22.9 Whole Agreement. The Tenant agrees that demised premises are
leased by the Tenant without any representations or warranties other then as
contained in this Lease.

         22.10 Option to Renew. The Landlord agrees that if the Tenant duly and
regularly pays the rent hereunder and performs all the covenants, provisos and
agreements herein contained and on the part of the Tenant to be paid and
performed, the Landlord will upon the written request of the Tenant made not
less that six (6) months prior to the expiration of the term, and at the cost of
the Tenant, grant to the Tenant a renewal of this Lease for a further term of
THREE (3) years at a basic rent to be agreed upon based on the fair market
rental for premise of similar size, quality and location at the time of renewal

                                    10.3-16

<PAGE>

(but which shall not be less than the basic monthly rental of the last month of
the term plus TEN percent (10%) or failing agreement, at a rate to be determined
on the same basis as set out above by reference to one arbitrator if the parties
can agree in selecting one and failing that to be determined by the decision of
three arbitrators or a majority of them, with one to be named by the Landlord
and one by the Tenant, not more than fourteen (14) days after the giving of
notice by the Landlord or Tenant requesting such arbitration and the two
arbitrators as chosen shall within seven (7) days after the appointment of the
two arbitrators select a third arbitrator, it being expressly agreed that:

         (a)      The award of the arbitrator or arbitrators or a majority of
                  them shall be made not later than twenty-one (21) days after
                  the date of the appointment of the arbitrator or third
                  arbitrator (as the case may be) so appointed hereunder.

         (b)      The Landlord and Tenant shall each pay its own cost of the
                  arbitration proceedings, provided that in the case of a single
                  arbitrator the arbitrator's fee shall be paid equally between
                  them and in the case of three arbitrators the fee of the third
                  arbitrator shall be paid equally between them;

         (c)      If either the Landlord or the Tenant neglects or refuses to
                  name its arbitrator in the time hereinbefore limited or fails
                  to proceed with the arbitration, the arbitrator named by the
                  other of them shall determine the basic rent and decision of
                  such arbitrator shall be final and binding on both the
                  Landlord and Tenant;

         (d)      Any arbitration hereunder shall be governed by the Commercial
                  Arbitration Act of the Province of British Columbia.

Such renewal lease shall contain the same terms, provisos, covenants and
agreements herein contained excluding this paragraph and except for the basic
rent which shall be determined above.

         22.11 Additional Termination Clause. In addition to any of the other
rights and remedies of the Landlord under this Lease, the Landlord at its option
may terminate this Lease upon giving the Tenant six (6) months notice in writing
to vacate the lands for the reason that the Landlord intends to either:

         (a)      demolish the entire building;

         (b)      substantially renovate the building; or

         (c)      strata title the building.

The Tenant shall upon receipt of the notice aforementioned vacate the lands on
the first day of the sixth month of the notice period and this Lease shall
terminate and the installments of rent and other moneys payable hereunder by the
Tenant shall be apportioned and payable only up to the date of such vacating.

In addition to any other rights and remedies, the Landlord and Tenant will have
the option to terminate this lease by giving ninety (90) days notice in writing
prior to the end of the 1st year of the said term to the other party.

                                    10.3-17

<PAGE>
23.      INDEMNITY
         ---------
         The Indemnitor, as a separate and distinct agreement and in
consideration of the Landlord entering into this Lease with the Tenant and other
good and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), covenants and agrees with the Landlord as follows:

         1.       this indemnity is absolute, unconditional and irrevocable;

         2.       the Tenant will duly keep, observe and perform all of its
                  covenants and agreements under this tease (including the
                  payment of rent and all other amounts from time to time
                  payable under this Lease);

         3.       if any default is made by the Tenant under this Lease, the
                  Indemnitor shall on demand of the Landlord forthwith remedy
                  such default;

         4.       the Landlord shall not be bound or required to proceed against
                  the Tenant or to have recourse to or exhaust any security from
                  time to time held by it for the performance of such covenants
                  or agreements or to pursue any other remedy whatsoever which
                  may be available to it, before proceeding against the
                  Indemnitor;

         5.       the Indemnitor shall indemnify and save harmless the Landlord
                  with respect to all losses, costs, expenses, claims,
                  liabilities and damages that may be suffered or incurred by
                  the Landlord by reason of or relating to, directly or
                  indirectly, any default of the Tenant under this Lease;

         6.       the Indemnitor is jointly and severally bound with the Tenant
                  to the Landlord to keep, observe and perform all covenants and
                  agreements of the Tenant under this Lease;

         7.       the obligations of the Indemnitor under this clause shall be
                  in no way released, discharged, or reduced or otherwise
                  affected by:

                  a.   modifications, releases or discharges granted to the
                       Tenant in respect of its obligations to keep, observe and
                       perform its covenants end agreements hereunder;

                  b.   any neglect, delay or forebearance of the Landlord in
                       demanding, requiring or enforcing the keeping, observance
                       or performance by the Tenant of any of its covenants or
                       agreements under this Lease or by the Indemnitor of any
                       obligations under this clause;

                  c.   granting any extension of time, waivers or indulgences;

                  d.   any assignment or subleasing by the Tenant or any trustee
                       in bankruptcy, receiver or other successor or any consent
                       of the Landlord to any assignment or subleasing;

                  e.   bankruptcy, insolvency or dissolution of the Tenant;

                                    10.3-18

<PAGE>
                  f.   any other event or occurrence which would have the affect
                       at law of terminating or rendering unenforceable any
                       covenants or agreements of the Tenant;

                  g.   any agreements or other dealings between the Landlord and
                       the Tenant having the effect of amending or altering the
                       Lease or the obligations of the Tenant hereunder.

                  h.   any want of notice by the Landlord to the Indemnitor of
                       any default of the Tenant;

                  i.   any re-entry onto the Leased Premises or termination of
                       this Lease; or

                  j.   any other matter, thing, act or omission of the Landlord
                       whatsoever.

         8.       the obligations of the Indemnitor under this clause shall
                  extend to the Term and to any overholding by the Tenant
                  thereafter and to any renewal or extension of the Term;

         9.       no proceeding under this clause and no recovery made as a
                  result thereof will be a bar or defence to any further
                  proceeding under this Clause;

         10.      the Indemnitor waives any right to receive notices of any
                  default of the tenant;

         11.      the Indemnity is bound by all the terms and provisions of this
                  lease; and

         12.      this Indemnity shall enure to the benefit of and be binding
                  upon the Landlord and the Indemnitor and their respective
                  heirs, executors, administrator's, successors and assigns.

         THIS INDENTURE shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.

         IN WITNESS WHEREOF the parties hereto have affixed their common seals
in the presence of their offices duly authorized in that behalf, or have
hereunto set their hands and seals, as the case may be, on the day and year
first above written.

The Common Seal of GASTOWN INVESTMENT 21 LTD.
was hereunto affixed in the presence of:                       C/S

___/s/ George Lee______
      George Lee

The Common Seal of VERIDICOM INTERNATIONAL
(CANADA) INC. was hereunto affixed in the presence of:         C/S

___/s/ Terry Laferte___
       Terry Laferte

___/s/ Paul Mann___
       Paul Mann
                                    10.3-19

<PAGE>

                                   SCHEDULE A

                                    10.3-20
<PAGE>
                                   SCHEDULE B

                      GENERAL BUILDING RULES & REGULATIONS

                       21 WATER STREET / 109 CARRAL STREET

              ATTACHED TO AND FORMING PART OF THIS LEASE AGREEMENT

1.       No Sign, advertisement, notice or other lettering shall be exhibited,
         inscribed, painted or affixed by the Tenant on any part of the outside
         of the Leased premises or the Building without the prior written
         consent of the Landlord. In the event of the violation of the foregoing
         by the Tenant, the Landlord may remove same without any liability, and
         may charge the expense of such removal to the Tenant. Provided however
         that upon the termination of the Lease to which these rules and
         regulations are attached, the Tenant will at the request of the
         Landlord remove any and all such signs and shall make good any damage
         occasioned by the installation and/or removal thereof.

2.       The water and wash closets and other plumbing fixtures shall not be
         used for purposes other than those for which they were construed, and
         no sweeping, rubbish, rags or other substances shall be thrown therein.
         All damages resulting from any misuse of the fixtures shall be borne by
         the Tenant; the servants, employees, agents, visitors or licensees of
         which shall have caused the same.

3.       The Tenant shall not mark, paint, drill into or in any way deface any
         part of the Leased Premises or the Building. No showing, cutting or
         stringing of wires shall be permitted, except with the prior written
         consent of the Landlord and as the Landlord may direct, such consent
         not to be unreasonably withheld.

4.       The Tenant and any of the Tenant's servants, employees, agents,
         visitors or licensees shall not, at any time, bring or keep on the
         Leased Premises any inflammable, combustible or explosive fluid,
         chemical or substance.

5.       No loudspeaker, television, phonograph, radio or other device shall be
         used in the manner so as to be heard or seen as the case may be,
         outside the Leased premises without the prior consent of the Landlord.

6.       The Normal Building Operating Hours are from 7:00 a.m. to 8:00 p.m.
         Monday to Friday, Statutory holidays excepted. The Landlord reserves
         the right to charge tenants an additional Electrical Levy Charge should
         the tenants use the premises extensively outside the Normal Building
         Operating Hours.

7.       The Leased Premises shall be used exclusively for conducting the
         business of the tenant. The Leased Premises are not licensed nor can be
         used for overnight sleeping accommodations or as a place of habitation.

8.       The Building will open to tenants and their clients during Normal
         Building Operating Hours. Outside of the Normal Building Operating
         Hours, the building will be locked and access is restricted to
         authorized personnel only.

                                    10.3-21

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