Document:

Exhibit 4.1

                                                905 WEST PENDER
                                                Vancouver, B.C.

GROSS LEASE

Between: CT. MANAGEMENT CORPORATION

                           as Landlord

and DSI DATOTECH SYSTEMS INC.

                                          as Tenant

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                                                     -2-

                                            905 WEST PENDER STREET
                                                 Office Lease
                                                     Index

ARTICLE ONE DEFINITIONS                                                    5
  1.01    DEFINITIONS                                                      5
ARTICLE TWO PREMISES                                                       5
  2.01    GRANT OF LEASE                                                   5
  2.02    COMMON AREA                                                      5
  2.03    LIMITS OF PREMISES                                               5
  2.04    AREA OF PREMISES                                                 5
ARTICLE THREE TERM                                                         6
  3.01    COMMENCEMENT AND TERMINATION                                     6
  3.02    TENANTS POSSESSION                                               6
  3.03    RENTAL ADJUSTMENTS                                               6
  3.04    CONDITION OF PREMISES                                            6
  3.05    STATEMENT OF LEASE COMMENCEMENT                                  6
ARTICLE FOUR RENT                                                          6
  4.01    GROSS ANNUAL RENT                                                6
  4.02    PLACE OF PAYMENT                                                 7
  4.03    TIME OF PAYMENT                                                  7
  4.04    PAYMENT OF ADDITIONAL CHARGES                                    7
  4.05    PRO-RATING OF ADDITIONAL CHARGES                                 7
  4.06    DETERMINATION OF DISPUTES                                        7
ARTICLE FIVE USE AND OCCUPATION                                            8
  5.01    USE OF PREMISES                                                  8
  5.02    PROHIBITIONS                                                     8
  5.03    ADVERTISING                                                      8
  5.04    COMPLIANCE WITH LAWS                                             8
  5.05    NUISANCE                                                         8
  5.06    ADVERTISING IN COMMON AREAS                                      8
ARTICLE SIX REGISTRATION                                                   9
   6.01 REGISTRATION                                                       9
ARTICLE SEVEN RULES AND REGULATIONS                                        9
  7.01    PRESENT AND FUTURE                                               9
  7.02    DELIVERIES                                                       9
  7.03    REMEDIES OF LANDLORD                                             9
ARTICLE EIGHT ADDITIONAL CHARGES                                           9
  8.01    INSURANCE                                                        9
  8.02    TENANTS TAXES                                                    9
  8.03    FAILURE TO PAY TAXES                                            10
  8.04    GOODS AND SERVICES TAX                                          10
ARTICLE NINE MAINTENANCE AND REPAIR                                       10
  9.01    MAINTENANCE                                                     10
  9.02    MAINTENANCE AND INSURANCE                                       10
  9.03    COMMON FACILITIES                                               10
  9.04    PROHIBITION                                                     11
  9.05    PAINTING AND REDECORATING                                       11
  9.06    WINDOWS AND DOORS                                               11
  9.07    LANDLORD'S REMEDY                                               11

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                                                     -3-

  9.08    ENTRY TO LANDLORD                                               11
  9.09    PERMITTED ALTERATIONS                                           11
  9.10    LANDLORD'S REPAIRS                                              12
ARTICLE TEN SURRENDER AND TERMINATION                                     12
 10.01     SURRENDER                                                      12
 10.02     LEASING SIGNS                                                  12
 10.03     TENANT'S IMPROVEMENTS                                          12
 10.04     TRADE FIXTURES                                                 12
ARTICLE ELEVEN INDEMNITY AND LIABILITY                                    12
  11.01      INDEMNIFICATION                                              12
  11.02      PUBLIC LIABILITY AND PROPERTY DAMAGE                         13
ARTICLE TWELVE LANDLORD'S OBLIGATIONS                                     13
  12.01      HEAT AND VENTILATION                                         13
  12.02      COMMON AREA MAINTENANCE                                      13
  12.03      LANDLORD'S TAXES                                             14
  12.04      CLEANING AND JANITORIAL SERVICES                             14
  12.05      EXPENSE APPORTIONED                                          14
  12.06      STRUCTURAL REPAIRS                                           14
  12.07      QUIET POSSESSION                                             14
ARTICLE THIRTEEN INSURANCE                                                14
  13.01      FIRE AND EXTENDED COVERAGE                                   14
  13.02      PLATE GLASS                                                  14
  13.03      LIABILITY                                                    15
  13.04      LEASE INSURANCE                                              15
  13.05      INCREASE IN PREMIUMS                                         15
  13.06      WAIVER OF SUBROGATION                                        15
  13.07      LANDLORD'S INSURANCE                                         15
  13.08      CANCELLATION                                                 15
  13.09      LANDLORD'S REMEDIES                                          16
ARTICLE FOURTEEN PARTIAL AND TOTAL DESTRUCTION                            16
  14.01      PARTIAL DESTRUCTION                                          16
  14.02      TOTAL DESTRUCTION                                            16
  14.03      DAMAGE TO BUILDING                                           17
  14.04      DAMAGES OF TENANT                                            17
ARTICLE FIFTEEN ASSIGNMENT AND SUB-LETTING                                17
  15.01      CONSENT REQUIRED                                             17
  15.02      UNAUTHORIZED ASSIGNMENT OR SUB-LEASE                         17
  15.03      CHANGE OF CORPORATE CONTROL                                  18
ARTICLE SIXTEEN SALE OR MORTGAGE                                          18
  16.01      LANDLORD RELIEVED                                            18
  16.02      POSTPONEMENT AND SUBORDINATION                               18
  16.03      ESTOPPEL CERTIFICATE                                         19
ARTICLE SEVENTEEN LANDLORD'S REMEDIES                                     19
  17.01      SEVERABILITY                                                 19
  17.02      WAIVER                                                       19
  17.03      INTEREST                                                     19
  17.04      PERFORMANCE BY LANDLORD                                      20
  17.05      EVENTS OF DEFAULT AND CONSEQUENCES                           20
  17.06      DISTRESS                                                     20
  17.07      RE-ENTRY AND DAMAGES                                         21
  17.08      REMEDIES CUMULATIVE                                          21
  17.09      LANDLORD'S EXPENSES ENFORCING LEASE                          22

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ARTICLE EIGHTEEN EXPROPRIATION                                            22
  18.01      EXPROPRIATION                                                22
ARTICLE NINETEEN COMMON AREAS                                             22
  19.01      CONTROL OF COMMON AREAS                                      22
  19.02      LICENSE                                                      23
ARTICLE TWENTY GUARANTEE                                                  23
ARTICLE TWENTY-ONE OVER-HOLDING                                           23
  21.01 OVER-HOLDING                                                      23
ARTICLE TWENTY-TWO NOTICE                                                 23
  22.01    TO LANDLORD                                                    23
  22.02    TO TENANT                                                      24
  22.03    DEEMED RECEIPT                                                 24
  22.04    CHANGE OF ADDRESS                                              24
ARTICLE TWENTY-THREE FORCE MAJEURE                                        24
  23.01    FORCE MAJEURE                                                  24
ARTICLE    TWENTY-FOUR PREPAID RENTAL AND SECURITY DEPOSIT                24
  24.01    PREPAID RENT                                                   24
  24.02    SECURITY DEPOSIT                                               25
ARTICLE TWENTY-FIVE MISCELLANEOUS                                         25
  26.01    TIME OF ESSENCE                                                25
  26.02    AMENDMENT                                                      25
  26.03    ENTIRE AGREEMENT                                               25
  26.04    CAPTIONS AND HEADINGS                                          25
  26.05    INTERPRETATION                                                 25
  26.06    ACCEPTANCE                                                     26
  26.07    INUREMENT                                                      26
  26.08    SPECIAL CLAUSES                                                26
SCHEDULES                                                                 28
   SCHEDULE A DEFINITIONS                                                 28
   SCHEDULE B PLAN.                                                       31
   SCHEDULE C STATEMENT OF LEASE COMMENCEMENT                             32
   SCHEDULE D RULES AND REGULATIONS                                       34
   SCHEDULE E TERMINATION IN THE EVENT OF DEMOLITION                      36

<PAGE>

This agreement made this 25th day of July, 2000

BETWEEN:               C.T. MANAGEMENT CORPORATION,
                       a company incorporated under the Laws of
                       the Province of British Columbia, having an
                       office at Suite 300, 905 West Pender Street,
                       in the City of Vancouver, in the Province of
                       British Columbia.

                      (hereinafter called the "Landlord")

                                               OF THE FIRST PART

     AND: DSI DATOTECH SYSTEMS INC., a company duly incorporated  under the laws
of the Province of British Columbia,  having an office at Suite 712, 525 Seymour
Street, in the City of Vancouver, in the Province of British Columbia.

     (hereinafter called the "Tenant")

                                              OF THE SECOND PART

               IN   CONSIDERATION   of  the  mutual   covenants  and  agreements
hereinafter set forth the parties do hereby covenant and agree as follows:

                                                  ARTICLE ONE
                                                  Definitions
1.01           Definitions

In this Agreement, including the schedules hereto, which are incorporated in and
form part of this Agreement,  unless the context otherwise requires,  the words,
phrases  and  expressions  defined  in  Schedule  "A"  shall  have the  meanings
attributed to them in Schedule "A".

                                                  ARTICLE TWO
                                                   Premises
2.01           Grant of Lease

               The  Landlord  does hereby  demise and lease unto the Tenant that
portion of the floor of the  Building  outlined in red on Schedule "B" hereto as
(the  "Premises")  comprising an area of five thousand  seven hundred twenty one
(5,721)  square feet of floor area,  more or less, the precise floor area of the
Premises to be determined by reference to Article 2.04,  reserving and excluding
from the Premises those portions of the Building referred to in Article 2.03.

2.02           Common Area

               During  the term of the Lease  the  Tenant,  in  common  with the
Landlord and all other tenants, occupants or users of the Building will have the
right to use and enjoy the  Common  Areas of the  Building  in such  manner  and
subject to such reasonable regulations and restrictions as the Landlord may from
time to time designate.

2.03           Limits of Premises

               The Premises do not comprise any air rights or other right, title
or  interest  in any space above a height of ten (10) feet from the floor of the
Premises,  save as required for installation of the Tenant's light fixtures, nor
any right,  title or interest in the subsurface or other area below the floor of
the Premises.

2.04           Area of Premises

               The precise floor area of the Premises and the  Building,  or any
part or parts thereof shall be  conclusively  determined for the purposes of the
Lease  upon  completion  of  construction  of the  Building  or any  expansions,
alterations,  additions or relocations  thereto by measurement of the Landlord's
Architect who will measure from the exterior window glass line (as extended by a
straight line where the glass line is interrupted by columns or other structural
members) and from the center

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line of all interior  walls  separating  the Premises from  adjoining  premises;
provided that if the exterior window glass line of such premises  (including the
Premises)  are recessed from the outside line of the main exterior wall or walls
of the Building,  the area of such recess shall be included in  determining  the
precise floor area of such  premises.  In the  determination  of the total floor
area  there  shall  be  included  columns,  projections,  interior  construction
supports and equipment and a pro rata share of  corridors,  lobbies,  entrances,
washroom,  electrical  rooms and other common areas on the floor but there shall
be deductions for shafts, stairs and elevators.

                                                ARTICLE THREE

                                                     Term

3.01           Commencement and Termination

The term of the Lease  shall be five (5) years,  commencing  on the first day of
October, 2000 (the "Commencement Date").

The Landlord shall not be liable for any loss,  injury,  damage or inconvenience
which the  Tenant may  sustain by reason of the  inability  of the  Landlord  to
deliver the Premises ready for occupancy on the Commencement Date.

3.02           Tenants Possession

Upon receipt of notice from the Landlord that the Landlord's Work has progressed
to the stage where the Tenant's  Work must commence  forthwith,  notwithstanding
that some portion of the Landlord's Work remains to be completed the Tenant will
immediately  take  possession of the Premises for the purpose of preparing  same
for the  commencement  of business,  and the Tenant shall be obliged to commence
business as soon as possible thereafter, but in any event, not later than thirty
days after receipt of such notice.

3.03           Rental Adjustments

               The Rent  payable by the  Tenant  pursuant  to the terms  hereof,
shall be  calculated  pro rata on a per diem  basis  from the date on which  the
Tenant  actually  commences  or is obliged  pursuant to Article 3.02 to commence
business in the Premises  until the  Commencement  Date, and shall be payable by
the  Tenant on demand  therefore  or on the date on which the first  payment  of
Gross Annual Rent becomes payable by the Tenant, whichever is earlier.

3.04           Condition of Premises

               The taking of  possession  of the Premises by the Tenant shall be
conclusive  evidence as against the Tenant that at the time thereof the Premises
were in good and satisfactory  condition,  except only for deficiencies of which
notice  may be given by the Tenant to the  Landlord  within ten (10) days of the
date on which the Tenant  took  possession,  or is obliged  pursuant  to Article
3.0210  take  possession,  of  the  Premises.  No  promise,   representation  or
undertaking  relating  to  any  alteration,  remodeling  or  decorating  of,  or
installation  of equipment or fixtures in the Premises shall be binding upon the
Landlord  unless  expressly  set  forth  herein  or in  any  collateral  written
agreement between the parties hereto.

3.05           Statement of Lease Commencement

               When the  Tenant's  obligation  to pay  Rent has been  determined
pursuant  to Article  3.03 the Tenant will  promptly  execute,  acknowledge  and
deliver to the Landlord a written  statement in the form annexed as Schedule "C"
specifying  the  Commencement  Date and the precise  floor area of the  Premises
(determined in accordance  with the provisions of Article 2.04).  Such statement
will also state that the Tenant is in  possession  of the Premises and is paying
the Rent and all  Additional  Charges  hereunder,  and  that the  Tenant  has no
claims,  defenses,  set-offs or counter-claims against the Landlord, or, if such
exist,  specifying  the nature  and  amount  thereof.  Such  statement,  when so
executed, shall be deemed to be incorporated in and become part of the Lease.

                                                 ARTICLE FOUR
                                                     Rent
    4.01       Gross Annual Rent

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                                                     -7-

     (a) The  Tenant  will pay to the  Landlord  in each year of the term of the
Lease a Gross

                      Annual Rent as specified  below.  In addition,  the Tenant
                      shall pay all other amounts payable by the Tenant pursuant
                      to the provisions  hereof; all of which shall be deemed to
                      be Rent and shall be  recoverable  by the  Landlord by the
                      remedies  available  to the  Landlord  for the recovery of
                      rent in arrears.

     (b) The term of the Lease  shall be  divided  into five (5) parts of twelve
(12) months  each.  The first of such parts shall  commence on the  Commencement
Date.

     (c) The Tenant will pay to the Landlord during the first (3) three parts of
the term a Gross Annual Rent of  approximately  One Hundred Eight  Thousand Five
Hundred  Twenty Seven  Dollars  ($108,527.37)  the exact Gross Annual Rent to be
calculated by  multiplying  the total floor area of the Premises  (determined in
accordance with the provisions of Article 2.04) by a rental rate of Eighteen and
97/100 Dollars ($18.97) per square foot of the Premises.

                      The  Gross  Annual  Rent  payable  by  the  Tenant  to the
                      Landlord for each of the remaining parts of the term shall
                      be determined by  multiplying  the total floor area of the
                      Premises  (determined as specified above) by a rental rate
                      of Nineteen and 97/100 Dollars ($19.97) per square foot of
                      for the fourth (4th) part of the term; by a rental rate of
                      Twenty and 97/100 Dollars ($20.97) per square foot for the
                      fifth (5th) part of the term:

     4.02 Place of Payment

               The Tenant  will make all  payments  from time to time due herein
without  set-off,  compensation  or deduction  whatsoever to the Landlord at the
address set forth in Article 22 or to such other person or persons at such other
place or places as the Landlord may from time to time designate in writing.

     4.03 Time of Payment

               The  Gross  Annual  Rent  shall be paid in 12  equal  consecutive
monthly installments  commencing on the Commencement Date and payable thereafter
during  the term of the  Lease on the first  day of each and  every  month.  The
Tenant  will,  at the  request  of  the  Landlord,  provide  the  Landlord  with
post-dated  cheques to be  deposited  by the Landlord in payment of Gross Annual
Rent.

     4.04 Payment of Additional Charges

               The  Tenant  will  pay  all  Additional  Charges  payable  by  it
including those set out in Article 8, or any portion  thereof;  on or before the
expiration  of 15 days after  receipt by the  Tenant of a  Statement  requesting
payment  from the Tenant of such  Additional  Charges or  portion  thereof;  but
nothing  herein will limit the rights of the Landlord or the  obligations of the
Tenant under Article 4.05.

     4.05 Pro-Rating of Additional Charges

               The  Landlord  may at any time and from time to time  during  the
term hereof (but not oftener than twice in a calendar  year) compute a bona fide
estimate of the Additional  Charges payable by the Tenant during the forthcoming
year or  portion  thereof  From and  after the date  upon  which  notice of such
estimate  is given by the  Landlord to the Tenant the Tenant will pay the amount
of such estimated costs by equal  consecutive  monthly  installments  payable in
advance  on the first day of each and every  month  during  the year or  portion
thereof for which such estimate was computed. The Tenant will, at the request of
the Landlord,  provide the Landlord with  post-dated  cheques to be deposited by
the Landlord and applied in payment of such monthly installments.

     4.06 Determination of Disputes

               In the event of disagreement  between the Landlord and the Tenant
in regard to the manner of calculation or amount payable as Additional  Charges,
the  Tenant  will  make  payment  in  accordance  with any  notice  given by the
Landlord, but the disagreement shall immediately be referred by the Landlord for
determination by one or more of the Landlord's  auditors,  architect,  insurance
broker  or other  professional  consultant  (such as may be,  in the  reasonable
opinion of the Landlord, best

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                                                     -8-

informed and qualified to determine the difference on a basis  equitable to both
parties) who shall be deemed to be acting as experts and not arbitrators,  and a
determination  signed by the selected  expert(s) shall be final and binding upon
the Landlord and Tenant. Any adjustment required to any previous payment made by
the  Tenant  by reason of any such  determination  shall be made  within 14 days
thereof.

                                                 ARTICLE FIVE
                                              Use and Occupation

     5.01 Use of Premises

               The Tenant will carry on business in the Premises  only under the
firm name and style of DSI  Datotech  Systems Inc. and only for the purpose of a
business office.

     5.02 Prohibitions

               Without the prior written  approval of the Landlord,  the Tenant,
or anyone acting through,  for, or in the place of the Tenant,  will not conduct
or advertise on or from or pertaining to the Premises any auction or closing out
or  bankruptcy  or other  similar  bulk sale or conduct  wholesale  or  discount
businesses;  nor will the Tenant grant any concession,  license or permission to
any third  party to sell or take  orders  for  merchandise  or  services  in the
Premises;  nor will the  Tenant use  promotional  or  advertising  media such as
loudspeakers,  phonographs,  signs, posters, broadcasts or telecasts in a manner
seen or heard outside of the Premises.

     5.03 Advertising

               The Tenant will not,  without the previous written consent of the
Landlord in each  instance,  erect,  install,  or maintain any exterior  sign of
whatsoever  nature,  or any  window or door  sign,  lettering,  placard or other
advertising  matter  of  whatsoever  nature  if all or any  part of  such  sign,
lettering,  placard or other  advertising  matter is  painted  upon or posted or
otherwise  affixed to the  exterior of the  Buildings  or the Premises or to the
interior or exterior of or is visible  through any window or door.  The Landlord
will provide a uniform pattern of identification  signs for tenants to be placed
on the outside of doors  leading into  premises of tenants on part  floors,  and
other than such identification sign the Tenant shall not paint,  display,  place
or affix any sign, picture, advertisement,  logo, notice, lettering or direction
on the Premises without the prior written consent of the Landlord.

     5.04 Compliance with Laws

               The  Tenant  will not  place,  leave or  permit  or  suffer to be
placed,  left in or upon the  Premises or Common  Areas,  washrooms,  elevators,
hallways, stairways. driveways, sidewalks, parking or delivery areas any debris,
garbage or refuse,  except as  deposited  in areas  indicated by the Landlord in
adequate  and proper  receptacles  supplied  and placed for that  purpose by the
Landlord  or the  Tenant.  The  Premises  shall be kept in a clean and  sanitary
condition in accordance with all directions, rules and regulations of the health
officer,  fire  marshall,  building  inspector or other  proper  officers of the
government,  municipal or other agencies  having  jurisdiction,  all at the sole
cost and expense of the Tenant.  The Tenant will comply with all laws,  by-laws,
regulations and ordinances relating or pertaining to its business, the operating
thereof upon the Premises, and the occupation by the Tenant of the Premises.

     5.05 Nuisance

               The Tenant  will not use,  keep or permit in or about any part of
the Premises any goods, provisions, equipment or materials of an offensive odour
or combustible or noxious nature or anything which would create a fire hazard or
undue load on electrical  circuits or cause vibration or undue heat or noise and
will not cause or maintain any nuisance in or about the

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                                                     -9-

Premises.

     5.06 Advertising in Common Areas

               Neither  the Tenant nor the  Tenant's  agents or  employees  will
either solicit business or distribute handbills or other advertising material in
the Common Areas of the Building.

                                                  ARTICLE SIX
                                                 Registration

     6.01 Registration

               The Tenant  acknowledges  and  agrees  that  notwithstanding  any
rights which the Tenant might.  otherwise have under any laws of the Province of
British  Columbia or otherwise the Lease shall not be registered and any attempt
to do so by the Tenant shall be deemed a default  hereunder.  The Landlord shall
not be required to provide this Lease in registrable  form,  unless the Landlord
first  consents  in writing to permit the Tenant to  register  this  Lease.  The
Tenant  shall bear all costs of providing  this Lease in  registrable  form,  if
necessary so to do.

                                                ARTICLE SEVEN
                                            Rules and Regulations

     7.01 Present and Future

               For purposes of the common good and welfare of all tenants of the
Building,  the Tenant will  observe and  perform the rules and  regulations  set
forth in Schedule "E". The Landlord will for the said purposes have the right to
promulgate and from time to time amend, vary or add further reasonable rules and
regulations  not  repugnant to the  conditions  of the Lease and relating to the
operation  of the  Building  and the use of all  Common  Areas.  Any  amendment,
variation of or addition to the said rules and regulations shall be binding upon
the Tenant upon the Landlord giving notice thereof to the Tenant

     7.02 Deliveries

               The ingress,  egress and parking of vehicles,  and the  receiving
and  deliveries of goods and  merchandise to and from the Premises shall be made
only at such times and at such  locations  as the  Landlord may approve and only
subject to such conditions as the Landlord may from time to time  prescribe.  In
all such  matters and to the extent  pertinent  thereto the  Landlord  will have
absolute discretion to amend the aforementioned rules or regulations, or to make
Or substitute new rules and regulations.

     7.03 Remedies of Landlord

               For the enforcement of any rules and regulations above mentioned,
the Landlord will have  available to it all remedies in the Lease provided for a
breach hereof; and all legal rights and remedies, including injunction,  whether
or not provided for in the Lease, either at law or in equity. The Landlord shall
not be  responsible  to the Tenant for the  non-observance  or  violation by any
other tenant or person of any such rules or regulations.

                                      ARTICLE EIGHT
                                      Additional Charges

     8.01 Insurance

               The Tenant will pay for the  insurance  required to Article 13 to
be maintained by the Tenant.

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                                                     -10-

     8.02 Tenants Taxes

               The  Tenant  will  pay  all  taxes,   rates,   duties,   charges,
assessments,  fees and licenses whatsoever imposed by any governmental authority
in respect of the Tenant's goods, chattels or equipment in the Premises, or upon
or in  respect  of any  business  or other  activity  carried  on,  upon,  or in
connection  with the Premises,  or upon the Tenant on account of the Premises or
such goods, business or other activity.

8.03           Failure to Pay Taxes

               Should the Tenant fail to pay any taxes, rates,  duties,  charges
or  assessments  which it is required or has herein  covenanted to pay and which
could  constitute a lien,  charge or encumbrance upon the Lands or the Premises,
the Landlord,  after the expiration often (10) days' notice to the Tenant within
which such default has not been cured, may pay all or any of the same and all of
such payments so made will  constitute  Rent forthwith  payable by the Tenant to
the Landlord,  PROVIDED, HOWEVER, that the Tenant will have the right to contest
the validity or amount of any such taxes, rates, duties,  charges or assessments
so long as such  contestation  could not involve or impend  forfeiture,  sale or
disturbance  of the  Landlord's  interest  in the  Premises,  but upon the final
determination  of any contest,  the Tenant will  immediately pay and satisfy the
amount  thereof found to be due, if any,  together with all costs,  penalties or
interest,  and during the bona fide period of such  contest the Tenant shall not
be deemed in default hereunder. The Tenant may designate that taxes attributable
to the Premises be or accrue for the support of separate schools, but the Tenant
will thereupon reimburse the Landlord any increase in taxes that would otherwise
be payable by the Landlord.

     8.04 Goods and Services Tax

               Despite  any other  section or clause of this  Lease,  the Tenant
shall pay to the  Landlord  upon demand an amount equal to any and all Goods and
Services Tax, it being the  intention of the parties that the Landlord  shall be
fully  reimbursed  by the Tenant with  respect to any and all Goods and Services
Tax at the full tax rate  applicable  from time to time in  respect  of the Rent
payable for the lease of the Premises  pursuant to this Lease. The amount of the
Goods and  Services  Tax so  payable by the Tenant  shall be  calculated  by the
Landlord in accordance with the applicable  legislation and shall be paid to the
Landlord  at the same time as the amounts to which such Goods and  Services  Tax
apply and is  payable  to the  Landlord  under  the terms of this  Lease or upon
demand at such other time or times as the Landlord from time to time determines.
Despite  any other  section or clause in this Lease,  the amount  payable by the
Tenant  under this  paragraph  shall be deemed not to be Rent,  but the Landlord
shall have all of the same remedies for and rights of recovery of such amount as
it has for recovery of Rent under this Lease.  As referred to herein  "Goods and
Services Tax" means the tax imposed under part IX of the Excise Tax Act (Canada)
or any similar tax hereafter  imposed in  substitution  therefore or in addition
thereto.

                                                 ARTICLE NINE
                                            Maintenance and Repair

     9.01 Maintenance

               The Tenant will maintain the Premises and the windows,  doors and
interior of the  Premises in a neat,  clean and  well-repaired  condition at all
times, and in the event that the Tenant fails to clean upon notice so to do from
the  Landlord,  the  Landlord  may clean the same and the Tenant will pay to the
Landlord the costs thereof forthwith upon demand.

     9.02 Maintenance and Insurance

               The Tenant will at all times keep the Premises in such  condition
as to comply with  federal,  provincial,  governmental  and  municipal  laws and
regulations and will not do or permit to be done,  committed or omitted upon the
Premises  anything  which will cause the rate of Insurance  upon the Building or
any part  thereof  to be  increased.  If the  insurance  rate  should be thereby
increased,  the Tenant will pay to the Landlord on demand therefore,  the amount
by which the insurance premium shall be so increased.

<PAGE>

                                                     -11-

     9.03 Common Facilities

               The sinks,  toilets and urinals in the  Premises or  elsewhere in
the  Buildings  shall not be used for any other purpose than that for which they
were intended and the expense of any breakage, stoppages or any damage resulting
from a violation of this  provision  shall be borne by the Tenant,  who or whose
employees,  agents,  customers,  licensees or invitees have caused the breakage,
stoppage or damage.  The Tenant will pay for any structural  Repairs and repairs
to the  Buildings  required as a result of the use or occupation of the Premises
or the Buildings by the Tenant or its employees, agents, customers, licensees or
invitees.

9.04           Prohibition

               Save as provided for in this Lease,  the Tenant,  its  employees,
agents and licensees will not mark, paint, drill or in any way deface any walls,
ceilings,  partitions, floors, wood, stone, glass or other part of the Buildings
or the Premises.

     9.05 Painting and Redecorating

               The Tenant will paint and redecorate as required, and maintain in
good  condition the interior of the Premises and any  appurtenances  thereto and
any improvements now or hereafter erected or installed therein and will make all
needed  repairs  and  replacements  for which the  Landlord  is not  responsible
hereunder,  and damage by fire or the elements only excluded;  PROVIDED that the
Landlord will make  available to the Tenant the benefits of all  warranties  and
guarantees  given or to be given to it which affect the obligation of the Tenant
to repair the Premises. The Tenant will repair in accordance with the Landlord's
notice so to do.

     9.06 Windows and Doors

               Without restricting the generality of the foregoing, the Tenant's
obligation  to repair will  include  any damage to or  breakage of glass,  plate
glass, office windows,  mouldings,  signs, doors, hardware,  partitions,  walls,
fixtures, lighting, heating, air conditioning, and plumbing fixtures, wiring and
piping,  ceilings,  floors  and  thresholds  forming  part  of the  Premises  or
providing services exclusively to the Premises.

     9.07 Landlord's Remedy

               In the event the Tenant  fails to maintain or repair as aforesaid
the  Landlord  on not less than ten (10) days  notice to the Tenant may make the
repairs without liability to the Tenant for any loss or damage that may occur to
the  Tenant's  merchandise,  fixtures  or  other  property  or to  the  Tenant's
business,  and the Tenant will on demand reimburse the Landlord the cost thereof
plus 20% of such cost for overhead and supervision.

     9.08 Entry to Landlord

               The Tenant covenants to permit the Landlord entry to the Premises
at  reasonable  times during  working  hours,  and at any time in the event of a
situation considered by the Landlord to be an emergency, to inspect the state of
repair of the Premises,  to effect repairs to the Premises, to effect repairs or
alterations  pursuant  to  Article  9.10,  or for any other  purpose  considered
necessary by the Landlord.

     9.09 Permitted Alterations

     The Tenant may at any time at its expense  paint and  decorate the interior
of the Premises and appurtenances

<PAGE>

                                                     -12-

thereof and make such changes, alterations, additions and improvements in and to
the Premises,  the appurtenances  thereof and the facilities  thereof as will in
the  judgement  of the  Tenant  better  adapt  the same for the  purpose  of its
business except that no structural changes and no alterations to the mechanical,
heating,  electrical, water or air conditioning systems or to Common Areas or to
the  exterior of the Premises  shall be made without the written  consent of the
Landlord; PROVIDED that:

     (a) All such  changes,  alterations,  additions  and  improvements  will be
subject to the approval of the Landlord,  such  approval not to be  unreasonably
withheld.

     (b) All such changes,  alterations,  additions and improvements will comply
with all laws or regulations of any governmental authority; and

     (c) The  Tenant  will pay to the  Landlord  an  increase  in any  insurance
premium on any policy  covering the building and  appurtenances  thereto and any
increase in taxes payable by the Landlord to the extent that such  increases are
directly attributable to any action by the Tenant under this paragraph.

9.10           Landlord's Repairs

               The Landlord will have the right to make  repairs,  replacements,
changes or additions to the equipment,  appliances,  pipes, conduits,  ducts, or
structures  of any kind in the  Premises  where  necessary  to  serve  adjoining
premises  or other  parts of the  Building  but in so doing will not  disturb or
interfere  with the Tenant's  operation of its business  more than is reasonably
necessary in the circumstances and in .so doing, the Landlord will make good any
damage to the Premises so caused.  The Landlord may make  alterations,  changes,
additions  or  extensions  to any part or  component  of the  Building not in or
forming part of the Premises in its unfettered discretion. -

     10.01 Surrender

               Upon the  surrender of possession of the Premises to the Landlord
at the  termination  hereof by affluxion of time or  otherwise,  the Tenant will
restore and deliver the same in the condition in which the Tenant is required to
maintain the same,  subject to damage by perils in respect to which the Landlord
maintains  insurance to the extent such insurance  compensates  the Landlord for
such damage.

10.02          .Leasing Signs

               The  Landlord  may,  during  the last 90 days of the term of this
Lease, display on the Premises, in such manner as not to unreasonably  interfere
with the Tenant's business,  signs that the Premises are available for lease and
the Tenant agrees that such signs will remain unmolested upon the Premises.

10.03          Tenant's Improvements

               Upon the termination of this Lease, all alterations, additions or
improvements  which may have  been  made or  installed  by the  Tenant  upon the
Premises  whether with or without the Landlord's  consent and which are attached
to the floors,  walls, or ceilings  including  carpeting and light fixtures will
remain  upon and be  surrendered  with the  Premises as a part  thereof  without
disturbance,  molestation  or  injury  and the same and any trade  fixtures  not
removed  by the  Tenant  shall  be  and  become  the  property  of the  Landlord
absolutely.  The  Tenant  will at the  expiration  of the  Term,  to the  extent
requested by the Landlord,  remove the alterations,  additions,  improvements or
fixtures made or installed by the Tenant upon the Premises.

     10.04 Trade Fixtures

<PAGE>

                                                     -13-

               Notwithstanding anything herein contained, the Tenant may install
its usual trade fixtures in the usual manner,  provided such  installation  does
not damage the structure of the Buildings and,  provided the Tenant has paid the
Rent hereby reserved and performed and observed all the covenants and conditions
herein  contained,  the Tenant will at the expiration or other  determination of
this Lease have the right to remove such trade fixtures,  but will make good the
damage caused to the Premises by such installation and removal.

                                                ARTICLE ELEVEN
                                            Indemnity and Liability

     11.01 Indemnification

               The Tenant will indemnify and save the Landlord harmless of; from
and  against any and all  claims,  demands,  actions,  loss,  costs,  damages or
expenses  whatsoever  for which the Landlord shall or may become liable or incur
or suffer by reason of any breach, violation or non-performance by the Tenant of
any covenant,  term or provision  hereof or by reason of any mechanics' or other
liens  for  any  work  done or  materials  provided  or  services  rendered  for
improvements,  alterations or repairs made by the Tenant to the Premises, or .by
reason of any injury  occasioned  to or  suffered by any person or damage to any
property  arising by reason of any wrongful act,  neglect or default on the part
of the Tenant or any of its employees, agents, contractors, customers, licensees
invitees, or any other person permitted by the Tenant to be on the Premises. The
Tenant will forthwith upon demand of the Landlord  remove or cause to be removed
any  mechanics',  builders' or other lien  aforesaid  noted or filed  against or
otherwise constituting an encumbrance on any title of the Landlord.

     11.02 Public Liability and Property Damage

               Notwithstanding  anything to the contrary herein  contained,  the
Landlord  shall not be liable nor  responsible  in any way for any  personal  or
consequential  injury of any nature whatsoever that may be suffered or sustained
by the Tenant or by any employees,  agent, customer, licensee or invitees of the
Tenant  or any other  person  who may be upon the  Premises,  or for any loss or
damage  howsoever  caused  to any  property  belonging  to the  Tenant or to its
employees, agents, customers, licensees, invitees or any other person while such
property  is in or about  the  Building,  save  such as is  caused  by the gross
negligence of the Landlord or its servants,  or agents.  For greater  certainty,
but without restricting the generality of the foregoing,  the Landlord shall not
be liable for

     (a) any damage or damages of any nature  whatsoever to any property  caused
by failure,  by reason of breakdown or other cause, to supply adequate drainage,
snow or ice removal,  or by interruption or failure of any service or utility or
elevator or escalator or other service, or by steam, water, rain, snow, or other
substances  leaking into,  issuing or flowing into any part of the Premises,  or
from the water, steam, sprinkler or drainage,  pipes or plumbing of the Building
or from any other place or quarter, or for any damage caused by anything done or
omitted to be done by any tenant;

     (b) any act, omission,  theft, malfeasance or negligence on the part of any
agent,  contractor  or person  from time to time  employed  by the  Landlord  to
perform janitor services security services,  supervision or any other work in or
about the Premises or the Building; or

     (c) loss or  damage,  however  caused,  to books,  records,  files,  money,
securities, negotiable instruments, papers or other valuables of the Tenant; and
the Tenant will indemnify the Landlord against and from all loss, costs,  claims
or demands in respect of any injury, loss or damage referred to above.

                                                ARTICLE TWELVE
                                            Landlord's Obligations

     12.01 Heat and Ventilation

<PAGE>

                                                     -14-

               The Landlord will,  during normal business hours  designated from
time to time by the Landlord, provide in the Building heat and ventilation,  and
air  conditioning  where  required,  in such manner as to  maintain  comfortable
conditions  and will  maintain an  adequate  supply of hot and cold water to any
common  washrooms in the Building for the normal use of the  occupants  thereof;
PROVIDED that in the event the apparatus or equipment used for these purposes or
any part  thereof  damaged,  destroyed or  impaired,  the  Landlord  will have a
reasonable time within which to repair or replace the apparatus or equipment and
during that time shall only be required to maintain the most reasonable services
and temperatures possible having regard to the circumstances.

     12.02 Common Area Maintenance

               The Landlord will make such repairs or replacements,  and perform
such  maintenance  to any elevator or escalator  services in the  Building,  the
heating,  mechanical,  electrical,  plumbing and air conditioning  apparatus and
facilities therein (other than such apparatus and facilities as may form part of
the Premises or may be the property of or installed by the Tenant), the parking,
driveway and Common Areas of the Building,  and damage to the Building caused by
perils  against  which the Landlord  maintains  insurance.  All of the foregoing
shall be done by the Landlord as  expeditiously  as  reasonably  possible in the
circumstances,  provided that the Landlord shall not be liable for any direct or
consequential  damage to any person or property for any failure so to do, unless
such loss or damage is caused by the willful act or neglect of the Landlord.

12.03          Landlord's Taxes

               The Landlord will pay the  Landlord's  Taxes saving and excepting
any business tax, tax on personal  property or income,  licenses,  fees or other
taxes imposed upon the property, business or income of the Tenant.

     12.04 Cleaning and Janitorial Services

               The Landlord will provide cleaning and janitorial  services,  but
the Landlord shall not be responsible for the negligent or dishonest acts on the
part of the person or persons  employed by the  Landlord or its  contractors  to
perform such work.

     12.05 Expense Apportioned

               Nothing in Articles 12.01,  12.02,  12.03 and 12.04 will derogate
from the liability of the Tenant for  maintenance  and repair of the Premises as
set forth in Article Nine.

     12.06 Structural Repairs

               The  Landlord  will  make  all  Structural  Repairs  required  to
maintain the Buildings in such condition as to ensure the Tenant that it will be
able to carry out the purpose for which this Lease is granted,  such  Structural
Repairs  to be  carried  out by the  Landlord  as  expeditiously  as  reasonably
possible in the  circumstances,  provided that the Landlord  shall not be liable
for any direct or consequential damage to any person or property for any failure
so to do.

     12.07 Quiet Possession

               If the Tenant  pays the rent hereby  reserved  and  performs  the
covenants and obligations on its part, to be performed and observed  pursuant to
the provisions  hereof;  the Tenant may peaceably possess and enjoy the Premises
for the term hereby granted  without any  interruption  or disturbance  from the
Landlord or any other Person or persons lawfully  claiming by, from or under it;
PROVIDED that in no event will any  alteration of Common Areas of the conduct of
repairs or  renovations  or  re-development  by the  Landlord of the exterior or
interior of the Building,  or the construction of additions to the Building,  or
the  exercise  by the  Landlord of any of the rights  provided  to the  Landlord
hereby,  constitute a breach of this covenant for quiet  enjoyment or in any way
relieve the Tenant of its obligations hereunder.

<PAGE>

                                                     -15-

                                               ARTICLE THIRTEEN
                                                   Insurance

     13.01 Fire and Extended Coverage

               The  Tenant  will  maintain  in respect  of its  property  on the
Premises  fire  insurance  with  extended  coverage and water damage  insurance,
including  sprinkler  leakage or discharge,  and, where  applicable,  boiler and
pressure  vessel  insurance  Such  insurance  will  cover  all of  the  Tenant's
improvements (including loss to those improvements to the Premises),  furniture,
fittings,  fixtures,  stock-in-trade  and personal  property in amounts equal to
full replacement value without deduction for depreciation.

     13.02 Plate Glass

               Unless other  provision  satisfactory  to the Landlord is made to
cover loss in regard thereto,  the Tenant will maintain insurance upon all glass
and plate glass in or forming  part of the Premises  against  breakage or damage
from any cause  including  the  elements,  war and  riots  and civil  commotion.
Notwithstanding  anything to the  contrary in this Lease  contained,  the Tenant
will repair or replace any damaged or broken  glass or plate glass in or forming
part of the Premises, regardless of the cause of the damage or breakage.

13.03          Liability

               The Tenant will  maintain for the mutual  benefit of the Landlord
and the Tenant  comprehensive  general liability  insurance  providing insurance
coverage against claims for personal injury,  death,  property damage,  products
liability,  contractual liability,  non-owned automobile liability, and tenant's
legal  liability  with respect to the occupancy by Tenant of the Premises.  Such
insurance  will  provide  coverage  to the limit of not less than  $2,000,000.00
inclusive per occurrence.

     13.04 Lease Insurance

               The Landlord reserves the right at any time to require the Tenant
to  forthwith  apply to the  Mortgage  Insurance  Company  of Canada or  similar
company for a policy of lease guarantee  insurance for the term of the Lease and
any extensions  thereof in an amount  sufficient to insure the Gross Annual Rent
for the time being in force and any escalation of Gross Annual Rent which may be
set out in the Lease,  the cost of such insurance to be borne by the Tenant.  If
the Tenant is unable to obtain lease  guarantee  insurance then the Landlord may
terminate the Lease.  If the Landlord  shall exercise its right pursuant to this
Article and the Tenant shall obtain and maintain such Lease guarantee insurance,
the Landlord  shall apply to the cost of such  insurance,  upon receipt from the
Tenant,  an amount  equal to 5% of Gross  Annual Rent  payable  hereunder by the
Tenant to the Landlord in accordance with Article 8.04.

     13.05 Increase in Premiums

               The  Tenant  will pay to the  Landlord  on demand  therefore  any
increase in the cost to the Landlord of maintaining or placing insurance upon on
in  respect  of the  Building  if such  increase  in cost  relates  directly  or
indirectly  to the use or  occupation by the Tenant or its servants or agents of
the Premises.

     13.06 Waiver of Subrogation

               The policies of insurance to be maintained by the Tenant pursuant
to the provisions of this Article Thirteen will name the Landlord and the Tenant
as insured parties with a cross-liability  clause and will contain a clause that
the insurer will not cancel or change or refuse to renew the  insurance  without
first giving the Landlord 30 days prior written  notice.  The Tenant will,  upon
the request of the  Landlord,  provide the Landlord  with proof of the placement
and maintenance of the insurance

<PAGE>

                                                     -16-

hereinbefore referred to, and due payment of the premiums for such insurance.

     13.07 Landlord's Insurance

               The Landlord  will take out and maintain  insurance of such types
and in such amounts as may  reasonably be carried by a prudent owner  including,
but not  limited to,  insurance  against  loss by fire,  extended  coverage  and
supplemental  risk  insurance,  boiler and pressure  vessel  insurance,  general
liability  insurance,  and insurance upon the  Landlord's  total income from the
Building  including  total Gross Annual Rents,  contingent  rent and  Additional
Charges.

     13.08 Cancellation

               If any insurance policy upon the Building, or the Premises 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 and  occupation  of the  Premises  or any part  thereof by the
Tenant or by any  sub-tenant  or anyone  permitted  by the Tenant to be upon the
Premises,  and if the  Tenant  fails to  remedy  the  condition  giving  rise to
cancellation,  threatened cancellation, or reduction of coverage within 24 hours
after notice thereof by the Landlord, the Landlord may, at its option, either:

     (a)  terminate  this Lease  forthwith by notice in writing to the Tenant of
its  intention  so to do, in which  case the Rent for which the Tenant is liable
under this Lease to the date of such termination, together with the Gross Annual
Rent which  would  otherwise  have been  payable by the Tenant for the 12 months
next following the date of such termination, shall be paid in full by the Tenant
to the Landlord, and the Tenant will immediately deliver up vacant possession of
the Premises to the Landlord; or

(b) enter  upon the  Premises  and  remedy  the  condition  giving  rise to such
cancellation,  threatened  cancellation,  or reduction  (entry for such purposes
being hereby  authorized),  in which case the Tenant will  forthwith upon demand
therefore pay the cost thereof; plus 20% for overhead and administration, to the
Landlord and the Tenant will  indemnify  and save harmless the Landlord from all
claims,  demands,  loss or damage to any person or property  arising out of such
action of the Landlord.

     13.09 Landlord's Remedies

               The policies of insurance to be maintained by the Tenant pursuant
to the  provisions  of  this  Article  Thirteen  shall  be in a form,  and  with
insurers,  acceptable  to the  Landlord,  and if the Tenant fails to take out or
maintain any insurance  required to be maintained by the Tenant pursuant to this
Article,  or should any such  insurance not be approved as to form or insurer by
the Landlord,  or should the Tenant fail,  upon the request of the Landlord,  to
provide to the Landlord proof of the placement and  maintenance of the insurance
hereinbefore  referred to, the Landlord will have the right without assuming any
obligation in connection therewith, to effect such insurance at the sole cost of
the Tenant and all expenses incurred by the Landlord in effecting such insurance
shall be  payable by the  Tenant to the  Landlord  on the first day of the month
next following the date of payment thereof by the Landlord without  prejudice to
any other rights or remedies of the Landlord under this Lease.

                                               ARTICLE FOURTEEN
                                         Partial and Total Destruction

     14.01 Partial Destruction

               In the event of Partial  Destruction of the Premises by fire, the
elements  or  other  cause  or  casualty,  then in  such  event  if the  Partial
Destruction is such in the opinion of the Landlord's Architect that the Premises
cannot be used for the Tenant's business until repairs,  all Rent payable by the
Tenant  hereunder  will abate  until the repair has been made.  If such  Partial
Destruction is such that in the opinion of the Landlord's Architect the Premises
may be partially used for the Tenant's business

<PAGE>

                                                     -17-

while the  repairs are being  made,  then the Rent will abate in the  proportion
that the  part of the  Premises  rendered  unusable  bears  to the  whole of the
Premises  provided that if the part rendered  unusable  exceeds  one-half of the
area of the Premises there shall be a total  abatement of Rent until the repairs
have been made unless the Tenant with the  permission of the  Landlord,  in fact
uses the undamaged  part, in which case the Tenant will pay  proportionate  Rent
for the part so used. The certificate of the Landlord's  Architect as to whether
the whole of a part of the  Premises is  rendered  unusable,  certifying  to the
extent of the part rendered  unusable shall be binding and conclusive  upon both
Landlord and Tenant for the purposes  hereof.  Notwithstanding  anything in this
paragraph  contained,  if in fact the Partial  Destruction is repaired within 14
days of the date of Partial Destruction, there shall be no abatement of Rent. In
the event of Partial  Destruction,  the Landlord and Tenant each  covenant  that
they will  forthwith  repair and  restore  the  Premises  to the extent of their
respective  obligations to repair the same, to  substantially  the condition the
same  were  prior  to such  Partial  Destruction  and to  complete  its  repairs
diligently.  The  abatement of Rent will not extend beyond the date by which the
Landlord  reasonably  believes  the Tenant  should have  completed  its repairs.
Provided  further that the Landlord shall not in any such event be liable to the
Tenant by reason of  inconvenience  of annoyance  arising from the  necessity of
repairing,  altering or improving any portion of the said  Premises  however the
necessity may occur.  It is expressly  understood and agreed that the obligation
of the Landlord to rebuild and restore the Premises shall extend to or be deemed
to  include  the  rebuilding  or  restoring  of  any  alterations,   partitions,
additions,  extensions,  equipment or installations  made by the Tenant upon the
Premises.

14.02          Total Destruction

               In the event of the Total  Destruction  of the  Premises by fire,
the  elements  or other  cause or  casualty,  then in such event this Lease will
terminate  with  effect  from the  date  when  such  Total  Destruction  occurs.
Thereupon  the  Tenant  will  immediately  surrender  the  Premises  and all its
interest  therein to the  Landlord and the Tenant will pay Rent only to the time
of such Total  Destruction  and the  Landlord may  re-enter  and  repossess  the
Premises discharged to this Lease. Upon such termination, the Tenant will remain
liable to the Landlord for all sums accrued due to the Landlord  pursuant to the
terms  hereof to the date of such Total  Destruction.  The  certificates  of the
Landlord's  Architect  certifying  that Total  Destruction has occurred shall be
binding and conclusive upon both Landlord and Tenant for the purposes hereof.

     14.03 Damage to Building

               Notwithstanding  the  foregoing  provisions  concerning  Total or
Partial Destruction of the Premises, in the event of destruction of the Building
(and whether or not the Premises are destroyed) to such a material  extent or of
such a nature  that,  for  whatever  reason,  in the opinion of the Landlord the
Building  must be or should be totally or  partially  demolished,  whether to be
reconstructed  in whole or in part or not,  then the  Landlord may at its option
(to be exercised within 90 days from the date of such  destruction)  give notice
to the Tenant that this Lease is terminated  with effect from the date stated in
the notice.  If the Tenant is able to  effectively  use the  Premises  after the
destruction,  such date  shall be not less than 30 days from the date of notice.
If the Tenant is unable to effectively  use the Premises after the  destruction,
the  date  given in the  notice  shall be the  date of  destruction.  Upon  such
termination,  the Tenant will  immediately  surrender  the  Premises and all its
interest therein to the Landlord and the Rent will abate (if not already abated)
and be apportioned to the date of termination  and the Tenant will remain liable
to the  Landlord  for all sums  accrued due  pursuant to the terms hereof to the
date of  termination.  The Landlord will  determine  whether the Premises can or
cannot be effectively used by the Tenant and its  certificates  thereon shall be
binding and conclusive upon both Landlord and Tenant for the purposes hereof.

     14.04 Damages of Tenant

               in none of the situations  contemplated by Articles 14.01, 14.02,
or 14.03  will the  Tenant  have any claim  upon the  Landlord  for any  damages
sustained by the Tenant.

                                                ARTICLE FIFTEEN
                                          Assignment and Sub-Letting

     15.01 Consent Required

<PAGE>

                                                     -18-

               The Tenant will not assign  this Lease,  nor sub-let the whole or
any part of the Premises  save for the purposes  herein  permitted and then only
with leave of the  Landlord,  which  leave shall not be  unreasonably  withheld;
PROVIDED that no such assignment or sub-letting shall:

     (a) in any  manner  or  extent  release  or  relieve  the  Tenant  from the
performance or observance of any of its covenants or obligations hereunder;

     (b) be made other  than to  responsible  persons,  firms,  partnerships  or
bodies  corporate  who undertake to perform and observe the  obligations  of the
Tenant hereunder;

     (c) be made to any person,  firm,  partnership or body corporate who intend
to or do use the  Premises for any business or use which the Landlord is obliged
to restrict or prohibit by reason of any other lease or contract;

               The  Tenant  acknowledges  that  the  Landlord's  consent  to  an
assignment or sub-letting may be reasonably  withheld by reason of the financial
background  or  status or the  business  history  of the  proposed  assignee  or
sub-tenant.  If  the  Landlord  shall  agree  to  consent  to an  assignment  or
sub-letting  by the  Tenant,  then the  Tenant's  solicitors  will  prepare  the
required documentation to submit to the Landlord for formal written consent, the
Tenant to bear all costs of the preparation of such documentation.

     15.02 Unauthorized Assignment or Sub-Lease

     In the event the Tenant  assigns,  or purports or attempts to assign,  this
Lease or any part  thereof;  or sub-let  the whole or any part of the  Premises,
without the prior  consent of the  Landlord,  then at the option of the Landlord
all  Gross  Annual  Rent  reserved  in this  Lease  from the date of such act or
purported or attempted act to the expiration date of this Lease will immediately
become due and payable to the  Landlord,  or this Lease my be  terminated by the
Landlord by notice of termination to the Tenant,  either of which notices may be
given at any  time  prior  to 60 days of the  later of the date of the  Landlord
ascertaining  or being advised by notice that such sale or other  disposition or
change of control or management has occurred.  Notice of termination  will state
the date on which the Lease will terminate, which date shall be not less than 30
nor more  than 90 days  following  delivery  of the  notice,  and on the date so
stated the  Tenant  will pay all Rent due  hereunder  to the  stated  date,  and
deliver up vacant  possession of the  Premises.  The Landlord may as a condition
precedent to any consent it may give to an assignment  hereof or  sub-letting of
the Premises, require the said balance of Gross Annual Rent for the remainder of
the term to be immediately  paid,  unless  security to the  satisfaction  of the
Landlord for due payment thereof is provided by the Tenant or by the assignee or
sub-tenant.

15.03             Change of Corporate Control

               If the Tenant is a  corporation,  other than a corporation  whose
shares are listed on any recognized exchange, effective management or control of
the  corporation  shall  not be  changed  directly  or  indirectly  by any sale,
encumbrances  or other  disposition  of shares or otherwise  howsoever,  without
first  obtaining the leave of the Landlord;  PROVIDED that the Landlord's  leave
shall not be required:

     (a) for any sale or other disposition of shares by the present shareholders
of the Tenant to and between themselves;

     (b) for any transmission of shares on death or by operation of law;

     (c) where control of the Tenant corporation is to pass to persons, firms,
partnerships  or  corporations  who would not be  precluded  from  accepting  an
assignment of this Lease under the conditions set forth in Article 15.01.

<PAGE>

                                                     -19-

               If  such  management  or  control  changes  without  leave  being
obtained (save as herein  provided) then at the option of the Landlord all Gross
Annual Rent reserved in the Lease from the date of notice by the Landlord to the
expiration  of this  Lease  shall  immediately  become  due and  payable  to the
Landlord,  or  this  Lease  may be  terminated  by the  Landlord  by  notice  of
termination  to the  Tenant,  either of which  notices  may be given at any time
prior to 60 days of the later of the date of the Landlord  ascertaining or being
advised by notice  that such sale or other  disposition  or change of control or
management has occurred.  Notice of termination will state the date on which the
Lease will terminate,  which date shall be not less than 30 or more than 90 days
following  delivery of the notice, and on the date so stated the Tenant will pay
all Rent due hereunder to the stated date,  and deliver up vacant  possession of
the Premises.

                                 ARTICLE SIXTEEN
                                      Sale or Mortgage

16.01          Landlord Relieved

               In the event of a sale or transfer  or lease or  mortgage  of; or
the raising of funds  charged  upon the interest of the Landlord in the lands or
the Buildings by the Landlord,  this Lease may be assigned by the Landlord to an
Encumbrancer.  In  the  event  of any  such  sale,  transfer  or  lease,  or the
assignment  of this Lease or any  interest of the Landlord  therein,  and to the
extent the Encumbrancer may agree with the Landlord or the Tenant to be bound by
the covenants and  obligations of the Landlord  hereunder,  the Landlord  shall,
without  further  written  agreement,  be relieved and released from any and all
liability subsequent to the date of the transaction in respect of such covenants
and obligations.  In the event of any Encumbrancer  going into possession of the
Lands or the  Buildings,  the Tenant will, at the request of such  Encumbrancer,
attorn to and become the Tenant of such Encumbrancer.

16.02          Postponement and Subordination

               On request from the Landlord or any Encumbrancer, at any time and
from time to time,  the Tenant will promptly  execute and deliver any instrument
or further assurance reasonably required to:

     (a) postpone and subordinate this Lease to such  Encumbrancer to the intent
and effect that this Lease and all the rights of the Tenant  shall be subject to
the rights of such  Encumbrancer  as though the same existed prior to the making
of this Lease; and

     (b) attorn to the  Encumbrancer  and become  bound to the  Encumbrancer  as
Tenant of the Premises for the then unexpired  term of this Lease,  and upon the
conditions herein set forth.

               No attornment or subordination  aforesaid by the Tenant will have
the effect of disturbing the Tenant's  occupation and possession of the Premises
if the Tenant is not in default  hereunder  and complies and continues to comply
with all the covenants, terms and conditions hereof.

16.03          Estoppel Certificate

               Within five (5) days after  request  therefore by the Landlord or
an  Encumbrancer,  the Tenant will promptly execute and deliver a certificate or
acknowledgment certifying or acknowledging (if such be the case) that this Lease
is in full force and effect and unamended,  that Rent is paid currently  without
any defenses or offsets  thereto,  that the Tenant is in possession,  that there
are no prepaid rents or security deposits other than those set out therein, that
there  are no  uncured  defaults  by  the  Landlord  and  providing  such  other
information as may reasonably be required, including a copy of the Tenant's most
recent audited financial  statements or such other financial  information as may
reasonably be required by an  Encumbrancer  to enable the  Encumbrancer  to make
investment  decisions on the basis of good  business  practice  provided that no
information need be provided which the Tenant reasonably  believes would provide
undue disclosure concerning its business operations to the possible benefit of a
competitor.   The  Tenant   hereby   irrevocably   appoints   the   Landlord  as
attorney-in-fact  for the Tenant  with full power and  authority  to execute and
deliver  in  the  name  of  the  Tenant  any  of  the  above   certificates   or
acknowledgments. If ten (10) days after the date of a request by the Landlord to
execute such  certificates  or  acknowledgments  the Tenant has not executed the
same, the Landlord may, at its option,  cancel this Lease without  incurring any
liability on account  thereof and the term hereby  granted is expressly  limited
accordingly.

<PAGE>

                                                     -20-

                                               ARTICLE SEVENTEEN
                               Landlord's Remedies

17.01          Severability

               Should any  provision  of this Lease be or become  illegal or not
enforceable it shall be considered separate and severable from the Lease and the
remaining provisions will remain in force and be binding upon the parties hereto
as though the said provision had not been included.

17.02          Waiver

     No act or omission of a party, nor any condonment , excusing or overlooking
by a party of any default,  breach or non-observance by the other at any time or
times in respect of any covenant,  proviso or condition herein  contained,  will
operate as a  precedent  nor as a waiver of that  party's  rights  hereunder  in
respect of any subsequent default, breach or non-observance, nor so as to defeat
or  affect  in any way the  rights of the  party in  respect  of any  subsequent
default, breach or non-observance

17.03          Interest

               The Tenant will pay to the Landlord  interest at a rate of 2% per
month upon all Rent required to be paid  hereunder from the due date for payment
thereof until the same is fully paid and satisfied,  and the Tenant will pay and
indemnify  the Landlord for and against all costs and charges  (including  legal
fees on a  solicitor-client  basis, and  disbursements)  lawfully and reasonably
incurred in enforcing payment thereof or in obtaining possession of the Premises
after  default of the Tenant or upon  expiration or earlier  termination  of the
term of this Lease,  or in enforcing any  covenant,  proviso or agreement of the
Tenant herein contained

17.04          Performance by Landlord

     If the Tenant should fail to perform any of the covenants or obligations of
the Tenant under this Lease, the Landlord may at its option and discretion, from
time to time perform or cause to be performed  the covenant or  obligation or an
part  thereof in respect of which the Tenant is in breach,  and for such purpose
the  Landlord  may make any payment or may do or cause to be done such things as
may be required  to fulfill the  Tenant's  covenant or  obligation,  and for the
purposes  aforesaid  the Landlord  shall be entitled to enter upon the Premises.
All  expenses,  costs and  expenditures  (including  legal fees on a  solicitor-
client basis and  disbursements)  incurred by the Landlord in performance of any
of the  covenants or  obligations  of the Tenant  hereunder  shall  forthwith on
demand  therefore  be paid by the Tenant,  and may be  recovered by all remedies
available to a landlord for recovery of rent in arrears,  and the Landlord shall
not be liable for any loss or damage to the Tenant's property or business caused
by reasonable  and  responsible  acts of the Landlord in  performing  any of the
covenants or obligations of the Tenant.

17.05 Events of Default and Consequences

If and whenever:

(a) The rent hereby reserved, or any part thereof; be not paid
when due; or

     (b) The term hereby  granted,  or any goods,  chattels or  equipment of the
Tenant,  be taken or  exigible in  execution  or in  attachment  or if a writ of
execution issues against the Tenant; or

     (c) The Tenant  becomes  insolvent or commit and act of bankruptcy or takes
the benefit of any Act that may be in force for bankrupt or insolvent debtors or
becomes  involved in voluntary or  involuntary  winding-up  proceedings  or if a
receiver be appointed  for the  business,  property,  affairs or revenues of the
Tenant; or

     (d) The  Tenant  makes a bulk  sale of its  goods or  moves  or  commences,
attempts or threatens to move its

<PAGE>

                                                     -21-

                      good,  chattels and equipment  out of the Premises  (other
                      than in the routine  course of its  business) or ceases to
                      conduct business from the Premises, or

     (e) The Tenant  does not  observe,  perform  and keep each and every of the
covenants, agreements, provisions,  stipulations and conditions herein contained
to be  observed,  performed  and kept by the Tenant and persists in such failure
after seven (7) days notice by the Landlord  requiring  that the Tenant  remedy,
correct,  desist, or comply (or in the case of any such breach ~which reasonably
would require more than seven (7) day notice period and thereafter  promptly and
diligently and continuously proceeds with the rectification of the breach);

then and in any of such cases, at the option of the Landlord, the full amount of
the current  month's and next ensuing  three  months' Gross Monthly Rent and all
other Additional Charges for the current month, shall immediately become due and
payable and the Landlord may immediately  distrain from the same and any arrears
of Gross  Monthly Rent or Additional  Charges then unpaid,  and the Landlord may
without  notice or any form of legal  process  forthwith  re-enter upon and take
possession  of the Premises or any part thereof and remove and sell the Tenant's
goods,  chattels  and  equipment  therefrom,  any rule of law or  equity  to the
contrary  notwithstanding;  and the  Landlord  may seize  and sell  such  goods,
chattels  and  equipment of the Tenant as are in the Premises or at any place to
which the Tenant or any other person may have removed them in the same manner as
if they had remained and been distrained upon the Premises; and such sale may be
effected  in the  discretion  of the  Landlord  either by public  auction  or by
private  agreement,  and either in bulk or by individual  item, or partly by one
means and partly by another,  all as the Landlord in its entire  discretion  may
decide.

17.06          Distress

               The Tenant hereby  agrees with the Landlord that  notwithstanding
anything in any statute in force limiting or abrogating the right of distress or
in any other statute in that regard which may  hereafter be passed,  none of the
Tenant's goods or chattels on the Premises at any time during the continuance of
the term shall be exempt from levy by distress for Rent in arrears and that upon
any claim being made for such  exemption by the Tenant or on distress being made
by the Landlord  this Lease may be pleaded as an estoppel  against the Tenant in
any action  brought to test the right to the levying  upon any such goods as are
named as exempted in any such statute, the Tenant waiving as it hereby does, all
and every  benefit  that could or might have  accrued to the Tenant under and by
virtue of any such  statute,  but for this Lease.  The Tenant  hereby  expressly
waives  any and all  rights of  redemption  granted  by or under any  present or
future laws in the event of the Tenant  being  evicted or  dispossessed  for any
cause or in the event of the Landlord obtaining  possession of the Premises,  by
reason of the  violation by the Tenant of any of the  covenants or conditions of
this Lease or otherwise.

17.07          Re-Entry and Damages

               If  and  whenever  the  Landlord  is  entitled  to  re-enter  the
Premises, or does re-enter the Premises,  the Landlord may either terminate this
Lease by giving  written  notice of  termination  to the  Tenant,  or by posting
notice  of  termination  in the  Premises,  and in Such  event the  Tenant  will
forthwith vacate and surrender the Premises or  alternatively,  the Landlord may
from time to time without terminating the Tenant's obligations under this Lease,
make alterations and repairs  considered by the Landlord necessary to facilitate
a  sub-letting,  and  sub-let the  Premises or any part  thereof as agent of the
Tenant for Such term or terms and at such  rental or rentals and upon such other
terms and  conditions  as the Landlord in its  reasonable  discretion  considers
advisable.  Upon each  sub-letting  all rent and other  moneys  received  by the
Landlord  from  the  sub-letting  will  be  applied,  first  to the  payment  of
indebtedness  other than Rent due  hereunder  from the  Tenant to the  Landlord,
second  to the  payment  of costs  and  expenses  of the  sub-letting  including
brokerage fees and  solicitors'  fees and costs of the  alterations and repairs,
and third to the payment of Rent due and unpaid hereunder.  The residue, if any,
will be held by the Landlord and applied in payment of future Rent as it becomes
due and payable.  If the Rent  received from the  sub-letting  during a month is
less than the Rent to be paid during  that month by the Tenant,  the Tenant will
pay the deficiency to the Landlord.  The deficiency  will be calculated and paid
monthly.  No re-entry by the  Landlord  will be  construed as an election on its
part to terminate  this Lease unless a written notice of that intention is given
to the Tenant. Despite a sub-letting without termination, the Landlord may elect
any  time to  terminate  this  Lease  for a  previous  breach.  If the  Landlord
terminates  this Lease for any breach,  the Tenant  will pay to the  Landlord on
demand therefore:

     (a) Gross Monthly Rent up to the time of re entry or termination, whichever
is later, plus accelerated Rent

<PAGE>

                                                     -22-

                      as provided for in Article 17.05;

     (b) all Additional Charges payable by the Tenant pursuant to the provisions
hereof up until the date of re- entry or termination whichever is later;

     (c) such  expenses as the Landlord may incur or have incurred in connection
with reentering or terminating and reletting,  or collecting sums due or payable
by the Tenant or realizing upon assets seized including brokerage expense, legal
fees and disbursements determined on a solicitor-client basis, and including the
expense of keeping the Premises in good order and repairing or  maintaining  the
same or preparing the Premises for re-letting; and

     (d) as  liquidated  damages  for the loss of Rent and  other  income of the
Landlord  expected to be derived  from this Lease  during the period which would
have  constituted the unexpired  portion of the term had it not been terminated,
the amount,  if any, by which the rental  value of the  Premises for such period
established by reference to the terms and provisions of this Lease,  exceeds the
rental  value of the Premises  for such period  established  by reference to the
terms and provisions upon which the Landlord re-lets them, if such re-letting is
accomplished  within a  reasonable  time  after  termination  of this  Lease and
otherwise with reference to all market and other relevant circumstances.

               Rental  value  is to be  computed  in each  case by  reducing  to
present  worth at an assumed  interest  rate of 10% per annum all Rent and other
amounts to become payable for such period and where the ascertainment of amounts
to become payable  requires it, the Landlord may make estimates and  assumptions
of fact which will govern unless shown to be unreasonable or erroneous.

17.08          Remedies Cumulative

           No reference  to nor exercise of any specific  right or remedy by the
Landlord  will  prejudice  or preclude the Landlord  from  exercising  any other
remedy provided by this Lease or allowed at law or in equity. No remedy provided
to the  Landlord  by this Lease or at law or in equity  shall be  exclusive  or
dependent  upon any other such remedy,  and the Landlord may, from time to time,
exercise anyone or more such remedies independently or in combination.

17.09      Landlord's Expenses Enforcing Lease

               If it shall be necessary  for the Landlord to retain the services
of a  solicitor  or any other  proper  person for the purpose of  assisting  the
Landlord in enforcing any of its rights hereunder in the event of default on the
part of the Tenant,  it shall be entitled to collect from the Tenant the cost of
all such  services  including all necessary  Court  proceedings  to trial and on
appeal on a solicitor and own client basis as if the same were rent reserved and
in arrears hereunder.

                              ARTICLE EIGHTEEN
                                Expropriation

18.01          Expropriation

                     If at any time during the term of this Lease the whole or a
portion of the Building or the Common Areas (whether
or not  including the  Premises)  are  expropriated  by right or exercise by any
competent authority of powers of expropriation, the parties hereto shall each be
entitled to  separately  advance their claims for  compensation  for the loss of
their  respective  interest in the Premises and shall be entitled to receive and
obtain such compensation as may be awarded to each respectively.  If an award of
compensation made to the Landlord specifically includes an award for the Tenant,
the  Landlord  will  account  therefore  to  the  Tenant  and  if  an  award  of
compensation made to the Tenant specifically includes an award for the Landlord,
the Tenant will account therefore to the Landlord. Upon termination of the Lease
by  expropriation  or other  operation of law, the Tenant will forthwith pay the
Landlord the Rent,  and all other charges which may be due to the Landlord up to
the date of such termination. The Tenant will have no claim upon the Landlord up
to the date of such termination. The Tenant will have no claim upon the Landlord
for the value of its property  expropriated  or the unexpired term of the Lease,
or for any other damages, costs, losses or

<PAGE>

                                                     -23-

expenses  whatsoever.  The Landlord  and Tenant agree to cooperate  one with the
other in respect of any  expropriation of all or any part of the Premises or the
Building,  so that  each  may  receive  the  maximum  award  in the  case of any
expropriation to which they are respectively  entitled in law. In the event that
any  portion  or  portions  of the  Building  other than the  Premises  shall be
expropriated as aforesaid,  then the full proceeds accruing therefrom or awarded
as a result thereof; will ensure to the benefit of and belong to the Landlord.

                                               ARTICLE NINETEEN
                                                 Common Areas

19.01          Control of Common Areas

               All Common  Areas shall at all times be subject to the  exclusive
control and  management of the Landlord.  The Landlord will operate and maintain
the Common  Areas of the  Building in such manner as the  Landlord,  in its sole
discretion,  from time to time determines.  Without  restricting or limiting the
generality of the foregoing,  the Landlord will have the right,  in the control,
management and operation of the Common Areas to:

     (a) construct,  maintain and operate lighting, heating, ventilating and air
conditioning in all or any parts of the Common Areas;

     (b) police and supervise all or any part o parts of the Common Areas;

     (c) grant, modify and terminate easements or other agreements pertaining to
the use and maintenance of all or any part or parts of the Common Areas;

     (d)  obstruct  or close  off all or any part of the  Common  Areas or parts
thereof for the purpose of maintenance,  reconstruction,  construction or repair
and for the  purpose of  providing  security or to prevent the accrual of rights
therein to any person;

               (e)    use  of  the   Common   Areas   from   time  to  time  for
                      merchandising,  display,  decorations,  entertainment  and
                      structures designated for special features and promotional
                      activities;

     (f) from time to time change the area, level, location, arrangement and use
of the Common Areas;

     (g) construct  other  buildings,  structures or  improvements in the Common
Areas  and  make  alterations  thereof  or  additions  thereto  or  subtractions
therefrom  or  rearrangements  thereof;  and  build  additional  storeys  on any
Building or Buildings and build adjoining same;

     (h) construct elevated or underground parking facilities.

19.02          License

               All Common  Areas  which the Tenant may be  permitted  to use and
occupy are to be used and occupied for the purposes for which they were intended
under a revocable  license,  and if the area of the Common Areas be  diminished,
the  Landlord  shall not be  subject  to any  liability  nor shall the Tenant be
entitled to any compensation,  damages,  or diminution or abatement of rent, nor
shall such  diminution  of such Common  Areas be deemed  constructive  or actual
eviction, or a breach of any covenant for quiet enjoyment set forth herein

                                   ARTICLE TWENTY
                                      Guarantee

20.01          GUARANTEE - INTENTIONALLY DELETED

<PAGE>

                                                     -24-

                                              ARTICLE TWENTY-ONE
                                                 Over-Holding
21.01          Over-Holding

               In the event the Tenant  remains in  possession  of the  Premises
after the  expiration  of this Lease and without the execution and delivery of a
new lease,  the Landlord may  re-enter and take  possession  of the Premises and
remove  the  Tenant  therefrom  and  the  Tenant  will,  in the  event  of  such
over-holding,  be deemed to be occupying  the Premises as a tenant from month to
month at a monthly  rental  payable  in  advance  on the first day of each month
equal to twice the highest  Rent  actually  paid in any month during the term of
this Lease, subject to all of the covenants,  agreements,  conditions,  provisos
and  obligations  of this Lease insofar as the same are applicable to a month to
month  tenancy,  and a  tenancy  from  year  to  year  will  not be  created  by
implication of law.

                                              ARTICLE TWENTY-TWO
                                                    Notice

22.01          To Landlord

               Any  notices  herein  provided  or  permitted  to be given by the
Tenant to the Landlord shall be sufficiently given if mailed by registered mail,
postage prepaid, address to the Landlord do Colliers Macaulay Nicolls Inc., 16th
Floor,  Granville  Square,  200 Granville  Street,  Vancouver,  British Columbia
Canada V6C 2R6, with a copy to C.T. Management Corporation,  Suite 300, 905 West
Fender Street, Vancouver, BC, V6C 1L6.

22.02          To Tenant

               Any  notices  herein  provided  or  permitted  to be given by the
Landlord to the Tenant shall be sufficiently given if:

     (a) written or printed  copy of such notice is  delivered  to the Tenant at
the Premises or posted upon a door of the Premises;  or

     (b) a written or printed
copy of such notice is mailed by registered mail, postage prepaid,  addressed to
the Tenant at the Premises.

22.03          Deemed Receipt

               All notices given as aforesaid  shall be  conclusively  deemed to
have been given, and received by the party to whom such notice was directed,  on
the day on which such notice was received at the addresses as  aforesaid,  or on
the day on which such notice is delivered or affixed as aforesaid.

22.04          Change of Address

               Either party hereto may at any time in the manner  provided above
give notice in writing to the other of any change of address of the party giving
such  notice and from and after the giving of such  notice the  address  therein
specified  shall be deemed to be the  address  of such  party for the  giving of
notices hereunder.

                                             ARTICLE TWENTY-THREE
                                                 Force Majeure

23.01          Force Majeure

<PAGE>

                                                     -25-

               In the  event  that  either  party  hereto  shall be  delayed  or
hindered in or prevented from the  performance of any act required  hereunder by
reason of strikes,  lockouts,  labour troubles,  inability to procure materials,
failure  of  power,  restrictive   governmental  laws  or  regulations,   riots,
insurrections,  war or other  reason of a like nature not the fault of the party
delayed in performing work or doing acts required under the terms of this Lease,
then  performance of such act shall be excused for a period of the delay and the
period  for the  performance  of any such act  shall  be  extended  for a period
equivalent to the period of such delay.  The provisions of this paragraph  shall
not operate to excuse the Tenant from the prompt payment of Rent nor entitle the
Tenant to compensation  for any  inconvenience,  nuisance of discomfort  thereby
occasioned.

                                              ARTICLE TWENTY-FOUR
                                      Prepaid Rental and Security Deposit

24.01          Prepaid Rent

               The Landlord acknowledges having received payment from the Tenant
of the sum of Nine  Thousand  Six  Hundred  Seventy  Seven  and  03/100  Dollars
($9,677.03)  which sum shall be applied in payment of the Gross Monthly Rent and
GST payable by the Tenant hereunder for the first month of the term hereof.

24.02          Security Deposit

               The Landlord acknowledges having received payment from the Tenant
of the  sum of  Ten  Thousand  Six  Hundred  Ninety  Seven  and  26/100  Dollars
($10,697.26) as partial  consideration for the execution by the Landlord of this
Lease,  and  such sum  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  of this Lease,  and if at any time during the
term of this Lease the Rent  payable by the Tenant  hereunder  is overdue  and
unpaid then the Landlord  may at its option  apply any portion of such  security
deposit  toward the payment of such  overdue Rent  without  thereby  limiting or
excluding  any other right which the Landlord may have  hereunder or at law, and
if such security  deposit is not so applied during the term hereof then such sum
shall be applied  toward payment of the Gross Monthly Rent payable by the Tenant
for the last  month(s)  of the term  hereto.  In the event the  entire  security
deposit or any portion thereof is applied by the Landlord towards the payment of
overdue  Rent  then  the  Tenant  will on the  written  demand  of the  Landlord
forthwith  remit to the  Landlord  such sum as is  sufficient  to  restore  such
security  deposit to the original sum deposited.  In the even any portion of the
security  deposit is then  remaining,  it shall be applied to the Tenant's  last
months Gross Monthly Rent and GST payable hereunder.

                                              ARTICLE TWENTY-FIVE
                                                 Miscellaneous

26.01          Time of Essence
               Time shall be of the essence hereof

26.02          Amendment

               This Lease shall not be or be deemed or  construed to be modified
or amended,  except by an  instrument in writing  signed by the parties  hereto,
specifically asserting that the Lease is thereby amended.

26.03          Entire Agreement

               Subject to the  provisions of any written  collateral  agreements
this Lease contains the entire  agreement  between the parties which is admitted
so that they shall be forever estopped from asserting to the contrary that there
is any representation, condition, precedent or warranty whatsoever to the within
Lease.  Any offer to lease made by the Tenant to the  Landlord in respect of the
Premises shall be merged in this Agreement  except to the extent that such offer
to lease  specifically  provides for non-merger of its terms in this Lease,  and
execution  hereof by the Tenant  shall  constitute  an  acknowledgment  from the
Tenant that the Landlord's  obligations  have been fully performed and satisfied
to the extent stated  herein.  Delivery of an unsigned copy of this Lease to the
Tenant,   notwithstanding   insertion  of  all  particulars  in  the  Lease  and
presentation  of any cheque or acceptance of any monies by the Landlord given by
the Tenant as a deposit,  does not  constitute  an offer by the  Landlord and no
contractual  or other legal right  shall be created  between the parties  hereto
until this Lease has been fully executed by both parties and delivery

<PAGE>

                                                     -26-

has been made of an executed copy of this Lease to the Tenant.

26.04          Captions and Headings

               The captions, paragraph or section numbers and headings appearing
in this Lease are inserted only as a matter of convenience and in no way define,
limit or describe the scope or intent of this Lease nor any part hereof.

26.05          Interpretation

               Wherever the neuter,  singular number or a gender is used in this
instrument  the  same  shall  be  construed  as  including  the  plural  and the
masculine,  feminine  and  neuter  respectively  where  the fact or  context  so
requires;  and in any case where this Lease is executed by more than one Tenant,
all covenants and agreements  therein  contained shall be construed and taken as
against such executing Tenants as joint and several;  and the heirs,  executors,
administrators, successors and assigns of each Tenant executing this Lease shall
be jointly and severally bound by the covenants,  agreements,  stipulations  and
provisos herein contained. The covenants, agreements,  stipulations and provisos
herein  stated  shall be in  addition  to those  granted or implied by  Statute.
Wherever the word "Landlord" is used in this Lease, such word shall be deemed to
include the Landlord and its duly authorized representatives.

26.06          Acceptance

               The Tenant does hereby accept this Lease of the Lands, to be held
by the  Tenant as  tenant,  and  subject  to the  conditions,  restrictions  and
covenants above set forth.

26.07                Inurement

               These  presents and everything  herein  contained  shall,  except
where  otherwise  provided,  be  binding  upon and enure to the  benefit  of the
parties hereto and the  successors  and assigns of the Landlord,  and the heirs,
executors,  administrators and approved successors and assigns of the Tenant and
the Guarantor,  and this Lease shall be interpreted under and be governed by the
laws of the Province of British  Columbia and the courts of that  Province  will
have sole  jurisdiction  to adjudicate on such matters,  and the parties  hereto
submit to such jurisdiction.

26.08              Special Clauses

     (a) The Tenant  accepts the Premises "as is".  Any  alterations  the Tenant
wishes to carry out shall  comply  with the terms of this  Lease and the  Tenant
shall obtain any applicable  approvals of the local  Municipal  Authority and of
the Landlord's architects, mechanical, electrical and structural consultants, at
the Tenant's cost. (b) For the purposes of planning and the  construction of its
leasehold  improvements,  the Tenant shall have access to the Premises  prior to
the Commencement Date from the execution of this Lease.  During this period, the
Tenant shall not be obligated to pay any Gross Monthly Rent,  but shall abide by
all other terms of this Lease.

                IN WITNESS  WHEREOF the parties  hereto have executed this Lease
  by affixing their corporate seals by their authorized officers in that behalf;
  or by the Tenant's  signature hereto, or by the Guarantor's  signature hereto,
  as of the day and year first above written.

  THE CORPORATE SEAL of
  C.T. MANAGEMENT CORPORATION
  was hereunto affixed in the presence of

  -----------------------------------
  Authorized Signatory

<PAGE>

                                                     -27-

  THE CORPORATE SEAL OF
  DSI DATOTECH SYSTEMS INC.
  was hereunto affixed in the presence of:

  --------------------------------
  Authorized Signatory

<PAGE>

                                                     -28-

                                                   SCHEDULES

  Schedule A Definitions

  THIS IS SCHEDULE "A" TO THE LEASE AGREEMENT

  DATED JULY 25, 2000

  BETWEEN:

                                          C.T. MANAGEMENT CORPORATION

                                                   Landlord

  AND:
                                           DSI DATOTECH SYSTEMS INC.

                                                    Tenant

                In the Lease, including all schedules thereto:

     (a)  "Additional  Charges" - means all such amounts other than Gross Annual
Rent or Additional  Rent as are payable by the Tenant pursuant to the provisions
of the Lease;

     (b)  "Additional  Rent" - means the  amount  payable  by the Tenant for any
additional work performed by the Landlord specifically for the Tenant other than
Landlord's  Work and any  excess  or  additional  costs in the  Landlord's  Work
occasioned by the Tenant's requirements;

     (c)  "Allowance in Kind" - means that portion of the Tenant's Work, if any,
to be performed by the Landlord at the sole cost of the Landlord;

     (d) "Building" - means the building in which the Premises are situated;

     (e) "Cash  Allowance" - means that allowance,  if any, to be contributed by
the  Landlord  to the Tenant  towards the cost to the Tenant of  performing  the
Tenant's Work;

     (f) "Commencement Date" - means the earlier to occur of the three
dates referred to in Article 3.01 with reference to  commencement of the term of
the Lease;

     (g)  "Common   Areas"  -  includes   all  areas,   facilities,   utilities,
improvements, equipment and installations of the Building which are from time to
time provided to be used in common by, or for the common  benefit of; any two or
more of the  Landlord,  the  Tenant,  other  tenants  or space in the  Building,
employees and customers of tenants of the Building,  and all others  entitled to
the use or benefit of such areas, facilities, utilities, improvements, equipment
and  installations  and,  without  restricting  the generality of the foregoing,
includes;

     i. all parking areas,  access roads,  employee parking areas, truck courts,
driveways, loading docks and areas, pedestrian sidewalks,  landscaped or planted
areas  exterior to the  Building,  bus stops,  exterior  weather  walls,  roofs,
entrances  to  and  exits  from  the  Building  and  the  plumbing,  mechanical,
electrical, heating and air conditioning systems serving the Building and all of
the components thereof; and

<PAGE>

                                                     -29-

     ii. all  interior  walls not  required to be  maintained  by tenants of the
Building,  all space in all enclosed  malls,  courts and ramps,  landscaped  and
planted  areas  contained  within the Building,  stairways,  first aid stations,
washrooms,   storage  facilities,   utilities  and  service  rooms,  escalators,
elevators,  moving sidewalks,  music and public address systems,  general signs,
lighting equipment, standards and facilities,

            except  to the  extent  that  the  Landlord  may  from  time to time
            prescribe  that  anyone  or more  of the  foregoing  or any  portion
            thereof shall not be included in Common Areas;

     (h) "Encumbrancer" - means any purchaser,  transferee, lessee or mortgagee,
or any trustee for them,  severally and jointly together with any purchaser from
or successor to them, who acquires by way of sale, transfer,  lease, mortgage or
other  manner a charge  upon the  interest  of the  Landlord in the Lands or the
Buildings;

     (i)  "Gross  Leasable  Area"  - of the  Building  shall  be the  sum of the
leasable area of all the floors of the Building,  save and except those leasable
areas designated by the Landlord as storage areas.

     (j) "Landlord's Architect" - means such firm of professional  architects or
engineers  as the  Landlord  may from time to time  engage  for  preparation  of
construction   drawings  for  the  Building  or  for  general   supervision   of
architectural and engineering aspects and operations  thereof;  and includes any
consultant from time to time appointed by the Landlord or the architect whenever
in accordance with normal professional practice such consultant is acting within
the scope of his appointment and specialty;

     (k) "Landlord's Taxes" - means the aggregate of:

     i. any taxes (specifically including property taxes and corporation capital
taxes),  rates,  charges,   .levies  or  assessments  imposed  by  a  municipal,
parliamentary,  school or other  competent  authority  upon or in respect of the
Lands and/or upon or in respect of any Buildings or improvements on or under the
Lands; and

     ii. any  imposition  upon the  Landlord by reason of its  ownership  of the
Lands for or in respect of any  purpose of schools or  education  whether or not
the same are payable to or raised by one or more competent authority; and

     iii. any frontage or other  assessments  or levies upon the Lands for local
or special improvements or municipal utilities or services; and

     iv. any charges whether in the nature of taxes, rent, amortized payment, or
otherwise and whether  directly  charged upon the Lands or otherwise,  which the
Landlord  is required to pay for or in  connection  with any lease,  easement or
other use of portion or portions of any street land,  tunnel or pedway providing
access, ingress, egress or other facilities to or for the Lands or the Building;
and

     v. any costs and expenses  (including legal and other professional fees and
interest and  penalties on deferred  payments)  incurred by the Landlord in good
faith in appealing, contesting or resisting any of the aforementioned;

     (l)  "Landlord's  Work"  -  means  all  work,  labour,  materials,  o other
improvements required by the Landlord in the Premises which will be provided and
installed by the Landlord in the Premises at its expense in accordance  with the
Landlord's choice of materials;

     (m) "Lands" - means  lands and  premises  situate in the City o  Vancouver,
Province of British Columbia, more particularly described as:

                      Plan 210, Lots 11 and 12, Block 20,
                      District Lot 541, N. WD.

        and includes the Building;

     (n) "Lease" - means the  Agreement to which this  schedule is annexed,  and
includes this and all other schedules annexed to the Agreement;

     (o)  "Lease  Year"  -  means  the  period  of one  year  commencing  on the
Commencement Date or the anniversary thereof;

<PAGE>

                                                     -30-

     (p) "Gross Annual Rent" - means the rent payable by the Tenant  pursuant to
Article 4.01 of the Lease;

     (q) "Gross  Monthly  Rent" - means  one-twelfth  (1/12) of the Gross Annual
Rent;

     (r)  "Partial  Destruction"  - means  any  damage  to the  Building  or the
Premises less than Total  Destruction,  but which renders all or any part of the
Premises temporarily unfit for use by the Tenant for the Tenant's business;

     (s)  "Premises" - means that portion of the Building  prescribed,  limited,
and quantified as to area by reference to the provisions of Articles 2.01, 2.03,
and 204 of the Lease;

(to)    "Rent" -includes,  but is not limited to, all monies payable at any time
        and from time to time by the Tenant to the  Landlord in respect of Gross
        Annual Rent, Gross Monthly Rent, Additional Charges and Additional Rent;

     (u)  "Structural  Repair"  -means  any  required  maintenance,  repair,  or
replacement of the footings,  foundations,  columns, beams, concrete floor slab,
and roof supports of the Building;

     (v)  "Tenant's  Work"  -  means  all  work,  labour,  materials,  or  other
improvements  required for the Premises  which will be provided and installed at
the Tenant's cost by either the Landlord or the Tenant; and

     (w) "Total  Destruction"  - means  such  damage to the  Buildings  or other
Premises  as  renders  the latter  unfit for use by the Tenant for the  Tenant's
business and which cannot reasonably be repaired within 12 months of the date of
the destruction to the state wherein the Tenant could use  substantially  all of
the Premises for its business.

<PAGE>

                                                     -31-

Schedule B Plan

THIS IS SCHEDULE "B" TO THE LEASE AGREEMENT

DATED JULY 25, 2000

                                             PLAN OF THE PREMISES

                                          THIRD FLOOR, 905 W. PENDER
                                                 VANCOUVER, BC

<PAGE>

                                                     -32-

Schedule C Statement of Lease Commencement

THIS IS SCHEDULE "C" TO THE LEASE AGREEMENT

DATED JULY 25, 2000

BETWEEN:

                                          C.T. MANAGEMENT CORPORATION

                                                   Landlord

AND:
                                         DSI DATOTECH SYSTEMS INC.

                                                    Tenant

Dear Sir:

     Re: Lease Agreement dated July 25, 2000

This  letter will  confirm  that,  with  respect to the  Premises  leased to the
undersigned pursuant to the above agreement:

(a)          The Commencement Date is _________________

     (b) The precise floor area of the Premises is _____________ square feet;

     (c) The Tenant's Proportionate Share is as defined in the Lease.

     (d) The  undersigned  is in possession  of the Premises,  and is paying all
Rent payable pursuant to the above Lease;

(e)     The undersigned commenced to pay Rent on ___________________

(f)     The Gross Monthly Rent is ___________________

     (g)  The  undersigned  has  delivered  to  the  Landlord  __________  being
____________ month(s) prepaid Gross Monthly Rent and _____________ as a security
deposit;

<PAGE>

                                                     -33-

     (h) The Premises have been completed in accordance  with all obligations of
the Landlord and are entirely satisfactory and suitable for the use thereof;

     (i) The undersigned has no claims,  defenses,  set-offs,  or  counterclaims
against you; and

     (j) The above Lese is unamended and in good standing as at the date hereof.

DATED, this _____ day of_______________ 200_.

THE CORPORATE SEAL OF
DSI DATOTECH SYSTEMS INC.
was hereunto affixed in the presence of:

----------------------------
Authorized Signatory

----------------------------
Authorized Signatory

<PAGE>

                                                     -34-

Schedule D Rules and Regulations

THIS IS SCHEDULE "D" TO THE LEASE AGREEMENT

DATED JULY 25, 2000

BETWEEN:

                                           C.T. MANAGEMENT CORPORATION

                                                   Landlord

AND:
                                           DSI DATOTECH SYSTEMS INC.

                                                    Tenant

                                             RULES AND REGULATIONS

     1. The Tenant  will not burn any trash or garbage in or about the  Premises
or anywhere within the confines of the Building.  All garbage, trash and rubbish
shall be kept within the interior of the Premises  until the day of removal Such
removal  will  comply  with  arrangements  prescribed  from  time to time by the
Landlord,  and shall be at the expense of the Tenant.  If the Tenant's  trash or
garbage is of a deteriorating nature, creating offensive odours, then the Tenant
will provide and maintain at its sole expense sealed refrigerated  garbage rooms
In the event that it is  considered  necessary by the Landlord that such garbage
be placed  outside the  Premises,  and the  Landlord  consents in writing to the
placing of garbage outside the Premises,  then such garbage shall be placed in a
container specified by the Landlord, but provided at the expense of the Tenant

     2. The Tenant will not load any floor of the  Premises in the office  tower
with a weight in excess of 50 pounds per square foot or in the retail  buildings
with a weight in excess of ] 00 pounds per square foot, nor will the Tenant hang
or suspend  from any wall or ceiling or roof;  or any other part of the Building
any  equipment,  displays,  fixtures  or signs which are not  authorized  by the
Landlord

     3. The Tenant will at its expense maintain all office fixtures and lighting
fixtures and the components thereof.

     4. The Tenant will not attempt any repairs, alterations or modifications to
the heating, air conditioning, plumbing or electrical systems of the Premises or
the Building without the prior written approval of the Landlord. The Tenant will
not impede the  operation  of; or place any  articles  upon,  any heating or air
conditioning equipment or facilities within the Premises or the Building

     5. The  Tenant  will not  change  locks on doors or  install  auxiliary  or
additional locks without the prior approval of the Landlord.

     6. The Tenant will not make or permit any noise or conduct in the  Building
which,  in the opinion of the  Landlord,  may disturb any other  tenant No pets,
animals or birds shall be brought into the Building,  or kept  therein,  without
the prior written  consent of the Landlord.  No portion of the Premises shall be
used for the storage of personal effects,  or articles not required for business
purposes.

     7. The Tenant will  ensure  that all  loading,  unloading  and  shipping of
merchandise,  supplies,  fixtures and other  materials  whatsoever are made only
through such areas, entrances,  elevators and corridors and during such days and
hours and in compliance  with such  provisions for the regulation of same as the
Landlord may from time to time prescribe,  and that delivery and shipping to and
from the Building and the  Premises are in  accordance  with and subject to such
rules and  regulations as are in the judgment of the Landlord  necessary for the
proper operation of the Building.

<PAGE>

                                                     -35-

     8. The  Landlord  reserves  the  right to  restrict,  control  or  prohibit
canvassing,  soliciting and peddling  within the Building and upon the Lands The
Tenant will not grant any  concessions,  licenses or permission  for the sale or
taking of orders for food or  services  or  merchandise  in the  Premises or the
Building,  nor install or permit the  installation  or use of any  machinery  or
equipment for dispensing goods or foods or beverages in the Building, nor permit
the preparation,  serving,  distribution or delivery of food or beverages in the
Premises   without  the  approval  of  the  Landlord  and  in  compliance   with
arrangements  prescribed by the Landlord  Only persons  approved by the Landlord
shall be permitted to serve, distribute or deliver food and beverages within the
Building,  or to use the  elevators  or public  areas of the  Building  for that
purpose

     9. If the Tenant requires any electrical  equipment which will overload the
electrical  facilities  in the  Premises,  the Tenant  will first  submit to the
Landlord  plans and  specifications  for the work required to install and supply
additional   electrical  equipment  necessary  to  prevent  overloading  of  the
electrical  facilities  in the  Premises,  and obtain from the Landlord  written
approval  to  perform  the  same.  All such  work  will  meet  all  governmental
regulations,  regulations of any other competent  authority,  regulations of the
Canadian  Underwriters'  Association,  and  requirements  as  set  down  by  the
Landlord's insurers, and shall be at the sole expense of the Tenant.

     10. The  Tenant and its  employees,  agents and  contractors  may enter the
Premises at all times outside regular  business hours of the Building,  but only
by such entrances as the Landlord may from time to time  prescribe,  and subject
to such means as the  Landlord  may require to control  the  presence of persons
within the Building when it is closed to the public.

     11. The Tenant shall be entitled to have its name shown upon the  directory
board or the Building,  but the Landlord shall in its sole discretion decide the
style of such  identification  and allot space on the  directory  board for each
tenant.

     12. No awnings or other  projections shall be attached to the outside walls
or the Building All curtains,  blinds, shades or screens attached to or hung in,
or used in connection  with, any window or door of the Premises shall be subject
to the approval of the Landlord. Window shading shall be kept closed on exterior
windows  when  exposed to the sun and at such other  times as may be directed by
the Landlord.

     13. The Tenant shall not mark, paint,  drill into, or in any way deface any
part or the Premises or the Building.  No boring,  cutting or stringing of wires
shall be permitted,  except with the prior written consent or the Landlord,  and
as the Landlord may direct. The Tenant shall not lay linoleum,  or other similar
floor covering,  so that the same shall come in direct contact with the floor of
the Premises,  and, if linoleum or other similar floor covering is desired to be
used an  interlining  of builders  deadening  felt shall be first affixed to the
floor by a paste or other material soluble in water.

     14. Except as may be otherwise  approved by the Landlord,  the Tenant shall
not occupy or permit any  portion of the  Premises  to be  occupied  by a public
stenographer or typist, or for the possession,  storage, manufacture, or sale of
liquor,  narcotics,  tobacco in any form,  or as a barber or manicure  shop,  or
engage or pay any employees on the Premises,  except those actually  working for
the Tenant on the Premises,  or advertise for laborers  giving an address at the
Premises.

     15. All persons  entering  and leaving the  Building at any time other than
during  normal  business  hours as  designated by the Landlord from time to time
shall  register in the books kept by the Landlord at or near the night  entrance
and the  Landlord  will have the right to prevent  any person  from  entering or
leaving the Building  unless  provided  with a key to the Premises to which such
person seeks  entrance or a pass in a form to be approved by the  Landlord.  Any
persons  round in the  Building at such times  without  such key or pass will be
subject to the  surveillance  of the employees  and agents of the Landlord.  The
Landlord shall be under no responsibility for failure to enforce this rule.

<PAGE>

                                                     -36-

Schedule E Termination in the Event of Demolition

THIS IS SCHEDULE "E" TO THE LEASE AGREEMENT

DATED JULY 25, 2000

                 BETWEEN:

                                             C.T. MANAGEMENT CORPORATION

                                                   Landlord

                            AND
                                               DSI DATOTECH SYSTEMS INC.

                                                    Tenant

TERMINATION IN THE EVENT OF DEMOLITION

                 The Tenant  hereby  agrees that if the Landlord  desires at any
time to remodel the building housing the Premises or any part thereof or to take
down the said building,  the Landlord may terminate this Lease and all rights to
renew  the same  upon  giving  the  Tenant  12  months'  written  notice  of the
Landlord's  intention  so to do,  provided  that  the  date  of  termination  as
specified  in such notice shall not be before the expiry of the first five years
of the original term of this Lease. The Tenant will surrender this Lease and all
the remainder of the term, if any, then yet to come and  unexpired,  as from the
day of termination  mentioned in such notice, and will, subject  nevertheless to
the provisions  hereinbefore contained thereupon,  vacate the premises and yield
up to the Landlord the peaceable  possession  thereof. It is understood that the
said 12 months'  notice  need not expire at the end of any year or at the end of
any  month,  and in the  event of the day fixed for  termination  of this  Lease
expiring  on some  other day than the last day of the  month,  the rent for such
month shall be apportioned for the broken period.Exhibit 4.2

                                             DSI DATOTECH SYSTEMS INC.

                                              1996 STOCK OPTION PLAN

1.       INTERPRETATION

1.1 Defined  Terms - For the purposes of this Plan,  the  following  terms shall
have the following meanings:

     (a) "Affiliate" means a Parent Corporation or a Subsidiary Corporation of a
corporation;

     (b)  "Associate"  means,  where used to  indicate a  relationship  with any
Person,

     (i) any relative of that Person,

     (ii) any person of the  opposite sex to whom that Person is married or with
whom that Person is living in a conjugal relationship outside marriage,

     (iii) any  relative of a Person  mentioned  in clause (ii) who has the same
home as that Person,

                   (iv)    any partner of that Person,

     (v) any trust or estate in which such Person has a  substantial  beneficial
interest or as to which such Person serves as trustee or in a similar  capacity,
or

     (vi) any corporation of which such Person  beneficially  owns,  directly or
indirectly,  voting  securities  carrying  more than ten  percent  of the voting
rights attached to all outstanding voting securities of the corporation;

     (c) "Beneficial  Owner" of a security  includes any Person who, directly or
indirectly,  through any contract,  arrangement  understanding,  relationship or
otherwise  has voting  power over the security or the power to dispose or direct
the  disposition  of the  security,  and any  Person  who  uses a trust or other
arrangement  with the purpose or effect of divesting  such Person of  beneficial
ownership as part of a plan to evade the reporting requirements of section 13 of
the Exchange Act shall be deemed to be the Beneficial Owner of the security;

     (d) "Board" means the Board of Directors of the Company;

     (e) "Code"  means the  United  States  Internal  Revenue  Code of 1986,  as
amended from time to time;

<PAGE>

                                                         2

     (f) "Committee" means a committee of the Board appointed in accordance with
this Plan, or if no such committee is appointed, the Board itself;

          (g)      "Company" means DSI Datotech Systems Inc. and its Affiliates;

     (h)  "Date of  Grant"  means  the date on  which a grant  of an  Option  is
effective;

     (i) "Direct or Indirect  Ownership" of securities by a Person is calculated
in accordance with the following rules:

     (i) the Person shall be deemed to own stoc owned,  directly or  indirectly,
by or for his brothers and sisters  (including  half-brothers and half-sisters),
spouse, ancestors and lineal descendants, and

     (ii)  stock  owned,  directly  or  indirectly,  b  or  for  a  corporation,
partnership,  estate or trust, shall be deemed to be owned proportionately by or
for its shareholders, partners or beneficiaries;

     (j)  "Disability"  means  a  medically   determinable  physical  or  mental
impairment expected to result in death or to last for a continuous period of not
less than 12 months  which  causes an  individual  to be unable to engage in any
substantial gainful activity;

     (k)   "Disinterested   Person"   means  a  director  who   qualifies  as  a
"Disinterested Person" as defined in subclause 240.16b-3(c)(2)(i) of Title 17 of
the Code of Federal Regulations of the United States; meaning a director who has
not been granted or awarded equity securities  pursuant to the Plan or any other
plan of the  Company for one year prior to the  initiation  of his service as an
administrator of the Plan, other than securities  received pursuant to an annual
retainer fee;

     (1)  "Disposition"  includes a sale,  exchange,  gift, or transfer of legal
tide, but does not include a pledge,  hypothecation,  transfer from a descendent
to an  estate,  transfer  by  bequest  or  inheritance,  or the  other  excepted
circumstances referred to in section 424(c) of the Code;

     (m)  "Domestic  Relations  Successor"  means a person  entitled  to receive
transfer of ownership of an Option  pursuant to a Qualified  Domestic  Relations
Order;

     (n)  "Effective  Date"  means the  effective  date of this  Plan,  which is
November 15, 1996;

     (o) "Exchange Act" means the Securities Exchange Ac of 1934, as amended;

<PAGE>

                                                         3

     (p) "Fair Market Value" means:

     (i) where the Shares are listed for tradin on the VSE, the closing price of
the Shares on the VSE,

     (ii) where the Shares are publicly  traded but are not  listed for trading
on the VSE, the closing  price of the Shares on such stock  exchange or over the
counter market as may be selected for such purpose by the Committee, or

     (iii)  where  the  Shares  are not  publicly  traded,  the  value  which is
determined  by the  Committee  to be the fair value of the Shares at the Date of
Grant,   taking  into   consideration  all  factors  that  the  Committee  deems
appropriate,  including, without limitation, recent sale and offer prices of the
Shares in private transactions negotiated at arm's length;

     (q) "Guardian" means the guardian, if any, appointed for an Optionee;

(r) "ISO" means an Option  granted to an employee of the Company that  qualifies
as an  "incentive  stock option" for  purposes of section 422 of the Code and is
therefore subject to favorable tax treatment under the Code;

     (s) "ISO Optionee" means an Optionee to whom an ISO has been granted;

(to) "Modification"  means any change in the terms of an Option  which gives the
Optionee additional benefits under the Option, but such change shall not include
a change in the terms of an Option:

     (i) to make the Option not  transferable  other than by will or the laws of
descent and distribution,

     (ii)  to make  the  Option  exercisable  only by the  Optionee  during  his
lifetime,

     (iii) in the case of an Option  not  immediately  exercisable  in full,  to
accelerate the time within which the Option may be exercised, or

     (iv) attributable to the issuance or assumption of an Option by reason of a
corporate merger,  consolidation,  acquisition of property or stock, separation,
reorganization  or liquidation if the new Option or assumption of the old Option
does not give the Optionee  additional  benefits which he did not have under the
old Option;

<PAGE>

                                                         4

(u)  "Non-ISO"  means an Option  that is not an "  incentive  stock  option" for
purposes of section 422 of the Code,  and is therefore  not subject to favorable
tax treatment under the Code;

     (v)  "Non-ISO  Optionee"  means  an  Optionee  to whom a  Non-ISO  has been
granted;

     (w) "Option"  means an option to purchase  Shares  granted  pursuant to the
terms of this Plan;

     (x) "Option Agreement" means a written agreement between the Company and an
Optionee, specifying the terms of the Option being granted to the Optionee under
the Plan;

     (y) "Option  Price"  means the price at which an Option is  exercisable  to
purchase Shares;

     (z) "Optionee" means a person to whom an Option has been granted;

     (aa) "Parent  Corporation"  means any  corporation  in a unbroken  chain of
corporations  ending with the Company if, at the Date of Grant, each corporation
other  than the  Company  owns stock  possessing  50 percent or mor of the total
combined  voting power of all classes of stock in one of the other  corporations
in such chain;

     (bb) "Person" means a natural  person,  company,  government,  or political
subdivision  or agency of a  government;  and where two or more Persons act as a
partnership,  limited  partnership,  syndicate or other group for the purpose of
acquiring,  holding or disposing of securities of an issuer,  such  syndicate or
group shall be deemed to be a Person;

     (cc) "Plan" means this Stock Option Plan of the Company;

     (dd) "Qualified  Domestic  Relations Order" means a judgment or order which
relates to the provision of child support,  alimony payment or marital  property
rights to a spouse, former spouse, child or other dependent of an Optionee, made
pursuant to domestic  relations law of a state of the United  States,  and which
meets all the requirements of section 414(p) of the Code;

     (ee) "Qualified Successor" means a person who is:

     (i) entitled to  ownership  of an Option upo the death of an ISO  Optionee,
pursuant  to a will or the  applicable  laws of descent  and  distribution  upon
death, or

     (ii) a Domestic Relations Successor of an Optionee;

<PAGE>

                                                         5

     (ff) "Shares"  means the common shares  without par value in the capital of
the Company;

     (gg) "Subsidiary Corporation" means any corporation in an unbroken chain of
corporations  beginning  with the Company if, at the Date of Grant,  each of the
corporations other than the last corporation owns stock possessing 50 percent or
more of the total  combined  voting  power of all classes of stock in one of the
other corporations in such chain;

     (hh) "Term" means the period of time during which an Option is exercisable;

     (ii) "Terminating Event" means:

     (i) the dissolution or liquidation of the Company,

     (ii) a merger or consolidation of the Company with one or more corporations
as a result of which,  immediately  following such merger or consolidation,  the
shareholders  of the  Company as a group  will hold less than a majority  of the
outstanding capital stock of the surviving corporation,

     (iii)  the  sale or other  disposition  of all o  substantially  all of the
assets of the Company,

     (iv) the  occurrence of an event  whereby any Person or entity  becomes the
Beneficial Owner of Shares representing 50% or more of the combined voting power
of the voting securities of the Company, or

     (v) a material  change in the  capital  structure  of the  Company  that is
deemed to be a Terminating  Event by virtue of the last sentence of Section 11.1
of this Plan or by virtue of Section 11.4 of its Plan;

          (jj)     "VSE" means the Vancouver Stock Exchange.

     2. STATEMENT OF PURPOSE

2.1 Principal  purposes - The principal  purposes of the Plan are to provide the
Company with the advantages of the incentive  inherent in stock ownership on the
part of employees,  officers,  directors,  and  consultants  responsible for the
continued  success of the Company;  to create in such  individuals a proprietary
interest in, and a greater  concern for, the welfare and success of the Company;
to encourage  such  individuals  to remain with the Company;  and to attract new
employees, officers, directors and consultants to the Company.

<PAGE>

                                                         6

2.2 ISOs and  Non-ISOs - Under this Plan,  the Company may grant  either ISOs or
Non- ISOs.  Each ISO granted  hereunder is intended to  constitute an "incentive
stock  option," for the  purposes of section 422 of the Code,  and this Plan and
each such ISO is intended to comply with all of the  requirements of Section 422
of the Code and of all other  provisions  of the Code  applicable  to "incentive
stock options" and to plans issuing the same. Each Non-ISO granted  hereunder is
intended to constitute an Option that is not an "incentive stock option" for the
purposes  of  section  422 of the  Code,  and  that  does  not  comply  with the
requirements of Section 422 of the Code.

2.3 Benefit to  shareholders - The Plan is expected to benefit  shareholders  by
enabling the Company to attract and retain  personnel of the highest  caliber by
offering  them an  opportunity  to share in any  increase in value of the Shares
resulting from their efforts.

3.                 ADMINISTRATION

3.1 Board or  Committee  - The Plan shall be  administered  by the Board or by a
Committee appointed in accordance with Section 3.2 or 3.4(b) below.

3.2  Appointment  of  Committee - The Board may at any time appoint a Committee,
consisting of not less than two of its members, to administer the Plan on behalf
of the Board in  accordance  with such  terms  and  conditions  as the Board may
prescribe,  consistent  with this Plan.  Once  appointed,  the  Committee  shall
continue to serve until otherwise  directed by the Board. From time to time, the
Board may increase the size of the  Committee  and appoint  additional  members,
remove  members (with or without  cause) and appoint new members in their place,
fill  vacancies  however  caused,  or remove all  members of the  Committee  and
thereafter directly administer the Plan.

3.3  Quorum  and  voting - A majority  of the  members  of the  Committee  shall
constitute  a quorum,  and,  subject to the  limitations  in this Section 3, all
actions of the  Committee  shall  require  the  affirmative  vote of members who
constitute  a majority  of such  quorum.  Members of the  Committee  who are not
Disinterested  Persons may vote on any matters  affecting the  administration of
the Plan or the  grant of  Options  pursuant  to the Plan,  except  that no such
member  shall act upon the granting of an Option to himself (but any such member
may be counted in  determining  the  existence of a quorum at any meeting of the
Committee  during  which action is taken with respect to the granting of Options
to him).

3.4   Administration   of  Plan  upon   registration  of  equity   securities  -
Notwithstanding  the  foregoing  provisions  of this  Section 3, if the  Company
registers  any  class of any  equity  security  pursuant  to  section  12 of the
Exchange Act the Plan shall, from the effective date of such registration  until
six months  after the  termination  of such  registration,  be  administered  as
follows:

     (a) the Plan shall be  administered  by the Board so long as each member of
the Board is a Disinterested Person; and,

<PAGE>

                                                         7

     (b) if at any time not all members of the Board are Disinterested  Persons,
then the  Board  shall  appoint  a  Committee  consisting  of two or more of its
members, all of whom are Disinterested  Persons, to administer the Plan o behalf
of the Board in  accordance  with such  terms  and  conditions  as the Board may
prescribe,  consistent  with this Plan.  Once  appointed,  the  Committee  shall
continue to serve until otherwise  directed by the Board.  From time to time the
Board may increase the size of the Committee and appoint additional members (all
of whom shall b Disinterested  Persons),  remove members (with or without cause)
and appoint new members in their place, fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer the Plan so long
as all members of the Board are Disinterested Persons. At no time shall a person
who is not a  Disinterested  Person serve on the Committee  appointed under this
Section  3.4%,  no shall  such  Committee  at any time  consist of less than two
members of the Board.

     3.5 Powers of Committee - Any Committee appointed ------------------- under
Section 3.2 or 3.4(b) above shall have the authority to do the following:

     (a) administer the Plan in accordance with its express terms;

     (b) determine all questions arising in connection with the  administration,
interpretation, and application of the Plan, including all questions relating to
the value of the Shares;

     (c)  correct  any  defect,   supply  any  information,   or  reconcile  any
inconsistency  in the Plan in such  manner and to such extent as shall be deemed
necessary or advisable to carry out the purposes of the Plan;

     (d) prescribe,  amend,  and rescind rules and  regulations  relating to the
administration of the Plan;

     (e) determine the duration and purposes of leaves o absence from employment
which  may be  granted  to  Optionees  without  constituting  a  termination  of
employment for purposes of the Plan;

     (f) do the following with respect to the granting o Options:

     (i) determine the employees,  officers,  directors,  or consultants to whom
Options  shall be granted,  based on the  eligibility  criteria  set out in this
Plan,

     (ii) determine whether such Options shall b ISOs or Non-ISOs,

     (iii)  determine  the terms and  provisions  of the Option  Agreement to be
entered  into with any Optionee  (which need not be identical  with the terms of
any other Option Agreement),

<PAGE>

                                                         8

     (iv) amend the terms and  provisions  of Option  Agreements,  provided  the
Committee obtains:

     (A) the consent of the Optionee; and

     (B) the approval of any stock exchange on which the Company is listed,

     (v) determine when Options shall be granted,

     (vi) determine the number of Shares subject to each Option, and

     (g) make all other determinations necessary or advisable for administration
of the Plan.

3.6 Obtain regulatory  approvals - In administering this Plan the Committee will
obtain any  regulatory  approvals  which may be required  pursuant to applicable
securities  laws or the rules of any stock  exchange  on which  the  Company  is
listed.

3.7 Administration by Committee - The Committee's  exercise of the authority set
out in Section 3.5 shall be  consistent  with the intent that ISOs issued  under
the Plan be  qualified  under the  terms of  Section  422 of the Code,  and that
Non-ISOs shall not be so qualified.  All determinations made by the Committee in
good faith on matters referred to in Section 3.5 shall be final, conclusive, and
binding  upon all  Persons.  The  Committee  shall have all powers  necessary or
appropriate  to  accomplish  its  duties  under  this  Plan.  In  addition,  the
Committee's  administration of the Plan shall in all respects be consistent with
the policies and rules of the VSE governing the granting of stock options for so
long as the Shares are  listed on the VSE and any other  regulatory  authorities
having jurisdiction.

4.                 ELIGIBILITY

4.1  Eligibility  for ISOs - ISOs may be granted to any employee of the Company,
including directors or officers of the Company who are employees of the Company.
An Optionee  who is not an employee of the Company is not eligible to receive an
ISO under the Plan.

     4.2  Eligibility  for Non-ISOs - Non-ISOs  may be granted to any  employee,
officer, director ------------------------- or consultant of the Company.

4.3 No violation of securities laws - No Option shall be granted to any Optionee
unless  the  Committee  has  determined  that the grant of such  Option  and the
exercise  thereof by the  Optionee  will not violate the  securities  law of the
jurisdiction where the Optionee resides.

4.4 Limit on maximum  grant to any Optionee -  Notwithstanding  anything in this
Plan to the  contrary,  no officer or  employee  of the  Company  shall  receive
Options exercisable for more than 750,000 Shares over any three year period.

<PAGE>

                                                         9

5.                 SHARES SUBJECT TO THE PLAN

5.1 Number of Shares - The  Committee,  from time to time,  may grant Options to
purchase an aggregate of up to 1,500,000 Shares, subject to regulatory approval,
to be made  available  from  authorized,  but  unissued or  reacquired,  Shares,
provided  that not more than  750,000  options may be granted to  directors  and
officers in management,  administration and investor relations and the remaining
options may be granted to employees and  consultants and members of any advisory
board working in the research,  development,  marketing and commercialization of
gesture interface control systems and other technology developed by the Company.
In calculating the foregoing  1,500,000 Shares,  the Committee shall include all
Shares subject to options  outstanding  prior to the Effective Date of the Plan.
The  foregoing  number of Shares shall be  adjusted,  where  necessary,  to take
account of the events referred to in Section 11 hereof

5.2 Decrease in number of Shares  subject to Plan - Upon  exercise of an Option,
the number of Shares  thereafter  available  under the Plan and under the Option
shall decrease by the number of Shares as to which the Option was exercised.

5.3 Expiry of option - If an Option expires or terminates for any reason without
having been exercised in full,  the  unpurchased  Shares  subject  thereto shall
again be available for the purposes of the Plan.

5.4  Reservation  of Shares - The  Company  will at all times  reserve  and keep
available  such  number  of  Shares  as  shall  be  sufficient  to  satisfy  the
requirements of the Plan.

6.                 OPTION TERMS
                   ------------

6.1 Option agreement - With respect to each Option to be granted to an Optionee,
the Committee shall specify the following terms in the Option Agreement  between
the Company and the Optionee:

     (a) whether such Option is an ISO or a Non-ISO;

          (b)      the number of Shares  subject to  purchase  pursuant  to such
                   Option, provided that so long as the Shares are listed on the
                   VSE,  the number of Shares  reserved  for issuance to any one
                   person  pursuant  to  Options  does  not  exceed  5%  of  the
                   outstanding Shares;

          (c)      Date of Grant;

          (d)      the Term, provided that:

<PAGE>

                                                        10

     (i) the Term shall in no event be more than ten years following the Date of
Grant provided that while the Company is listed on the Venture Board of the VSE,
the Term shall be not more than five years from the Date of Grant; and

     (ii) if an ISO Option is granted  to an  Optionee  who on the Date of Grant
has Direct or Indirect  Ownership of more than 10% of the total combined  voting
power of all classes of stock of the  Company,  the Term of the Option shall not
exceed five years;

     (e) the Option Price, provided that,

     (i) so long as the Shares are listed on th VSE,  the Option Price shall not
be less than the Fair Market  Value of the Shares on the  trading day  preceding
the Date of Grant; and

     (ii) if an ISO Option is granted  to an  Optionee  who on the Date of Grant
has Direct or Indirect  Ownership of more than 10% of the total combined  voting
power of all classes of stock of the Company,  then the Option Price shall be at
least 110% of the Fair Market Value of the Shares on the Date of Grant;

     (f) any vesting schedule upon which the exercise of an Option is contingent
provided that each Option must be subject to a vesting  schedule under which not
more than 25% of the initial  aggregate  number of Shares which may be purchased
under the Option may vest in any six month period, on a cumulative basis; and

     (g) such other terms and  conditions as the Committee  deems  advisable and
are consistent with the purposes of this Plan.

6.2 No grant after ten years from  effective  date - No Option  shall be granted
under the Plan later than ten years from the Effective Date of the Plan.  Except
as expressly provided herein,  nothing contained in this Plan shall require that
the terms and conditions of Options granted under the Plan be uniform.

6.3 No Disposition  for six months - An Optionee who is subject to section 16 of
the Exchange Act shall not make a Disposition of any Shares issued upon exercise
of an Option unless at least six months has elapsed between the Date of Grant of
the Option and the date of  Disposition  of the Shares  issued upon  exercise of
such Option.

7.                LIMITATION ON GRANTS OF OPTIONS

     7.1 Non-ISO if Exceed  $100.000 (U.S.) - If the aggregate Fair Market Value
of: --------------------------------

<PAGE>

                                                        11

     (a) Shares  underlying  ISOs which have been  granted to an Optionee  under
this Plan and which are  exercisable  for the first time during a calendar year,
and

     (b) Shares  underlying  incentive  stock options which have been granted to
such Optionee under any other plan of the Company and which are  exercisable for
the first time during that calendar year,

exceeds $100,000 (U.S.),  as such amount may be adjusted from time to time under
Section 422(d) of the Code, then to the extent of such excess such Options shall
be treated as Non-ISOs.

7.2 ISO Optionee  owning  greater than 10% of voting  securities - The Committee
may grant an ISO to an employee of the Company  who, at the Date of Grant,  owns
securities  of the  Company  representing  more than 10% of the  total  combined
voting power of all classes of stock of the Company only if:

     (a) the  Option  Price is at least  110% of the  Fair  Market  Value of the
Shares at the Date of Grant; and

     (b) the Term is five years or less.

8.                 EXERCISE OF OPTION
                   ------------------

8.1 Method of Exercise - Subject to any  limitations or conditions  imposed upon
an Optionee pursuant to the Option Agreement or Section 6 above, an Optionee may
exercise  an Option by giving  written  notice  thereof  to the  Company  at its
principal place of business or as otherwise indicated by the Company in writing.

8.2  Payment of Option  price - The  notice  described  in Section  8.1 shall be
accompanied  by full  payment of the  aggregate  Option  Price to the extent the
Option is so exercised,  and full payment of any amounts the Company  determines
must be  withheld  for tax  purposes  from the  Optionee  pursuant to the Option
Agreement. Such payment shall be:

     (a) in lawful money (Canadian funds) in cash or by check;

     (b) at the  discretion  of the  Committee  and if such form of  payment  is
permitted  under the corporate laws then  governing the Company,  by delivery of
the  Optionee's  personal  recourse  note  bearing  interest  at a  rate  deemed
appropriate by the Committee;

          (c)      at  the  discretion  of the  Committee,  and  subject  to all
                   applicable  securities laws, through delivery by the Optionee
                   and/or  withholding  the Company,  of Shares  having a market
                   value as of the date of exercise  equal to the cash  exercise
                   price  of the  Option  plus  any  amounts  that  the  Company
                   determines must be withheld from the

<PAGE>

                                                        12

     Optionee for U.S. or Canadian tax purposes. The market value of each of the
Shares  on the  date of  delivery  shall  be  determined  in good  faith  by the
Committee, which determination shall be binding for all purposes hereunder; or

     (d) at the  discretion of the  Committee,  by any  combination  of Sections
8.2(a) to 8.2(c) above.

8.3 Issuance of stock  certificate - As soon ~s practicable after exercise of an
Option in accordance with Sections 8.1 and 8.2 above,  the Company shall issue a
stock  certificate  evidencing  the Shares with  respect to which the Option has
been exercised.  Until the issuance of such stock certificate,  no right to vote
or receive  dividends  or any other  rights as a  shareholder  shall  exist with
respect  to  such  Shares,  notwithstanding  the  exercise  of  the  Option.  No
adjustment  will be made for a dividend or other right for which the record date
is prior to the date the stock  certificate  is issued,  except as  provided  in
Section 11 below.

9.                 TRANSFERABILITY OF OPTIONS

9.1  Non-transferable  - Except as provided otherwise in this Section 9, Options
are non- assignable and non-transferable.

9.2 Death of  Optionee - If the  employment  of an  Optionee  as an  employee or
consultant  of the Company,  or the position of an Optionee as a director of the
Company,  terminates  as a result of his or her death,  any Options held by such
Optionee shall pass to the Qualified Successor of the Optionee, and

     (a) in the case of an ISO, shall be exercisable by the Qualified  Successor
for a period of six months following such death, and

     (b) in the  case  of a  Non-ISO,  shall  be  exercisable  by the  Qualified
Successor for a period of 12 months following such death.

9.3  Disability of Optionee - If the employment of an Optionee as an employee or
consultant  of the Company,  or the position of an Optionee as a director of the
Company,  is terminated by the Company by reason of such Optionee's  Disability,
any Option  held by such  Optionee  that could have been  exercised  immediately
prior to such  termination of employment  shall be exercisable by such Optionee,
or by his  Guardian,  for a period  of one year  following  the  termination  of
employment of such Optionee.

9.4  Disability  and death of  Optionee  - If an  Optionee  who has ceased to be
employed by the Company by reason of such Optionee's  Disability dies within six
months after the termination of

<PAGE>

                                                        13

such employment, any Option held by such Optionee that could have been exercised
immediately  prior to his or her death shall pass to the Qualified  Successor of
such Optionee, and shall be exercisable by the Qualified Successor

     (a) in the case of an ISO, for a period of six months  following  the death
of such Optionee, and

     (b) in the case of a Non-ISO, for a period of 12 months following the death
of such Optionee.

9.5 Qualified  Domestic Relations Order - In the event that a Qualified Domestic
Relations  Order  mandates  the  transfer  of any  Option  that  could have been
exercised  immediately  prior to the  issuance of such order,  such Option shall
pass to the  Domestic  Relations  Successor,  and shall be  exercisable  by such
person  or  persons  in  accordance  with  the  terms of the  applicable  Option
Agreement.

9.6 Vesting - Options held by a Qualified Successor or exercisable by a Guardian
shall,  during  the  period  prior to  their  termination,  continue  to vest in
accordance with any vesting schedule to which such Options are subject.

9.7  Unanimous  agreement  - If two or more  persons  constitute  the  Qualified
Successor or the Guardian of an Optionee, the rights of such Qualified Successor
or such Guardian shall be exercisable only upon the unanimous  agreement of such
persons.

9.8  Deemed  non-interruption  of  employment  -  Employment  shall be deemed to
continue  intact  during any  military or sick leave or other bona fide leave of
absence if the  period of such leave does not exceed 90 days or, if longer,  for
so long as the Optionee's  right to reemployment  with the Company is guaranteed
either by statute or by  contract.  If the period of such leave  exceeds 90 days
and the Optionee's reemployment is not so guaranteed, then his or her employment
shall be deemed to have terminated on the ninety-first day of such leave.

10.                TERMINATION OF OPTIONS

10.1 Termination of Options - To the extent not earlier  exercised or terminated
in accordance with section 9 above, an Option shall terminate at the earliest of
the following dates:

     (a) the termination date specified for such Option in the Option Agreement;

     (b) where the Optionee's position as an employee, consultant or director of
the Company is terminated for just cause,  the date of such termination for just
cause;

     (c) where the Optionee's position as an employee, consultant or director of
the Company terminates for a reason other than the Optionee's Disability, death,
or

<PAGE>

                                                        14

                   termination  for  just  cause,  30 days  after  such  date of
                   termination,  or upon the Optionee making written application
                   to the Committee  and  receiving  the written  consent of the
                   Committee,  which  consent may be given at the  discretion of
                   the Committee, up to 90 days after such date of termination;

     (d) the date of any sale,  transfer,  assignment or  hypothecation,  or any
attempted  sale,  transfer,  assignment  or  hypothecation,  of such  Option  in
violation of Section 9.1 above; and

     (e) the date  specified in Section 11.2 below for such  termination  in the
event of a Terminating Event.

11.               ADJUSTMENTS TO OPTIONS

11.1 Alteration in capital structure - If there is a material  alteration in the
capital structure of the Company resulting from a recapitalization, stock split,
reverse stock split, stock dividend, or otherwise, the Committee shall make such
adjustments to this Plan and to the Options then outstanding  under this Plan as
the  Committee   determines   to  be   appropriate   and  equitable   under  the
circumstances,  so that the  proportionate  interest  of each holder of any such
Option shall, to the extent practicable,  be maintained as before the occurrence
of such event Such adjustments may include,  without  limitation (a) a change in
the number or kind of shares of stock of the  Company  covered by such  Options,
and (b) a change in the Option Price payable per share; provided,  however, that
the aggregate  Option Price  applicable to the  unexercised  portion of existing
Options shall not be altered,  it being intended that any adjustments  made with
respect to such  Options  shall apply only to the price per share and the number
of shares subject  thereto.  For purposes of this Section 11.1,  neither (i) the
issuance of  additional  shares of stock of the Company in exchange for adequate
consideration  (including  services),  nor (ii) the  conversion  of  outstanding
preferred  shares of the  Company  into  Shares  shall be deemed to be  material
alterations of the capital structure of the Company. If the Committee determines
that the nature of a material alteration in the capital structure of the Company
is such that it is not practical or feasible to make appropriate  adjustments to
this Plan or to the  Options  granted  hereunder,  such event  shall be deemed a
Terminating Event for the purposes of this Plan.

11.2 Terminating events - Subject to Section 11.3, all Options granted under the
Plan shall terminate upon the occurrence of a Terminating Event.

11.3 Notice of Terminating  Event - The Committee shall give notice to Optionees
not less than thirty days prior to the consummation of a Terminating  Event Upon
the giving of such  notice,  all  Options  granted  under the Plan shall  become
immediately  exercisable,  notwithstanding  any contingent  vesting provision to
which such Options may have otherwise been subject.

11.4 Corporate  reorganization - In the event of a reorganization  as defined in
this  Section  11.4 in which  the  Company  is not the  surviving  or  acquiring
corporation, or in which the Company

<PAGE>

                                                        15

is or  becomes  a  wholly-owned  subsidiary  of  another  corporation  after the
effective  date of the  reorganization,  then  unless  provision  is made by the
acquiring corporation for the assumption of each Option granted under this Plan,
or the substitution of an option therefor, such that no Modification of any such
Option  occurs,  all Options  granted  under this Plan shall  terminate and such
event shall be deemed a  Terminating  Event.  For purposes of this Section 11.4,
reorganization shall mean any statutory merger, statutory consolidation, sale of
all or substantially all of the assets of the Company,  or sale,  pursuant to an
agreement with the Company,  of securities of the Company  pursuant to which the
Company is or becomes a wholly-owned subsidiary of another corporation after the
effective date of the reorganization.

11.5  Acceleration  of date of exercise - The Committee  shall have the right to
accelerate the date of exercise of any installment of any Option; provided that,
without the consent of the Optionee  with respect to any Option,  the  Committee
shall not  accelerate  the date of any  installment  of any Option granted to an
employee  as an ISO (and not  previously  converted  into a Non-ISO  pursuant to
Section  13  below)  if such  acceleration  would  violate  the  annual  vesting
limitation  contained in Section 422(d) of the Code, as described in Section 7.1
above.

11.6  Determination  to be made by Committee -  Adjustments  and  determinations
under this Section 11 shall be made by the Committee, whose decisions as to what
adjustments or  determination  shall be made, and the extent  thereof,  shall be
final, binding, and conclusive.

12.               TERMINATION AND AMENDMENT OF PLAN

12.1  Termination of Plan - Unless earlier  terminated as provided in Section 11
above or in Section 12.2 below, the Plan shall terminate on, and no Option shall
be granted under the Plan, after ten years has passed from the Effective Date of
the Plan.

12.2 Power of  Committee to terminate or amend Plan - Subject to the approval of
any stock exchange on which the Company is listed,  the Committee may terminate,
suspend  or amend the  terms of the Plan;  provided,  however,  that,  except as
provided  in Section 11 above,  the  Committee  may not do any of the  following
without  obtaining,  within 12  months  either  before or after the  Committee's
adoption of a resolution  authorizing  such action,  approval by the affirmative
votes of the  holders of a  majority  of the voting  securities  of the  Company
present,  or  represented,  and  entitled  to vote  at a  meeting  duly  held in
accordance with the applicable  corporate laws, or by the written consent of the
holders of a majority of the securities of the Company entitled to vote:

     (a) increase the  aggregate  number of Shares which may be issued under the
Plan;

     (b) materially  modify the requirements as to eligibility for participation
in the Plan,  or change the  designation  of the employees or class of employees
eligible to receive ISOs under the Plan;

     (c) materially  increase the benefits  accruing to  participants  under the
Plan; or

<PAGE>

                                                        16

             (d) make any change in the terms of the Plan that  would  cause the
ISOs granted hereunder to lose their  qualification as "incentive stock options"
under Section 422 of the Code.

12.3 No grant during  suspension  of Plan - No Option may be granted  during any
suspension,  or  after  termination,  of the  Plan.  Amendment,  suspension,  or
termination of the Plan shall not, without the consent of the Optionee, alter or
impair any rights or obligations under any Option previously granted.

13.                CONVERSION OF ISOS INTO NON-ISOS

13.1  Conversion  of ISOs into  Non-ISOs  - At the  written  request  of any ISO
Optionee,  the  Committee  may in its  discretion  take such  actions  as may be
necessary to convert such  Optionee's  ISOs (or any  installments or portions of
installments  thereof)  that have not been  exercised on the date of  conversion
into Non-ISOs at any time prior to the  expiration  of such ISOs,  regardless of
whether  the  Optionee  is an  employee  of the  Company  at the  time  of  such
conversion.  Such actions  include,  but shall not be limited to,  extending the
exercise  period of such ISOs. At the time of such  conversion,  the  Committee,
with the consent of the Optionee,  may impose such conditions on the exercise of
the  resulting  Non-ISOs  as the  Committee  in its  discretion  may  determine,
provided that such conditions are consistent with this Plan. Nothing in the Plan
shall be deemed to give any  Optionee  the  right to have such  Optionee's  ISOs
converted into Non-ISOs, and no such conversion shall occur until and unless the
Committee  takes  appropriate  action.  The  Committee,  with the consent of the
Optionee,  may also terminate any portion of any ISO that has not been exercised
at the time of such conversion.

14.                CONDITIONS PRECEDENT TO ISSUANCE OF SHARES

14.1  Compliance  with  securities laws - Shares shall not be issued pursuant to
the  exercise of any Option  unless the exercise of such Option and the issuance
and  delivery  of such  Shares  comply  with  all  relevant  provisions  of law,
including,  without  limitation,  the  Securities  Act of 1933, as amended,  the
Exchange Act, any applicable  state or provincial  securities law, the rules and
regulations promulgated  thereunder,  and the requirements of any stock exchange
upon which the Shares may then be listed or otherwise traded.

14.2  Representations by Optionee - As a condition  precedent to the exercise of
any Option,  the Company may require the Optionee to represent  and warrant,  at
the time of exercise,  that the Shares are being  purchased  only for investment
and without any present  intention to sell or distribute  such Shares if, in the
opinion of counsel for the Company,  such  representations  and  warranties  are
required by any applicable law.

14.3  Regulatory  approval to issuance of Shares - The  Company's  inability  to
obtain authority from any regulatory body having  jurisdiction,  which authority
is deemed by the Company's

<PAGE>

                                                        17

counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability  with respect to the failure to issue
or sell such Shares.

15.                USE OF PROCEEDS
                   ---------------

15.1 Use of Proceeds - Proceeds from the sale of Shares  pursuant to the Options
granted  and  exercised  under the Plan shall  constitute  general  funds of the
Company and shall be used for general corporate purposes.

16.                    NOTICES

16.1 Notices - All notices,  requests, demands and other communications required
or permitted to be given under this Plan and the Options granted under this Plan
shall be in writing and shall be either  served  personally on the party to whom
notice is to be given,  in which case  notice  shall be deemed to have been duly
given on the date of such  service;  telefaxed,  in which case  notice  shall be
deemed to have been duly given on the date the telefax is sent; or mailed to the
party  to whom  notice  is to be  given,  by first  class  mall,  registered  or
certified, return receipt requested, postage prepaid, and addressed to the party
at his or its most recent  known  address,  in which case such  notice  shall be
deemed to have been duly given on the tenth postal  delivery day  following  the
date of such mailing.

17.                MISCELLANEOUS PROVISIONS

17.1 No  obligation  to exercise -  Optionees  shall be under no  obligation  to
exercise Options granted under this Plan.

17.2 No  obligation  to retain  Optionee - Nothing  contained in this Plan shall
obligate the Company to retain an Optionee as an employee, officer, director, or
consultant  for any period,  nor shall this Plan  interfere  in any way with the
right of the Company to reduce such Optionee's compensation.

17.3 Binding  agreement - The provisions of this Plan and each Option  Agreement
with an Optionee shall be binding upon such Optionee and the Qualified Successor
or Guardian of such Optionee.

17.4 Use of terms - Where the  context  so  requires,  references  herein to the
singular  shall  include  the  plural,  and  vice  versa,  and  references  to a
particular gender shall include either or both genders.

18.                SHAREHOLDER APPROVAL TO PLAN

<PAGE>

                                                        18
18.1 Shareholder  approval to Plan - This Plan must be approved by a majority of
the votes cast at a meeting of the shareholders of the Company, other than votes
attaching to securities beneficially owned by:

     (a) insiders of the Company,  meaning directors,  officers and greater than
10 percent shareholders; and

     (b) Associates of persons referred to in (a).

19.                EFFECTIVE DATE OF PLAN

19.1 Effective date of Plan - This Plan was adopted by the Board of Directors on
November 15, 1996, and will be submitted to the  shareholders of the Company for
approval at the next annual general meeting of the  shareholders of the Company.
The Effective  Date of the Plan is November 15, 1996,  provided that any Options
granted pursuant to the Plan prior to the date on which shareholder  approval to
the Plan is  given  may not be  exercised  until  the Plan and any such  Options
receive shareholder approval.

<PAGE>

                                      DSI DATOTECH SYSTEMS INC.

                             AMENDMENT NO. 1 TO THE 1996 STOCK OPTION PLAN

The  1996  Stock  Option  Plan of DSI  Datotech  Systems  Inc.  (the  "Company")
effective  November  15, 1996 (the  "Plan")  attached  hereto as Schedule "A" is
amended as follows:

     1.  Subparagraph  4.4 under "Limit on maximum grant to any Optionee" of the
Plan is hereby deleted in its entirety and replaced with the following:

        "4.4 Limit on maximum grant to any Optionee -  Notwithstanding  anything
        in this Plan to the  contrary,  no officer or  employee  of the  Company
        shall receive Options  exercisable for more than 987,500 Shares over any
        three year period."

     2. Subparagraph 5.1 under "Numbers of Shares" of the Plan is hereby deleted
in its entirety and replaced with the following:

        "5.1  Number of  Shares - The  Committee,  from time to time,  may grant
        Options to purchase an aggregate of up to 1,975,086  Shares,  subject to
        regulatory approval, to be made available from authorized,  but unissued
        or reacquired, Shares, provided that no more than 987,500 options may be
        granted to directors  and  officers in  management,  administration  and
        investor relations and the remaining options may be granted to employees
        and  consultants  and  members  of any  advisory  board  working  in the
        research,  development,   marketing  and  commercialization  of  gesture
        interface control systems and other technology developed by the Company.
        In  calculating  the foregoing  1,975,086  Shares,  the Committee  shall
        include all shares subject to options outstanding prior to the Effective
        Date of the Plan. The foregoing number of Shares hall be adjusted, where
        necessary,  to take  account  of the  events  referred  to in Section 11
        hereof."

3.      In all other respects the Plan shall remain the same.

This  Amendment  to the Plan was adopted by the Board of Directors on January 9,
1998 and submitted to the shareholders of the Company for approval at the annual
general meeting held January 9, 1998.

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