Document:

STOCK OPTION AGREEMENT
                             ----------------------

                          MERLIN SOFTWARE TECHNOLOGIES
                               INTERNATIONAL, INC.

     THIS  is  entered  into  as  of  the 4th day of January, 2001 (the "Date of
Grant")

BETWEEN:

MERLIN  SOFTWARE  TECHNOLOGIES  INTERNATIONAL,  INC.,  a  company  incorporated
pursuant  to  the  laws of the State of Nevada, of 4199 Lougheed Highway, Suites
200  and  201,  Burnaby,  British  Columbia,  Canada

(the  "Company")

AND:

KEVIN  O'REILLY,  of  1212  10th  Avenue,  #101, San Francisco, California 94122

(the  "Optionee")

WHEREAS:

A.          The Board of Directors of the Company (the "Board") has approved and
adopted  the 2000 Stock Option Plan (the "Plan"), pursuant to which the Board is
authorized  to  grant  to  employees and other selected persons stock options to
purchase  common  stock, without par value, of the Company (the "Common Stock");

B.          The  Plan provides for the granting of stock options that either (i)
are  intended  to  qualify  as  "Incentive  Stock Options" within the meaning of
Section  422  of  the Internal Revenue Code of 1986, as amended (the "Code"), or
(ii)  do  not  qualify  under  Section  422  of  the  Code ("Non-Qualified Stock
Options");  and

C.          The  Board  has  authorized  the  grant  to  Optionee  of options to
purchase  a  total  of  120,000  shares  of  Common Stock (the "Options"), which
Options  are  intended  to  be  (select  one):

         [X]   Incentive  Stock  Options

         [ ]   Non-Qualified  Stock  Options;

          NOW  THEREFORE, the Company agrees to offer to the Optionee the option
to  purchase,  upon  the  terms and conditions set forth herein and in the Plan,
120,000  shares  of

<PAGE>

Common  Stock.  Capitalized  terms  not  otherwise defined herein shall have the
meanings  ascribed  thereto  in  the  Plan.

1.     Exercise  Price.  The  exercise  price  of the Options shall be $0.21 per
share  (as  to  20,000 Options which vest as per Section 3(a) of this Agreement)
and  $0.35  per  share  (as to 100,000 Options which vest as per Section 3(a) of
this  Agreement).

2.     Limitation  on  the  Number of Shares.  If the Options granted hereby are
Incentive  Stock  Options,  the  number  of  shares  which  may be acquired upon
exercise  thereof  is  subject to the limitations set forth in Section 5.1(a) of
the  Plan.

3.     Vesting  Schedule.  The  Options  are  exercisable in accordance with the
following  vesting  schedule:

(a)     20,000  of  the  Options may be exercised upon execution of a management
agreement between the Company and the Optionee (the "Management Agreement"); and

(b)     100,000 of the Options may be exercised upon the expiration of 12 months
from  the  date  of  execution  of  the  Management  Agreement.

4.     Options  not Transferable.  The Options may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will, by applicable laws of descent and distribution or (except in
the  case  of  an  Incentive  Stock  Option)  pursuant  to  a qualified domestic
relations  order,  and  shall not be subject to execution, attachment or similar
process;  provided, however, that if the Options represent a Non-Qualified Stock
Option,  such  Option  is  transferable  without  payment  of  consideration  to
immediate  family  members  of  the  Optionee  or  to  trusts  or  partnerships
established  exclusively  for  the  benefit  of  the Optionee and the Optionee's
immediate  family members.  Upon any attempt to transfer, pledge, hypothecate or
otherwise  dispose  of  any Option or of any right or privilege conferred by the
Plan contrary to the provisions thereof, or upon the sale, levy or attachment or
similar  process  upon  the  rights  and  privileges conferred by the Plan, such
Option  shall  thereupon  terminate  and  become  null  and  void.

5.     Investment Intent.  By accepting the Options, the Optionee represents and
agrees  that  none  of the shares of Common Stock purchased upon exercise of the
Options  will  be  distributed  in  violation  of  applicable federal, state and
provincial  laws  and  regulations.  In  addition, the Company may require, as a
condition  of  exercising the Options, that the Optionee execute an undertaking,
in  such  a  form  as  the  Company shall reasonably specify, that the shares of
Common Stock is being purchased only for investment and without any then-present
intention  to  sell  or  distribute  such  shares  of  Common  Stock.

6.     Termination  of  Employment  and  Options.  Options  which have vested in
accordance  with  Section 3 of this Agreement shall terminate, to the extent not
previously  exercised, upon the occurrence of the first of the following events:

<PAGE>

(a)     Expiration.  Ten  (10)  years;  except,  that the expiration date of any
Incentive Stock Option granted to a greater than ten percent (> 10%) shareholder
of  the  Company  shall not be later than five (5) years from the Date of Grant;

(b)     Termination  for  Cause.  The  date  of  an  Optionee's  termination  of
employment  or  contractual  relationship  with  the  Company  or  any  Related
Corporation  for  cause  (as  determined  in  the  sole  discretion  of the Plan
Administrator);

(c)     Termination  Due to Death or Disability.  The expiration of one (1) year
from  the  date  of  the  death  of  the  Optionee or cessation of an Optionee's
employment  or  contractual  relationship by reason of disability (as defined in
Section  5.1(g)  of  the  Plan).  If  an  Optionee's  employment  or contractual
relationship  is  terminated  by death, any Option held by the Optionee shall be
exercisable  only  by the person or persons to whom such Optionee's rights under
such  Option  shall  pass  by  the Optionee's will or by the laws of descent and
distribution;

(d)     Termination  Due  to Cessation of Service as a Director.  The expiration
of  three  (3)  months  from the date an Optionee, if a director of the Company,
ceases  to  serve  as  a  director  of  the  Company;  or

(e)     Termination  for  Any  Other Reason.  The expiration of three (3) months
from  the  date  of  an  Optionee's  termination  of  employment  or contractual
relationship  with  the  Company  or  any  Related  Corporation  for  any reason
whatsoever  other  than cause, death or Disability (as defined in Section 5.1(g)
of  the  Plan).

Each  unvested  Option  granted pursuant hereto shall terminate immediately upon
termination  of  the  Optionee's employment or contractual relationship with the
Company  for any reason whatsoever, including death or Disability unless vesting
is  accelerated  in  accordance  with  Section  5.1(f)  of  the  Plan.

7.     Common  Stock.  In  the  case  of any stock split, stock dividend or like
change  in  the  nature of shares of Common Stock covered by this Agreement, the
number of shares of Common Stock and the exercise price shall be proportionately
adjusted  as  set  forth  in  Section  5.1(m)  of  the  Plan.

8.     Exercise of Option.  Options shall be exercisable, in full or in part, at
any  time  after vesting, until termination; provided however, that any Optionee
who  is  subject  to the reporting and liability provisions of Section 16 of the
Securities  Exchange  Act  of  1934  with  respect  to the Common Stock shall be
precluded  from  selling  or  transferring  any  Common  Stock or other security
underlying  an  Option during the six (6) months immediately following the grant
of  that Option.  If less than all of the shares of Common Stock included in the
vested  portion  of  any Option are purchased, the remainder may be purchased at
any  subsequent  time prior to the expiration of the Option term.  No portion of
any  Option  for  less  than  fifty (50) shares (as adjusted pursuant to Section
5.1(m)  of  the  Plan) may be exercised; provided, that if the vested portion of
any  Option  is less than fifty (50) shares, it may be exercised with respect to
all  shares  for  which  it is vested.  Only whole shares of Common Stock may be
issued  pursuant to an Option, and to the extent that an Option covers less than
one  (1)  share,  it  is  unexercisable.

<PAGE>

          Each exercise of the Options shall be by means of delivery of a notice
of  election to exercise (which may be in the form attached hereto as Exhibit A)
to  the  Secretary  of the Company at its principal executive office, specifying
the  number of shares of Common Stock to be purchased and accompanied by payment
in cash by certified check or cashier's check in the amount of the full exercise
price  for  the Common Stock to be purchased.  In addition to payment in cash by
certified  check  or cashier's check, an Optionee or transferee of an Option may
pay for all or any portion of the aggregate exercise price by complying with one
or  more  of  the  following  alternatives:

(a)     by  delivering  to  the  Company  free  trading  shares  of Common Stock
previously  held  by the Optionee or by the Company withholding shares of Common
Stock  otherwise deliverable pursuant to exercise of the Option, which shares of
Common  Stock received or withheld shall have a fair market value at the date of
exercise  (as  determined  by  the  Plan  Administrator)  equal to the aggregate
purchase  price  to  be  paid  by  the  Optionee  upon  such  exercise;  or

(b)     by  complying  with  any  other  payment  mechanism approved by the Plan
Administrator  at  the  time  of  exercise.

It  is  a condition precedent to the issuance of shares of Common Stock that the
Optionee  execute  and  deliver  to the Company a Stock Transfer Agreement, in a
form  acceptable  to  the  Company, to the extent required pursuant to the terms
thereof.

9.     Holding  period  for Incentive Stock Options.  In order to obtain the tax
treatment  provided  for Incentive Stock Options by Section 422 of the Code, the
shares  of  Common  Stock  received  upon exercising any Incentive Stock Options
received  pursuant to this Agreement must be sold, if at all, after a date which
is later of two (2) years from the date of this Agreement is entered into or one
(1)  year  from  the  date  upon  which the Options are exercised.  The Optionee
agrees  to  report sales of shares of Common Stock prior to the above determined
date  to  the  Company within one (1) business day after such sale is concluded.
The  Optionee  also  agrees to pay to the Company, within five (5) business days
after  such  sale  is concluded, the amount necessary for the Company to satisfy
its  withholding  requirement  required  by  the Code in the manner specified in
Section  5.1(l)  of  the  Plan.  Nothing  in  this  Section  9  is intended as a
representation  that  Common  Stock  may  be  sold  without  registration  under
provincial,  state and federal securities laws or an exemption therefrom or that
such  registration  or  exemption  will  be  available  at  any  specified time.

10.     Subject to 2000 Stock Option Plan.  The terms of the Options are subject
to the provisions of the Plan, as the same may from time to time be amended, and
any inconsistencies between this Agreement and the Plan, as the same may be from
time to time amended, shall be governed by the provisions of the Plan, a copy of
which  has been delivered to the Optionee, and which is available for inspection
at  the  principal  offices  of  the  Company.

11.     Professional  Advice.  The  acceptance  of  the  Options and the sale of
shares  of  Common  Stock  issued  pursuant  to the exercise of Options may have
consequences  under  federal, state and provincial tax and securities laws which
may  vary  depending  upon  the  individual  circumstances  of  the  Optionee.
Accordingly,  the  Optionee  acknowledges  that  he  or  she has been advised to

<PAGE>

consult  his  or  her  personal  legal  and  tax advisor in connection with this
Agreement  and  his  or  her  dealings with respect to Options for the shares of
Common  Stock.  Without  limiting  other  matters to be considered, the Optionee
should  consider whether upon the exercise of Options, the Optionee will file an
election  with  the  Internal  Revenue  Service pursuant to Section 83(b) of the
Code.

12.     No  Employment  Relationship.  Whether  or  not  any  Options  are to be
granted  under  this Plan shall be exclusively within the discretion of the Plan
Administrator,  and  nothing contained in this Plan shall be construed as giving
any  person  any  right  to participate under this Plan.  The grant of an Option
shall in no way constitute any form of agreement or understanding binding on the
Company  or  any  Related  Company,  express or implied, that the Company or any
Related Company will employ or contract with an Optionee for any length of time,
nor  shall  it  interfere  in any way with the Company's or, where applicable, a
Related  Company's  right  to terminate Optionee's employment at any time, which
right  is  hereby  reserved.

13.     Entire  Agreement.  This  Agreement  is  the  only agreement between the
Optionee and the Company with respect to the Options, and this Agreement and the
Plan  supersede  all  prior  and contemporaneous oral and written statements and
representations  and  contain  the  entire  agreement  between  the parties with
respect  to  the  Options.

14.     Notices.  Any notice required or permitted to be made or given hereunder
shall  be mailed or delivered personally to the addresses set forth below, or as
changed  from  time  to  time  by  written  notice  to  the  other:

The  Company:

Merlin  Software  Technologies  International,  Inc.
4199  Lougheed  Highway
Suites  200  and  201
Burnaby,  British  Columbia
Canada
Attention:  President

With  a  copy  to:

Clark,  Wilson
Barristers  and  Solicitors
Suite  800  -  885  West  Georgia  Street
Vancouver,  British  Columbia  V6C  3H1
Attention:  Virgil  Z.  Hlus

The  Optionee:

Kevin  O'Reilly
1212  10th  Avenue,  #101
San  Francisco,  CA  94122

MERLIN  SOFTWARE  TECHNOLOGIES  INTERNATIONAL,  INC.

Per: /s/ Trevor McConnell
     Authorized  Signatory

THERE  MAY  NOT  BE  PRESENTLY  AVAILABLE  EXEMPTIONS  FROM  THE  REGISTRATION
REQUIREMENTS OF APPLICABLE FEDERAL, STATE AND PROVINCIAL SECURITIES LAWS FOR THE

<PAGE>

ISSUANCE  OF SHARES OF STOCK UPON EXERCISE OF THESE OPTIONS.  ACCORDINGLY, THESE
OPTIONS  CANNOT  BE EXERCISED UNLESS THESE OPTIONS AND THE SHARES OF STOCK TO BE
ISSUED  UPON  EXERCISE OF THESE OPTIONS ARE REGISTERED OR AN EXEMPTION FROM SUCH
REGISTRATION  REQUIREMENTS  IS  AVAILABLE.

THE  SHARES  OF  COMMON STOCK ISSUED PURSUANT TO THE EXERCISE OF OPTIONS WILL BE
"RESTRICTED  SECURITIES" AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF 1933
AND WILL BEAR A LEGEND RESTRICTING RESALE UNLESS THEY ARE REGISTERED UNDER STATE
AND FEDERAL SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.  THE
COMPANY  IS  NOT  OBLIGATED TO REGISTER THE SHARES OF STOCK OR TO MAKE AVAILABLE
ANY  EXEMPTION  FROM  REGISTRATION.

THE  SHARES  OF  COMMON STOCK ISSUED PURSUANT TO THE EXERCISE OF OPTIONS WILL BE
SUBJECT  TO  AN  INDEFINITE HOLD PERIOD FOR OPTIONEES RESIDENT IN CANADA AND MAY
ONLY BE RESOLD BY OPTIONEES RESIDENT IN CANADA PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION  AND  PROSPECTUS REQUIREMENTS OF ANY APPLICABLE CANADIAN SECURITIES
LEGISLATION.

<PAGE>

                                    EXHIBIT A
                                    ---------

                         NOTICE OF ELECTION TO EXERCISE
                         ------------------------------

          This  Notice  of  Election  to Exercise shall constitute proper notice
pursuant to Section 5(h) of the Merlin Software Technologies International, Inc.
2000  Stock  Option Plan (the "Plan") and Section 8 of that certain Stock Option
Agreement  (the  "Agreement")  dated as of the 4th day of January, 2001, between
Merlin  Software  Technologies  International,  Inc.  (the  "Company")  and  the
undersigned.

          The  undersigned  hereby  elects  to  exercise  Optionee's  option  to
purchase  shares  of  the common stock of the Company at a price of US$_________
per  share,  for  aggregate  consideration of $, on the terms and conditions set
forth  in the Agreement and the Plan.  Such aggregate consideration, in the form
specified  in  Section  8  of  the  Agreement,  accompanies  this  notice.

          The  undersigned  has  executed  this  Notice  this  day  of  ,  .

     Signature

     Name  (typed  or  printed)EMPLOYMENT AGREEMENT
                              --------------------

THIS  effective  as  of  the  4th  day  of January, 2001 (the "Effective Date"):

BETWEEN:

MERLIN  SOFTWARE  TECHNOLOGIES  INTERNATIONAL,  INC.,  a  company  incorporated
pursuant  to  the  laws of the State of Nevada, of 4199 Lougheed Highway, Suites
200  and  201,  Burnaby,  British  Columbia,  Canada

(the  "Company")

AND:

JIM  BAGLOT,  an  individual  having  an  address  of  1514  -  10th Avenue, New
Westminster,  British  Columbia

(the  "Employee")

WHEREAS:

A.          The  Company  has  requested  the  assistance  of  the  Employee  in
providing  certain  employment  services,  as described in Schedule "A" attached
hereto;  and

B.          The  Employee  has agreed to provide such assistance and services to
the  Company  in  accordance  with  the  terms  and conditions herein set forth.

NOW,  THEREFORE,  in  consideration  of  the  foregoing  recitals and the mutual
covenants  set  forth  below,  the  parties  hereto  agree  as  follows:

1.     DUTIES  AND  DEVOTION  OF  TIME

1.1     Duties.  During  the  term  of  this  Agreement,  the  Employee  will be
responsible  for  the  duties  set  out  in  Schedule  "A"  attached hereto (the
"Duties").

1.2     Devotion  of  Time.  The  parties  hereto acknowledge and agree that the
work  of  the  Employee  is  and will be of such a nature that regular hours are
insufficient  and  impractical and occasions may arise whereby the Employee will
be  required  to work more than eight (8) hours per day and/or five (5) days per
week.  It  is  also anticipated that the Employee may be required to work during
evenings,  Saturdays,  Sundays  and public holidays in order to properly perform
the Duties.  The Employee agrees that the consideration set forth herein will be
in full and complete satisfaction for such work and services, regardless of when
and  where  such work and services are performed.  The Employee further releases
the  Company  from  any claims for overtime pay or other such compensation which
may  accrue  to  the Employee by reason of any existing or future legislation or
otherwise.  Notwithstanding  the  foregoing,  the  Company  agrees

<PAGE>

that  so  long  as the Employee properly discharges the Duties, the Employee may
devote  the  remainder of his time and attention to other non-competing business
pursuits.

1.3     Business Opportunities the Property of the Company.  The Employee agrees
to communicate immediately to the Company all business opportunities, inventions
and  improvements in the nature of the business of the Company which, during the
term  of  this  Agreement,  the  Employee may conceive, make or discover, become
aware  of,  directly or indirectly, or have presented to him in any manner which
relates in any way to the Company, either as it is now or as it may develop, and
such  business  opportunities,  inventions  or  improvements  will  become  the
exclusive  property  of  the  Company  without any obligation on the part of the
Company  to  make  any  payments therefor in addition to the salary and benefits
herein  described  to  the  Employee.

1.4     No Personal Use.  The Employee will not use any of the work the Employee
performs  for  the Company for any personal purposes without first obtaining the
prior  written  consent  of  the  Company.

2.     SALARY,  BONUSES  AND  BENEFITS

2.1     Salary.  In  consideration  of  the  Employee  providing  the  services
referred to herein, the Company agrees to pay the Employee a monthly base salary
(the  "Monthly  Base  Salary")  of  Ninety  Thousand  US  Dollars ($90,000) less
applicable  deductions,  payable  bi-weekly, plus the signing bonus, performance
bonus  and stock options as set out below, subject to increase from time to time
as  approved by the Board of Directors of the Company or as agreed to in writing
from  time  to  time  by  both  parties.

2.2     Benefits.  The  Company  will  provide,  maintain  and  pay  for:

(a)     medical  insurance  for  the  Employee  and  his  immediate family as is
provided  by  the  Company's  medical  services  plan;  and

(b)     such  extended  health  and  other  benefits  for  the  Employee and his
immediate  family  as are provided to other employees of the Company, subject to
the  eligibility  of  the  Employee.

2.3     Signing  Bonus.  If the Employee commences full-time employment with the
Company  during the week commencing January 2, 2001, the Company will pay to the
Employee  a  signing  bonus  of  Five  Thousand  Dollars  (CDN  $5,000).

2.4     Performance  Bonus.  The  Company will pay to the Employee a performance
bonus  for  the  year  ended  December  31, 2001 (the "Performance Bonus Year"):
(a)     in  the amount of ten percent (10%) of any amount of the gross margin on
all sales which exceed a gross margin on sales of $1,200,000 for the Performance
Bonus  Year;  and

<PAGE>

(b)     for  subsequent  years,  in  such  amounts  and  upon  such  performance
objectives as is set from time to time by the Board of Directors of the Company,
or  as  amended  in  writing  from time to time by the Board of Directors of the
Company.

2.5     Stock  Options.  The Company has agreed to grant to the Employee options
(the  "Options")  to  purchase  a total of One Hundred Thousand (100,000) common
shares  in the capital stock of the Company pursuant to the terms and conditions
of  a  stock  option  agreement  to  be entered into between the Company and the
Employee.

3.     VACATION

3.1     Entitlement  to  Vacation.  The  Company  acknowledges that the Employee
will  be  entitled  to an annual vacation of three (3) weeks.  The Employee will
use  his  best efforts to ensure that such vacation is arranged with the Company
in  advance  such  that it does not unduly affect the operations of the Company.

3.2     Increase  in  Vacation.  The  period set out in Section 3.1 above may be
increased  from  time  to  time  as agreed between the Employee and the Company.

4.     REIMBURSEMENT  OF  EXPENSES

4.1     Reimbursement  of  Expenses.  The  Employee  will  be reimbursed for all
reasonable  out-of-pocket  expenses  incurred  by  the  Employee in or about the
execution  of  the  Duties  contained  herein, including without limitation, all
reasonable  travel  and promotional expenses payable or incurred by the Employee
in  connection  with  the  Duties  under  this  Agreement.  All  payments  and
reimbursements  will  be made within ten (10) days of submission by the Employee
of  vouchers,  bills  or  receipts  for  such  expenses.

5.     CONFIDENTIAL  INFORMATION,  NON-COMPETE  AND  NON-SOLICITATION

5.1     Confidential Information.  The Employee will not, either during the term
of  this  Agreement  or  at  any  time  thereafter,  without specific consent in
writing,  disclose  or reveal in any manner whatsoever to any other person, firm
or  corporation,  nor  will  he/she use, directly or indirectly, for any purpose
other  than  the  purposes of the Company, the private affairs of the Company or
any  confidential  information  which he/she may acquire during the term of this
Agreement  with  relation  to  the  business  and  affairs  of the directors and
shareholders  of the Company, unless the Employee is ordered to do so by a court
of  competent  jurisdiction  or  unless required by any statutory or other legal
authority.

5.2     Non-Disclosure  Provisions.  The Employee will be subject to the further
non-disclosure  provisions  contained  in  Schedule  "B"  attached  hereto  and
incorporated  hereinafter  by  this  reference.

5.3     Non-Competition  and  Non-Solicitation.  The Employee agrees that during
the  period  of  the  Employee's employment with the Company and for a period of
twenty-four (24) months from the last payment of compensation to the Employee by
the  Company,  the  Employee  will  not engage in or participate in any business
activity  that  competes,  directly  or  indirectly,  with  the

<PAGE>

businesses  of  the  Company  in  the  United  States  or any other geographical
location  in  which  the  Company  carries  on  business.

5.4     Exception.  Notwithstanding  anything  to  the contrary contained herein
the  Employee may, without being deemed to compete, directly or indirectly, with
the  businesses  of  the  Company  own not more than twenty percent (20%) of any
class  of  the  outstanding securities of any corporation listed on a securities
exchange  or  traded  in  the  over-the-counter  market.

5.5     Non-Solicitation.  The  Employee agrees that for a period of twenty-four
(24)  months  following  the  termination  of  the Employee's employment for any
reason whatsoever, the Employee will not, whether as principal, agent, employee,
employer,  director,  officer,  shareholder  or  in  any  other  individual  or
representative  capacity, solicit or attempt to retain in any way whatsoever any
of  the  employees  of  the  Company  or  its  affiliates.

5.6     Provisions  Survive  Termination.  The provisions of this Section 5 will
survive  the  termination of this Agreement.  It is the desire and the intent of
the  parties  that  the provisions of this Section 5 shall be enforceable to the
fullest  extent  permissible  under the laws and public policies applied in each
jurisdiction  in  which  enforcement  is sought.  Accordingly, if any particular
portion of this Section 5 is adjudicated unenforceable in any jurisdiction, such
adjudication  shall  apply  only  in  that particular jurisdiction in which such
adjudication  is  made.

6.     TERM

6.1     Term.  This  Agreement  will  remain  in  effect  until  terminated  in
accordance  with  any  of  the  provisions  contained  in  this  Agreement.

7.     TERMINATION

7.1     Termination  by Employee.  Notwithstanding any other provision contained
herein, the parties hereto agree that the Employee may terminate this Agreement,
with  or  without  cause,  by  giving  three  (3) months' written notice of such
intention  to  terminate.

7.2     Resignation  or  Cessation  of  Duties.  In  the event that the Employee
ceases  to  perform  all of the Duties contained herein, other than by reason of
the  Employee's death or disability, or if the Employee resigns unilaterally and
on  his  own initiative from all of his positions, this Agreement will be deemed
to  be  terminated by the Employee as of the date of such cessation of Duties or
such  resignation,  and  the  Company  will  have  no  further obligations under
Sections  2.1  and  2.2  hereof.

7.3     Termination by Company.  The Company may terminate this Agreement at any
time  for  cause, but no such termination will in any way affect the obligations
of  the  Employee  to  the  Company  pursuant  to Section 5 hereof.  The parties
further  agree  that  except  for  termination  for  cause,  the Company may not
terminate  this  Agreement  without  payment  to  the  Employee of a termination
allowance  equivalent  to three (3) months of the Monthly Base Salary payable by
the Company to the Employee, regardless of the date of termination. For purposes
of  this  Section 7.3 and of the Employee's employment with the Company, "cause"
shall  include,  without  limitation,  the  following  circumstances:

<PAGE>

(a)     if  the  Employee  has  committed  a  criminal  offence  involving moral
turpitude  or  has  improperly  enriched  himself at the expense of the Company;

(b)     if  the  Employee,  in  carrying  out his duties hereunder, (i) has been
wilfully and grossly negligent, or (ii) has committed wilful or gross misconduct
or,  (iii)  has failed to comply with an instruction or directive from the Board
of  Directors  (and  which  is  not  otherwise  cured  within thirty (30) days);

(c)     if  the  Employee  has  breached  a material term of this Agreement (and
which  is  not  otherwise  cured  within  thirty  (30)  days);

(d)     if  the  Employee becomes bankrupt or in the event a receiving order (or
any analogous order under any applicable law) is made against the Employee or in
the  event  the  Employee  makes  any  general disposition or assignment for the
benefit  of  his  creditors;  or

(e)     if the Employee is diagnosed as being afflicted by chronic alcoholism or
drug  addiction.

7.4     Death.  In  the  event  of  the death of the Employee during the term of
this  Agreement, this Agreement will be terminated as of the date of such death.

7.5     Disability.  In the event that the Employee will during the term of this
Agreement by reason of illness or mental or physical disability or incapacity be
prevented  from  or  incapable  of  performing  the  Duties  hereunder, then the
Employee will be entitled to receive the remuneration provided for herein at the
rate specified hereinbefore for the period during which such illness, disability
or  incapacity  continues.

8.     RIGHTS  AND  OBLIGATIONS  UPON  TERMINATION

8.1     Rights  and  Obligations.  Upon  termination  of  this  Agreement,  the
Employee  will deliver up to the Company all documents, papers, plans, materials
and  other property of or relating to the affairs of the Company, which may then
be  in  its  or  the  Employee's  possession  or  under  his  control.

9.     CLOSING

9.1     Closing  Date.  This  Agreement will be effective on the Effective Date.

9.2     Conditions  of Closing.  The parties hereto agree that it is a condition
of  the  effectiveness  of  this Agreement that the Company's Board of Directors
approve  this  Agreement.

10.     NOTICES  AND  REQUESTS

10.1     Notices and Requests.  All notices and requests in connection with this
Agreement  will  be  deemed  given  as  of  the  day they are received either by
messenger,  delivery  service,  or  mailed  by registered or certified mail with
postage  prepaid  and  return  receipt  requested  and  addressed  as  follows:

<PAGE>

(a)     if  to  the  Company:

Merlin  Software  Technologies  International,  Inc.
4199  Lougheed  Highway
Suites  200  and  201
Burnaby,  British  Columbia  V5C  3Y6
Canada
Attention:  President
Facsimile:  (604)  320-7277

with  a  copy  to:

CLARK,  WILSON
Suite  800-885  West  Georgia  Street
Vancouver,  British  Columbia  V6C  3H1
Attention:  Virgil  Hlus
Facsimile:  (604)  687-6314

(b)     If  to  the  Employee:

Jim  Baglot
1514  -  10th  Avenue,  New  Westminster,
British  Columbia

or to such other address as the party to receive notice or request so designates
by  written  notice  to  the  other.

11.     INDEPENDENT  PARTIES

11.1     Independent  Parties.  This  Agreement  is  intended  solely  as  an
employment  services  agreement  and  no  partnership,  agency,  joint  venture,
distributorship  or  other  form  of  agreement  is  intended.

12.     AGREEMENT  VOLUNTARY  AND  EQUITABLE

12.1     Agreement  Voluntary.  Each  of  the  parties acknowledges and declares
that  such  party  has  obtained  all  such professional advice (including legal
advice) as such party deems appropriate before executing this Agreement and that
such  party is relying wholly on its own judgment and knowledge and has not been
influenced to any extent whatsoever by any representations or statements made by
or  on  behalf  of  the  other  party regarding any matters dealt with herein or
incidental  thereto  save  as  set  out  herein.

12.2     Agreement  Equitable.  The parties further acknowledge and declare that
they  each  have  carefully  considered  and understand the provisions contained
herein,  including,  but  without  limiting the generality of the foregoing, the
Employee's  rights  upon  termination  and  the

<PAGE>

restrictions  on  the  Employee  after  termination  and  agree  that  the  said
provisions  are  mutually  fair  and  equitable,  and  that  they  executed this
Agreement  voluntarily  and  of  their  own  free  will.

13.     CONTRACT  NON-ASSIGNABLE;  ENUREMENT

13.1     Contract Non-Assignable.  This Agreement and all other rights, benefits
and  privileges  contained  herein  may  not be assigned by the Employee without
consent.

13.2     Enurement.  The  rights,  benefits and privileges contained herein will
enure to the benefit of and be binding upon the respective parties hereto, their
heirs,  executors,  administrators  and  successors  and  permitted  assigns.

14.     ENTIRE  AGREEMENT

14.1     Entire  Agreement.  This  Agreement  represents  the  entire  Agreement
between  the  parties  and  supersedes  any  and  all  prior  agreements  and
understandings,  whether  written  or  oral,  between  the  parties.

14.2     Previous  Agreements  Cancelled.  Save  and  except  for  the  express
provisions  of this Agreement, any and all previous agreements, written or oral,
between  the  parties  hereto or on their behalf relating to the services of the
Employee  for  the  Company  are hereby terminated and cancelled and each of the
parties  hereby releases and further discharges the other of and from all manner
of  actions, causes of action, claims and demands whatsoever under or in respect
of  any  such  Agreement.

15.     WAIVER

15.1     Waiver.  No  consent  or waiver, express or implied, by either party to
or  of  any breach or default by the other party in the performance by the other
of  its obligations herein will be deemed or construed to be a consent or waiver
to  or  of  any  breach  or  default of the same or any other obligation of such
party.  Failure  on  the  part of any party to complain of any act or failure to
act, or to declare either party in default irrespective of how long such failure
continues, will not constitute a waiver by such party of its rights herein or of
the  right  to  then  or  subsequently  declare  a  default.

16.     SEVERABILITY

16.1     Severability.  If  any  provision  contained herein is determined to be
void  or  enforceable  in whole or in part, it is to that extent deemed omitted.
The  remaining  provisions  will  not  be  affected  in  any  way.

17.     AMENDMENT

17.1     Amendment.  This  Agreement  will  not be amended or otherwise modified
except  by a written notice of even date herewith or subsequent hereto signed by
both  parties.

<PAGE>

18.     HEADINGS

18.1     Headings.  The  headings of the sections and subsections herein are for
convenience  only  and will not control or affect the meaning or construction of
any  provisions  of  this  Agreement.

19.     GOVERNING  LAW

19.1     Governing  Law.  This Agreement will be construed under and governed by
the  laws  of  the  Province  of British Columbia and the federal laws of Canada
applicable  therein,  and  each party irrevocably and unconditionally submits to
the non-exclusive jurisdiction of the courts such state and all courts competent
to  hear  appeals therefrom and waives, so far as is legally possible, its right
to  have  any  legal  action  relating  to  this  Agreement  tried  by  a  jury.

20.     EXECUTION

20.1     Execution  in  Several Counterparts.  This Agreement may be executed by
facsimile  and  in  several  counterparts, each of which will be deemed to be an
original  and all of which will together constitute one and the same instrument.

IN  WITNESS  WHEREOF, the parties hereto have executed this Agreement on the 4th
day  of  January,  2001.

MERLIN  SOFTWARE  TECHNOLOGIES  INTERNATIONAL,  INC.

Per: /s/ Trevor McConnell
     Authorized  Signatory

EXECUTED by JIM BAGLOT in the presence of:          )
                                                    )
/s/ Haide James                                     )
Signature                                           )
Haide James                                         )
Print Name                                          )      /s/ Jim Baglot
East 8th Avenue                                     )          JIM BAGLOT
Vancouver, BC                                       )
Address                                             )
Office Manager                                      )
Occupation                                          )

<PAGE>

                                  SCHEDULE "A"

The  Employee shall have the title of Vice President of Sales and will report to
the  President  of  the  Company.

The  Employee's  duties  shall  include,  without  limitation,  the  following:

1.     develop  revenue  streams  from  existing  and potential partners through
sales of the Company's current products with an emphasis on the first quarter of
2001;

2.     develop  a sales target to get a budget and department that will meet the
corporate objectives as determined from time to time by management and the Board
of  Directors;  and

3.     All  other  duties  and responsibilities that are usually and customarily
performed  by  a  Vice  President  of  Sales.

<PAGE>

                                  SCHEDULE "B"

                            NON-DISCLOSURE PROVISIONS
                            -------------------------

1.     CONFIDENTIAL  INFORMATION  AND  MATERIALS

(a)     "Confidential  Information"  will  mean,  for  the  purposes  of  this
Agreement,  non-public  information  which  the  Company  designates  as  being
confidential  or  which,  under  the  circumstances surrounding disclosure ought
reasonably  to  be  treated as confidential.  Confidential Information includes,
without  limitation,  information,  whether written, oral or communicated by any
other  means,  relating  to  the  Company's  released  or unreleased software or
hardware products, the marketing or promotion of any product of the Company, the
Company's  business  policies or practices, and information received from others
which the Company is obliged to treat as confidential.  Confidential Information
disclosed  to  the  Employee  by  any subsidiary and/or agents of the Company is
covered  by  this  Agreement.

(b)     Confidential  Information  will  not include that information defined as
Confidential  Information  hereinabove  which  the  Employee  can  exclusively
establish:

(i)     is  or  subsequently  becomes  publicly  available without breach of any
obligation  of  confidentiality  owed  by  the  Company;

(ii)     became  known to the Employee prior to disclosure by the Company to the
Employee;

(iii)     became  known  to  the  Employee  from a source other than the Company
other  than  by  the  breach  of  any obligations of confidentiality owed to the
Company;  or

(iv)     is  independently  developed  by  the  Employee.

(c)     Confidential  Materials  will  include all tangible materials containing
Confidential  Information,  including,  without  limitation,  written or printed
documents  and  computer  disks  or  tapes,  whether  machine  or user readable.

2.     RESTRICTIONS

(a)     The  Employee  will  not  disclose any Confidential Information to third
parties  for  a  period  of  one  (1)  year  following  the  termination of this
Agreement,  except  as  provided  herein.  However,  the  Employee  may disclose
Confidential  Information  during  bona  fide  execution  of  the  Duties  or in
accordance with judicial or other governmental order, provided that the Employee
will  give  reasonable  notice  to the Company prior to such disclosure and will
comply  with  any  applicable  protective  order  or  equivalent.

<PAGE>

(b)     The  Employee  will  take  reasonable  security precautions, at least as
great  as  the precautions it takes to protect its own confidential information,
to  keep  confidential  the  Confidential  Information,  as defined hereinabove.

(c)     Confidential  Information  and  Materials  may be disclosed, reproduced,
summarized  or distributed only in pursuance of the business relationship of the
Employee  with the Company, and only as provided hereunder.  The Employee agrees
to  segregate  all  such  Confidential Materials from the materials of others in
order  to  prevent  co-mingling.

3.     RIGHTS  AND  REMEDIES

(a)     The  Employee  will notify the Company immediately upon discovery of any
unauthorized  use or disclosure of Confidential Information or Materials, or any
other  breach  of  this  Agreement by the Employee, and will co-operate with the
Company  in  every  reasonable manner to aid the Company to regain possession of
said  Confidential  Information  or  Materials  and  prevent  all  such  further
unauthorized  use.

(b)     The  Employee  will  return  all  originals,  copies,  reproductions and
summaries  of  or relating to the Confidential Information at the request of the
Company  or,  at  the  option  of  the Company, certify destruction of the same.

(c)     The parties hereto recognize that a breach by the Employee of any of the
provisions  contained herein would result in damages to the Company and that the
Company  could not be compensated adequately for such damages by monetary award.
Accordingly,  the  Employee  agrees  that  in  the  event of any such breach, in
addition to all other remedies available to the Company at law or in equity, the
Company  will  be entitled as a matter of right to apply to a court of competent
jurisdiction  for such relief by way of restraining order, injunction, decree or
otherwise,  as  may  be  appropriate to ensure compliance with the provisions of
this  Agreement.

4.     MISCELLANEOUS

(a)     All  Confidential  Information  and  Materials  are  and will remain the
property of the Company.  By disclosing information to the Employee, the Company
does  not grant any express or implied right to the Employee to or under any and
all  patents,  copyrights,  trademarks, or trade secret information belonging to
the  Company.

(b)     All obligations created herein will survive change or termination of any
and  all  business  relationships  between  the  parties.

(c)     The Company may from time to time request suggestions, feedback or other
information  from  the  Employee  on  Confidential Information or on released or
unreleased  software  belonging  to  the  Company.  Any suggestions, feedback or
other disclosures made by the Employee are and will be entirely voluntary on the
party  of  said  Employee and will not create any obligations on the part of the

<PAGE>

Company  or  a  confidential  agreement  between  the  Employee and the Company.
Instead,  the Company will be free to disclose and use any suggestions, feedback
or other information from the Employee as the Company sees fit, entirely without
obligation  of  any  kind  whatsoever  to  the  Employee.

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