Document:

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                                                                   Exhibit 10.17

                              EMPLOYMENT AGREEMENT

BY AND BETWEEN:        HENRY BIRKS & SONS, INC., a corporation duly incorporated
                       according to the laws of Canada, having its head office
                       at 1240, Phillips Square, Montreal, Quebec, herein acting
                       and represented by its Chairman, Lorenzo Rossi di
                       Montelera, duly authorized for the purposes hereof as
                       he hereby declares (hereinafter referred to as the
                       "EMPLOYER"),

AND:                   THOMAS A. ANDRUSKEVICH, residing and domiciled at
                       22 Roxiticus Road, Mendham, New Jersey, United States of
                       America (hereinafter referred to as the "EMPLOYEE")

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WHEREAS pursuant to an agreement entered into as of the 15th day of May, 1996
(the "1996 Agreement"), the EMPLOYEE was hired as the President and Chief
Executive Officer of JOALLIERS BIRKS INC./BIRKS JEWELLERS INC., a
predecessor-in-title of the EMPLOYER;

WHEREAS the 1996 Agreement was superseded and replaced by an agreement entered
into by and between the EMPLOYER and the EMPLOYEE on the 19th day of June, 1998
extending the term of employment of EMPLOYEE as President and Chief Executive
Officer of the EMPLOYER to March 31, 2002, the whole upon the terms and
conditions set forth therein (the "1998 Agreement");

WHEREAS the 1998 Agreement was amended and renewed by way of an employment
agreement dated October 24, 2001 (the "2001 Agreement");

WHEREAS the 2001 Agreement was amended by way of an amending agreement dated
December 20, 2002 (the "Amendment");

WHEREAS the EMPLOYER is engaged in the business of the operation of a chain of
retail stores specializing in jewellery, timepieces, crystal and giftware (the
"Business");

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                                     - 2 -

WHEREAS the EMPLOYEE is a resident of the United States of America who possesses
certain expertise in the fields in which the EMPLOYER specializes and who is not
currently legally prevented from working in Canada or travelling abroad;

WHEREAS the EMPLOYER and the EMPLOYEE wish to amend certain of the terms and
conditions and to provide for the renewal of the 2001 Agreement and its
Amendment, the whole upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, FOR THE REASONS SET FORTH ABOVE, AND IN CONSIDERATION OF THE
MUTUAL PREMISES AND AGREEMENTS HEREINAFTER SET FORTH, THE PARTIES HERETO
ACKNOWLEDGE AND AGREE AS FOLLOWS:

1.   PRELIMINARY

1.1  The preamble hereto shall form an integral part hereof as if recited herein
at length.

1.2  The parties acknowledge that this Agreement constitutes the entire
agreement between the parties concerning the employment of the EMPLOYEE by the
EMPLOYER during the term hereof and supersedes any and all prior negotiations,
agreements or understandings with respect thereto. Without limiting the
generality of the foregoing, this Agreement supersedes and replaces the terms
and conditions originally set forth in the 1998 Agreement, unless otherwise
specified herein.

2.   NATURE OF SERVICES

2.1  The EMPLOYER hereby engages and hires the EMPLOYEE to continue to be its
President and Chief Executive Officer during the term of this Agreement and the
EMPLOYEE hereby accepts and agrees to such engagement and employment. In
addition, the EMPLOYEE hereby agrees to serve as a director of the EMPLOYER
should he be elected as such by the shareholders(s) of the EMPLOYER, provided
the insurance described in Section 4.6 is available and the EMPLOYEE is
indemnified by the EMPLOYER to the fullest extent permitted by law.

2.2  It is hereby agreed that the EMPLOYEE shall provide his services to the
EMPLOYER in Canada and spend in Canada the time necessary to appropriately
provide effective and quality leadership to the Senior Management Team and shall
also provide his services outside of Canada by participating in trade shows and
other business travel.

2.3  The EMPLOYEE shall perform such executive duties and have such
responsibilities as are consistent with his capacity as President and Chief
Executive Officer, as well as those duties and responsibilities which the Board
of Directors of the EMPLOYER may reasonably delegate to the EMPLOYEE from time
to time.

2.4  The EMPLOYEE shall have control over the organization of his work and shall
be responsible, in his best judgment, for determining the means and methods for
performing his services hereunder. The EMPLOYEE shall have, subject to the
general directions of

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                                     - 3 -

the Board of Directors, full power and authority to manage the business and
affairs of the EMPLOYER, including power and authority to enter into contracts,
engagements or commitments of every nature or kind in the ordinary course of
business in the name of or on behalf of the EMPLOYER and to engage and employ
and to dismiss all managers and other employees of the EMPLOYER.

2.5  The EMPLOYEE shall perform his duties as President and Chief Executive
Officer diligently and conscientiously and loyally and shall use his best
efforts to promote the interests of the EMPLOYER.

2.6  During the term of employment, the EMPLOYEE shall devote himself to the
business of the EMPLOYER and shall not be employed or engaged in any capacity in
promoting, undertaking or carrying on any other business, without the prior
written approval of the EMPLOYER. The EMPLOYER hereby acknowledges that the
EMPLOYEE may render consulting services to Iniziativa S.A. or any successor
thereto, in connection with its international operations and that the EMPLOYEE
also serves as a member of the Board of Directors of Brazilian Emeralds Inc. and
may serve as a member of the Board of Directors of The Robbins Company with all
of the duties commensurate with such positions. The EMPLOYER further
acknowledges that the EMPLOYEE has, since October 1, 2002, been employed by
Mayors Jewelers Inc. ("Mayors") as President and Chief Executive Officer, and
has agreed to serve on the Board of Directors of that company. The EMPLOYER
continues to hold a substantial interest in Mayors and therefore fully approves
EMPLOYEE's involvement in this company.

3.   TERM

3.1  The term of this Agreement and the continued employment of the Employee
(the "Term") shall begin on April 1, 2005 and shall terminate on the 31st day of
March, 2008. Until March 31, 2005, the 2001 Agreement and its Amendment shall
continue to govern the employment relationship of the EMPLOYER and the EMPLOYEE
save and except for Sections 8.2 and 8.3 hereof which shall apply immediately
and bind both the EMPLOYER and the EMPLOYEE as and from the date hereof. For the
purposes of this Agreement, a "Contract Year" shall mean the twelve (12) month
period commencing on April 1st of a particular calendar year and terminating on
March 31st of the immediately subsequent calendar year.

3.2  The parties agree to negotiate in good faith for the renewal of this
Agreement or extension of the employment of the EMPLOYEE by the EMPLOYER for a
further period of three (3) years, upon such terms and conditions as they may
then determine, prior to the end of March, 2007. Either party shall be entitled,
however, to definitively terminate their relationship on March 31, 2008 by
sending to the other, on or before March 31, 2007, a written notice of such
desire to terminate. In the event that the EMPLOYER terminates the relationship
and should the EMPLOYEE be unable to find another suitable employment position
commencing April 1, 2008, then the EMPLOYER shall compensate the EMPLOYEE by
continuing to pay to the EMPLOYEE the same base salary as that which was payable
to him pursuant to Section 4.1 during the fiscal year terminating March 31,

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                                     - 4 -

2008, as increased, where applicable, by the amount that would otherwise have
constituted his salary increase for the period April 1, 2008 to March 31, 2009
pursuant to Section 4.2 hereof, the whole for the period in which the EMPLOYEE
is unable to find a suitable position, to a maximum of twelve (12) months.
Should the EMPLOYER so desire, however, the EMPLOYEE shall continue to render
services to the EMPLOYER during the period in which such additional compensation
is paid. Notwithstanding the generality of the foregoing, in the event that the
EMPLOYEE makes a diligent attempt to negotiate the renewal of this Agreement
prior to the end of March, 2007, but the EMPLOYER has neither finalized its
decision with respect thereto nor provided the EMPLOYEE with a written notice of
termination, then the maximum period within which the additional compensation
hereunder shall be paid, in the event that the EMPLOYER subsequently determines
not to renew this Agreement, shall be extended by one month for each month
between March 31, 2007 and the date upon which the written notice of termination
is ultimately delivered to the EMPLOYEE.

4.   REMUNERATION AND BENEFITS

4.1  In consideration of the services to be rendered pursuant to this Agreement,
the EMPLOYER shall pay to the EMPLOYEE a base salary of a minimum of $US
364,000, which amount will be determined in accordance with Section 4.2 of the
2001 Agreement, during the first (1st) Contract Year ending March 31, 2006, and
a minimum base salary, subject to the provisions of Section 4.2 below, of $US
364,000 (or such greater amount paid to the EMPLOYEE in the first Contract Year)
for the three Contract Years ending March 31, 2007, March 31, 2008 and March 31,
2009.

The amount described above shall be paid in arrears on a bi-weekly basis.

4.2  The base salary of the EMPLOYEE will be adjusted annually, at the beginning
of each Contract Year, and the EMPLOYEE will also be entitled to a bonus (the
"Special Net Income Bonus"), in both cases, based upon the percentage of the
adjusted net income goal of the EMPLOYER (as established on an annual basis in
the profit plan and compared to the adjusted net income goal set forth in the
strategic plan of the EMPLOYER approved by the Board of Directors of the
EMPLOYER, the most recent of which shall be approved in July or November, 2004)
actually earned by the EMPLOYER during the preceding Contract Year, the whole in
accordance with the provisions of this Section 4.2. No amount will be payable to
the EMPLOYEE, on account of the Special Net Income Bonus or salary increase
pursuant hereto, unless the net income earned by the EMPLOYER, during the
relevant Contract Year, is at least 80% of the adjusted net income goal of the
EMPLOYER for such Contract Year. The maximum amount payable to the EMPLOYEE
pursuant hereto, in the event that 100% of the adjusted net income goal is
achieved, will be as follows:

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                                     - 5 -

<TABLE>
<CAPTION>
                                          MAXIMUM
                                     CUMULATIVE SALARY        MAXIMUM SPECIAL NET
                                     INCREASE BASED ON         INCOME BONUS BASED
                      CUMULATIVE      PRIOR CONTRACT          ON CURRENT CONTRACT
 CONTRACT YEAR      TARGET AMOUNT     YEAR'S RESULTS             YEAR'S RESULTS
----------------    -------------    -----------------    ---------------------------
<S>                  <C>              <C>                 <C>
April 1, 2005 to      $US100,000         $US100,000                $US100,000
  March 31, 2006

April 1, 2006 to      $US150,000         $US100,000         $US150,000 less current
  March 31, 2007                                             year's salary increase

April 1, 2007 to      $US200,000         $US100,000        $US200,000 less cumulative
  March 31, 2008                                            salary increases during
                                                            prior and current years

April 1, 2008 to           N.A.          $US150,000                   N.A.
  March 31, 2009
</TABLE>

The maximum Special Net Income Bonus shall be subject to adjustment based on a
comparison of the adjusted net income goal of the EMPLOYER established annually
and the amount of the adjusted net income goal for such Contract Year stipulated
in the strategic plan. If the adjusted net income goal of the EMPLOYER
established for any Contract Year is more than ninety percent (90%) of the
amount of the adjusted net income goal for such Contract Year stipulated in the
strategic plan, then there shall be no adjustment to the Special Net Income
Bonus. If the adjusted net income goal of the EMPLOYER established for any
Contract Year is ninety percent (90%) or less (the "Percentage") of the amount
of the adjusted net income goal for such Contract Year stipulated in the
strategic plan, then the amount of the Special Net Income Bonus cumulative
target shown above shall be proportionately adjusted by multiplying such
cumulative target amount by the Percentage. However, if the Special Net Income
Bonus is adjusted in accordance with the foregoing and the actual net income of
the EMPLOYER is determined to be more than 100% of the adjusted net income goal,
then the Special Net Income Bonus shall be proportionately increased so that if
the net income of the EMPLOYER is equal to or greater than the adjusted net
income goal for such Contract Year stipulated in the strategic plan, the
EMPLOYEE shall receive 100% of the maximum Special Net Income Bonus. In
addition, if the adjusted net income goal of the EMPLOYER established annually
exceeds the amount of the adjusted net income goal for such Contract Year
stipulated in the strategic plan, then, for the purposes of determining the
Special Net Income Bonus, the amount stipulated in the strategic plan for such
Contract Year shall be used.

The strategic plan or profit plan adjusted net income goal shall be reevaluated
and adjusted, if necessary, by the Human Resource Committee of the EMPLOYER in
case of a major uncontrollable event that causes a dramatic change in the
EMPLOYER's ability to achieve such goals such as a terrorist attack which

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                                     - 6 -

dramatically impacts retail sales for an extended period of time. In addition,
the adjusted net income goal shall be re-established for any combined entity
resulting from a merger of the EMPLOYER with any other entity or a consolidation
of the business of the EMPLOYER with that of another, if appropriate.

At the end of each Contract Year, the salary increase for the following Contract
Year shall be calculated by multiplying the percentage of the adjusted net
income goal actually earned by the EMPLOYER during such Contract Year by the
Target Amount set forth above with respect to such year. The Special Net Income
Bonus shall be calculated at the same time, in accordance with the above table
and potential adjustments and shall be payable to the EMPLOYEE within ten (10)
days following the issue of the audited financial statements of the EMPLOYER for
the relevant Contract Year. For the purposes hereof, the net income shall be
determined by the auditors of the EMPLOYER, solely from the relevant audited
financial statements of the EMPLOYER. Three examples follow which assume that
the EMPLOYEE's base salary for the first Contract Year is $364,000 and that the
adjusted net income goal established for each Contract Year is at least 90% of
the corresponding adjusted net income goal provided in the strategic plan:

(i)    In the event that 100% of the adjusted net income goal is achieved by the
       EMPLOYER in each of the Contract Years ending 2006 through 2008, then the
       amounts due to the EMPLOYEE hereunder would be as follows:

<TABLE>
<CAPTION>
Contract        Salary        Special Net
Year Ending     Increase      Income Bonus                            Salary
-----------     --------      -----------------------------------     ----------
<S>             <C>           <C>                                     <C>
2006            Nil           $US100,000                              $US364,000
2007            $US100,000    $US150,000 - $US100,000 = $US50,000     $US464,000
2008            $US50,000     $US200,000 - $US150,000 = $US50,000     $US514,000
2009            $US50,000     N.A.                                    $US564,000
</TABLE>

(ii) If the actual net income earned by the EMPLOYER during the Contract Year
     ending March 31, 2006 were less than 80% of the adjusted net income goal,
     but the actual net income earned by the EMPLOYER in the Contract Years
     ending March 31, 2007 and March 31, 2008 were 100% of the adjusted net
     income goal, then the results would be as follows:

<TABLE>
<CAPTION>
Contract        Salary        Special Net
Year Ending     Increase      Income Bonus                            Salary
-----------     --------      ------------------------------------    ----------
<S>             <C>           <C>                                     <C>
2006            Nil           Nil                                     $US364,000
2007            Nil           $US150,000                              $US364,000
2008            $US100,000    $US200,000 - $US100,000 = $US100,000    $US464,000
2009            $US100,000    N.A.                                    $US564,000
</TABLE>

(iii)  the actual net income earned by the EMPLOYER during the Contract Year
       ending March 31, 2006 was 87% of the adjusted net income goal, while the
       actual net income earned by the EMPLOYER in the Contract Years ending

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                                     - 7 -

      March 31, 2007 and March 31, 2008 was 92% of the adjusted net income goal,
      then the results would be as follows:

<TABLE>
<CAPTION>
Contract      Salary     Special Net
Year Ending   Increase   Income Bonus                                        Salary
-----------   --------   -------------------------------------------------   ----------
<S>           <C>        <C>                                                 <C>

2006          Nil         $US87,000                                          $US364,000
2007          $US87,000   $US138,000 - $US87,000 = $US51,000                 $US451,000
2008          $US51,000   $US184,000 - ($US87,000 + $US51,000) = $US46,000   $US502,000
2009          $US46,000   N.A.                                               $US548,000
</TABLE>

If the EMPLOYEE is awarded his full salary increase for the first Contract Year
ending March 31, 2006 based on the 2001 Agreement, then the EMPLOYEE's base
salary would be $US 464,000 and the above examples would have to be adjusted
accordingly.

Another three examples follow which explain the adjustments to the Special Net
Income Bonus, if necessary:

(i)   in the event that the adjusted net income goal for Contract Year Ending
      2006 stipulated in the strategic plan is $4 Million but as established for
      such year is $3 Million, then the Special Net Income Bonus shall be
      reduced by 25% to $75,000. If the actual net income earned by the EMPLOYER
      during the Contract Year ending March 31, 2006 is $3 Million, then the
      EMPLOYEE would receive a Special Net Income Bonus of $75,000 for Contract
      Year Ending 2006 and a salary increase of $75,000 for Contract Year Ending
      2007.

(ii)  in the event that the adjusted net income goal for Contract Year Ending
      2006 stipulated in the strategic plan is $5 Million but as established for
      such year is $4 Million, then the Special Net Income Bonus shall be
      reduced by 20% to $80,000. If the actual net income earned by the EMPLOYER
      during the Contract Year ending March 31, 2006 is $5 Million, then the
      EMPLOYEE would receive a Special Net Income Bonus of $100,000, as 100% of
      the strategic plan adjusted net income goal was achieved. In addition the
      EMPLOYEE would receive a salary increase of $100,000 in Contract Year
      Ending 2007.

(iii) In the event that the adjusted net income goal for 2006 stipulated in the
      strategic plan is $6.2 Million but as estimated for such year is $6
      Million, then the Special Net Income Bonus shall not be adjusted as the
      adjusted net income goal established for such year is within 90% of the
      amount stipulated in the strategic plan.

4.3  In addition to the base salary and Special Net Income Bonus, the EMPLOYEE
shall also be entitled to an annual performance-based bonus (the "Performance
Bonus") for

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                                     - 8 -

each Contract Year throughout the Term, in an amount ranging from 0% to 150% of
his base salary during the relevant Contract Year, based upon certain results
achieved by the EMPLOYER, as set forth in this Section 4.3 and in accordance
with the performance criteria set forth in Exhibit A. The target for the
Performance Bonus shall be 100% of the EMPLOYEE'S base salary, and the
Performance Bonus shall be made of two (2) elements in the following proportions

         (i)   quantifiable operating results objectives of the EMPLOYER (60% to
               75%); and

         (ii)  strategic objectives (25% to 40%).

Exhibit A provides an example of the objectives and respective bonus allocation
weight in each category. Each Contract Year, the EMPLOYEE, the EMPLOYER's
Compensation Committee and a shareholder representative of the EMPLOYER (who is
currently Filippo Recami) shall meet and determine the objectives, the level,
amount and respective bonus allocation weight within each category which shall
be based on the profit plan objectives of the EMPLOYER. The parties shall have
the flexibility to adjust the range of objectives (eg. the prior year base
amounts and the 150% maximum amount) from year to year provided such adjustments
are reasonable and mutually agreed by the parties. Such determinations shall be
made no later than thirty (30) days after the approval of the profit plan by the
EMPLOYER's Board of Directors for the ensuing Contract Year.

Notwithstanding anything contained in this Section 4.3, it is agreed and
understood that the thresholds for determining the EMPLOYEE's Performance Bonus
should be consistent with the senior management performance bonus plan currently
in place for senior management of the EMPLOYER. The EMPLOYEE shall not be
eligible for any bonus under such plan as his bonuses are contained in this
Agreement. The parties further acknowledge that the current thresholds under
such plan require at least 75% of the adjusted net income for any fiscal year of
the EMPLOYER to be achieved for a performance bonus to be paid. Such threshold
is subject to change and may be established at a different level in the future.
If the threshold for such plan is achieved, it is the intention of the parties
that the EMPLOYEE will also receive his Performance Bonus in accordance with
Exhibit A and the terms hereof. Therefore, if the actual adjusted net income for
a given fiscal year of the EMPLOYER is less than 75% of the goal (provided that
such percentage is still the threshold under the senior management performance
bonus plan), the EMPLOYEE shall not be eligible for the Performance Bonus.

For greater certainty, the EMPLOYEE shall not be required to pay any amount to
the EMPLOYER in the event that the calculation of the annual bonus results in a
negative amount for any particular year.

An annual profit plan shall be prepared by the EMPLOYEE and the EMPLOYER's
senior management team prior to the beginning of each fiscal year and submitted
to the Board of Directors. The final profit plan for any fiscal year shall be
mutually agreed upon for presentation to the Board of Directors by the EMPLOYER
and the EMPLOYEE and approved by the Board of Directors.

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                                     - 9 -

Payment of the Performance Bonus shall be due within ten (10) days following the
issue of the audited financial statements for the relevant Contract Year.

4.4  The EMPLOYEE shall be entitled to five (5) weeks paid vacation leave in
each calendar year throughout the Term. The EMPLOYEE shall be entitled to carry
forward any unused vacation time for one (1) calendar year, which shall accrue
in his favour until used.

4.5  The EMPLOYER shall reimburse the EMPLOYEE for the entire cost of a term
life insurance policy on his life and the life of his spouse and/or a long-term
disability policy, in an aggregate amount not exceeding $US 18,000 per Contract
Year, the whole upon proof of payment thereof by the EMPLOYEE.

4.6  The EMPLOYER shall provide the EMPLOYEE with comprehensive health and
dental insurance in such amounts as is available to all other executives of the
EMPLOYER and in this regard, the EMPLOYEE shall not be prejudiced by the fact
that he and his family reside in the United States. The EMPLOYER shall also
provide the EMPLOYEE with adequate "Directors and Officers" liability insurance
coverage, commensurate with existing coverage and industry standards.

4.7  Recognizing the requirement for entertainment of suppliers, special
customers and others by the EMPLOYEE, the EMPLOYER shall pay for initiation fees
and annual golf and other club memberships of the EMPLOYEE, to a maximum of $CDN
10,000 per Contract Year.

4.8  In addition, the EMPLOYEE shall be reimbursed for all reasonable expenses
incurred by him in the fulfilment of his duties hereunder, the whole upon the
presentation of appropriate receipts or vouchers.

4.9  In the event that the EMPLOYEE should decide to move his family to Canada,
the EMPLOYER shall reimburse the EMPLOYEE for all costs of such move and will
work together with the EMPLOYEE to minimize the taxes and costs which will
become payable by the EMPLOYEE upon his becoming a resident of Canada (for
example, by compensating the EMPLOYEE for the increased mortgage or other costs
of living in Montreal, the whole without being obliged to increase his aggregate
remuneration hereunder).

4.10  For greater clarity, all calculations made under the terms of Section 4.2
and 4.3 hereof shall be made without reference to any sums that the EMPLOYER may
receive on account of any interest it may have in the securities of Mayors
Jewelers Inc. or of any other corporation unless such sums were provided for in
EMPLOYER's business plan. In addition, the impact on inter-company accounts as
between the EMPLOYER and Mayors (such as, without limitation, consulting fees,
dividends or sale of common stock, etc.) shall be reviewed and determined by the
Human Resources Committee of the EMPLOYER on an annual basis so that the
EMPLOYER and the EMPLOYEE mutually agree as to the impact of these inter-company
accounts on the calculations.

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                                     - 10 -

4.11  The EMPLOYEE shall have access to and be entitled to the non-exclusive use
of a company car and company apartment when in Montreal performing his duties
for EMPLOYER. While such use shall be non-exclusive, the EMPLOYEE shall be
entitled to such use on a priority basis.

4.12  The parties acknowledge that the EMPLOYEE is entitled to certain benefits
in this Agreement and pursuant to his Employment Agreement with Mayors. It is
the intention of the parties that the EMPLOYEE shall not be entitled to the
duplication of any such benefits. However, benefits such as dental and health
insurance coverage should be available to the EMPLOYEE both in Canada and the
United States.

5.   STOCK OPTIONS

5.1  The EMPLOYER hereby confirms the grant to the EMPLOYEE, in 1996, of an
option to subscribe for that number of shares which, immediately following their
issue, would represent two percent (2%) of the issued and outstanding shares in
the capital stock of the EMPLOYER (on a fully diluted basis), upon the terms and
conditions originally set forth in the 1996 Agreement, as clarified in the 1998
Agreement, and as further clarified herein, as follows:

     (a)  the purchase price shall be an amount equal to $CDN 6.00 per share,
          which the parties, together with the auditors of the EMPLOYER, had
          determined to be the fair market value for such shares as at the
          original date of the grant of such option (the "Exercise Price"). The
          parties acknowledge that this price was determined based on the then
          current number of issued and outstanding shares being 2,379,100. In
          the event that the shares in the capital stock of the EMPLOYER are
          consolidated or split, or in the event that any new shares are issued
          prior to the exercise of the option, then the purchase price and/or
          the number of shares, as the case may be, will be adjusted
          accordingly;

     (b)  the option shall be exercisable at any time prior to the expiry of a
          period of three (3) months following the date upon which the EMPLOYEE
          ceases to be employed by the EMPLOYER, by notice in writing to the
          EMPLOYER;

     (c)  in the event of the death of the EMPLOYEE, the estate of the EMPLOYEE
          shall continue to be entitled to exercise the option hereunder for a
          period of three (3) months following the date of his death;

     (d)  the EMPLOYEE (or his estate, as the case may be) shall have a put
          option, exercisable at any time within (I) the six (6) month period
          following the death or departure of the EMPLOYEE, or (II) the three
          (3) month period following a notice by the EMPLOYER or its parent
          company, Iniziativa S.A., of an impending change of control of the
          EMPLOYER, to require Iniziativa S.A., to purchase his shares, for a
          price equal to the fair market value thereof, as determined by the
          auditors of the EMPLOYER, in a manner consistent with

<PAGE>

                                     - 11 -

          the method used by Coopers & Lybrand to establish the Exercise Price
          (the "Put Price"). The Purchase Price shall be payable, in full,
          within fifteen (15) days following the exercise of the put option
          herein described, unless the exercise of the option to subscribe and
          the exercise of the put option occur simultaneously, in which event
          Iniziativa S.A. or the EMPLOYER, shall simply remit to the EMPLOYEE
          (or his estate, as the case may be), an amount equal to the difference
          between the Put Price and the Exercise Price within such fifteen (15)
          day period. In the event that the EMPLOYER shall have offered its
          securities to the public on or before the date of the death or
          departure of the EMPLOYEE, then the put option shall automatically
          expire upon such offering. For the purposes hereof a "change of
          control" shall mean any sale or transfer of shares or any other act or
          transaction which will result, directly or indirectly, in any party
          other than Iniziativa S.A., or entities with which it is currently
          related, owning more than fifty percent (50%) of the voting shares in
          the capital stock of the EMPLOYER. For greater certainty, the EMPLOYER
          and Iniziativa S.A. shall be required to give notice to the EMPLOYEE
          of any proposed change of control such that the EMPLOYEE shall have
          sufficient time to exercise his option hereunder; and

     (e)  Iniziativa S.A. shall have a call option to require the EMPLOYEE to
          sell his shares of the EMPLOYER, upon the terms and conditions
          described in paragraph 5.1(d), mutatis mutandis. In the event that any
          securities of the EMPLOYER are offered to the public within six (6)
          months following the exercise of the call option herein described, or
          substantially all of the shares of the EMPLOYER are sold to an arm's
          length third party within the same period, then the EMPLOYER shall be
          obliged to pay to the EMPLOYEE (or his estate, as the case may be), an
          amount equal to the difference between the proceeds which the EMPLOYEE
          would have received had he still owned two percent (2%) of the shares
          of the EMPLOYER at the time of the public offering or sale and the
          price actually paid upon the exercise of the call option.

5.2  The EMPLOYER hereby confirms, as well, the grant to the EMPLOYEE in 1998,
of a second option to subscribe for an additional two percent (2%) of the issued
and outstanding shares in the capital stock of the EMPLOYER as at January 1,
1999, regardless of the date of exercise of this option (and not on a
fully-diluted basis after January 1, 1999), namely, 126,272 out of a total of
6,313,618 shares then issued and outstanding, the whole upon the terms and
conditions set forth in the 1998 Agreement, as clarified herein, as follows:

     (a)  the option exercise price is an amount equal to $CDN 6.25 per share,
          which the parties had determined to be the fair market value of the
          shares as at January 31, 1999, based upon the report prepared by
          Coopers & Lybrand on March 31, 1999;

<PAGE>

                                     - 12 -

     (b)  the EMPLOYEE agrees that following the exercise of this second
          option, he shall vote the shares issued pursuant thereto (only) in
          accordance with the instructions of Lorenzo Rossi di Montelera, until
          the earlier of

          (i)   the termination of the employment of the EMPLOYEE hereunder; or

          (ii)  an offer to the public of the securities of the EMPLOYER.

     (c)  the option shall be exercisable at any time prior to the expiry of a
          period of three (3) months following the date upon which the EMPLOYEE
          ceases to be employed by the EMPLOYER, by notice in writing to the
          EMPLOYER. In the event of the death of the EMPLOYEE, the estate of the
          EMPLOYEE shall continue to be entitled to exercise the option
          hereunder for a period of three (3) months following the date of his
          death;

     (d)  The EMPLOYEE (or his estate, as the case may be) shall have a put
          option, exercisable solely in the event that the shareholder(s) of the
          EMPLOYER decided not to proceed with an initial public offering of the
          shares of the EMPLOYER in accordance with any reasonable offer to take
          the EMPLOYER public proposed by a reputable securities underwriter,
          the whole upon the terms and conditions set forth in paragraph 5.1(d),
          mutatis mutandis.

5.3  In addition to the options described in Sections 5.1 and 5.2 above, the
EMPLOYER hereby confirms the grant to the EMPLOYEE in 2001, of a third option to
subscribe for an additional two percent (2%) of the issued and outstanding
shares in the capital stock of the EMPLOYER as at April 1, 2002, regardless of
the date of the exercise of this option (and not on a fully-diluted basis after
April 1, 2002), upon the following terms and conditions:

     (a)  this third option will be exercisable at any time after April 1,
          2002, and the option exercise price will be an amount equal to the
          fair market value of the shares as at April 1, 2002, the whole as
          determined by auditors of the EMPLOYER, in a manner consistent with
          the method used by Coopers & Lybrand to establish the Exercise Price,
          the fair market value of the shares of the EMPLOYER as at January 1,
          1999 and the fair market value of the shares of the EMPLOYER as at
          March 31, 2001; and

     (b)  the provisions of paragraphs (b), (c) and (d) of Section 5.2 shall
          also apply to this third option, mutatis mutandis.

5.4  For the purposes of this Article 5, in the event that an offering of the
securities of a corporation which owns a majority of the shares in the capital
stock of the EMPLOYER is made to the public, rather than an offering of the
shares of the EMPLOYER itself, or, alternatively, the EMPLOYER is involved in a
reverse takeover with Mayors or a similar business reorganization that results
in a new entity the stock of which is publicly traded, then the provisions
hereof which refer to an offering of securities of the EMPLOYER shall be
automatically deemed to mean and refer to an offering of the securities of the

<PAGE>

                                     - 13 -

corporation owning a majority of the shares of the EMPLOYER or to the reverse
takeover transaction, mutatis mutandis. For greater certainty, any options
herein granted to the EMPLOYEE shall be convertible, at the option of the
EMPLOYEE, into an appropriate number of shares of the corporation which has
offered its securities to the public or trades on a recognized stock exchange.

5.5  Notwithstanding the existing terms of the stock options described in
Sections 5.1, 5.2 and 5.3 hereof, the parties agree that the exercise period for
all stock options shall be extended on April 1, 2005 so that they are all
exercisable at any time prior to the expiry of a period of twenty-four (24)
months following the date of the termination of employment of the EMPLOYEE, for
any reason whatsoever including death. In the event of the retirement of the
EMPLOYEE at the expiry of the Term, all of these options shall remain valid and
exercisable for ten (10) years following the date of retirement.

6.   TERMINATION

6.1  In the event of the death of the EMPLOYEE or the non-renewal of this
Agreement, then this Agreement shall be terminated automatically and the
EMPLOYEE (or his estate, as the case may be) shall be entitled, thereafter, to
the following payments:

     (a)  The base salary described in Section 4.1 which shall have accrued to
          the date of such death or departure;

     (b)  Any accrued but unpaid vacation pay;

     (c)  Any Special Net Income Bonus and Performance Bonus earned in
          connection with each Contract Year terminating prior to the date of
          such death or non-renewal, as well as a pro-rated Special Net Income
          Bonus and a pro-rated Performance Bonus for the number of months in
          which services were rendered hereunder prior to the date of such death
          or non-renewal.

6.2  This Agreement may also be terminated by the EMPLOYER in the event of a
just and sufficient cause for such termination, provided that the EMPLOYEE shall
be provided with a written notice of the alleged cause and a chance to defend
his actions and/or eliminate the cause within a period of thirty (30) days, save
and except where the EMPLOYER is able to establish theft of its property, in
which case the termination may be effected without notice or delay. Termination
of the EMPLOYEE's employment with Mayors Jewelers Inc. for cause shall be deemed
to constitute cause for termination of this Agreement.

6.3  In the event that the EMPLOYER is unable to obtain the renewal of his work
permit for any reason during the term of this Agreement, then the EMPLOYEE
hereby agrees to continue to render his services hereunder from the United
States for a transition period of up to six (6) months, to allow the EMPLOYER to
find a suitable replacement, at the end of which this Agreement shall be
automatically terminated, save and except that the provisions of Section 3.2
hereof shall apply, mutatis mutandis, such that the EMPLOYER

<PAGE>

                                     - 14 -

shall continue to be obliged to pay the EMPLOYEE an amount equal to his then
base salary for such period until the EMPLOYEE is able to find suitable
employment, to a maximum of twelve (12) months.

7.   CONFIDENTIAL INFORMATION AND NON-COMPETITION COVENANT

7.1  For the purposes of this Agreement, the term "Confidential Information"
shall mean, but shall not be limited to, any technical or non-technical data,
budgets, business plans, pricing policies, financial records and any information
regarding the EMPLOYER's marketing, sales or dealer network, which is not
generally known to the public through legitimate origins, but shall not include
any information and knowledge which the EMPLOYEE himself possessed at the
commencement of his employment with the EMPLOYER.

7.2  Unless otherwise required by law or expressly authorized in writing by the
EMPLOYER, the EMPLOYEE shall not, at any time during or after his employment by
the EMPLOYER, directly or indirectly, in any capacity whatsoever, except in
connection with services to be performed hereunder, divulge, disclose or
communicate to any person, moral or physical, entity, firm or any other third
party, or utilize for his personal benefit or for the benefit of any other
party, any Confidential Information.

7.3  During the Term of this Agreement and for a period terminating:

     (a)  in the event that the EMPLOYEE does not desire to renew this Agreement
          upon the expiry of the Term: December 31, 2008; or

     (b)  in the event that the EMPLOYER does not desire to renew this Agreement
          upon the expiry of the Term: December 31, 2008; or

     (c)  in the event that this Agreement is terminated by the EMPLOYEE prior
          to the expiry of the Term: twelve (12) months following the date of
          such termination;

then the EMPLOYEE, provided he shall have received all amounts due to him
hereunder to the date of the termination of his employment or the expiry of the
period described in Section 3.2, as the case may be, on account of base salary,
vacation pay, Special Net Income Bonus, Performance Bonus, purchase price for
shares of the EMPLOYER or otherwise, shall not, on his own behalf or on behalf
of another, either alone or in combination with others, directly or indirectly,
in any capacity whatsoever, engage in the Business, for and on behalf of any
entity whose operations are located principally in Canada.

8    NO DUPLICATION OF BENEFITS

8.1  The parties acknowledge that the EMPLOYEE is entitled to certain benefits
in this Agreement and pursuant to his Employment Agreement with Mayors. It is
the intention of

<PAGE>

                                     - 15 -

the parties that the EMPLOYEE shall not be entitled to the duplication of any
such benefits. However, benefits such as dental and health insurance coverage
should be available to the EMPLOYEE both in Canada and the United States.

8.2   However, in the event of the merger or consolidation of the EMPLOYER and
Mayors, both this Agreement and the EMPLOYEE's employment agreement with Mayors
will bind the successor entity and the EMPLOYEE should not lose any rights,
monetary benefits or compensation as a result. The parties also agree that the
terms of the Mayors Employment Agreement will prevail and the compensation
(including salary, bonuses and benefits) payable hereunder will be added to such
agreement. To the extent that as a result of such merger the EMPLOYEE no longer
receives the equivalent after tax value of both agreements, then the successor
entity of the EMPLOYER and Mayors will compensate the EMPLOYEE accordingly. All
stock options then held by the EMPLOYEE will also be converted into options of
the successor entity (to the extent that they are not or have not been exercised
by the EMPLOYEE) on the same basis of conversion as the shares of the respective
entities with no lesser terms and conditions of exercise than as provided in
this Agreement.

8.3  The combined or resulting compensation of the EMPLOYEE (in the event of a
merger or consolidation of the EMPLOYER and MAYORS) and the amended agreement,
if any, will be presented to the Compensation Committee of surviving entity to
ensure the EMPLOYEE receives an appropriate combined compensation package
considering the nature and specifics of his duties and position and the market
in general.

9    MISCELLANEOUS

9.1  The EMPLOYEE and the EMPLOYER acknowledge and agree that the covenants,
terms and provisions contained in this Agreement and the rights of the parties
hereunder cannot be transferred, sold, assigned, pledged, or hypothecated;
provided, however that this Agreement shall be binding upon and shall enure to
the benefit of the EMPLOYER and any successor to or assignee of all or
substantially all of the business and property of the EMPLOYER.

9.2  In the event of the reorganization of the EMPLOYER, then it is hereby
acknowledged and agreed that the provisions hereof which are binding upon it,
will continue to bind its successors or the entity resulting from the merger,
amalgamation or other combination or arrangement of the EMPLOYER with any other
person or entity.

9.3  The EMPLOYEE hereby represents and warrants that, in entering into this
Agreement, he is not in violation of any contract or agreement, whether written
or oral, with any other person, moral or physical, firm, partnership,
corporation or any other entity to which he is a party or by which he is bound
and will not violate or interfere with the rights of any other person, firm,
partnership, corporation or other entity.

9.4  This Agreement contains the entire agreement between the parties and shall
not be modified except in writing by the parties hereto.

<PAGE>

                                     - 16 -

9.5  The waiver by the EMPLOYER or the EMPLOYEE of any breach of any term or
condition of this Agreement shall not be deemed to constitute the waiver of any
other breach of the same or any other term or condition hereof.

9.6  The parties hereto agree that this Agreement shall be construed as to both
validity and performance and shall be enforced in accordance with and governed
by the laws of the Province of Quebec and the laws of Canada applicable therein.

9.7  The parties hereto have requested and hereby confirm that this Agreement as
well as any notice, document, or proceeding relating to same be drawn up in
English; Les parties aux presentes ont demande et par les presentes confirment
leur demande que la presente convention ainsi que tous avis, documents, ou
procedures s'y rapportant soient rediges en anglais.

                            (Signatures on next page)

<PAGE>

                                     - 17 -

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the dates indicated below.

SIGNED AT ROME     ,                      HENRY BIRKS & SONS, INC.
THIS 27TH DAY OF SEPTEMBER, 2004.

                                          PER:  /S/  LORENZO ROSSI DI MONTELERA
                                                -------------------------------
                                                LORENZO ROSSI DI MONTELERA

SIGNED AT MONTREAL
THIS 1ST DAY OF SEPTEMBER, 2004.
                                                /S/  THOMAS A. ANDRUSKEVICH
                                                ------------------------------
                                                THOMAS A. ANDRUSKEVICH

                                  INTERVENTION

AND THERE INTERVENED HERETO, Iniziativa S.A. who, after taking cognizance of the
foregoing Agreement, agrees to be bound hereby insofar as its interests may
appear and to guarantee all obligations of the EMPLOYER in favour of the
EMPLOYEE hereunder.

SIGNED AT                          ,      INIZIATIVA S.A.
          -------------------------
THIS 25TH DAY OF SEPTEMBER, 2004.

                                          PER:  /S/  FILIPPO RECAMI
                                                -------------------------------
                                                FILIPPO RECAMI

<PAGE>

                                                                       EXHIBIT A
                                                                     APPENDIX II

                      PERFORMANCE BONUS APPRAISAL CRITERIA
                                EXAMPLE (*) (**)

<TABLE>
<CAPTION>
                                                                  150% OF
                                     50% OF INCREASE/           INCREASE IN      BONUS        FY                 TARGET    ACTUAL
                                      DECREASE IN PP               PP VS       ALLOCATION    2007    ADJUSTED     BONUS     BONUS
COMPANY OBJECTIVES      PRIOR YEAR     VS PRIOR YR      PLAN      PRIOR YR       WEIGHT     ACTUAL      %         VALUE     VALUE
------------------      ----------   ----------------   ----    ------------   ----------   ------   --------    ------   -------
<S>                     <C>             <C>            <C>        <C>            <C>        <C>        <C>       <C>      <C>

  Bonus Payout %

QUANTITATIVE OPERATING
RESULTS OBJECTIVES
(60 - 75%)

Sales                    130,000K       135,000K      140,000K    145,000K       10%      142,500K    12.5%      36,400    45,500
Gross Profit              40,000K        45,000K       50,000K     55,000K       15%       50,000K    15.0%      54,600    54,600
Operating Expense         70,000K        65,000K       60,000K     55,000K       20%       65,000K    10.0%      72,800    36,400
Net Income                     0            475K          949K      1,424K       20%          712K    15.0%      72,800    54,600
Financial Debt/Equity        2.5           2.25           2.0        1.75        10%         2.25      5.0%      36,400    18,200
Ratio
                                                                               ---------             -------              -------
                                                     SUB TOTAL                   75%                  57.5%     273,000   209,300
                                                                               ---------             -------              -------
</TABLE>

<TABLE>
<CAPTION>
                                                                                              FY
STRATEGIC OBJECTIVE                                                                          2007
(25-40%)                                                                         WEIGHT     ACTUAL      %                  VALUE
------------------                                                             ----------   ------   --------             -------
<S>                                                                             <C>        <C>       <C>          <C>     <C>

EXAMPLES:
Development of Private                                                            25%        Over       30%      91,000   109,200
Label                                                                                      Achieved
                                                                                            Goals

                                                                               ---------             -------              -------
                                                                                  25%                   30%               109,200
                                                                               ---------             -------    -------   -------
                                                      TOTAL                      100%                 87.5%     364,000*  318,500
                                                                               ---------             -------              -------

</TABLE>

-----------

*    For this example the Target Bonus Value is calculated using 100% of
     EMPLOYEE's hypothetical annual base of $364,000 for Fiscal Year 2007

**   EXTRACT OF SECTION 4.3 OF THIS AGREEMENT STATES THAT IF THE ACTUAL ADJUSTED
     NET INCOME FOR A GIVEN FISCAL YEAR OF THE EMPLOYER IS LESS THAN 75% OF THE
     GOAL (PROVIDED THAT 75% IS STILL THE THRESHOLD UNDER THE SENIOR MANAGEMENT
     PERFORMANCE BONUS PLAN), THE EMPLOYEE SHALL NOT BE ELIGIBLE FOR THE
     PERFORMANCE BONUS.<PAGE>

                                                                   Exhibit 10.18

[SEAL]

      BEFORE MTRE. SHELDON MERLING, the undersigned Notary for the Province of
      Quebec, practising in the City and District of Montreal,

      APPEARED:

      ANGLO CANADIAN INVESTMENTS, L.P., a limited partnership constituted under
      Section 121-201 of the Revised Limited Partnership Act of the laws of the
      State of New York having its principal place of business, c/o EPIC LLC, 12
      East 44th Street, 6th Floor, New York, New York 10017, represented herein
      by Birkmont Corp., having its principal place of business at the same
      address, its sole General Partner, herein acting and represented by Robert
      Vineberg, its representative, duly authorized for all purposes in virtue
      of a Resolution of its Board of Directors adopted on the fourth day of
      December, Two Thousand; a certified extract whereof being hereunto annexed
      to form part hereof after having been acknowledged as true and signed for
      identification by the signing officer of the said Corporation with and in
      the presence of the undersigned Notary "ne varietur",

                          (hereinafter sometimes referred to as the "Landlord"),

                                                              OF THE FIRST PART;

      AND:

      HENRY BIRKS & SONS INC. / HENRY BIRKS ET FILS INC., a corporation duly
      constituted under the Canada Business Corporations Act by Certificate of
      Amalgamation bearing Corporation Number 357267-6 dated December 26th, 1998
      and which Corporation resulted from an amalgamation, under Section 185 of
      the Canada Business Corporations Act, of "Henry Birks & Sons Inc. - Henry
      Birks et Fils Inc." (Corporation Number 3332667) and "3138712 Canada Inc."
      (Corporation Number 3138712), having its head office at 1240 Carre
      Phillips, Montreal, Quebec, H3B 3H4, herein acting and represented by
      Thomas A. Andruskevich, its President and CEO and John D. Ball, its Vice
      President and Chief Financial and Administrative Officer, both duly
      authorized for all purposes hereof in virtue of a Resolution of its Board
      of Directors adopted on the 7th day of April ---- Two Thousand; a
      certified extract whereof being hereunto annexed to form part hereof after
      having been acknowledged as true and signed for identification by the
      signing officer of the Company with and in the presence of the undersigned
      Notary "ne varietur".

                             (hereinafter sometimes referred to as the "Tenant")

                                                             OF THE SECOND PART.

<PAGE>
                                       2

                                    ARTICLE I

                                   DEFINITIONS

         The parties hereto agree that when used in this Lease or in any
   Schedule attached to this Lease, the following words or expressions have the
   meaning hereinafter set forth.

1.1   "Additional Rent" means any and all sums of money or charges required to
      be paid by the Tenant under this Lease (except Minimum Rent) whether or
      not the same are designated "Additional Rent" or whether or not the same
      are payable to the Landlord or otherwise, and all such sums are payable in
      lawful money of Canada without any deduction, abatement, set-off or
      compensation whatsoever. Additional Rent is due and payable with the next
      monthly installment of Minimum Rent unless otherwise provided, but in any
      event is not payable as part of Minimum Rent.

1.2   "Consumer Price Index" (hereinafter referred as the "C.P.I.") means the
      Consumer Price Index, all items, for the Montreal area as published from
      time to time by Statistics Canada. In the event that the Consumer Price
      Index is no longer published or ceases to be calculated in substantially
      the same fashion as at the date hereof, the parties hereto shall agree
      upon another formula or index upon which the Option Rent (as hereinafter
      defined) for the Option Term (as hereinafter defined) of the Lease shall
      be adjusted. In the event of disagreement, the independent Canadian
      national auditors of the Landlord shall select the applicable formula or
      index which most closely mirrors the CPI and their determination shall be
      final and binding.

1.3   "Landlord" means the party of the First Part. Wherever the word "Landlord"
      is used in this Lease, it is deemed to have the same meaning as "lessor"
      and shall include the Landlord and its duly authorized representatives.
      For the purpose of Section 8.4, "Landlord" also includes the officers,
      servants, employees and agents of the Landlord.

1.4   "Lease Interest Rate" means, at any time, the annual percentage rate of
      interest which is the higher at such time of (i) 18% and (ii) the rate per
      annum which is 5 percentage points in excess of the annual percentage rate
      of interest which is announced from time to time by the Royal Bank of
      Canada as its prime rate of interest for loans made in Canada in Canadian
      funds.

1.5   "Minimum Rent" means the annual rent payable by the Tenant pursuant to
      Section 4.2 hereof. During the First Option, the Second Option, the Third
      Option and the Fourth Option,

<PAGE>
                                       3

      "Minimum Rent" shall mean the annual rent payable by the Tenant pursuant
      to Section 16.1 hereof.

1.6   "Mortgagee" means any and every mortgagee or hypothecary creditor
      (including any trustee for bondholders) of the Premises.

1.7   "Person", if the context allows, includes any person, firm, partnership or
      corporation, or any group of persons, firms, partnerships or corporations
      or any combination thereof.

1.8   "Premises" means the premises leased to the Tenant as referred to and
      described in Section 3.1 hereof.

1.9   "Rental Year" means a period of time, the first Rental Year commencing on
      the first day of the Term hereof, and ending twelve (12) calendar months
      thereafter. Rental Years shall consist of consecutive periods of twelve
      (12) calendar months. If, however, the Landlord considers it necessary or
      convenient for its accounting purposes, the Landlord may at any time and
      from time to time, by written notice to the Tenant, specify an annual date
      from which each subsequent Rental Year is to commence and, in such event,
      the then current Rental Year shall terminate on the day preceding the
      commencement of such new Rental Year. The last Rental Year of the Term
      shall terminate upon the expiration of the Term or earlier termination of
      this Lease, as the case may be. Notwithstanding any change to the Rental
      Year, the Minimum Rent as stated in Section 4.2 and the Term of the Lease
      as stated in Section 3.2 shall not be modified as a consequence.

1.10  "Tenant" means the party of the Second Part and is deemed to include the
      word "lessee" and to mean each and every Person mentioned as Tenant in
      this Lease, whether one or more. Any reference to "Tenant" includes, where
      the context allows, the officers, servants, employees, agents and invitees
      of the Tenant and all others over whom the Tenant may reasonably be
      expected to exercise control.

1.11  "Term" means the period of time referred to and ,described in Section 3.2
      hereof and any extension or renewal thereof.

                                   ARTICLE II

                            INTENT AND INTERPRETATION

2.1   Net Lease:

      The Tenant acknowledges and agrees that it is intended that this Lease is
      a completely net net net lease to the Landlord, except as expressly herein
      set out, that the Landlord is not responsible during the Term for any
      costs, charges, expenses and outlays of any nature whatsoever arising from
      or relating to

<PAGE>
                                       4

      the Premises, or the use and occupancy thereof, or the contents thereof or
      the business carried on therein, and the Tenant shall pay all charges,
      impositions, costs and expenses of every nature and kind relating to the
      Premises except as expressly herein set out. Any obligation which is not
      expressly declared herein to be that of the Landlord pertaining to the
      Premises shall be deemed to be the obligation of the Tenant to be
      performed by and/or at the expense of the Tenant.

2.2   Obligations:

      Each agreement of the Landlord or the Tenant expressed in this Lease, even
      though not expressed as an obligation, is considered to be an obligation
      for all purposes.

2.3   Captions and Section Numbers:

      The captions, section numbers and article numbers appearing in this Lease
      are inserted only as a matter of convenience and in no way define, limit,
      construe or describe the scope or intent of such sections or articles of
      this Lease nor in any way affect this Lease.

2.4   Extended Meanings:

      The words "hereof", "herein", "hereunder" and similar expressions used in
      any section or subsection of this Lease relate to the whole of this Lease
      and not to that section or subsection only, unless otherwise expressly
      provided. The use of the neuter singular pronoun to refer to the Landlord
      or the Tenant is deemed a proper reference even though the Landlord or the
      Tenant is an individual, a partnership, a corporation or a group of two or
      more individuals or corporations. The necessary grammatical changes
      required to make the provisions of this Lease apply in the plural sense
      where there is more than one Landlord or Tenant and to either
      corporations, associations, partnerships, or individuals, males or females
      shall in all instances be assumed as though in each case fully expressed.

2.5   Partial Invalidity:

      If for any reason whatsoever any term, obligation or condition of this
      Lease, or the application thereof to any Person or circumstance, is to any
      extent held or rendered invalid, unenforceable or illegal, then such term,
      obligation or condition:

      (a)   is deemed to be independent of the remainder of the Lease and to be
            severable and divisible therefrom, and its invalidity,
            unenforceability or illegality does not affect, impair or invalidate
            the remainder of the Lease or any part thereof, and

<PAGE>
                                       5

      (b)   continues to be applicable and enforceable to the fullest extent
            permitted by law against any Person and circumstances other than
            those as to which it has been held or rendered invalid,
            unenforceable or illegal.

      Neither party is obliged to enforce any term, obligation or condition of
      this Lease against any Person if, or to the extent by so doing, such party
      is caused to be in breach of any laws, rides, regulations or enactments
      from time to time in force and nothing in this Lease entitles the Landlord
      to stipulate the price or price range at which any article or service is
      to be supplied, offered or advertised by the Tenant.

2.6   Entire Agreement:

      This Lease and the Schedules, Appendices and Riders, if any, attached
      hereto form a part hereof, and set forth all the obligations, promises,
      agreements, conditions and understandings between the Landlord and the
      Tenant concerning the lease of the Premises and there are no promises,
      agreements, conditions or understandings, either oral or written, between
      them other than as herein set forth. For greater certainty, this Lease
      supersedes and terminates any previous agreement, if any, between the
      Landlord and the Tenant with respect to the lease of the Premises, as of
      the Commencement Date hereof whether such agreement is in the form of a
      lease, an offer to lease or the like. Except as herein otherwise provided,
      no subsequent alteration, amendment, change or addition to this Lease
      shall be binding upon the Landlord or the Tenant unless in writing and
      signed by the Tenant and a duly authorized representative of the Landlord.

2.7   Governing Law:

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

2.8   Time of the Essence:

      Time is of the essence of this Lease and of every part hereof.

                                   ARTICLE III

                                 LEASE AND TERM

3.1   Premises:

      In consideration of the vents, obligations and agreements herein contained
      on the part of the Tenant to be paid, observed and performed, the Landlord
      leases to the Tenant, and the Tenant leases from the Landlord, those
      certain Premises consisting of the Land more fully described in Schedule
      "A" hereto and the buildings thereon erected. The Tenant

<PAGE>

                                       6

      acknowledges that it is leasing the Premises on an "as is" basis, without
      any work, improvement or alteration from the Landlord.

3.2   Term:

      Subject to Sections 16.1, 16.2 and 16.4, the Term of the Lease is twenty
      (20) years commencing on December 12th 2000 (the "Commencement Date") and
      expiring on December 11th, 2020, unless sooner terminated under the
      provisions hereof.

                                   ARTICLE IV

                                      RENT

4.1   Obligation to Pay:

      The Tenant shall pay Minimum Rent and Additional Rent as herein provided.

4.2   Minimum Rent:

      The Tenant shall pay from and after the Commencement Date to Friedman &
      Friedman, the rental agent of the Landlord, at the office of the agent
      located at 8000 Decarie Blvd., Suite 500, Montreal, Quebec, H4P 2S4 or to
      Landlord or to such other agent of Landlord as Landlord may direct in
      writing from time to time, which payment shall be made to "Friedman &
      Friedman In Trust Anglo Canadian Investments, L.P." or in such other
      manner as may be directed in writing from time to time by Landlord, in
      lawful money of Canada, without any prior demand therefor and without any
      deduction, abatement, set-off or compensation whatsoever, as Minimum Rent
      the sum of:

      (i)   One Million Three Hundred Seventy-Five Thousand Dollars ($1,375,000)
            for the period commencing on December 12th, 2000 and terminating on
            December 11th, 2003, inclusive;

      (ii)  One Million Five Hundred Twelve Thousand Five Hundred Dollars
            ($1,512,500) for the period commencing on December 12th, 2003 and
            terminating December 11th, 2006, inclusive;

      (iii) One Million Six Hundred Sixty-Three Thousand Seven Hundred and Fifty
            Dollars ($1,663,750), for the period commencing December l2th, 2006
            and terminating December 11th, 2009, inclusive;

      (iv)  One Million Eight Hundred Thirty Thousand One Hundred and
            Twenty-Five Dollars ($1,830,125), for the period commencing December
            12th, 2009 and terminating December 11th, 2012, inclusive;

<PAGE>
                                       7

      (v)   Two Million Thirteen Thousand One Hundred and Thirty-Eight Dollars
            ($2,013,138), for the period commencing December 12th, 2012 and
            terminating December 11th, 2015, inclusive.

      (vi)  Two Million Two Hundred Fourteen Thousand Four Hundred Fifty-Two
            Dollars ($2,214,452) for the period commencing December 12th, 2015
            and terminating December 11th, 2020 inclusive.

      Minimum Rent shall be payable in equal monthly instalments in each year in
      advance on the first (1st) day of each calendar month.

      The Minimum Rent will be adjusted on a per diem basis based on a period of
      three hundred and sixty-five (365) days if the first Rental Year or the
      last Rental Year is less than twelve (12) months.

      If the Commencement Date is on a day other than the first (1st) day of a
      calendar month, then the Tenant shall pay, upon the Commencement Date, a
      portion of the Minimum Rent prorated on a per diem basis from the
      Commencement Date to the end of the month in which the Commencement Date
      occurs, based upon a period of three hundred and sixty-five (365) days.

      From the Commencement Date until August 1, 2001, the Landlord authorizes
      the Tenant to make its monthly payment of Minimum Rent in the following
      manner:

      (i)   the Tenant shall make a payment to "Friedman & Friedman In
            Trust-Anglo Canadian Investments, L.P." and to "Gespa CDPQ Inc., as
            mandatary for N-45o First CMBS Issuer Corporation and Montreal Trust
            Company, to the extent of their respective interests" jointly in the
            amount (the "Mortgage Payment Amount") then owed pursuant to the
            terms of the Deed of Loan entered into between Caisse de depot et
            placement du Quebec ("CDPQ") and 3138712 Canada Inc. before Kevin
            Leonard, Notary, on July 2, 1998 under his minute number 3250 (the
            "1998 Mortgage");

      (ii)  the Tenant shall make a second payment to "Friedman & Friedman In
            Trust Anglo Canadian Investments, L.P." and to "Hypotheques CDPQ
            Inc." jointly in the amount (the "Second Mortgage Payment Amount")
            then owed pursuant to the terms of the Deed of Loan entered into
            between Hypotheques CDPQ Inc. and Henry Birks et Fils Inc. before
            Kevin Leonard, Notary, on

<PAGE>
                                       8

            November 4, 1999 under his minute 3764 (the "1999 Mortgage"); and

      (iii) the Tenant shall make a third payment to "Friedman & Friedman In
            Trust-Anglo Canadian Investments, L.P." in the amount which
            represents the difference between the monthly payment of Minimum
            Rent payable for the month in question less the Mortgage Payment
            Amount and the Second Mortgage Payment Amount paid by Tenant for the
            said month.

            From and after September 1, 2001, the Tenant shall make its monthly
            payment of Minimum Rent to "Friedman & Friedman In Trust-Anglo
            Canadian Investments, L.P." or as Landlord shall otherwise from time
            to time direct.

4.3   Non-Resident Tax

      The Tenant shall make the Canadian tax withholding provided for under Part
      XIII of the Income Tax Act (Canada) (the "Non-Resident Tax") as required
      with respect to each entire payment of Minimum Rent and Additional Rent
      unless, at the Commencement Date, the Landlord or a person acting on
      behalf of the Landlord has confirmed to the Tenant in writing (the "Tax
      Confirmation") that the Non-Resident Tax relating to said payments will be
      paid within the prescribed delay to the Canadian tax authority. The Tax
      Confirmation will remain in effect until written notice to the contrary is
      received by the Tenant or until Tenant is informed that Landlord or agent
      effecting payment on behalf of Landlord has not remitted to the Canadian
      tax authority the Non-Resident Tax within the prescribed delay. In the
      latter case, the Tenant will provide the Landlord with a notice informing
      it that unless the Landlord pays all outstanding amounts of Non-Resident
      Tax within 10 days of the said notice, the Tenant will withhold from the
      payments of Rent an amount equal to the Non-Resident Tax and remit same to
      the Canadian tax authority as required.

      The Landlord shall promptly indemnify and keep indemnified the Tenant from
      and against any loss, costs, charges and expenses resulting or arising
      from any tax assessment of the Tenant by the Canadian tax authority for
      failure to have withheld the Non-resident Tax with respect to a payment of
      Minimum and Additional Rent for which the Tenant had obtained a Tax
      Confirmation from the Landlord.

4.4   Rent and Additional Rent Past Due:

      If the Tenant falls to pay, when the same is due and payable, any Minimum
      Rent, Additional Rent (collectively referred to as the "Rent") or other
      amount payable by the Tenant under this

<PAGE>
                                       9

      Lease, such unpaid amounts bear interest from the due date thereof to the
      date of payment at the Lease Interest Rate from time to time.

      In addition, in the event of any failure by Tenant referred to in the
      preceding paragraph, which failure extends beyond the five (5) day notice
      period referred to in Section 14.1(a), there shall immediately become due
      and payable by the Tenant to the Landlord, as an indemnity in respect of
      the loss of the Landlord arising from such failure, an amount equal to
      five percent (5%) of the amount which the Tenant failed to pay when due.

                                    ARTICLE V

                                      TAXES

5.1   Taxes - Definition:

      "Taxes" shall mean and include all real estate taxes, property taxes,
      surtaxes on non-residential properties and/or similar, municipal taxes,
      school taxes, ecclesiastical taxes, rates including local improvement
      rates, duties and assessments (as they presently exist and as they may
      hereafter exist during the term hereof) that may be levied, rated, charged
      or assessed against the Premises and/or all fixed equipment and facilities
      thereon or therein or any property on or in the Premises owned or brought
      thereon or therein by Landlord or Tenant, and any and every of its
      assignees or subtenants and its and their respective officers, agents,
      employees, servants, visitors or licensees and/or against Landlord or
      Tenant in respect thereof, whether such Taxes, rates, duties or
      assessments are charged by a municipal, parliamentary, school, or any
      other body of competent jurisdiction. Taxes shall exclude amounts
      attributable to Landlord's tax on capital, large corporation's tax,
      Landlord's Federal and Provincial income taxes and any amounts payable
      pursuant to Part XIII of the Income Tax Act (Canada).

      Real estate taxes shall also include, without limitation:

      (a)   Any governmental charges, duties or taxes (other than income tax),
            including goods and services tax and provincial sales tax assessed
            with respect to rents payable to the Landlord by any tenant or
            occupant of the Premises, in lieu of, in replacement for, or in
            addition to any of the real estate taxes; and

      (b)   All reasonable costs and fees incurred by the Landlord in contesting
            and/or negotiating with public authorities as to the real estate
            taxes.

<PAGE>
                                       10

      If the system of real estate taxation shall be altered or varied and any
      new tax or levy shall be levied or imposed on the Premises in substitution
      (in whole or in part) for and/or in addition to real estate taxes
      presently levied or imposed on immoveables in the city, or urban community
      in which the Premises are situated, then any such new tax or levy shall be
      included within the term "real estate taxes".

5.2   Taxes Payable by the Tenant:

      Landlord shall estimate from time to time the amount of the Taxes payable
      by Tenant hereunder for such periods, not exceeding twelve (12) months, as
      Landlord shall from time to time determine acting reasonably, Tenant shall
      pay to the Landlord monthly, in advance, on the first day of each calendar
      month 1/12th of the amount as so reasonably estimated by Landlord. In
      addition, if at any time Landlord determines that the amount paid to it by
      Tenant, after deduction of amounts previously paid by Landlord on account
      of Taxes, is not sufficient to pay any instalment on account of Taxes
      coming due, the Tenant shall pay the amount of the deficiency to the
      Landlord within ten (10) days of notice from the Landlord, (provided that
      if such notice is received by Tenant more than forty (40) days prior to
      the date when such Taxes are due, Tenant shall be entitled to pay such
      deficiency in equal monthly instalments, provided that the entire
      deficiency shall be paid not less than twenty (20) days prior to the date
      when such Taxes are due) the intent being that at the time at which any
      instalment on account of or other payment in respect of Taxes comes due
      (the "Due Date") the Landlord shall have received from the Tenant an
      amount (net of amounts previously paid by the Landlord on account of
      Taxes) sufficient to pay the amount of such instalment or other payment in
      full and overpayments or underpayments of instalments by Tenant shall be
      adjusted on a periodic basis, as Landlord shall determine acting
      reasonably. Conversely, if at the Due Date, the Tenant has paid amounts in
      excess of the amounts due on account of Taxes, Landlord shall give Tenant
      credit for the amount of the excess payment against future instalments for
      Taxes.

      Notwithstanding the provisions of this Section 5.2, the Tenant shall pay
      directly to the CDPQ, as required by the 1998 Mortgage, all amounts
      payable in respect of Taxes.

5.3   Business Taxes and Other Taxes of the Tenant:

      In addition to the Taxes payable by the Tenant pursuant to Section 5.2,
      the Tenant shall pay as Additional Rent to the lawful taxing authorities,
      or to the Landlord, as Landlord may direct, and shall discharge in each
      Rental Year when the same become due and payable:

<PAGE>
                                       11

      (a)   all taxes, rates, duties, assessments and other charges that are
            levied, rated, charged or assessed against or in respect of all
            improvements, equipment and facilities of the Tenant on or in the
            Premises or any part or parts thereof, or the Landlord on account of
            its ownership thereof or interest therein; and

      (b)   every tax and license fee which is levied, rated, charged or
            assessed against or in respect of any and every business carried on
            in the Premises or in respect of the use or occupancy thereof and
            every subtenant of the Tenant, or against the Landlord on account of
            its ownership thereof or interest therein, in respect of the
            business carried on in the Premises or in respect of the use or
            occupancy thereof.

      all of the foregoing being collectively referred to as "Business Taxes"
      and whether in any case, any such taxes, rates, duties, assessments or
      license fees are levied, rated, charged or assessed by any federal,
      provincial, municipal, school or other body during the Term. For greater
      certainty, Business Taxes shall not include amounts attributable to
      Landlord's tax on capital, large corporations tax nor Landlord's federal
      and provincial income taxes.

5.4   Tenants Responsibility:

      The Tenant shall:

      (a)   upon request of the Landlord:

            (i)   promptly deliver to the Landlord for inspection, receipts for
                  payment of all Business Taxes payable by the Tenant pursuant
                  to Section 5.3;

            (ii)  promptly deliver to the Landlord notices of any assessments of
                  any Business Taxes or other assessments received by the Tenant
                  which relate to the Premises;

            (iii) furnish such other information in connection with any Taxes
                  and any Business Taxes payable by the Tenant pursuant to
                  Sections 5.2 or 5.3 as the Landlord reasonably determines from
                  time to time; and

      (b)   promptly deliver to the Landlord notice of any appeal or
            contestation which the Tenant shall intend to institute with respect
            to any Taxes payable pursuant to Section 5.2 or any Business Taxes
            payable pursuant to Section 5.3 and consult with and obtain the
            prior written approval of the Landlord to any such appeal or
            contestation which prior written approval shall not be

<PAGE>
                                       12

            unreasonably withheld. If the Tenant obtains such approval, the
            Tenant shall deliver to the Landlord such security for the payment
            of such Taxes and Business Taxes as the Landlord deems advisable,
            acting reasonably, and the Tenant shall diligently prosecute any
            such appeal or contestation to a speedy resolution and shall keep
            the Landlord informed of its progress in that regard, from time to
            time.

      The Tenant shall promptly indemnify and keep indemnified the Landlord from
      and against all loss, costs, charges and expenses occasioned by or arising
      from all Taxes and Business Taxes and any taxes which may in future be
      levied in lieu of Taxes or Business Taxes or which may be assessed against
      any rentals payable pursuant to this Lease in lieu of Taxes or Business
      Taxes, whether against the Landlord or the Tenant, including, without
      limitation, any increase whensoever occurring in Taxes or Business Taxes
      directly or indirectly arising out of any appeal or contestation by the
      Tenant of the Taxes or Business Taxes relating to the Premises or any part
      thereof.

5.5   Per Diem Adjustment:

      If any Rental Year during the Term of this Lease is less than twelve (12)
      calendar months, the Taxes that the Tenant is required to pay pursuant to
      Section 5.2 hereof shall be subject to a per diem adjustment on the basis
      of a period of three hundred and sixty-five (365) days.

                                   ARTICLE VI

             UTILITIES AND HEATING, VENTILATING AND AIR-CONDITIONING

6.1   Charges for Utilities:

      The Tenant shall be solely responsible for and shall promptly pay the
      aggregate of:

      (i)   the total cost of supplying water, fuel, power, telephone and other
            utilities (the "Utilities") used or consumed in or with respect to
            the Premises; and

      (ii)  the cost of any other charges levied or assessed in lieu of or in
            addition to such Utilities.

      Tenant shall also be responsible for and shall promptly pay all costs and
      expenses including charges from the public utilities providing same for
      fittings, machines, apparatus, meters or other items or machinery leased
      in respect of any Utilities and

<PAGE>
                                       13

      for all work or services performed by any corporation or commission in
      connection therewith.

      In no event is the Landlord liable for, nor has the Landlord any
      obligation with respect to an interruption or cessation of, or a failure
      in the supply of any such Utilities, services or systems in, to or serving
      the Premises, whether supplied by the Landlord or others.

6.2   Heating. Ventilating and Air-Conditioning:

      The Tenant shall, throughout the Term, cause the Premises to be heated,
      ventilated and cooled, as appropriate in such a manner as to maintain such
      reasonable conditions of temperature and humidity within the Premises as
      are determined by the Landlord. All costs and expenses of the heating,
      ventilating and air-conditioning of the Premises including, without
      limitation, the cost of maintaining, repairing and replacing any heating,
      ventilating and air-conditioning systems shall be paid by the Tenant.

                                   ARTICLE VII

                                 USE OF PREMISES

7.1   Use of Premises:

      The Tenant shall use the Premises in accordance with the uses permitted by
      the applicable city by-laws; substantially all of the portion of the
      Premises used presently for retail purposes shall continuously be used
      throughout the Term of this Lease for the purpose of retail sales or
      corporate sales of jewellery, flatware, giftware and similar products; the
      balance of the Premises may be used for any lawful purpose provided that
      with respect to such non-retail portion of the Premises, if Tenant wishes
      to materially change its use from its present use, it shall obtain the
      prior written consent of the Landlord and the Landlord shall be entitled
      to withhold such consent if, in the opinion of Landlord, reasonably
      expressed, such proposed use may materially adversely affect the value of
      the Premises. The Tenant will not use or permit or suffer the use of the
      Premises or any part thereof for any other business or purpose.

7.2   Conduct of Business:

      The Tenant shall occupy the Premises from and alter the Commencement Date
      and, thereafter throughout the Term, shall conduct continuously and
      actively the business set out in Section 7.1 hereof.

<PAGE>
                                       14

7.3   Observance of Law:

      The Tenant shall, at its sole cost and expense and subject to Sections 9.1
      and 9.2 hereof, promptly:

      (a)   observe and comply with all provisions of law including, without
            limiting the generality of the foregoing, all requirements of all
            governmental authorities, including federal, provincial and
            municipal legislative enactments, by-laws and other regulations now
            or hereafter in force which pertain to or affect the Premises, the
            Tenant's use of the conduct of any business in the Premises, or the
            making of any repairs, replacements, alterations, additions,
            changes, substitutions or improvements of or to the Premises;

      (b)   observe and comply with all requirements of, and pay for all costs
            and expenses in connection with the controls imposed by governmental
            authorities for ambient air and environmental standards;

      (c)   observe and comply with all police, fire, sanitary and environmental
            regulations imposed by any governmental (federal, provincial or
            municipal) authorities, or made by fire insurance underwriters; and

      (d)   carry out all modifications, alterations or changes of or to the
            Premises and the Tenant's conduct of business in or use of the
            Premises which are required by any such authorities as set out
            above.

7.4   Extra-Provincial License:

      If at any time during the Term, the Tenant is or becomes a corporation
      which, under the laws of the Province of Quebec, is required to obtain an
      extra-provincial license in order to carry on business in the manner
      contemplated by this Lease, the Tenant shall obtain such license and shall
      promptly and at its sole cost and expense take all steps that are
      necessary to maintain same in good standing throughout the Term. The
      Tenant shall from time to time, at the request of the Landlord, provide
      the Landlord with evidence satisfactory to the Landlord and its solicitors
      of the status and the particulars of any such license, or the basis on
      which the Tenant is not so obliged to obtain or maintain such license.

<PAGE>
                                       15

                                  ARTICLE VIII

                             INSURANCE AND INDEMNITY

8.1   Insurance:

      (a)   The Tenant, from the Commencement Date and throughout the Term, at
            its sole cost and expense, shall take out and keep in full force and
            effect and in the names of the Tenant, the Landlord and the
            Mortgagee as their respective interests may appear, the following
            insurance:

            (i)   Insurance upon:

                  (A)   the Premises, together with all the improvements,
                        alterations and additions thereto and machinery and
                        equipment therein and thereon owned by the Landlord or
                        installed by or on behalf of the Landlord for the full
                        replacement cost thereof with coverage against at least
                        the perils of fire and standard extended coverage
                        including sprinkler leakages (if applicable),
                        earthquake, flood and collapse (as defined by the
                        policy);

                  (B)   property of every description and kind owned by the
                        Tenant, or for which the Tenant is legally liable, or
                        installed by or on behalf of the Tenant, and which is
                        located within the Premises, including, without
                        limitation, furniture, fittings, installations,
                        alterations, additions, partitions, fixtures and
                        anything in the nature of a leasehold improvement (but
                        specifically excluding the Tenant' s stock-in-trade,
                        furniture and moveable equipment), in an amount of not
                        less than ninety per cent (90%) of the full replacement
                        cost thereof, with coverage against at least, the perils
                        of fire and standard extended coverage including
                        sprinkler leakages (where applicable), earthquake, flood
                        and collapse (as defined by the policy); and

                  (C)   the Tenant's stock-in-trade, furniture and moveable
                        equipment in an amount of not less than ninety percent
                        (90%) replacement factory selling price thereof with
                        coverage against at least the perils of fire and
                        standard extended coverage

<PAGE>
                                       16

                        including sprinkler leakages (where applicable),
                        earthquake, flood and collapse (as defined by the
                        policy).

                  The amount of full replacement cost shall be determined from
                  time to time by an appraiser mutually acceptable to Landlord
                  and Tenant. In the event that Landlord and Tenant fall to
                  agree on a mutually accepted appraiser and if there is a
                  dispute as to the amount which comprises full replacement
                  cost, the decision of the Landlord and the Mortgagee shall be
                  conclusive;

            (ii)  broad form boiler and machinery insurance on a blanket repair
                  and replacement basis with limits for each accident in an
                  amount not less than the repair or the replacement cost of the
                  Premises and all leasehold improvements and of all boilers,
                  pressure vessels, air-conditioning equipment and miscellaneous
                  electrical apparatus owned or operated by the Tenant or by
                  Landlord or by others on behalf of the Tenant or the Landlord
                  in the Premises, or relating to or serving the Premises;

            (iii) business interruption insurance in such amount as will
                  reimburse the Tenant for direct or indirect loss of earnings
                  attributable to all perils insured against in Section
                  8.1(a)(i) and 8.1(a)(ii) and other perils commonly Insured
                  against by prudent tenants or attributable to prevention of
                  access to the Premises as a result of such perils;

            (iv)  rental interruption insurance in such amount as will be
                  sufficient to pay Minimum Rent and Additional Rent for a
                  twelve (12) month period during the then current Rental Year.

            (v)   public liability and property damage insurance including
                  personal injury liability, employers' liability, and owners'
                  and contractors' protective insurance coverage with respect to
                  the Premises, such coverage to include the activities and
                  operations conducted by the Tenant and any other Person on the
                  Premises. Such policies shall:

                  (A)   be written on a comprehensive basis with inclusive
                        limits of not less than Ten Million Dollars
                        ($10,000,000) for bodily injury to any one or more
                        Persons or property damage, or such higher limits as the

<PAGE>
                                       17

                        Landlord, acting reasonably, or the Mortgagee requires
                        from time to time;

                  (B)   not be invalidated as respects the interests of the
                        Landlord and the Mortgagee by reason of any breach or
                        violation of any warranties, representations,
                        declarations or conditions contained in the policies;
                        and

                  (C)   contain a severability of interests provision and
                        cross-liability clause;

            (vi)  any other form of insurance as the Tenant or the Landlord,
                  acting reasonably, or the Mortgagee requires from time to time
                  in form, in amounts and for insurance risks against which a
                  prudent owner or tenant would insure.

      (b)   All policies required to be written on behalf of the Tenant pursuant
            to Sections 8.1(a)(i), 8.1(a)(ii) and 8.1(a)(iii) shall contain the
            Mortgagee's standard mortgage clause and all policies required to be
            written on behalf of the Tenant pursuant to Sections 8.1(a)(i), 8.1
            (a) (il), 8.1(a)(iii), 8.1(a)(iv) and 8.1(a)(v) shall contain a
            waiver of any subrogation rights which the Tenants insurers may have
            against the Landlord and against those for whom the Landlord is in
            law responsible, whether any such damage is caused by the act,
            omission or negligence of the Landlord or those for whom the
            Landlord is in law responsible. All policies written on behalf of
            Landlord with respect to the Premises shall contain a waiver of
            subrogation of rights which Landlord's insurers may have against
            Tenant and against those for whom the Tenant is in law responsible.

      (c)   All policies required to be written on behalf of the Tenant pursuant
            to this Lease shall name Landlord and Mortgagee as additional
            insured as its interest may appear, it being understood that their
            rights in the proceeds payable with respect to the policies
            described in Section 8.1(a)(i)(B) and 8.1(a)(i)(C), other than with
            respect to the leasehold improvements, shall be subordinate to the
            rights of secured creditors of Tenant;

      (d)   All policies:

            (i)   shall be taken out with reputable insurers acceptable to the
                  Landlord and the Mortgagee;

            (ii)  shall be in a form satisfactory from time to time to the
                  Landlord and the Mortgagee;

<PAGE>
                                       18

            (iii) shall be non-contributing with, and shall apply only as
                  primary and not as excess to any other insurance available to
                  the Landlord or the Mortgagee; and

            (iv)  shall not be invalidated as respects the interests of any of
                  the Landlord, and of the Mortgagee by reason of any breach of
                  violation of any warranties, representations, declarations or
                  conditions contained in the policies.

            All policies shall contain an undertaking by the insurers to notify
            the Landlord and the Mortgagee in writing not less than thirty (30)
            days prior to any material change, cancellation, or termination
            thereof.

      (e)   The Tenant agrees that:

            (i)   certificates of insurance duly executed by the Tenant's
                  insurers evidencing the required insurance, or, if required by
                  the Landlord or the Mortgagee, certified copies of each such
                  insurance policy, will be delivered to the Landlord and the
                  Mortgagee as soon as practicable after the placing of the
                  required insurance;

            (ii)  no review or approval of any such insurance certificate by the
                  Landlord or the Mortgagee shall derogate from or diminish the
                  Landlord's or the Mortgagee's rights or the Tenant's
                  obligations contained in this Lease including, without
                  limitation, those contained in this Article VIII.

      (f)   The Tenant agrees that if the Tenant falls to take out or to keep in
            force any such insurance referred to in this Section 8.1, or should
            any such insurance not be approved by either the Landlord or the
            Mortgagee, the Landlord has the right without assuming any
            obligation in connection therewith, to effect such insurance at the
            sole cost of the Tenant and all outlays by the Landlord shall be
            immediately paid by the Tenant to the Landlord as Additional Rent on
            the first (1st) day of the next month following said payment by the
            Landlord without prejudice to any other rights and remedies of the
            Landlord under this Lease.

8.2   Increase in Insurance Premiums:

      The Tenant shall not keep, use, sell or offer for sale in or upon the
      Premises any article which may be prohibited by any fire insurance policy
      in force from time to time covering the Premises. If:

<PAGE>
                                       19

      (a)   the occupancy of the Premises;

      (b)   the conduct of business in the Premises;

      (c)   the sale of any merchandise from or on the Premises (whether or not
            the Landlord has consented to the sale of such merchandise); or

      (d)   any acts or omissions of the Tenant in the Premises or any part
            thereof,

      causes or results in any increase in premiums for the insurance carried
      from time to time by the Landlord with respect to the Premises, the Tenant
      shall pay any such increase in premiums for the insurance carried from
      time-to time by the Landlord as Additional Rent forthwith after invoices
      for such additional premiums are rendered by the Landlord. The Tenant
      shall comply promptly with all requirements of the Groupement Technique
      des Assureurs or of any insurer now or hereafter in effect, pertaining to
      or affecting the Premises.

8.3   Cancellation of Insurance:

      If any insurance policy upon 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
      assignee or subtenant of the Tenant, or by anyone permitted by the Tenant
      to be upon the Premises or for any other reason, and if the Tenant fails
      to remedy the condition giving rise to cancellation, threatened
      cancellation, or reduction of coverage within five (5) business days after
      written notice thereof by the Landlord or within a shorter delay if same
      is required by the insurer, the Landlord may, at its option, either:

      (a)   repossess the Premises forthwith by delivering to Tenant a notice in
            writing of its intention so to do and thereupon the Landlord shall
            have the same rights and remedies as are contained in Article XIV,
            or

      (b)   enter upon the Premises and remedy the condition giving rise to such
            cancellation, threatened cancellation or reduction, and the Tenant
            shall forthwith pay the cost thereof to the Landlord, which cost may
            be collected by the Landlord as Additional Rent, and the Landlord
            shall not be liable for any damage or injury caused to any property
            of the Tenant or of others located on the Premises as a result of
            any such entry. The Tenant agrees that any such entry by the
            Landlord is not a breach of any obligation for peaceable enjoyment
            contained in this Lease

<PAGE>
                                       20

8.4   Loss or Damage:

      Landlord shall not be liable for any death or injury arising from or out
      of any occurrence in, upon, at, or relating to, the Premises, or damage to
      property of the Tenant or of others located on the Premises, nor shall it
      be responsible for any loss of or damage to any property of the Tenant or
      others from any cause whatsoever, whether or not any such death, injury,
      loss or damage results from the negligence of the Landlord or its agents,
      servants or employees or other Persons for whom it may, in law, be
      responsible. Without limiting the generality of the foregoing, the
      Landlord shall not be liable for any injury or damage to Persons or
      property resulting from fire, explosion, falling plaster, steam, gas,
      electricity, water, rain, flood, snow, ice or leaks from any part of the
      Premises or from the pipes, appliances, plumbing works, roof, or
      subsurface of any floor or ceiling or from the street or any other place
      or by dampness or by any other cause whatsoever. Landlord shall not be
      liable for any such damage caused by other tenants or Persons in the
      Premises or by occupants of property adjacent thereto, or the public, or
      caused by construction or by any private, public or quasi-public work. All
      property of the Tenant kept or stored on the Premises shall be so kept or
      stored at the risk of the Tenant only and the Tenant shall indemnify the
      Landlord and save it harmless from any claims arising out of any damages
      to the same, including, without limitation, any subrogation claims by the
      Tenant's insurers.

8.5   Indemnification of Landlord:

      Notwithstanding any other terms, obligations and conditions contained in
      this Lease, the Tenant shall indemnify the Landlord and save it harmless
      from and against any and all loss (including loss of all rent payable by
      the Tenant pursuant to this Lease), claims, actions, damages, liability
      and expense in connection with loss of life, personal injury, damage to
      property or any other loss or injury whatsoever arising from or out of
      this Lease, or any occurrence in, upon or at the Premises, or the
      occupancy or use by the Tenant of the Premises or any part thereof, or
      anyone permitted to be on the Premises by the Tenant whether or not such
      loss, claims, actions, damages, liability or expense results from the
      negligence of the Landlord or its agents, servants or employees or other
      Persons for whom it may, in law, be responsible. If any claim is made
      against the Landlord with respect to this Lease, the Premises or the
      Tenant or if the Landlord shall be made a party to any litigation
      commenced by or against the Tenant, then the Tenant shall protect,
      indemnify and hold the Landlord harmless and shall pay all costs, expenses
      and reasonable legal fees incurred or paid by the Landlord in connection
      with such claim or litigation. The Tenant shall also pay all costs,
      expenses and legal fees that may be incurred or paid by the
<PAGE>

                                       21

      Landlord in enforcing the terms, obligations and conditions in this Lease.
      It is agreed by the parties hereto that any indemnification for which the
      Tenant is responsible shall be less any insurance proceeds paid to
      Landlord or for the benefit of Landlord in respect of such loss, claims,
      actions, damages, liability or expense.

                                   ARTICLE IX

                      MAINTENANCE, REPAIRS AND ALTERATIONS

9.1   Maintenance and Repairs by Tenant:

      The Tenant shall, at all times during the Term at its sole cost, repair,
      keep and maintain the Premises in good order and repair (which shall
      include, without limitation, periodic painting and decoration), in at
      least as good condition as at the Commencement Date as determined by the
      Landlord and shall, subject to Section 9.2, make all needed repairs and
      replacements thereto (including, without limitation, all major and minor
      repairs), with due diligence and dispatch to:

      (a)   the whole of the Premises, interior and exterior (including without
            limitation, the structure thereof, entrances, all glass, show window
            mouldings and exterior surfaces); and

      (b)   all equipment in and appurtenances of the Premises and improvements
            to the Premises (including, without limitation, lighting, wiring,
            plumbing fixtures and equipment and heating, air-conditioning and
            ventilating fixtures and equipment),

      the whole notwithstanding any law or regulation to the contrary relating
      to maintenance and repair of leased premises.

9.2   Landlord's Approval of the Tenant's Repairs:

      The Tenant shall not make any repairs, alterations, replacements, or
      improvements to any part of the Premises without first obtaining the
      Landlord's written approval not to be unreasonably withheld or delayed.
      The Tenant shall submit to the Landlord:

      (a)   details of the proposed work including drawings and specifications
            prepared by qualified architects or engineers and conforming to good
            engineering practice;

      (b)   such indemnification against privileges, costs, damages and expenses
            as the Landlord requires; and

      (c)   evidence satisfactory to the Landlord that the Tenant has obtained,
            at its expense, all necessary consents,

<PAGE>
                                       22

            permits, licenses and inspections from all governmental and
            regulatory authorities having jurisdiction. All such repairs,
            replacements, alterations, or improvements by the Tenant to the
            Premises approved by the Landlord shall be performed:

            (i)   at the sole cost of the Tenant;

            (ii)  by competent workmen whose labour union affiliations are
                  compatible with others employed by the Landlord and its
                  contractors;

            (iii) in a good and workmanlike manner;

            (iv)  in accordance with the drawings and specifications approved by
                  the Landlord; and

            (v)   subject to the reasonable regulations, controls and inspection
                  of the Landlord.

      Any such repairs, replacements, alterations, or improvements made by the
      Tenant without the prior written consent of the Landlord or which are not
      made in accordance with the drawings and specifications approved by the
      Landlord shall, if requested by the Landlord, be promptly removed by the
      Tenant at the Tenant's expense and the Premises restored to their previous
      condition. Where Landlord's approval is required hereunder, Landlord shall
      be deemed to have approved any such request if Landlord shall have not
      communicated its disapproval thereof within twenty-one (21) days following
      the date when the Landlord shall have received all of the documents
      required to be submitted by Tenant pursuant hereto with respect to such
      proposed repair, replacement, alteration or improvement. Notwithstanding
      the foregoing, the approval of Landlord shall not be required in respect
      of (i) minor nonstructural repairs replacements, improvements or
      alterations having a cost of not more than Fifty Thousand Dollars
      ($50,000) in respect of each repair or alteration, (ii) repairs having a
      cost of Ten Thousand Dollars ($10,000) or less; (iii) repairs of an
      emergency nature irrespective of the cost thereof, provided that notice of
      such repair be provided contemporaneously to Landlord; and (iv)
      renovations of the interior portion of the Premises used for retail sales
      provided that such renovations be non-structural and that in the case of
      subsections (i) and (iv) only, Tenant shall have given prior notice in
      writing to Landlord in respect to such proposed repairs, alterations or
      renovations not less than ten (10) days prior to the commencement of work
      with respect thereto.

      No repairs, alterations, additions, decorations or improvements to the
      Premises by or on behalf of the Tenant shall be permitted which may weaken
      or endanger the structure or adversely affect the condition or operation
      of the Premises or diminish the

<PAGE>
                                       23

      value thereof, or restrict or reduce the Landlord's coverage for zoning
      purposes.

      The parties hereto acknowledge that the Tenant has agreed to undertake to
      renovate the Premises within the first three (3) years of the Term in the
      amount of not less than Two Million Five Hundred Thousand Dollars
      ($2,500,000). The Tenant has submitted to the Landlord, and the Landlord
      acknowledges having received, details of the proposed work including
      drawings and specifications prepared by qualified architects. The Landlord
      has given its written approval to the said renovations as evidenced in a
      letter dated November 28th, 2000. It is understood by the parties hereto
      that a failure by the Tenant to undertake the renovations described herein
      shall constitute a default under this Lease in accordance with the
      provisions of Article XIV.

9.3   Maintenance by Landlord:

      The Landlord shall not be required to perform any maintenance or repair of
      any nature whatsoever to the Premises or any part thereof, the whole
      notwithstanding any law or regulation to the contrary, the intent of the
      parties being that Tenant shall be solely liable and responsible for the
      performance of all maintenance and repairs of every nature whatsoever to
      the Premises.

      If the Tenant refuses or neglects to commence promptly any repairs as
      required pursuant to Section 9.1 hereof following written notice thereof
      from Landlord and to carry out and complete such repairs on an expeditious
      basis or to the responsible satisfaction of the Landlord, the Landlord
      may, but shall not be obliged to, perform such maintenance and repairs and
      replacements without liability to the Tenant for any loss or damage that
      may result to the Tenant's merchandise, fixtures or other property or to
      the Tenant's business by reason thereof, and upon completion thereof, the
      Tenant shall pay to the Landlord as Additional Rent upon demand, both the
      Landlord's costs relating to any such maintenance and repairs and
      replacements plus a sum equal to fifteen percent (15%) thereof
      representing the Landlord's overhead the whole without prejudice to the
      Landlord's rights arising pursuant to Section 14.1 relating to the
      Tenant's failure to perform its obligations as herein contained. The
      Tenant agrees that the making of any maintenance and repairs and
      replacements by the Landlord pursuant to this Section 9.3 is not a breach
      of any obligation for peaceable enjoyment contained in this Lease.

9.4   Repair on Notice:

      In addition to the obligations of the Tenant contained in Section 9.1
      hereof, the Tenant shall effect all repairs referred to

<PAGE>
                                       24

      therein according to notice from the Landlord but failure by the Landlord
      to give notice shall not relieve the Tenant from its obligations under
      Section 9.1 hereof.

9.5   Return of the Premises:

      At the termination of this Lease, the Tenant will quit the Premises and
      will peaceably surrender and yield and deliver the same up to the Landlord
      together with all alterations, decorations, additions and improvements
      thereon (save such fixtures as are specifically excepted by the terms of
      this Lease) in good order and repair in at least as good condition as at
      the Commencement Date, and no compensation shall be paid by the Landlord
      to the Tenant therefore, and all such improvements shall remain the sole
      property of the Landlord.

9.6   Tenant Not to Overload Facilities:

      The Tenant shall not install any equipment which will exceed or overload
      the capacity of any utility, electrical or mechanical facilities in the
      Premises and the Tenant will not bring into the Premises or install any
      utility, electrical or mechanical facility or service which the Landlord
      does not approve. The Tenant agrees that if any equipment installed by the
      Tenant requires additional utility, electrical or mechanical facilities,
      the Landlord may in its sole discretion, if they are available, elect to
      install them at the Tenants expense and in accordance with plans and
      specifications to be approved in advance in writing by the Landlord.

9.7   Tenant Not to Overload Floors:

      The Tenant shall not bring upon the Premises or any part thereof, any
      machinery, equipment, article or thing that by reason of its weight, site
      or use, might in the opinion of the Landlord damage the Premises and shall
      not at any time overload the Floors of the Premises. If any damage is
      caused to the Premises by any machinery, equipment, object or thing or by
      overloading, or by any act, neglect, or misuse on the part of the Tenant,
      or any of its servants, agents, or employees, or any Person having
      business with the Tenant, the Tenant shall forthwith repair such damage,
      or in the event the Tenant shall fall to forthwith repair such damage
      following request by Landlord, at the option of the Landlord, pay the
      Landlord forthwith on demand as Additional Rent, the cost of repairing
      such damage plus a sum equal to fifteen percent (15%) of such cost
      representing the Landlord's overhead.

9.8   Environmental Condition of Property:

      The Tenant warrants and represents that during its occupancy of the
      Premises, as described above, it will not store, process or cause to
      remain on the Premises any contaminants,

<PAGE>
                                       25

      pollutants, toxic or dangerous or hazardous substances or materials or
      wastes, PCBs, friable asbestos, or oil contaminants which may have
      penetrated into the soil and/or building areas, and/or any other
      substances which create an environmental problem, or any other similar
      contamination except certain small quantities of acid used in the ordinary
      course of the production of jewellery (hereinafter altogether referred to
      as "Contaminants"). Furthermore, should there be evidence that
      Contaminants have been placed on the Premises by the Tenant during or
      prior to the Term, the Tenant shall be responsible for the cost of an
      environmental audit of the Premises prepared by the Landlord's reputable
      Environmental Consultant and shall comply, at its cost, with the methods
      of removal of said Contaminants as specified by the said Environmental
      Consultant. Landlord acknowledges that it is aware that friable asbestos
      is presently on the Premises and Tenant shall not be required to remove
      same as long as during the Term same remains in compliance with all
      applicable legislation; all liability of every nature whatsoever arising
      from such friable asbestos or any asbestos which has previously been
      within the Premises shall be borne exclusively by Tenant and Tenant shall
      indemnify Landlord and hold Landlord harmless in respect thereof. The
      obligations of the Tenant outlined in this Section 9.8 shall survive the
      termination of this Lease.

9.9   Removal and Restoration by Tenant:

      (a)   All alterations, decorations, additions and improvements made by the
            Tenant, or made by the Landlord on the Tenant's behalf (other than
            the Tenants trade fixtures), shall immediately become the property
            of the Landlord upon affixation or installation without compensation
            therefore to the Tenant. Such alterations, decorations, additions or
            improvements shall not be removed from the Premises either during or
            at the expiration of the Term or earlier termination of this Lease
            without compliance with the provisions of Section 9.2, except that:

            (i)   the Tenant may during the Term in the usual or normal course
                  of its business remove its trade fixtures, provided such trade
                  fixtures have become excess for the Tenant's purposes or the
                  Tenant is substituting new and similar trade fixtures
                  therefor, and provided that in each case,

                  (A)   the Tenant is not in default under this Lease; and

                  (B)   such removal is done at the Tenant's sole cost and
                        expense; and

<PAGE>
                                       26

            (ii)  the Tenant shall, at the expiration of the Term, at its own
                  cost, remove all its trade fixtures, including without
                  limitation, any free-standing safes and such of its leasehold
                  improvements and fixtures installed in the Premises by or for
                  the Tenant or by or for its predecessors as the Landlord
                  requires to be removed. Landlord shall give Tenant notice at
                  least thirty (30) days prior to the expiration of the Term as
                  to those leasehold improvements and fixtures which Landlord
                  requires Tenant to remove and if it shall be not possible for
                  Tenant, using all reasonable diligence, to remove all of same
                  prior to the expiration of the Term, Landlord shall grant to
                  Tenant such additional period of time as Landlord may
                  determine, acting reasonably, that shall be necessary in order
                  to permit Tenant to completely remove such leasehold
                  improvements and fixtures.

      (b)   If the Tenant does not remove its trade fixtures at the expiration
            of the Term or earlier termination of this Lease, the trade fixtures
            shall, at the option of the Landlord, become the property of the
            Landlord and may be removed from the Premises and sold or disposed
            of by the Landlord in such manner as it deems advisable. The Tenant
            shall be responsible for the reasonable costs incurred by the
            Landlord to remove the said property plus fifteen percent (15%).

      (c)   The Tenant shall, in the case of every such installation or removal
            either during or at the expiration of the Term effect the same at
            times designated by the Landlord and promptly make good any damage
            caused to the Premises by the installation or removal of any such
            alterations, decorations, additions or improvements.

      (d)   For greater certainty, the Tenant's trade fixtures shall not include
            any:

            (i)   heating, ventilating or air-conditioning systems, facilities
                  and equipment in, or serving the Premises;

            (ii)  floor covering affixed to the floor of the Premises;

            (iii) light fixtures;

            (iv)  store front and doors; and

            (v)   internal stairways;

            all of which are deemed to be leasehold improvements.

<PAGE>
                                       27

9.10  Notice by Tenant:

      The Tenant shall, when it becomes aware of same, notify the Landlord of
      any damage to or deficiency or defect in any part of the Premises, any
      equipment or utility systems, or any installations located therein,
      notwithstanding the Tact that the Landlord may have no obligations with
      respect to them, provided that no such notice shall be required in the
      case of damage, deficiency or defect having a cost to repair in the
      aggregate of Ten Thousand Dollars ($10,000) or less and provided that the
      Tenant shall nonetheless have the obligation to repair or replace same
      promptly.

9.11  Tenant to Discharge All Privileges, Charges and Legal Hypothecs:

      The Tenant shall at all times throughout the Term promptly pay all its
      contractors, suppliers and workmen and all charges incurred by or on
      behalf of the Tenant for any work, materials or services which may be
      done, supplied, or performed at any time in respect of the Premises and
      the Tenant shall do any and all things necessary so as to ensure that no
      privilege, charge or legal hypothec is created or registered against the
      Premises or any part thereof or against the Tenant' s interest in the
      Premises and if any such privilege, charge or legal hypothec is created or
      registered, the Tenant shall discharge it or cause it to be discharged
      forthwith at the Tenants expense.

      If the Tenant falls to discharge or cause any such privilege, charge or
      legal hypothec to be discharged as aforesaid then, in addition to any
      other right or remedy of the Landlord, the Landlord may, but it shall not
      be obligated to, discharge the same by paying the amount claimed to be due
      into court or directly to any such creditor, and the amount so paid by the
      Landlord and all costs and expenses including attorney's fees incurred for
      the discharge of such privilege, charge or legal hypothec shall be
      immediately due and payable by the Tenant to the Landlord as Additional
      Rent on demand.

                                    ARTICLE X

                    DAMAGE AND DESTRUCTION AND EXPROPRIATION

10.1  Destruction of Premises:

      If the Premises are at any time destroyed or damaged by any cause
      whatsoever, then:

      (a)   there shall not be any abatement of any Minimum Rent or any
            Additional Rent and the Tenant shall remain liable to perform all of
            its obligations under this Lease notwithstanding such damage and
            destruction, save in

<PAGE>
                                       28

            the event of termination of this Lease as hereinafter provided;

      (b)   Tenant shall notify Landlord and the Mortgagee within forty five
            (45) days of the happening of such damage or destruction as to
            whether or not it shall restore, repair or reconstruct the Premises
            and in the event that Tenant notifies the Landlord and the Mortgagee
            that it shall restore, repair or reconstruct the Premises, then the
            Tenant shall proceed diligently to effect the necessary repairs,
            restoration or reconstruction and Sections 9.2 and 9.11 shall apply,
            mutatis mutandis. Tenant shall be deemed to have notified Landlord
            and the Mortgagee that it shall repair, restore and reconstruct if
            no notice is given by it within such delay;

      (c)   if pursuant to Section 10.1(b) Tenant notifies the Landlord and the
            Mortgagee that it shall not restore, repair or reconstruct the
            Premises then Landlord may, within thirty (30) days following
            receipt of Tenants notice, notify the Tenant that the Landlord
            requires the Tenant to restore, repair or reconstruct the Premises,
            in which case the Tenant shall proceed diligently to restore, repair
            or reconstruct in the mariner contemplated in paragraph (b) above.
            If no notice is given by Landlord within such delay, Landlord shall
            be deemed to have notified Tenant that it does not require the
            Tenant to restore, repair or reconstruct the Premises;

      (d)   In the event that the Tenant has elected not to restore, repair or
            reconstruct the Premises and Landlord has notified or is deemed to
            have notified Tenant that Tenant shall not be obliged to restore,
            repair or reconstruct the Premises, then Landlord may terminate this
            Lease provided Landlord gives Tenant a written notice within five
            (5) days of the end of the notice period provided for in Section
            10.1(c) of its intention to terminate this Lease. If Landlord elects
            to terminate this Lease as aforesaid, Tenant shall notify Landlord
            within fifteen (15) days of receipt of said written notice of the
            Tenants intention to either restore, repair or reconstruct the
            Premises or accept the termination of this Lease. In the event that
            within such fifteen (15) day period, the Tenant notifies the
            Landlord of its intention to restore, repair or reconstruct the
            Premises, it shall proceed to do so promptly and the provisions of
            Section 10.1(e) and following shall apply thereto. In the event the
            Tenant notifies the Landlord within such period of time that it
            accepts the termination of this Lease, or in the event that the
            Tenant falls to send such notice to Landlord within such period of
            time, then this Lease shall terminate at

<PAGE>
                                       29

            the expiry of such fifteen (15) day period and the provisions of
            Section 9.5 of this Lease shall apply;

      (e)   in the event that Tenant elects or is required to restore, repair or
            reconstruct, the Premises shall be restored to substantially the
            same condition as they were immediately prior to the occurrence of
            the damage or destruction and in the event of total destruction, the
            Premises shall be substantially of the same size, construction and
            design as the Premises prior to the damage and destruction, unless
            the Tenant elects to modify the size, construction and design of the
            Premises the whole subject to the authorization in writing by the
            Landlord, which may be arbitrarily withheld;

      (f)   all insurance proceeds payable as a result of such damage or
            destruction shall be paid directly to the Landlord and the
            Mortgagee, each to the extent of its respective interest. In the
            event of termination of this Lease in accordance with Section
            10.1(d), such proceeds shall remain the absolute property of the
            Landlord and the Mortgagee respectively.

      (g)   subject to the provisions of Section 10.1(h) the Landlord shall,
            upon completion of the repair, restoration or reconstruction and
            payment of all costs and expenses incidental thereto, pay over to
            the Tenant, from any insurance proceeds received by Landlord (which,
            for greater certainty, shall not include proceeds paid to and
            retained by Mortgagee), an amount equal to the aggregate amount of
            the costs and expenses incurred by the Tenant in connection with the
            repair, restoration or reconstruction but only to the extent of such
            insurance proceeds. In the event that the total estimated cost of
            repair, restoration or reconstruction as certified by Architect's
            Certificate, is greater than the total amount of insurance proceeds
            relating to such damage or destruction paid to Landlord and the
            Mortgagee, Tenant shall be responsible for such excess (the
            "Excess") without reimbursement by Landlord. In the event that such
            an Excess does exist, the Tenant shall pay the Excess first and only
            thereafter seek reimbursement for the costs incurred over and above
            the Excess in accordance with this Article X.

      (h)   notwithstanding the provisions of Section 10.1(8), the Landlord
            will, after its approval of all matters set forth in Section 9.2
            with respect to the aforesaid restoration or reconstruction, if
            requested by the Tenant and provided Tenant has paid the Excess, if
            any, pay such proceeds in installments against proper Architect's
            Certificates during the period of reconstruction. The Landlord (or
            its

<PAGE>
                                       30

            agent as hereinafter provided) shall have the right to have
            exhibited to it, in addition to the Architect's Certificates,
            receipted accounts for all sums expended by the Tenant. For such
            purposes the Landlord shall arrange to have the proceeds of
            insurance policies paid to Landlord's Canadian legal counsel who
            shall hold such funds and disburse same to Tenant in accordance with
            the provisions of this Section 10.1(h). At the time of the Tenant's
            request for payment, the Landlord may deduct from the amount
            requested an amount not to exceed ten per cent (10%) (the
            "Holdback") to pay a potential claim of the supplier of materials
            and/or services (the "Supplier") identified in the account in
            question who may have a legal hypothec against the Premises. Upon
            completion of the entire restoration and reconstruction and
            presentation of an acquittance from the Supplier, the Landlord shall
            forthwith reimburse the Tenant the Holdback in question. The
            reasonable costs of Landlord's Canadian legal counsel incurred in
            connection with this process shall be borne by Tenant and shall
            constitute Additional Rent.

      (i)   in the event of failure by Tenant to proceed to restore, repair or
            reconstruct the Premises as herein provided within a reasonable
            delay, Landlord may, alter notice in writing to Tenant putting the
            Tenant in default, without prejudice to any of Landlord's other
            rights, remedies and recourses arising from such failure of Tenant
            including the rights arising from the default of Tenant as set forth
            in Article XIV hereof, elect to cause such repair, restoration or
            reconstruction to be effected and any and all costs and expenses
            incurred by Landlord over and above the amount of the insurance
            proceeds payable to Landlord and Mortgagee together with an
            administration fee of fifteen percent (15%) shall be due and payable
            by Tenant to Landlord, on demand.

      (j)   in the event the insurance proceeds payable to the Mortgagee are not
            made available to Tenant by the Mortgagee to finance the
            restoration, repair or reconstruction of the Premises (the "Retained
            Proceeds"), then the following shall apply:

            (i)   the Landlord shall make any proceeds paid to it available to
                  Tenant for Tenant's restoration, repair or reconstruction, in
                  accordance with Sections 10.1(8) and (h) unless the Tenant
                  decides to purchase the Premises in accordance with Section
                  10.1(j)(iii)(A);

            (ii)  the Landlord may elect to provide the Tenant with an amount
                  equal to the Retained Proceeds, the

<PAGE>
                                       31

                  whole in accordance with Sections 10.1(g) and (h). The
                  Landlord shall inform the Tenant in writing of its decision
                  (the "Landlord's Decision") within the delay provided in
                  Section 10.1(c);

            (iii) in the event the Landlord elects not to provide the Tenant
                  with an amount equal to the Retained Proceeds, the Tenant
                  shall inform the Landlord in writing, within thirty (30) days
                  of receipt of the Landlord's Decision, of whether it will:

                  (A)   purchase the Premises at the "Adjusted Price" (as
                        hereinafter defined) for the year in which the damage
                        occurred less the amount of the total insurance proceeds
                        paid to Landlord and Mortgagee;

                        or

                  (B)   carry out the restoration, repairs or reconstruction of
                        the Premises, the Landlord agreeing to reimburse the
                        Tenant up to the amount of the total insurance proceeds
                        payable to the Landlord and Mortgagee in the manner
                        provided herein. The Landlord shall reimburse the Tenant
                        in accordance with Section 10.1(8) and (h) from the
                        insurance proceeds received by the Landlord (which, for
                        greater certainty, shall not include proceeds paid to
                        and retained by Mortgagee). In addition, the Landlord
                        shall reimburse the costs incurred by the Tenant up to
                        the amount of the Retained Proceeds (the "Loan Amount")
                        by providing the Tenant with a credit applicable against
                        the Rent payable by the Tenant during the lesser of five
                        (5) years or the remainder of the Term (the "Repayment
                        Period"). The Loan Amount shall be amortized in equal
                        monthly installments over the Repayment Period with
                        deemed interest applicable at the rate paid by Landlord
                        to Mortgagee and the amount of such monthly installment
                        shall be credited against Tenants obligation to pay
                        Minimum Rent. In the event the Loan Amount is not fully
                        repaid at the end of the Repayment Period, the Landlord
                        may repay the outstanding Loan Amount on the last day of
                        the Repayment Period. If the Landlord elects not to
                        repay the outstanding Loan Amount, the Tenant shall

<PAGE>
                                       32

                        have the option to purchase the Premises at the Adjusted
                        Price for the then current year less the outstanding
                        amount of the Loan Amount. The Landlord shall inform the
                        Tenant of its decision to repay the outstanding Loan
                        Amount no later than one hundred and twenty (120) days
                        prior to the end of the Repayment Period. If the
                        Landlord elects not to pay the outstanding Loan Amount,
                        the Tenant shall inform the Landlord of its decision to
                        exercise the option to purchase described above no later
                        than ninety (90) days prior to the end of the Repayment
                        Period. If the Tenant elects not to purchase the
                        Premises, the Landlord shall pay to Tenant the
                        outstanding amount of the Loan Amount on the last day of
                        the Repayment Period.

                        "Adjusted Price" as used in this Article X means the
                        amount equal to 10.3636 multiplied by the annual Minimum
                        Rent payable at the time the purchase referred to in
                        this Article X is closed.

10.2  Expropriation:

      Both the Landlord and the Tenant agree to cooperate with each other in
      respect of any expropriation of all or any part of the Premises so that
      each may receive the maximum award in the case of any expropriation to
      which they are respectively entitled at law. For greater certainty, the
      Tenant acknowledges that the entirety of any indemnity or award related to
      the expropriation of all or any part of the land and building constituting
      the Premises shall be for the account of the Landlord, and the Tenant
      shall not in any event be entitled to any portion thereof. If at any time
      during the Term all or a substantial part of the Premises (such that
      business is unable to be carried on in the Premises for a period of three
      hundred and sixty-five (365) days or more), is acquired or expropriated by
      any lawful expropriating authority, or if reasonable access to the
      Premises is materially and adversely affected by any such acquisition or
      expropriation for a period of three hundred and sixty-five (365) days or
      more, then in any of such events, at the option of the Landlord or the
      Tenant, this Lease shall cease and terminate as of the date of the
      transfer to such expropriating authority and the Tenant shall have no
      claim against the Landlord for the value of any unexpired portion of the
      Term or for damages or for any reason whatsoever. If neither the Landlord
      nor the Tenant elects to cancel this Lease by notice as aforesaid, this
      Lease shall continue in full force and effect, without any reduction or
      abatement of Rent provided that if any part of the

<PAGE>
                                       33

      Premises is expropriated, and as a result thereof the area of the Premises
      is physically reduced, then, from and after the date of such physical
      reduction the Minimum Rent payable by the Tenant pursuant to Section 4.2
      be adjusted in proportion to the area of such reduction.

                                   ARTICLE XI

                            ASSIGNMENT AND SUBLETTING

11.1  Consent Required:

      The Tenant will not, in any event, assign this Lease in whole or in part,
      nor sublet all or any part of the Premises, nor suffer or permit the
      occupation, or part with or share possession, of all or any part of the
      Premises by or with any Person, (all of the foregoing being hereinafter
      collectively referred to as a "Transfer") without the prior written
      consent of the Landlord in each instance, which consent shall not be
      unreasonably withheld. The Tenant shall not in any event hypothecate or
      encumber this Lease or its interest therein or the Premises or any part
      thereof.

      Notwithstanding the provisions of this Article XI and the definition of
      Transfer, the following shall not constitute a Transfer:

      (a)   a change of control exclusively among the persons and entities which
            are the present shareholders of the Tenant;

      (b)   a change of control of the Tenant;

      (c)   an amalgamation of the Tenant;

      (d)   a transfer of the Lease or a sublease of the Premises in whole or in
            part, to, a parent, an affiliate or an associate of the Tenant, as
            these expressions are defined in the Canada Business Corporations
            Act,

      (e)   any public offering of the shares or securities of the Tenant
            pursuant to the Securities Act (Quebec);

      (f)   any transfer of the shares or securities of the Tenant once it has
            become a reporting issuer within the meaning of the of the
            Securities Act (Quebec), or once it has acquired a similar status
            under any similar securities legislation;

      (g)   any lease by the Tenant of a small portion of the retail part of the
            Premises for boutiques or other concessions as well as concessions
            related to the operation of Tenant's business such as the Tenant's
            employee

<PAGE>
                                       34

            cafeteria and other space which may be occupied by providers of
            service to the Tenant or Tenant's customers that form an integral
            part of the conduct of the Tenant's business operations such as,
            without limiting the generality of the foregoing, repair services
            for watches; or

      (h)   the lease of the space located at 630 Ste-Catherine Street West,
            Montreal, Quebec that as of date hereof is leased to 2867-8985
            Quebec Inc. provided that the nature of the business of the new
            tenant will not diminish the rentable value of the Premises as
            compared to the nature of the business presently being carried out
            by 2867-8985 Quebec Inc.;

      the Landlord and the Tenant agreeing that such operations shall be
      permitted without requiring compliance with the provisions of this Article
      XI. The Tenant undertakes to provide the Landlord, upon the Landlord's
      written request, a copy of any subleases entered into by the Tenant
      pursuant to this Section 11.1.

      Notwithstanding the provisions of this Article XI and the definition of
      Transfer, subject to obtaining the consent of any Mortgagee, the Tenant
      shall be entitled to Transfer this Lease if such Transfer is effected in
      connection with the sale of not less than fifty percent (50%) of the
      retail stores operated by Tenant and its affiliates to a third party
      acting at arm's length with Tenant and its affiliates, provided that as a
      condition precedent to any such Transfer, Tenant shall (i) not be in
      default of the Lease at the time of the Transfer and (ii) provide Landlord
      with all information requested by Landlord with respect to the financial
      position of the proposed transferee and Landlord shall have determined,
      acting reasonably, that such proposed transferee has a credit standing at
      least equal to that of Tenant.

      The Landlord acknowledges and accepts that as of the Commencement Date, a
      portion of the Premises are leased to 2867-8985 Quebec Inc. pursuant to
      the following terms and conditions:

            The leased premises consist of one thousand one hundred ninety-seven
            (1,197) square feet on the ground floor and eight hundred eight
            (808) square feet in the basement and the term expires July 31,
            2002, subject to renewal.

      Landlord shall not be obliged to provide its consent to any such Transfer
      unless the entity to which the Transfer is proposed to be made shall have
      a credit rating at least equal to, or be considered by Landlord's bankers
      to be as creditworthy as, Tenant on the date hereof and the proposed use
      of the

<PAGE>
                                       35

      Premises by such entity will not, in the judgment of Landlord, reasonably
      expressed, impair the value or leasability of the Premises. No Transfer of
      this Lease will be permitted if such Transfer would result in a breach or
      non-compliance with the provisions of this Lease or of any agreement in
      favour of any Mortgagee which appears on title to the Premises or of which
      Landlord has provided notice in writing to Tenant within thirty (30) days
      after request therefor from Tenant.

      If there is a Transfer of this Lease, the Landlord may collect rent from
      the assignee, subtenant or occupant (all of the foregoing being
      hereinafter collectively referred to as the "Transferee"), and apply the
      net amount collected to the Rent required to be paid pursuant to this
      Lease, but no acceptance by the Landlord of any payments by a Transferee
      shall be deemed a waiver of the requirements contained herein, or the
      acceptance of the Transferee as Tenant, or a release of the Tenant from
      the further performance by the Tenant of the obligations on the part of
      the Tenant herein contained. Any document or consent evidencing such
      Transfer of this Lease if permitted or consented to by the Landlord shall
      be prepared by the Landlord or its attorneys, and all reasonably legal
      costs with respect thereto shall be paid by the Tenant to the Landlord
      forthwith upon demand. Any Transfer or transaction contemplated in
      subparagraph (d) of the second paragraph of this Section 11.1 shall be
      subject to the Tenants causing any such Transferee to promptly execute an
      agreement directly with the Landlord assuming and agreeing to be bound by
      all of the terms, obligations and conditions contained in this Lease (to
      the extent that such terms, obligations and conditions are applicable to
      the portion of the Premises subject to such Transfer of Lease) as if such
      Transferee had originally executed this Lease as Tenant. Notwithstanding
      any such transfer permitted hereunder or consented to by the Landlord, the
      Tenant shall be solidarily liable with the Transferee on this Lease and
      shall not be released from performing any of the terms, obligations and
      conditions of this Lease.

      It is understood by the parties hereto that upon any assignment by Tenant
      of all or substantially all of the Tenants rights under this Lease, Tenant
      shall also assign to such assignee the Options to Purchase, the renewal
      options and the Tenants Hypothec.

11.2  No Advertising of Premises:

      The Tenant shall not advertise the whole or any part of the Premises or
      this Lease for the purposes of a Transfer and shall not print, publish,
      post, display or broadcast any notice or advertisement to that effect, and
      shall not permit any broker or other Person to do any of the foregoing,
      unless the complete text and format of any such notice, advertisement, or
      offer is

<PAGE>
                                       36

      first approved in writing by the Landlord. Without in any way restricting
      or limiting the Landlord's right to refuse any text or format on other
      grounds, any text or format proposed by the Tenant shall not contain any
      reference to the rental rate of the Premises.

11.3  Assignment by Landlord:

      In the event of the sale, lease or other disposition by the Landlord of
      the Premises or any part thereof, or the assignment by the Landlord of
      this Lease or any interest of the Landlord hereunder, and to the extent
      that such purchaser or assignee assumes the obligations of the Landlord
      hereunder, the Landlord shall, thereupon and without further agreement, be
      freed and relieved of all liability with respect to such obligations.

                                   ARTICLE XII

                             ACCESS AND ALTERATIONS

12.1  Right of Entry:

      The Landlord and its agents have the right to enter the Premises after
      having given the Tenant a twenty-four (24) hours' prior notice during
      Tenant's regular business hours (and for greater certainty except in the
      case of an emergency or deemed emergency in which case no notice shall be
      necessary) at all times to examine the same.

      The Landlord and its agents have the right to enter the Premises during
      Tenants regular business hours after having given the Tenant twenty-four
      (24) hours prior notice to show them to prospective purchasers, or
      hypothecary creditors and during the twelve (12) months prior to the
      expiration of the Term, the Landlord may show the Premises to prospective
      lessees on the basis hereinabove stated. During such period of time as
      Tenant is in default hereunder, the Landlord may place upon the Premises
      "For Rent" or "For Sale" notices which the Tenant shall permit to remain
      thereon without interference or complaint.

      If subject to the above conditions the Tenant is not personally present to
      open and permit an entry into the Premises, at any time when for any
      reason an entry therein is necessary, the Landlord or its agents may
      forcibly enter the same, without rendering the Landlord or such agents
      liable therefor, and without in any manner affecting the obligations under
      this Lease. Nothing herein contained, however, is deemed or construed to
      impose upon the Landlord any obligation, responsibility

<PAGE>
                                       37

      or liability whatsoever for the care, maintenance or repair of the
      Premises, or any part thereof. The Tenant agrees that any entry by the
      Landlord upon the Premises in accordance with this Section 12.1 is not a
      breach of any obligation for peaceable enjoyment contained in this Lease
      or implied by law.

12.2  Excavation:

      If an excavation is made upon land adjacent to the Premises, or is
      authorized to be made by the Landlord or its duly authorized
      representatives, the Tenant shall grant the Person making or authorized to
      make such excavation, permission to enter upon the Premises for the
      purpose of doing such work as the Landlord considers necessary to preserve
      the walls of the building of which the Premises form a part from injury or
      damage and to support the same in an appropriate manner, without giving
      rise to any claim for damages or indemnification against the Landlord or
      any diminution or abatement of Rent. The Tenant agrees that any work
      undertaken by or on behalf of the Landlord pursuant to this Section 12.2
      is not a breach of any obligation for peaceable enjoyment contained in
      this Lease or implied by law.

                                  ARTICLE XIII

                       STATUS STATEMENT AND SUBORDINATION

13.1  Status Statement:

      Within ten (10) days after written request therefor by the Landlord, or if
      upon any sale, assignment, lease or hypothecation of the Premises or the
      land thereunder by the Landlord, a status statement is required from the
      Tenant, the Tenant shall, without cost to the Landlord, deliver in a form
      supplied by the Landlord, a status statement or a certificate to any
      proposed hypothecary creditor, lessee or purchaser, or to the Landlord,
      stating (if such is the case):

      (a)   that this Lease is unmodified and in full force and effect (or if
            there have been modifications, that this Lease is in full force and
            effect as modified and identifying the modification agreements) or
            if this Lease is not in full force and effect, the certificate shall
            so state;

      (b)   the Commencement Date;

      (c)   the amount of and the date to which Rent has been paid under this
            Lease;

      (d)   whether or not there is any existing default by the Tenant in the
            payment of any Rent or other sum of money under

<PAGE>
                                       38

            this Lease, and whether or not there is any other existing or
            alleged default by either party under this Lease with respect to
            which a notice of default has been served and if there is any such
            default, specifying the nature and extent thereof;

      (e)   whether there are any set-offs, defences or counterclaims against
            enforcement of the obligations to be performed by the Tenant under
            this Lease; and

      (f)   with reasonable particularity, details (which may be limited to a
            letter from the Tenants banker) respecting the Tenants and any
            Surety's, as the case may be, financial standing and corporate
            organization; and

      (g)   any other matter that may be requested by the Landlord, acting
            reasonably

13.2  Subordination:

      (a)   It is a condition of this Lease and the Tenants rights granted
            hereunder that this Lease and all of the rights of the Tenant
            hereunder are, and shall at all times be, subject and subordinate to
            any and all hypothecs, trust deeds and the charge or privilege
            resulting therefrom, and any instruments of any financing,
            refinancing or collateral financing and any renewals or extensions
            thereof from time to time in existence against the lands, buildings
            and improvements forming the Premises, the whole subject to Section
            16.5 hereof. Upon request and subject as hereinafter provided, the
            Tenant shall subordinate this Lease and all of its rights hereunder
            in such form as the Landlord requires to any and all hypothecs,
            trust deeds and the charge resulting therefrom, and any instruments
            of any financing, refinancing or collateral financing and to all
            advances made or hereafter to be made upon the security thereof, the
            whole subject to Section 16.5 hereof and, if requested, the Tenant
            shall become the tenant of the holder thereof or the registered
            owners of the Premises. The foregoing subordination by Tenant shall
            be subject to each Mortgagee agreeing to enter into a
            non-disturbance agreement with Tenant in which the Mortgagee
            undertakes to respect all terms of the Lease from and after the date
            the Mortgagee assumes possession of the Premises, it being
            understood that the Mortgagee will respect the terms of the Lease
            concerning the Tenants Options to Purchase and the options to renew
            as hereinafter described from and after the date the Mortgagee
            realizes on its security, regardless of whether it has assumed
            possession of the Premises, the whole subject to Section 16.5
            hereof.

<PAGE>
                                       39

      (b)   The Tenant shall, if possession is taken under, or any proceedings
            are brought for the foreclosure or giving in payment of the
            Premises, or in the event of the exercise of the power of sale under
            any hypothec, charge, lease or sale and leaseback transaction, trust
            deed, or the security resulting from any other method of financing,
            refinancing or collateral financing made by the Landlord or
            otherwise in existence against the Premises, become the tenant of
            the Mortgagee, chargee, lessee, trustee, other encumbrancer or the
            purchaser upon any such foreclosure, giving in payment or sale and
            recognize such Mortgagee, chargee, lessee, trustee, other
            encumbrancer or the purchaser as the Landlord under this Lease.

13.3  Attorney:

      The Tenant shall, upon request of the Landlord or the Mortgagee or any
      other Person having an interest in the Premises, execute promptly and
      deliver such instruments and certificates to carry out the intent of
      Section 13.2 as are requested by the Landlord. If ten (10) days after the
      date of a request by the Landlord to execute and deliver any such
      instruments and certificates the Tenant has not executed the same, the
      Tenant hereby irrevocably appoints the Landlord as the Tenant's attorney
      with full power and authority to execute and deliver in the name of the
      Tenant any such instruments and certificates. If the Tenant fails to
      provide the Landlord with the instruments and certificates requested, the
      Landlord shall provide Tenant with a fifteen (15) day written notice of
      the Tenant's failure to perform its obligation and Tenant shall be in
      default, if within such period, it fails to provide the Landlord with the
      instruments and certificates requested.

13.4  Financial Statements:

      The Tenant shall annually, as soon as available and in any event within
      ninety (90) days after the end of each of Tenant's financial years,
      deliver or cause to be delivered to the Landlord the audited financial
      statements of the Tenant for such financial year. Landlord agrees to keep
      the information in such financial statements confidential and to disclose
      same only as required for Landlord's business purposes including to
      Landlord's Mortgagee, any mortgage broker, prospective lender, agent for
      any prospective lender provided prior to the transmission of the
      information, the said persons execute a confidentiality agreement in a
      form mutually acceptable to the Tenant and the Landlord, acting
      reasonably.

<PAGE>
                                       40

                                   ARTICLE XIV

                                     DEFAULT

14.1  Right to Repossess:

      If:

      (a)   the Tenant falls to pay any Rent or other sums due pursuant to this
            Lease on the day or dates appointed for the payment thereof,
            provided the Landlord first gives five (5) days' written notice to
            the Tenant of any such failure; or

      (b)   the Tenant fails to observe or perform any other of the terms,
            obligations or conditions of this Lease to be observed or performed
            by the Tenant provided the Landlord first gives the Tenant fifteen
            (15) days' written notice, or such shorter period of time as is
            otherwise provided herein (other than the terms, obligations or
            conditions set out in subparagraphs (c) to (o) inclusive, for which
            no notice shall be required), of any such failure to perform and the
            Tenant within such period of fifteen (15) days falls to commence
            diligently and thereafter to proceed diligently to cure any such
            failure to perform; or

      (c)   the Tenant or any agent or mandatary of the Tenant falsifies any
            report required to be furnished to the Landlord pursuant to this
            Lease; or

      (d)   the Tenant becomes bankrupt or insolvent or takes the benefit of any
            act now or hereafter in force for bankrupt or insolvent debtors or
            files any proposal or makes any assignment for the benefit of
            creditors or any arrangement or compromise; or

      (e)   a receiver or a receiver and manager is appointed for all or a
            portion of the Tenant's property; or

      (f)   any steps are taken or any action or proceedings are instituted by
            the Tenant or by any other party including, without limitation, any
            court or governmental body of competent jurisdiction for the
            dissolution, winding-up or liquidation of the Tenant or its assets;
            or

      (g)   the Tenant makes a sale in bulk of any of its assets wherever
            situated other than a bulk sale made to an assignee or sub-lessee
            pursuant to a permitted assignment or subletting hereunder; or

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

<PAGE>
                                       41

      (i)   the Premises become and remain vacant for a period of five (5)
            consecutive days or are used by any Persons other than such as are
            entitled to use them hereunder; or

      (j)   the Tenant assigns, transfers, encumbers, sublets or permits the
            occupation or use or the parting with or sharing possession of all
            or any part of the Premises by anyone except in a manner permitted
            by this Lease; or

      (k)   this Lease or any of the Tenant's assets are seized under any writ
            of execution with respect to a judgment rendered against the Tenant;
            or

      (l)   repossession of the Premises or termination of the Lease resulting
            from a default by Tenant as may be set forth herein under any other
            terms of this Lease; or

      (m)   the Tenant defaults under the terms of the 1998 Mortgage or the 1999
            Mortgage as defined in Section 4.2; or

      (n)   the Tenant defaults in its obligation to indemnify the Landlord in
            accordance with Section 9 of the Purchase and Sale Agreement entered
            into between the Landlord and the Tenant which bears the same date
            as this Lease; or

      (o)   the Tenant is in default of any of its obligations with respect to
            one of the Options to Purchase as hereinafter defined in Section
            16.2,

      then in any such event the balance of all Rent and Additional Rent for the
      remainder of the Term shall immediately become due and payable to the
      Landlord and the Landlord, in addition to any other rights or remedies it
      has pursuant to this Lease or by law, shall, to the extent permitted by
      law, have the immediate right to repossess the Premises and it may expel
      all Persons and remove all property from the Premises and such property
      may be removed and sold or disposed of by the Landlord as it deems
      advisable or may be stored in a public warehouse or elsewhere at the cost
      and for the account of the Tenant, all without service of notice or resort
      to legal process and without the Landlord being considered guilty of
      trespass or becoming liable for any loss or damage which may be occasioned
      thereby.

14.2  Right to Relet:

      If the Landlord elects to repossess the Premises as herein provided, or if
      it takes possession pursuant to legal proceedings or pursuant to any
      notice provided for by law, it may either terminate this Lease or it may
      from time to time without,
<PAGE>

                                       42

      terminating this Lease, make such alterations and repairs as are necessary
      in order to relet the Premises or any part thereof for such term or terms
      (which may be for a term extending beyond the Term) and at such rent and
      upon such other terms and conditions as the Landlord in its sole
      discretion considers advisable and, in any such event, the balance of all
      Minimum Rent and Additional Rent for the remainder of the Term shall
      immediately become due and payable by the Tenant to the Landlord. No such
      taking possession of the Premises by the Landlord shall be construed as an
      election on its part to terminate this Lease unless a written notice of
      such intention is given to the Tenant. Notwithstanding any such reletting
      without termination, the Landlord may at any time thereafter elect to
      terminate this Lease for such previous breach. In addition to any other
      remedies, the Landlord may have at law or under this Lease and to any
      amounts owing to it hereunder, the Landlord may recover from the Tenant
      all damages incurred by reason of the Tenant's breach, including but not
      limited to, the cost of repossessing the Premises and attorney's fees. No
      reletting of the Premises or any part thereof by the Landlord will have
      the effect of reducing the obligation of the Tenant to pay to the
      Landlord, upon the repossession of the Premises by the Landlord the
      balance of all Minimum Rent and Additional Rent for the remainder of the
      Term of the Lease as set out hereinabove. Should the Premises or any part
      thereof be relet by the Landlord for all or any portion of the period
      stipulated herein as the Term and whether or not this Lease shall have
      been terminated, Landlord shall, out of any rents collected or received by
      the Landlord from such reletting: first, pay to itself the cost and
      expense of retaking, repossessing, repairing and/or altering the Premises,
      and the cost and expense of removing all persons, and property therefrom;
      second, pay to itself any and all costs and expenses incurred in securing
      any new tenant and, if Landlord shall maintain and operate the Premises,
      the cost and expense of operating and maintaining the Premises; and, third
      pay to itself any balance of Minimum Rent and Additional Rent due to it by
      the Tenant for the remainder of the Term of the Lease at the time of
      repossession of the Premises by the Landlord in accordance with the terms
      of this Section 14.2. Should there remain any excess amounts from the
      rents collected or received by the Landlord from such reletting of all or
      part of the Premises, after Landlord has paid to itself all of the costs
      and expenses referred to above, and any balance of rent and Additional
      Rent due to it by the Tenant for the remainder of the Term of the Lease at
      the time of repossession of the Premises by the Landlord, Landlord shall
      remit to the Tenant such excess up to an amount equal to the amount paid
      by the Tenant to the Landlord in respect of the balance of all Rent and
      Additional Rent for the remainder of the Term of the Lease at the time or
      repossession of the Premises in accordance with the terms of this Section
      14.2.

<PAGE>
                                       43

14.3  Expenses:

      If legal action is brought for recovery of possession of the Premises, for
      the recovery of Rent or any other amount due under this Lease, or because
      of the breach of any other terms, obligations or conditions herein
      contained on the part of the Tenant to be kept or performed, or because of
      any action or any inaction of the Tenant and a breach is established, the
      Tenant shall pay to the Landlord all expenses incurred therefor, including
      legal fees, unless a court shall otherwise award.

14.4  Landlord May Cure Tenants Default or Perform Tenant's Obligations:

      If the Tenant falls to pay, when due, any amounts or charges required to
      be paid pursuant to this Lease, the Landlord, after giving five (5) days'
      notice in writing to the Tenant, may, but shall not be obligated to, pay
      all or any part of the same. If the Tenant is in default in the
      performance of any of its obligations hereunder (other than the payment of
      Rent or other sums required to be paid pursuant to this Lease) the
      Landlord may. from time to time after giving such notice as it considers
      sufficient (or without notice in the case of an emergency) having regard
      to the circumstances applicable, perform or cause to be performed any of
      such obligations, or any part thereof, and for such purpose may do such
      things as may be required, including, without limitation, entering upon
      the Premises and doing such things upon or in respect of the Premises or
      any part thereof as the Landlord reasonably considers requisite or
      necessary. All expenses incurred and expenditures made pursuant to this
      Section 14.4 plus a sum equal to fifteen percent (15%) thereof
      representing the Landlord's overhead shall be paid by the Tenant as
      Additional Rent forthwith upon demand. The Landlord shall have no
      liability to the Tenant for any loss or damages resulting from any such
      action or entry by the Landlord upon the Premises and same is not a breach
      of any obligation for peaceable enjoyment contained in this Lease or
      implied by law.

14.   Additional Rent:

      If the Tenant is in default in the payment of any amounts or charges
      required to be paid pursuant to this Lease, they shall, if not paid when
      due, be collectible as Additional Rent with the next monthly instalment of
      Minimum Rent thereafter falling due hereunder, but nothing herein
      contained is deemed to suspend or delay the payment of any amount of money
      or charges at the time it becomes due and payable hereunder, or limit any
      other remedy of the Landlord. The Tenant agrees that the Landlord may, at
      its option, apply or allocate any sums received from or due to the Tenant
      against any amounts due and payable hereunder in such manner as the
      Landlord sees fit, provide

<PAGE>
                                       44

      that if Landlord allocates sums received from Tenant to amounts other than
      those to which Tenant intended such sum to be allocated, Landlord shall
      inform Tenant in writing forthwith of such allocation.

14.6  Remedies Generally:

      Mention in this Lease of any particular remedy of the Landlord in respect
      of the default by the Tenant does not preclude the Landlord from any other
      remedy in respect thereof, whether available at law or in equity or by
      statute or expressly provided for in the Lease. The remedy shall not be
      exclusive or dependent upon any other remedy, but the Landlord may from
      time to time exercise any one or more of such remedies generally or in
      combination, such remedies being cumulative and not alternative. Whenever
      the Tenant seeks a remedy in order to enforce the observance or
      performance of one of the terms, obligations and conditions contained in
      this Lease on the part of the Landlord to be observed or performed
      (excluding however the Landlord's obligations with respect to the renewal
      options and the option to purchase the Premises as described herein, as
      well as the Landlord's failure to allow continued possession of the
      Premises by the Tenant during the Term), the Tenant's only remedy shall be
      for damages if it shall be able to prove in a Court of competent
      jurisdiction that it has suffered as a result of a breach (if established)
      by the Landlord in the observance or performance of any of the terms,
      obligations and conditions contained in this Lease on the part of the
      Landlord to be observed or performed.

14.7  Tenant's Recourse

      Notwithstanding anything to the contrary contained in this Agreement, the
      Tenant shall look solely to the assets of the Landlord for the
      satisfaction of the Tenant's rights and remedies arising under this Lease
      and no property or assets of any partner of Landlord or of any parent of
      any partner of Landlord or of any affiliate of any partner of Landlord or
      of any director or officer or shareholder of the general partner of
      Landlord shall be subject to any lien, levy, execution or other
      enforcement procedure for the satisfaction of any rights of Tenant under
      this Lease.

                                   ARTICLE XV

                                  MISCELLANEOUS

15.1  Overholding - No Tacit Renewal:

      If the Tenant remains in possession of the Premises after the end of the
      Term with the consent of the Landlord, there is no

<PAGE>
                                       45

      tacit renewal of this Lease notwithstanding any statutory provisions or
      legal presumption to the contrary, and the Tenant shall be deemed to be
      occupying the Premises as a Tenant from month to month by sufferance of
      the Landlord at a monthly Minimum Rent payable in advance on the first
      (1st) day of each month equal to the aggregate of the following:

      (a)   twice the monthly amount of Minimum Rent payable during the last
            month of the Term;

      (b)   one-twelfth (1/12th) of the amount of Additional Rent payable by the
            Tenant in the last full twelve-month Rental Year of the Term;

      and otherwise, upon the same terms and conditions as are set forth in this
      Lease (including the payment of all Additional Rent), so far as these are
      applicable to a monthly tenancy.

15.2  Successors:

      All rights and liabilities herein granted to, or imposed upon the
      respective parties hereto, extend to and bind the successors and assigns
      of the parties, provided that (i) the assigns of Landlord shall be bound
      by the liabilities only to the extent that they expressly assume such
      liabilities and (u) no rights shall enure to the benefit of any assignee
      or successor of the Tenant unless such successor or the assignment to such
      assignee has been approved by the Landlord in writing as provided in
      Section 11.1 hereof.

15.3  Tenant Partnership:

      If the Tenant is a partnership (the "Tenant Partnership") each Person who
      is presently a member of the Tenant Partnership, and each Person who
      becomes a member of any successor Tenant Partnership hereafter, shall be
      and continue to be liable jointly and severally for the full and complete
      performance of, and shall be and continue to be subject to the terms,
      obligations and conditions of this Lease, whether or not such Person
      ceases to be a member of such Tenant Partnership or successor Tenant
      Partnership.

15.4  Waiver:

      The waiver by the Landlord of any breach of any term, obligation or
      condition herein contained is not deemed to be a waiver of such term,
      obligation or condition or of any subsequent breach of the same or of any
      other term, obligation or condition herein contained. The subsequent
      acceptance of Rent hereunder by the Landlord is not deemed to be a waiver
      of any preceding breach by the Tenant of any term, obligation or condition
      of this Lease, regardless of the Landlord's knowledge of such preceding
      breach at the time of acceptance

<PAGE>
                                       46

      of such rent. No term, obligation or condition of this Lease is deemed to
      have been waived by the Landlord unless such waiver is in writing by the
      Landlord.

      All Minimum Rent and Additional Rent to be paid by the Tenant to the
      Landlord hereunder, shall be paid without any deduction, abatement,
      set-off or compensation whatsoever and the Tenant hereby waives the
      benefit of any statutory or other rights in respect of abatement, set-off
      or compensation in its favour at the time hereof or at any future time.

15.5  Accord and Satisfaction:

      No payment by the Tenant or receipt by the Landlord of a lesser amount
      than the monthly payment of Minimum Rent herein stipulated is deemed to be
      other than on account of the earliest stipulated Minimum Rent, nor is any
      endorsement or statement on any cheque or any letter accompanying any
      cheque or payment as Rent deemed an acknowledgement of full payment or an
      accord and satisfaction, and the Landlord may accept and cash such cheque
      or payment without prejudice to the Landlord's right to recover the
      balance of such Rent or pursue any other remedy provided in this Lease.

15.6  Brokerage Commissions:

      Except with respect to any real estate broker engaged by Landlord, any
      brokerage commission with respect to this Lease transaction shall be borne
      exclusively by the Tenant and the Tenant shall indemnify and hold harmless
      the Landlord from any and all claims with respect thereto.

15.7  No Partnership or Mandate:

      The Landlord does not in any way or for any purpose become a partner of
      the Tenant in the conduct of its business, or otherwise, or a joint
      venturer or a member of a joint enterprise with the Tenant, nor is the
      relationship of mandator and mandatary created.

15.8  Force Majeure:

      Notwithstanding anything to the contrary contained in this Lease, if
      either party hereto is bona fide delayed or hindered in or prevented from
      the performance of any term, obligation or act required hereunder by
      reason of strikes, labour troubles, inability to procure materials or
      services; power failure, restrictive governmental laws or regulations;
      riots, insurrection; sabotage; rebellion, war, act of God, or other reason
      whether of a like nature or not which is not the fault of the party
      delayed in performing work or doing acts required under the terms of this
      Lease, then performance of such term, obligation or act is excused for the
      period of the delay and the party so delayed

<PAGE>
                                       47

      shall be entitled to perform such term, obligation or act within the
      appropriate time period after the expiration of the period of such delay.
      However, the provisions of this Section do not operate to excuse the
      Tenant from the prompt payment of Minimum Rent, Additional Rent or any
      other payments required by this Lease.

15.9  Notices:

      Any notice, demand, request or other instrument which may be or is
      required to be given under this Lease shall be in writing and delivered in
      person, sent by registered mall postage prepaid, by telecopier or by
      courier and shall be addressed:

      (a)   if to the Landlord:

            Anglo Canadian Investments, L.P. c/o Epic LLC
            12th East 44th Street 6th Floor
            New York, NY 10017

            Attention: President

            or to such other Person or at such other address as the Landlord
            designates by written notice, with a copy to each of the following:

            1)    Goodman Phillips & Vineberg
                  1501 McGill College Avenue
                  26th Floor
                  Montreal, Quebec
                  H3A 3N9

                  Attention: Robert Vineberg
                  Telecopier: 514-841-6499

            2)    Kramer Levin Naftalis & Frankel LLP
                  919 Third Avenue
                  New York, New York 10022

                  Attention: Michael Korotkin
                  Telecopier: 212-715-8000

      (b)   If to the Tenant:

            Henry Birks & Sons Inc.
            1240 Square Phillips
            Montreal, Quebec H3B 3H4

            Attention: President
            Telecopier: 514-397-2577

<PAGE>
                                       48

            with a copy to each of the following:

            1)    Henry Birks & Sons Inc.
                  1240 Square Phillips
                  Montreal, Quebec
                  H3B 3H4

                  Attention: Vice President, Finance
                  Telecopier: 514-397-2472

            2)    Henry Birks & Sons Inc.
                  1240 Square Phillips
                  Montreal, Quebec
                  H3B 3H4

                  Attention: Vice President & General Counsel
                  Telecopier: 514-397-2537

            3)    Stikeman Elliott
                  1155 Rene-Levesque Blvd. West
                  Suite 4000 Montreal, Quebec
                  H3B 3V2

                  Attention: Peter O'Brien
                  Telecopier: 514-397-3222

      (c)   if to the Mortgagee:

            Gespa CDPQ Inc. & Hypotheques CDPQ Inc.
            1981 McGill College Avenue,
            #675 Montreal, Quebec
            H3A 3C7

            Attention: Chief Mortgage Administrator
            Telecopier: (514) 847-2397

      Any such notice, demand, request or consent is conclusively deemed to have
      been given or made on the day upon which such notice, demand, request or
      consent is delivered, or if sent by Telecopier, it shall be deemed to have
      been delivered on the date of transmission if such transmission occurs
      prior to 5:00pm (Montreal time) on a business day and otherwise on the
      next business day following the date of transmission, or, if mailed, then
      seventy-two (72) hours following the date of mailing, as the case may be,
      and the time period referred to in the notice commences to run from the
      time of delivery or seventy-two (72) hours following the date of mailing.
      Either party may at any time give notice in writing to the other of any
      change of address of the party giving such notice and from and alter the
      giving of such notice, the address therein specified is

<PAGE>
                                       49

      deemed to be the address of such party for the giving of notices
      hereunder. If the postal service is interrupted or if substantially
      delayed, any notice, demand, bequest or other instrument shall only be
      delivered in person.

15.10 Registration:

      Neither the Tenant nor anyone on the Tenant's behalf or claiming under the
      Tenant shall register this Lease or any permitted assignment or permitted
      sublease of this Lease or any document evidencing any interest of the
      Tenant in the Lease or the Premises or any part thereof other than in
      accordance with Article 2999.1 of the Civil Code of Quebec. If either
      party intends to register a notice of any permitted assignment or
      permitted sublease of this Lease then, upon request of such party, both
      parties may join in the execution of a notice which shall:

      (i)   be prepared by the Tenant or its attorneys at the Tenant's expense;
            and

      (ii)  describe the parties, the Premises, the Commencement Date and
            expiration date of the Term, the Tenant's options to renew and the
            option to purchase and any other provisions deemed relevant by the
            Tenant other than any financial terms; and

      (iii) if prepared by the Tenant or its attorneys, submitted to the
            Landlord for its approval prior to registration thereof, which
            registration shall not take place before the Commencement Date.

15.11 Peaceable Enjoyment:

      So long as the Tenant pays the Rent and other sums herein provided, and
      observes and performs all the terms, obligations and conditions on the
      Tenants part to be observed and performed, the Tenant shall peaceably hold
      and enjoy the Premises during the Term without hindrance or interruption
      by the Landlord, or any other Person lawfully claiming by, through or
      under the Landlord subject, nevertheless, to the terms, obligations and
      conditions of this Lease.

                                   ARTICLE XVI

                                 SPECIAL CLAUSES

16.1  RENEWAL OPTIONS:

      Subject to the terms and conditions set out in this Section 16.1, the
      Tenant shall have the option to renew and extend the Term of this Lease
      for three (3) further terms of five (5) years each

<PAGE>
                                       50

      and a fourth (4th) term of five (5) years minus eleven days the first
      option (the "First Option") commencing December 12th 2020 and ending
      December 11th , 2025 (the "First Option Period"), the second option (the
      "Second Option") commencing December 12th 2025 and ending December 11th,
      2030 (the "Second Option Period"), the third option (the 'Third Option")
      commencing December 12th, 2030 and ending December 11th, 2035 (the 'Third
      Option Period") and the fourth option (the "Fourth Option") commencing
      December 12th, 2035 and terminating November 30, 2040 (the "Fourth Option
      Period").

      The terms and conditions upon which this Lease may be renewed and extended
      are as follows:

      (a)   the extended terms shall be subject to the same terms and conditions
            as this Lease, save and except that there shall be no further option
            to renew in the case of the Fourth Option and the Minimum Rent shall
            be equal to:

            (i)   during the First Option Period, the greater of:

                  (A)   the Minimum Rent for the Rental Year immediately
                        preceding the commencement of the First Option Period;
                        and

                  (B)   the then current market rental rate for premises
                        comparable to the Premises in a location comparable to
                        the location of the Premises (less any amount
                        attributable to the value added to the said location by
                        the particular operations of the Tenant's business in
                        the Premises) and such market rental rate is herein
                        referred to as the "Market Rate";

                  the sum so obtained being hereinafter referred to as the
                  "First Option Minimum Rent". If the First Option Minimum Rent
                  is based on the then current Market Rate, then it shall be
                  increased each year of the First Option Period by the
                  percentage increase in the Consumer Price Index, using as a
                  base the Consumer Price Index for the month during which the
                  First Option Period commences;

            (ii)  during the Second Option Period, the greater of

                  (A)   the First Option Minimum Rent for the last year of the
                        First Option Period preceding the commencement of the
                        Second Option Period; and

                  (B)   the then current Market Rate,

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                                       51

                  the sum so obtained being hereinafter referred to as the
                  "Second Option Minimum Rent". If the Second Option Minimum
                  Rent is based on the then current Market Rate, then it shall
                  be increased each year of the Second Option Period by the
                  percentage increase in the Consumer Price Index, using as a
                  base the Consumer Price Index for the month during which the
                  Second Option Period commences;

            (iii) during the Third Option Period, the greater of:

                  (A)   the Second Option Minimum Rent for the last year of the
                        Second Option Period preceding the commencement of the
                        Third Option Period; and

                  (B)   the then current Market Rate,

                  the sum so obtained being hereinafter referred to as the
                  "Third Option Minimum Rent". If the Third Option Minimum Rent
                  is based upon the then current Market Rate, then it shall be
                  increased each year of the Third Option Period by the
                  percentage increase in the Consumer Price Index, using as a
                  base the Consumer Price Index for the month during which the
                  Third Option Period commences;

            (iv)  during the Fourth Option Period, the greater of:

                  (A)   the Third Option Minimum Rent for the last year of the
                        Third Option Period preceding the commencement of the
                        Fourth Option Period, and

                  (B)   the then current Market Rate,

                  the sum so obtained being hereinafter referred to as the
                  "Fourth Option Minimum Rent". If the Fourth Option Minimum
                  Rent is based upon the then current Market Rate, then it shall
                  be increased each year of the Fourth Option Period by the
                  percentage increase in the Consumer Price Index, using as a
                  base the Consumer Price Index for the month during which the
                  Fourth Option Period commences;

      (b)   the Tenant, at the time of the exercise of the option in question,
            shall not then be materially in default under the provisions of this
            Lease;

<PAGE>
                                       52

      (c)   in the case of the Second Option, the Tenant shall have exercised
            the First Option;

      (d)   in the case of the Third Option, the Tenant shall have exercised the
            Second Option;

      (e)   in the case of the Fourth Option, the Tenant shall have exercised
            the Third Option;

      (f)   the Tenant shall have notified the Landlord in writing of its
            intention to exercise the First Option on or before December 12th,
            2019; of its intention to exercise the Second Option on or before
            December 12th, 2024; of its intention to exercise the Third Option
            on or before December 12th, 2029 and of its intention to exercise
            the Fourth Option on or before December 12th, 2034;

      (g)   the Market Rate shall be determined by the Landlord and submitted to
            Tenant within sixty (60) days following Tenant providing to Landlord
            its notice of intention to exercise the First Option, the Second
            Option, the Third Option or the Fourth Option, as the case may be.
            If Landlord and Tenant shall not have agreed on the Market Rate
            within thirty (30) days following the submission of the proposed
            Market Rate by Landlord to Tenant, the Landlord and Tenant shall
            jointly submit the question to arbitration in accordance with the
            provisions hereinafter set forth. Such dispute shall be submitted to
            arbitration before a single arbitrator, whose decision as to the
            Market Rate shall be final and binding on the parties and
            non-appealable. The arbitrator shall be a person properly qualified
            in the evaluation of real estate rentals for comparable premises in
            the City of Montreal and shall be chosen jointly by Landlord and
            Tenant or, if they are unable to agree, shall be chosen jointly by
            the auditors of Landlord and of Tenant or, if they are unable to
            agree, shall be appointed by a judge of the Superior Court of
            Quebec, sitting in the judicial district of Montreal, at the request
            of either the Landlord or the Tenant.

      (h)   the costs and expenses of the arbitrator and the arbitration
            proceeding shall be borne equally by the Landlord and the Tenant but
            each party shall bear the costs of its own legal counsel and any
            professional advisors, appraisers or evaluators appointed by it. If
            the decision of the arbitrator is not rendered prior to the
            commencement of the First Option Period, the Second Option Period,
            the Third Option Period or the Fourth Option Period, as the case may
            be, the Tenant shall pay as Minimum Rent the same amount as payable
            in the immediately preceding Rental Year, with appropriate

<PAGE>
                                       53

            adjustments being made forthwith following the delivery of a
            decision by the arbitrator with such adjustments being retroactive
            to the commencement of the First Option Period, the Second Option
            Period, the Third Option Period or the Fourth Option Period, as the
            case may be. Provided and to the extent that they do not derogate
            from the foregoing, the present provisions of the Code of Civil
            Procedure of Quebec pertaining to arbitrations will apply in
            addition to the foregoing provisions with respect to the arbitration
            herein contemplated. In determining the Market Rate, the arbitrator
            shall assume no brokerage fees, no tenant improvements by Landlord,
            and that the Premises constitute vacant space free of tenancy ready
            to be leased in whole or in part for its highest and best uses
            and/or purposes;

      (i)   for the purposes hereof, the First Option Period, the Second

      (j)   Option Period, the Third Option Period and the Fourth Option Period
            are herein collectively referred to as the "Option Term" and the
            First Option Minimum Rent, the Second Option Minimum Rent, the Third
            Option Minimum Rent and the Fourth Option Minimum Rent are herein
            collectively referred to as the "Option Rent".

16.2  Option to Purchase the Premises;

      Tenant shall have two (2) options to purchase the Premises from the
      Landlord, who agrees to transfer title to the Premises to the Tenant, the
      whole in accordance with this Section 16.2 provided, (i) the Tenant is not
      materially in default of any of its obligations hereunder at the time of
      the exercise of the option to purchase or at the time of closing of the
      sale of the Premises and (u) that during the period between the exercise
      of the option to purchase and the closing of the sale (the "Interim
      Period"), the Tenant shall not be materially in default of its obligations
      hereunder. However, the Landlord agrees that if the Tenant is materially
      in default of its obligations during the Interim Period, the Landlord
      shall provide the Tenant with a written notice of default permitting the
      Tenant to cure the default within fifteen (15) days and if cured, the
      default shall be set aside and the Tenant shall not lose any rights with
      respect to the option to purchase it has exercised. The first option to
      purchase ("First Option to Purchase") the Premises may be exercised at the
      end of the 15th year of the Term and the second option to purchase
      ("Second Option to Purchase") the Premises may be exercised at the end of
      the 20th year of the Term (the First Option to Purchase and the Second
      Option to Purchase shall be collectively referred to as the "Options to

<PAGE>
                                       54

      Purchase" and individually as an "Option to Purchase"), the whole subject
      to the following terms and conditions:

      (a)   Tenant may not exercise the First Option to Purchase or the Second
            Option to Purchase earlier than nine (9) months nor later than six
            (6) months prior to December 12th, 2015 or December 12th, 2020
            respectively;

      (b)   a good faith deposit of Six Hundred Twenty-Five Thousand Three
            Hundred and Nine Dollars ($625,309) shall accompany a notice of
            exercise of the First Option to Purchase. In the event of the
            exercise of the Second Option to Purchase, a good faith deposit in
            the amount of Six Hundred Eighty-Seven Thousand Eight Hundred Forty
            Dollars ( $687,840) shall accompany the notice of exercise of the
            Second Option to Purchase. The deposit shall be forfeited to
            Landlord in the event that such transaction of purchase and sale
            shall fall to close for any reason attributable to the fault or
            default of Tenant, it being understood that Landlord shall have no
            further recourse against the Tenant with respect to the option to
            purchase exercised by the Tenant referred to in this Section 16.2;

      (c)   the purchase price with respect to the First Option to Purchase
            shall be the greater of the sum of Twenty Million Eight Hundred
            Sixty-Three Thousand, Four Hundred and Thirty Dollars ($20,863,430)
            and the then current market price for properties comparable to the
            Premises in a location comparable to the location of the Premises,
            evaluated as if the Premises were totally free and clear of all
            hypothecs and other encumbrances and this Lease and the Premises
            were ready to be dedicated to its then highest and best use or
            purpose (the "Market Value");

      (d)   the purchase price with respect to the Second Option to Purchase
            shall be the greater of the sum of Twenty-Two Million Nine Hundred
            Forty-Nine Thousand Seven Hundred Seventy-Three Dollars
            ($22,949,773) and the Market Value;

      (e)   within thirty (30) days following Tenant's exercise of its option in
            accordance with the provisions of paragraph 16.2(a), Landlord shall
            submit to Tenant Landlord's estimate of such Market Value. The
            Tenant shall pay all taxes applicable to such transaction (other
            than the Landlord's income taxes) including, without restriction,
            all GST, provincial sales tax and transfer taxes. In the event that
            Landlord and Tenant have not agreed upon the Market Value within
            sixty (60) days

<PAGE>
                                       55

            following Landlord's submission of Landlord's estimated Market Value
            to Tenant, then the parties shall refer such issue to arbitration
            and such arbitration shall be effected in accordance with the
            provisions of Section 16.1 above. The decision of such arbitrator
            shall be final and binding and non-appealable for all purposes;

      (f)   the Premises shall be sold by Landlord to Tenant free and clear of
            all hypothecs, liens and encumbrances other than (i) servitudes for
            public utilities and such other servitudes and encumbrances which do
            not in the aggregate materially affect the use of the Premises for
            the purposes for which they are presently being used and (ii)
            encumbrances (other than hypothecs) and other imperfections to title
            which exist on the date of execution of this Lease and to any other
            such encumbrances or imperfections resulting from the actions or
            omissions of Tenant;

      (g)   the Premises will be sold on a basis "as is" without any warranty
            whatsoever except as to title, with respect to which the warranty
            shall only apply to the period commencing from the date hereof in
            respect of title matters not attributable to Tenant's actions or
            omissions;

      (h)   the deed of sale shall be passed before Tenant's notary, and the
            Tenant shall pay the notarial fees and the cost of registering the
            deed of sale,

      (i)   the purchase price shall be allocated as to the land in an amount
            equal to its value for municipal tax purposes and the balance to the
            buildings thereon; the purchase price shall be payable by certified
            cheque or wire transfer at closing;

      (j)   Landlord shall be obliged to provide Tenant only with all such title
            deeds and other documents relating to the land and building as are
            in its possession within ten (10) business days of the exercise of
            the Tenants option;

      (k)   if there are any other tenants in the building at the time of
            execution of the deed of sale, in the deed of sale Tenant shall
            assume, to the exoneration of Landlord, all obligations pursuant to
            such lease from and after the deed of sale;

      (l)   the parties will make the customary closing adjustments as at the
            closing date;

      (m)   the closing in respect of such transaction shall occur sixty (60)
            days following the date when the purchase price in respect of the
            Premises has been determined it being understood that until the date
            of the closing the

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                                       56

            Tenant will continue to pay Rent at the rate applicable at the time
            of the exercise of the First Option to Purchase or the Second Option
            to Purchase, as the case may be;

      (n)   the Landlord shall provide an affidavit as to Canadian residency,
            falling which the provisions of Section 116 of the Income Tax Act
            (Canada) and the analogous provisions of the Quebec Taxation Act
            shall be applicable;

      (o)   if legal action is brought by either party for the enforcement of
            their respective rights pursuant to Sections 16.2, 16.4 or 16.6 or a
            party in whose favour judgment is awarded shall be entitled to
            receive from the other party all expenses incurred in connection
            therewith, including legal fees, unless a court shall otherwise
            award; and

      (p)   at closing any non-material monetary defaults will be cured by the
            Tenant.

16.3  Adjustment of Certain Amounts:

      The dollar amounts referred to in Article IX shall be increased throughout
      the Term, commencing with the lease year commencing December 12th, 2003,
      by the same percentage as is equal to the percentage increase in the
      Minimum Rent using as base the Minimum Rent as set forth in subsection (i)
      of Section 4.2 hereof.

16.4  Deemed Renewal:

      In the event that (i) Tenant has exercised an Option to Purchase and
      fulfilled each of its obligations as contained in Section 16.2 hereof,
      (ii) the sale and purchase of the Premises pursuant to the exercise of the
      Option to Purchase is prevented and, (iii) Tenant has exercised its rights
      pursuant to the provisions of Section 16.6 hereof to take the Premises and
      has fulfilled all of its obligations thereunder, including the tender and
      deposit of the sum referred to in Section 16.6, then (x) the Term of the
      Lease shall continue without interruption in the event the Tenant
      exercised the First Option to Purchase or (y) the Tenant shall be deemed
      to have exercised the First Option to renew the Lease in respect of the
      First Option Period in the event Tenant exercised the Second Option to
      Purchase. The Tenant's notice to exercise the First Option to renew the
      Lease shall, for purposes of Section 16.1, be deemed to have been given to
      Landlord on the day the tender and deposit of the sum referred to in
      Section 16.6 was made by the Tenant.

      Neither the continuation of the Term nor the deemed exercise of the First
      Option to renew the Lease shall preclude the Tenant from exercising its
      rights to obtain title to the Premises.

<PAGE>
                                       57

16.5  Mortgagees to Honour Option to Purchase:

      The Landlord undertakes to ensure that all future Mortgagees agree to
      honour the provisions of the Options to Purchase. To that end, all
      hypothecs entered into in favour of future Mortgagees of the Premises
      shall contain a covenant on the part of the Mortgagee to be bound by the
      Options to Purchase and to release and discharge the Mortgagees hypothec
      so as to transfer the Premises pursuant to the exercise of one of the
      Options to Purchase, free and clear of the Mortgagees hypothec, subject to
      the agreed upon purchase price being paid or distributed among all
      Mortgagees as their rights may appear. The Tenant hereby subordinates the
      Tenants Hypothec (as hereafter defined) to that of a future Mortgagee but
      only in the event the Mortgagees hypothec contains a covenant on the part
      of the Mortgagee to be bound by the Options to Purchase and provided that
      the Tenant and the said Mortgagee shall enter into a subordination
      agreement which shall contain the Mortgagees covenant to be bound by the
      Options to Purchase and to discharge and release its hypothec on the
      Premises in the event of the exercise by the Tenant of one of the Options
      to Purchase and to subordinate the Tenants Hypothec to the hypothec of the
      Mortgagee.

16.6  Tenants Hypothec:

      (a)   In the event the Tenant exercises one of the Options to Purchase and
            fulfils all its obligations with respect thereto, including the
            deposit of the sum of $625,309 in the event the First Option to
            Purchase is exercised or the sum of $687,840 in the event the Second
            Option to Purchase is exercised, the whole as described in Section
            16.2 of this Lease and the sale and purchase of the Premises
            pursuant to the exercise of the said option is prevented for reasons
            other than the fault or default of the Tenant, then the Tenant shall
            have recourse to the hypothec described in this Section 16.6 and be
            entitled to exercise any rights and remedies available to the Tenant
            under the provisions of the Civil Code of Quebec.

      (b)   As security for the fulfilment by the Landlord of its obligations
            pursuant to the provisions of Section 16.2 of this Lease, the
            Landlord hereby hypothecates to and in favour of the Tenant to the
            extent of the sum of the ONE HUNDRED MILLION DOLLARS
            ($100,000,000.00) in lawful money of Canada with interest thereon at
            the rate of TWENTY-FIVE PERCENT (25%) per annum, (the 'Tenants
            Hypothec"), the following property:

            (i)   the Premises described in Schedule A hereof, together with all
                  present and future works, constructions and appurtenances
                  related thereto;

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                                       58

            (ii)  all corporeal and incorporeal property which, with respect to
                  the Premises hereinabove hypothecated are covered by any of
                  Articles 901 through 904 of the Civil Code of Quebec;

            (iii) all corporeal moveable property which at any time ensures the
                  utility of the Premises hereinabove hypothecated.

      (c)   Upon the exercise of the Tenant's hypothecary recourse to take the
            Premises in payment, the Tenant shall be entitled to take the
            Premises in payment subject only to the deposit in Court of either:

            (i)   the sum of TWENTY MILLION EIGHT HUNDRED SIXTY-THREE THOUSAND
                  FOUR HUNDRED AND THIRTY DOLLARS ($20,863,430.00) in the event
                  the said hypothecary recourse is exercised with respect to the
                  First Option to Purchase; or

            (ii)  TWENTY-TWO MILLION NINE HUNDRED FORTY-NINE THOUSAND SEVEN
                  HUNDRED AND SEVENTY-THREE DOLLARS ($22,949,773.00) in the
                  event the said hypothecary recourse is exercised with respect
                  to the Second Option to Purchase; or

            (iii) such greater amount as may have been determined in accordance
                  with Section 16.2(c) of the Lease or, if not determined, then
                  as the Court may determine, in its discretion, to give effect
                  to Section 16.2(c) of the Lease.

            The said amount shall be distributed to the Landlord, the parties
            having a prior claim or a hypothec registered against the Premises,
            according to their respective interests and priorities.

16.7  Language:

      The Lessee hereby confirms that it has required that the present document
      be drawn up in the English language. Le Locataire confirme par les
      presentes qu'il a exige que le present document soit redige dans la langue
      anglaise.

16.8  Adhesion:

      Each of the parties hereto acknowledge that the essential stipulations of
      these presents were negotiable, and that consequently the present
      Agreement of Lease does not constitute a contract of adhesion.

<PAGE>
                                       59

                                   SCHEDULE A

         An emplacement situated between the streets Sainte-Catherine West,
Union and Cathcart in Ville de Montreal, Province of Quebec, Canada, known and
designated as lot 1 340 553 on the Official Cadastre of Quebec.

         With all the improvements therein erected including without limitation
the buildings thereon erected bearing civic numbers 1240 Union Avenue (also
referred to as 1240 Place Phillips), 620-630 Sainte-Catherine Street West and
635 Cathcart Street in the City of Montreal.

<PAGE>
                                       60

EXECUTED at the said City of Montreal, on the 12th day of December Two thousand
and under the number 33,585 of the original Notarial Minutes of the undersigned
Notary.

AND AFTER DUE READING HEREOF, the parties have signed with and in the presence
of the undersigned Notary.

                             ANGLO CANADIAN INVESTMENTS, L.P.
                             by its general partner BIRKMONT CORP.

(SIGNED)                     Per: Robert Vineberg
                             Robert Vineberg, Representative

                             HENRY BIRKS & SONS INC. I
                             HENRY BIRKS ET FILS INC.

(SIGNED)                     Per
                             Thomas A. Andruskevich, President & CEO

(SIGNED)                     Per: John D. Ball
                             John D. Ball, Vice-President & Chief Financial
                             and Administrative Officer

(SIGNED)                     Per: Sheldon Merling
                             Sheldon Merling, Notary

                        TRUE COPY of the original hereof
                        remaining of record in my office

                             (SIGNED) Sheldon Merling

<PAGE>

                                       61

     No. 33,585
     December 12th, 2000

     INDENTURE OF LEASE

     BY

     ANGLO CANADIAN INVESTMENTS, L.P.

     to

     HENRY BIRKS & SONS INC./
     HENRY BIRKS ET FILS INC.

3RD COPY

                                MERLING & MERLING

                               NOTAIRES - NOTARIES

                                    SUITE 830
                           615 RENE LEVESQUE BLVD. W.
                                  MONTREAL.QUE,
                                     H3B 1P5

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