VHS Network, Inc.
1599 Hurontario Street

                                                                  April 15, 1999

Re: Management Agreement

Dear Sirs:

This letter will  constitute  our  agreement of VHS Network,  whereby  Groupmark
Canada  Ltd.,  will  supply  executive,  clerical  and  administrative  staff as
required to perform the day to day  business of VHS.  Groupmark  will  contract,
where required,  with third parties for technical  development and consulting in
regard to "Set Top Box: and "Smart Card" applications.

Groupmark will respond to requests for quotations, answer e-mails etc. Groupmark
will also supply the necessary telephones,  office equipment,  reception and all
other physical requirements to carry the business of VHS.

The charge for these  services will vary  depending on demand,  however will not
exceed  $56,000  per month in U.S.  funds  including  travel  and other  related
expenses.

Groupmark  agrees to accrue its billing for services until VHS may reasonably be
able to pay for same and in the  alternative,  Groupmark can exercise the option
to accept  payment by way of VHS stock in lieu  therefore.  This  agreement will
renew each year unless  cancelled  by either  party in  writing,  giving 30 days
notice.

Yours truly,


By: /s/ Elwin Cathcart

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Elwin Cathcart
CEO Groupmark Canada Ltd.


Accepted by VHS Network Inc.

Per_______________________