EXHIBIT 10.10









                                                       Nixon Peabody LLP
                                                       Draft No. 1
                                                       Dated:  01/28/04

                                                       Transcript Document No. 2


                   TOWN OF ISLIP ENDUSTRIAL DEVELOPMENT AGENCY

                            (Town of Islip, New York)

                                       and

                               HPG REALTY CO., LLC

                          ---------------------------

                                 LEASE AGREEMENT

                          ----------------------------

                          Dated as of February 1, 2004


                   Town of Islip Industrial Development Agency
         (HPG Realty Co., LLC/Tri-Start Electronics, Inc. 2004 Facility)



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                                TABLE OF CONTENTS

                                                                                         Page No.

<S>                                                                                        <C>
ARTICLE I DEFINITIONS.......................................................................3

ARTICLE II REPRESENTATIONS AND COVENANTS....................................................3

         Section 2.1       Representations and Covenants....................................3
         Section 2.2       Representations and Covenants of Company.........................4

ARTICLE III FACILITY SITE AND TITLE INSURANCE...............................................5

         Section 3.1       Agreement to Convey to Agency....................................5
         Section 3.2       Title Insurance..................................................5
         Section 3.3       Subordination of Lease Agreement.................................5

ARTICLE IV ACQUISITION, CONSTRUCTION AND EQUIPPING OF FACILITY..5

          Section 4.1     Acquisition, Construction and Equipping of Facility...............5
          Section 4.2     Making of the Loan; Disbursements of Loan Proceeds................6
          Section 4.3     Certificates of Completion........................................6
          Section 4.4     Completion by Company.............................................6
          Section 4.5     Remedies to be Pursued Against Contractors, Subcontractors,
                          Materialmen and their Sureties....................................7

ARTICLE V DEMISING CLAUSES AND RENTAL PROVISIONS............................................7

         Section 5.1       Demise of Facility...............................................7
         Section 5.2       Duration of Lease Term; Quiet Enjoyment..........................7
         Section 5.3       Rents and Other Amounts Payable..................................8
         Section 5.4       Obligations of Company Hereunder Unconditional...................8
         Section 5.5       Payment of Additional Moneys in Prepayment of Loan...............8
         Section 5.6       Rights and Obligations of the Company upon Prepayment of Loan....9

ARTICLE VI MAINTENANCE, MODIFICATIONS, TAXES AND INSURANCE..................................9

         Section 6.1       Maintenance and Modifications of Facility by Company.............9
         Section 6.2       Installation of Additional Equipment.............................9
         Section 6.3       Taxes, Assessments and Utility Charges..........................10
         Section 6.4       Insurance Required..............................................10
         Section 6.5       Additional Provisions Respecting Insurance......................12
         Section 6.6       Application of Net Proceeds of Insurance........................13
         Section 6.7       Right of Mortgagee to Pay Taxes, Insurance Premiums and Other
                           Charges.........................................................13

ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION...........................................14
         Section 7.1       Damage or Destruction of the Facility...........................14
         Section 7.2       Condemnation....................................................15


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         Section 7.3       Condemnation of Company Owned Property..........................16
         Section 7.4       Waiver of Real Property Law Section 227.........................16

ARTICLE VIII SPECIAL COVENANTS.............................................................17

         Section 8.1       No Warranty of Condition or Suitability by Agency...............17
         Section 8.2       Hold Harmless Provisions........................................17
         Section 8.3       Right to Inspect Facility.......................................18
         Section 8.4       Company to Maintain Its Existence...............................18
         Section 8.5       Qualification in State..........................................18
         Section 8.6       Agreement to File Annual Statements and Provide Information.....18
         Section 8.7       Books of Record and Account; Financial Statements...............18
         Section 8.8       Compliance With Orders, Ordinances, Etc.........................18
         Section 8.9       Discharge of Liens and Encumbrances.............................20
         Section 8.10      Indemnification of Equipment....................................20
         Section 8.11      Depreciation Deductions and Investment Tax Credit...............21
         Section 8.12      Employment Opportunities, Notice of Jobs........................21

ARTICLE IX RELEASE OF CERTAIN LAND; ASSIGNMENTS AND SUBLEASING;
MORTGAGE AND PLEDGE OF INTERESTS...........................................................21

         Section 9.1       Restriction on Sale of Facility; Release of Certain Land........21
         Section 9.2       Removal of Equipment............................................22
         Section 9.3       Assignment, Subleasing and Encumbering..........................22
         Section 9.4       Mortgage and Pledge of Agency's Interests to Mortgagee..........23
         Section 9.5       Pledge of Company's Interest to Mortgagee.......................23
         Section 9.6       Merger of Agency................................................23

ARTICLE X EVENTS OF DEFAULT AND REMEDIES...................................................24

         Section 10.1      Events of Default Defined.......................................24
         Section 10.2      Remedies on Default.............................................25
         Section 10.3      Remedies Cumulative.............................................27
         Section 10.4      Agreement to Pay Attorney's Fees and Expenses...................27
         Section 10.5      No Additional Waiver Implied by One Waiver......................28

ARTICLE XI EARLY TERMINATION OF LEASE AGREEMENT, OPTION IN FAVOR
OF COMPANY.................................................................................28

         Section 11.1      Early Termination of Lease Agreement............................28
         Section 11.2      Conditions to Early Termination of Lease Agreement..............28
         Section 11.3      Obligation to Purchase Facility.................................29
         Section 11.4      Conveyance on Purchase..........................................29

ARTICLE XII MISCELLANEOUS..................................................................29

         Section 12.1      Notices.........................................................29
         Section 12.2      Binding Effect..................................................30
         Section 12.3      Severability....................................................30
         Section 12.4      Amendments, Changes and Modifications...........................30
         Section 12.5      Execution of Counterparts.......................................30
         Section 12.6      Applicable Law..................................................30
         Section 12.7      List of Additional Equipment; Further Assurances................30


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         Section 12.8      Survival of Obligations.........................................30
         Section 12.9      Table of Contents and Section Headings Not Controlling..........30
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                                     -iii-
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     THIS LEASE AGREEMENT, dated as of February 1, 2004 (the "Lease Agreement"),
is between the TOWN OF ISLIP  INDUSTRIAL  DEVELOPMENT  AGENCY,  a public benefit
corporation  of the State of New York,  having its  office at 40 Nassau  Avenue,
Islip,  New York 1 1751 (the  "Agency"),  and HPG  REALTY  CO.,  LLC,  a limited
liability  company duly  organized  and validly  existing  under the laws of the
State of New York,  having  its  principal  office at 234  Remington  Boulevard,
Ronkonkoma, New York 11779 (the "Company").

                                 R E C I TA L S

     WHEREAS,  Title 1 of Article 18-A of the General Municipal Law of the State
of New York was duty enacted into law as Chapter 1030 of the Laws of 1969 of the
State of New York; and

     WHEREAS,   the  aforesaid  act   authorizes   the  creation  of  industrial
development agencies for the public purposes of the State; and

     WHEREAS,  the aforesaid act further  authorizes  the creation of industrial
development agencies for the benefit of the several Counties,  cities,  villages
and towns in the State and  empowers  such  agencies,  among  other  things,  to
acquire,  reconstruct,  renovate,  refurbish,  equip, lease, sell and dispose of
land and any building or other improvement,  and all real and personal property,
including  but not limited to,  machinery  and  equipment  deemed  necessary  in
connection  therewith,  whether now in  existence or under  construction,  which
shall be suitable for manufacturing,  civic, warehousing,  research, commercial,
recreation  or  industrial  facilities,  in order to advance job  opportunities,
health,  general  prosperity and the economic welfare of the people of the Suite
and to improve their standard of living; and

     WHEREAS, pursuant to and in accordance with the provisions of the aforesaid
act and Chapter 47 of the Laws of 1974 of the State  (collectively,  the "Act"),
the  Agency  was  created  and is  empowered  under  the  Act to  undertake  the
providing, financing and leasing 0 the Facility defined below; and

     WHEREAS,  the Facility shall consist of the acquisition of an approximately
one (1,0) acre parcel of land located at 979 Marconi Avenue, Ronkonkoma, Town of
Islip,  Suffolk  County,  New York,  and the  construction  and  equipping of an
approximately  13,300 square foot building containing office and warehouse space
located thereon,  to be leased by the Agency to the Company and subleased by the
Company to and used by Tri-Start Electronics, Inc., a corporation duly organized
and  validly  existing  under  the laws of the  State of New  York,  having  its
principal  office at 134 Remington  Boulevard,  Ronkonkoma,  New York 11779 (the
"Sublessee"),  for distribution of electronic parts (the "Facility"),  including
the  following as they relate to the  construction,  erection and  completion of
such  Facility,  whether or not any  materials or supplies  described  below are
incorporated into or become an integral part of such Facility (i) all purchases,
leases,  rentals and other uses of tools,  machinery and equipment in connection
with the  acquisition,  construction  and  equipping of the  Facility,  (ii) all
purchases,  rentals, uses or consumption of supplies,  materials and services or
every kind and description used in connection with acquisition, construction and
equipping of the Facility, and (iii) all equipment, machinery and other tangible
personal property (including installation costs with respect thereto), installed
or placed in, upon or under such Facility; and

<PAGE>

     WHEREAS, the Agency proposes to acquire and lease the Facility and American
Community  Bank (the  "First  Mortgagee")  proposes  to finance a portion of the
costs thereof by lending $650,000.00 to the Company; and

     WHEREAS,  in order to evidence its obligation to repay the loan made by the
First  Mortgagee  to it,  the  Company  will  issue  to the  First  Mortgagee  a
promissory  note (the  "First  Mortgage  Note") in the  principal  amount of the
loan.; and

     WHEREAS,  in order to secure its  obligations to the First  Mortgagee under
the First Mortgage Note, the Company and the Agency will grant a mortgage on the
Facility to the First  Mortgagee,  subject to  permitted  encumbrances  thereon,
pursuant to a certain  Mortgage and Security  Agreement,  dated February 4, 2004
(the "First Mortgage"),  from the Company and the Agency to the First Mortgagee;
and

     WHEREAS,  in order to finance a portion of the costs of the Facility,  Long
Island Development Corporation (the "Second Mortgagee";  together with the First
Mortgagee,  the "Mortgagee") has agreed to lend $520,000.00 to the Company after
the Closing Date; and

     WHEREAS,  in order to evidence its obligation to repay the loan made by the
Second  Mortgagee to it, the Company will,  after the Closing Date, issue to the
Second Mortgagee a promissory note (the "Second Mortgage Note") in the principal
amount of the loan (the "Second Mortgage Loan"); and

     WHEREAS,  in order to secure its obligations to the Second  Mortgagee under
the Second  Mortgage  Note,  the Company and the Agency will,  after the Closing
Date,  grant a mortgage  on the  Facility  to the Second  Mortgagee,  subject to
permitted  encumbrances thereon,  pursuant to a mortgage (the "Second Mortgage";
together with the Second Mortgage Note, the "Second Mortgage  Documents"),  from
the Company and the Agency to the Second Mortgagee; and

     WHEREAS, in order to provide bridge financing for the anticipated  proceeds
of the Second Mortgage Loan, the First Mortgagee has agreed to advance  $520,000
to the Company (the "Bridge Loan"), said advance to be evidenced by a promissory
note (the "Bridge Loan Mortgage Note") and secured by a Bridge Loan Mortgage and
Security Agreement, dated February 4, 2004 (the "Bridge Loan Mortgage"; together
with the First  Mortgage  and the Second  Mortgage,  the  "Mortgage"),  from the
Agency and the Company to the First  Mortgagee,  which Bridge Loan Mortgage will
be subordinate to the First Mortgage; and

     WHEREAS,  it is  anticipated  that,  after the Closing Date, (x) the Second
Mortgage  Documents  will be  executed by the  parties  thereto,  (y) the Second
Mortgage  Loan will be made for the benefit of the Company,  and (z) the Company
will pay to the First  Mortgagee  from the proceeds of the Second  Mortgage Loan
all amounts owing under the Bridge Loan Mortgage will be satisfied in full; and

     WHEREAS,  the Company  has agreed with the Agency,  on behalf of the Agency
and as the  Agency's  agent,  to acquire,  construct  and equip the  Facility in
accordance with the Plans and Specifications; and

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     WHEREAS,  the Agency proposes to lease the Facility to the Company, and the
Company  desires  to rent the  Facility  from the  Agency,  upon the  terms  and
conditions set forth in this Lease Agreement; and

     The Company  proposes to sublease  the Facility to the  Sublessee,  and the
Sublessee  desires to rent the  Facility  from the  Company,  upon the terms and
conditions set forth in the Sublease Agreement,  dated as of February ___, 2004
(the "Sublease Agreement"), between the Company and the Sublessee.

                                    AGREEMENT

     For  and  in  consideration  of  the  premises  and  the  mutual  covenants
hereinafter contained, the parties hereto do hereby mutually agree us follows:


                                    ARTICLE I

                                  DEFINITIIONS

     All  capitalized  terms  used in this  Lease  Agreement  and not  otherwise
defined  herein  shall have the  meanings  assigned  thereto in the  Schedule of
Definitions attached hereto as Schedule A.

                                   ARTICLE II

                          REPRESENTATIONS AND COVENANTS

     Section 2.1  Representations  and Covenants of Agency. The Agency makes the
following representations and covenants as the basis for the undertakings on its
part herein contained:

     (a)  The  Agency  is  duly  established  and  validly  existing  wider  the
provisions of the Act and has full legal right,  power and authority to execute,
deliver  and  perform  each of the  Agency  Documents  and the  other  documents
contemplated  thereby.  Each of the  Agency  Documents  and the other  documents
contemplated  thereby has been duly  authorized,  executed and  delivered by the
Agency.

     (b) The Agency will cause the Land to be acquired,  the  improvements to be
constructed  and the  Equipment to be acquired and  installed and will lease the
Facility to the Company  pursuant  to this Lease  Agreement,  all for the Public
Purposes of the State.

     (c) By resolution adopted on May 6. 2003, the Agency determined that, based
upon the review by the Agency of the materials submitted and the representations
made by the Company  relating to the  Facility,  the  Facility  would not have a
"significant  impact"  or  "significant  effect" on the  environment  within the
meaning of the SEQR Act.

     (d) Neither the execution  and delivery of any of the Agency  Documents and
the other documents contemplated thereby or the consummation of the transactions
contemplated thereby nor the fulfillment a. or compliance with the provisions of
any of the Agency Documents and the other documents  contemplated  thereby, will
conflict  with or result in a breach of or constitute a default under any of the
terms,  conditions  or  provisions of the Act, any other law or ordinance of the
State or any political  subdivision  thereof or of the Agency's  Certificate  of


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Establishment  or By-Laws,  as amended,  or of any corporate  restriction or any
agreement or  instrument to which the Agency is a party or by which it is bound,
or result in the  creation or  imposition  of any Lien of any nature upon any of
the  Property  of the  Agency  under  the  terms  of the  Act or any  such  law,
ordinance,  Certificate of  Establishment,  By-Laws,  restriction,  agreement or
instrument, except for Permitted Encumbrances.

     (e) Each of the  Agency  Documents  and the  other  documents  contemplated
thereby  constitutes  a  legal,  valid  and  binding  obligation  of the  Agency
enforceable against the Agency in accordance with its terms.

     (f) The Agency has been  induced to enter into this Lease  Agreement by the
undertaking  of the  Company to utilize the  Facility in the Town of Islip,  New
York.

     Section 2.2 Representation and Covenants of Company.  The Company makes the
following representations and covenants as the basis for the undertakings on its
part herein contained:

     (a) The Company is a limited  liability  company duly organized and validly
existing  under the laws of the State of New York, is in good standing under the
laws of the State and has full legal  right,  power and  authority  to  execute,
deliver  and  perform  each of the  Company  Documents  and the other  documents
contemplated  thereby.  Each of the Company  Documents  and the other  documents
contemplated  thereby has been duly  authorized,  executed and  delivered by the
Company.

     (b) Neither the execution and delivery of any of the Company  Documents and
the other documents contemplated thereby or the consummation of the transactions
contemplated thereby nor the fulfillment of or compliance with the provisions of
any of the Company Documents and the other documents  contemplated thereby, will
conflict  with or result in a breach of or constitute a default under any of the
terms,  conditions  or  provisions  of any law or  ordinance of the State or any
political  subdivision  thereof or of the Company's  Articles of Organization or
Operating  Agreement,  as  amended,  or  any  restriction  or any  agreement  or
instrument to which the Company is a party or by which it is bound, or result in
the creation or imposition of any Lien of any nature upon any of the Property of
the Company under the terms of any such law, ordinance, Articles of Organization
or Operating Agreement, as amended, restriction, agreement or instrument, except
for  Permitted   Incumbranees,   The  Facility  and  the  design,   acquisition.
construction,  equipping and operation  thereof will conform with all applicable
zoning,  planning,  building  and  environmental  laws,  ordinances,  rules  and
regulations of governmental  authorities having  jurisdiction over the Facility.
The  Company  shall  defend,  indemnify  and hold  harmless  the  Agency and the
Mortgagee for expenses, including reasonable attorneys' fees, resulting from any
failure by the Company to comply with the provisions of this subsection.

     (c) Except us otherwise provided in the Mortgage, the Company shall perform
or cause to be  performed,  for and on  behalf  of the  Agency,  each and  every
obligation of the Agency under and pursuant to the Mortgage.

     (d) Each of the  Company  Documents  and the other  documents  contemplated
thereby  constitutes  a legal,  valid  and  binding  obligation  of the  Company
enforceable against the Company in accordance with its terms.

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     (e) The Company will complete the  acquisition,  construction and equipping
of the Facility in  accordance  with the terms and  provisions  of the Plans and
Specifications.

     (f) The Facility is and will continue to be a "project" as such quoted term
is defined in the Act. The Company will not take any action, or fail to take any
action,  which would cause the  Facility to not  constitute  a "project" as such
quoted term is defined in the Act.

                                   ARTICLE III

                        FACILITY SITE AND TITLE INSURANCE

     Section 3.1 Agreement to Convey to Agency.  The Company has conveyed or has
caused to be conveyed to the Agency (i) good and  marketable  title to the Land,
including any  buildings,  structures or other  improvements  thereon,  and (ii)
lien-free   title  to  the   Equipment,   in  each  case  except  for  Permitted
Encumbrances,  and wilt convey or cause to be  conveyed to the Agency  lien-free
title to the Equipment and Improvements acquired after the date hereof.

     Section 3.2 Title Insurance.  The Company has obtained or will obtain (i) a
fee title  insurance  policy for the benefit of the Agency insuring title to the
Land and the  improvements,  and (ii) a mortgage title policy for the benefit of
the  Mortgagee   insuring  the  Lien  of  the  Mortgage  on  the  Land  and  the
improvements;  in each case in an amount  equal to the fair market  value of the
Land and the Improvements; and in each case except for Permitted Encumbrances.

     Section 3.3 Subordination of Lease Agreement.  This Lease Agreement and any
and all  modifications,  amendments,  renewals and extensions thereof is subject
and  subordinate to the Mortgage and to any and all  modifications,  amendments,
consolidations, extensions, renewals, replacements and increases thereof.

                                   ARTICLE IV

       ACQUISITION, CONSTRUCTION AND EQUIPPING OF FACILITY; MAKING OF THE
                                      LOAN

     Section  4.1   Acquisition,   Construction   and   Equipment  of  Facility.

     (a) The Company  agrees  that,  on behalf of the Agency,  it will  acquire,
construct   and  equip  the   Facility   in   accordance   with  the  Plans  and
Specifications.

     (b) The Company may revise the Plans and  Specifications  from time to time
with  the  written  approval  of  the  Mortgagee,  which  approval  may  not  be
unreasonably  withheld  but  which  may be  subject  to such  conditions  as the
Mortgagee may deem appropriate.

     (c)  Title  to all  materials,  equipment,  machinery  and  other  items of
Property  incorporated  or installed  in the  Facility  shall vest in the Agency
immediately  upon the Company's  obtaining its interest in or to the  materials,
equipment,  machinery and other items of Property.  The Company  shall  execute,
deliver and record or file all  instruments  necessary or appropriate to so vest
title to the  Agency  and shall  take all action  necessary  or  appropriate  to
protect such title against claims of any third Persons.

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<PAGE>

     (d) The Agency hereby  appoints the Company its true and lawful agent,  and
the Company hereby  accepts such agency (i) to acquire,  construct and equip the
Facility in accordance with the Plans and Specifications. (ii) to make, execute,
acknowledge  and  deliver  any  contracts,   orders,   receipts,   writings  and
instructions  with any other Persons,  and in general to do all things which may
be requisite or proper,  all for constructing the improvements and acquiring and
installing  the Equipment with the same powers and with the same validity as the
Agency  could do if acting on its own behalf,  (iii) to pay all fees,  costs and
expenses  incurred in the  construction of the  improvements and the acquisition
and  installation  of the  Equipment  from  funds  made  available  therefor  in
accordance with this Lease Agreement,  and (iv) to ask,  demand,  sue for, levy,
recover  and  receive  all such sums or  money,  debts,  dues and other  demands
whatsoever  which may be due, owing and payable to the Agency under the terms of
any contract,  order,  receipt,  or writing in connection with  construction and
completion of the  Improvements  and the  acquisition  and  installation  of the
Equipment, and to enforce the provisions of any contract, agreement, obligation,
bond or other performance security.

     (e) The  Agency  shall  enter  into,  and accept the  assignment  of,  such
contracts as the Company may request in order to effectuate the purposes of this
Section 4.1.

     (f) The Company. as agent for the Agency,  shall comply with all provisions
of the Labor Law of the State  applicable to the  acquisition,  construction and
equipping of the Facility and shall  include in all  construction  contracts all
provisions  which may be  required to be  inserted  therein by such  provisions.
Except as provided in the preceding sentence,  the provisions of this subsection
do not create any obligations or duties not created by applicable Law outside of
the terms of this Lease Agreement.

     Section  4.2  Making  of the  Loan.  Disbursements  of Loan  Proceeds.  The
Mortgagee has proposed to make the Loan to the Company.  Loan Proceeds  shall be
disbursed to the Company in accordance with the Loan Agreement.

     Section 4.3  Certificates of Completion.  To establish the Completion Date,
the Company  shall  deliver to the Agency and the  Mortgagee  (1) a  certificate
signed  by  an  Authorized  Representative  of  the  Company  (a)  stating  that
acquisition,  construction  and equipping of the Facility has been  completed in
accordance with the Plans and Specifications  therefor; and (b) stating that the
payment of all labor, services,  materials and supplies used in such acquisition
has been made or provided for; and (ii) such certificates as may be satisfactory
to  the  Mortgagee,   including  without  limitation,  a  final  certificate  of
occupancy,  if  applicable.  The  Company  agrees to complete  the  acquisition,
construction and equipping of the Facility on or before February 28, 2005.

     Section 4.4 Completion by company.

     (a) in the event that the Net  Proceeds of the Loan are not  sufficient  to
pay in full all costs of acquiring,  constructing  and equipping the Facility in
accordance with the Plans and Specifications, the Company agrees to pay, for the
benefit of the Agency  and the  Mortgagee,  all such sums as may be in excess of
the Net Proceeds of the Loan. Title to all portions of the Facility installed or
constructed  at the  Company's  cost or  expense  shall  immediately  upon  such
installation  or  construction  vest in the Agency.  The Company shall  execute,
deliver and record or file such instruments as the Agency or the Mortgagee may

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<PAGE>

request in order to perfect or protect the Agency's  title to or the lien of the
Mortgage on such portions of the Facility.

     (b) The Company shall not be entitled to any  reimbursement for such excess
cost or expense from the Agency or the Mortgagee nor shall it be entitled to any
diminution or abatement of any other  amounts  payable by the Company under this
Lease Agreement.

     Section 4.5  Remedies to be Pursued  Against  Contractors,  Subcontractors,
Materialism  and their  Sureties.  In the event of a default by any  contractor,
subcontractor,  materialman  or other Person  under any  contract  made by it in
connection  with the  Facility  or in the event of a breach of warranty or other
liability with respect to any materials,  workmanship,  or performance guaranty,
the Company at its expense, either separately or in conjunction with others, may
pursue any and all  remedies  available  to it and the Agency,  as  appropriate)
against the contractor, subcontractor, materialman or other Person so in default
and against any surety for the performance of such contract. The Company, in its
own name or in the name of the  Agency,  may  prosecute  or defend any action or
proceeding   or  take  any  other   action   involving   any  such   contractor,
subcontractor,  materialman  or surety or other Person  which the Company  deems
reasonably  necessary,  and in such event the Agency, at the Company's  expense,
hereby  agrees  to  cooperate  fully  with the  Company  and to take all  action
necessary to effect the  substitution  of the Company for the Agency in any such
action or proceeding.

                                    ARTICLE V

                     DEM1SING CLAUSES AND RENTAL PROVISIONS

     Section 5.1 Demise of  Facility.  The Agency  hereby  leases the  Facility,
consisting of the Land as particularly  described in Exhibit A attached  hereto,
the  Improvements  and the  Equipment  as  particularly  described  in Exhibit B
attached  hereto,  to the Company and the Company hereby takes the Facility from
the Agency upon the terms and conditions of this Lease Agreement.

     Section 5.2 Duration of Lease Term; Quiet Enjoyment.

     (a) The Agency shall deliver to the Company sole and  exclusive  possession
of the Facility (subject to Sections 3.3, 8.3 and 10.2 hereof) and the leasehold
estate  created  hereby shall commence on the Closing Date and the Company shall
accept possession of the Facility on the Closing Date.

     (b) Except as provided in Section 10.2 hereof, the leasehold estate created
hereby shall  terminate  at 11:59 p.m. on February 28, 2015,  or on such earlier
date as may be permitted by Section 11.1 hereof; provided, however, that, except
as provided in Section  10.2  hereof, in no event shall this Lease  Agreement be
terminated  until the Loan  shall have been paid in full or  provision  for such
full payment shall have been made.

     (c) Except as provided in Sections  3.3,  8.3 and 10.2  hereof,  the Agency
shall neither take nor suffer or permit any action to prevent the Company during
the Lease Term from having quiet and peaceable  possession  and enjoyment of the
Facility  and will,  at the request of the Company  and at the  Company's  cost,
cooperate  with  the  Company  in order  that the  Company  may have  quiet  and

                                       7
<PAGE>

peaceable possession and enjoyment of the Facility as hereinabove provided.

     Section 5.3 Rents and Other Amounts Payable.

     (a) The  Company  shall pay basic rent for the  Facility  as  follows:  One
Dollar  ($1.00) per year  commencing  on the Closing Date and on each February 1
thereafter during the term of this Lease Agreement.

     (b) In addition to the payments of rent pursuant to Section  5.3(a) hereof,
throughout  the Lease Term,  the Company  shall pay to the Agency as  additional
rent,  within ten (10) days of receipt of demand  therefor,  the expenses of the
Agency and the members thereof incurred (1) by reason of the Agency's  ownership
or leasing of the  Facility or (ii) in  connection  with the carrying out of the
Agency's duties and obligations under the Agency Documents, the payment of which
is not otherwise  provided for under this Lease  Agreement.  The foregoing shall
not be deemed to include any annual or continuing  administrative  or management
fee beyond any initial  administrative  fee or fee for services  rendered by the
Agency,

     (c) The Company,  under the provisions of this Section 5.3,  agrees to make
the  above-mentioned  payments in  immediately  available  funds and without any
further notice in lawful money of the United States of America. In the evens the
Company  shall fail to timely  make any payment  required  in Section  5.3(a) or
5.3(b), the Company shall pay the same together with interest on such payment at
a rate equal to two percent (2%) plus the Prime Rate,  but in no event at a rate
higher  than the maximum  lawful  prevailing  rate,  from the date on which such
payment was due until the date on which such payment is made,

     Section 5.4 Obligations of Company Hereunder Unconditional. The obligations
of the Company to make the  payments  required  in Section  5.3  hereof,  and to
perform and observe any and all of the other  covenants  and  agreements  on its
part contained herein shall be a general obligation of the Company, and shall be
absolute and  unconditional  irrespective of any defense or any rights of setoff
recoupment or counterclaim it may otherwise have against the Agency. The Company
agrees  it will not (1)  suspend,  discontinue  or abate  any  payment  required
hereunder, (ii) fail to observe any of its other covenants or agreements in this
Lease Agreement or (iii) terminate this Lease Agreement for any cause whatsoever
unless and until the Loan has been paid in full.

     Subject to the  foregoing  provisions,  nothing  contained  in this Section
shall be  construed  to release  the Agency from the  performance  of any of the
agreements on its part contained in this Lease  Agreement or to affect the right
of the Company to seek reimbursement, and in the event the Agency should fail to
perform any such  agreement,  the Company may  institute  such  separate  action
against the Agency as the Company may deem  necessary to compel  performance  or
recover damages for non-performance,  and the Agency Covenants that it will not,
subject to the  provisions  of Sections 3.3 and 8.3 and Article X hereof,  take,
suffer or permit any action which will adversely affect, or create any defect in
its title to the Facility or which will otherwise adversely affect the rights or
estate of the Company hereunder, except upon written consent of the Company.

     Section 5.5 Payment of Additional Moneys in Prepayment of Loan. In addition
to any other  moneys  required or  permitted  to be paid  pursuant to this Lease
Agreement,  the  Company  may,  subject  to the  terms  of the Note and the Loan

                                       8
<PAGE>

Agreement, pay moneys to the Mortgagee to be used for the prepayment of the Loan
at such time or times and on such terms and  conditions  as is  provided  in the
Note and the Loan Agreement.

     Section 5.6 Rights and  Obligations of the Company upon Prepayment of Loan.
In the event the Loan shall have been paid in full prior to the termination date
specified in Section 5.2(b) hereof (i) all references in this Lease Agreement to
the  Mortgagee,  the  Loan  Agreement,  the  Note  and  the  Mortgage  shall  be
ineffective  and (ii) the  Company  shall be  entitled,  at its  option,  to the
exclusive  use,  occupancy  and  enjoyment of the Facility from the date of such
payment  until the  scheduled  expiration of the Lease Term, on all of the terms
and  conditions  hereof,  except that the Company shall not be required to carry
any  insurance  for the benefit of the  Mortgagee,  or the  Company  may, at its
option, require the Agency to convey the Facility to the Company pursuant to the
terms of Section 1l.3 hereof.  in the event of any such payment or the making of
any such provision,  the Agency,  at the sole cost of the Company,  shall obtain
and record or file  appropriate  discharges  or releases of the Mortgage and any
other security interest relating to the Facility or this Lease Agreement.

                                   ARTICLE VI

              MAINTENANCE, MODIFICATIONS. TAXES AND INSURANCE

     Section 6.I Maintenance and Modification of Facility by Company,

     (a) The Company shall not abandon the Facility or cause or permit any waste
to the  Improvements.  During the Lease Term,  the Company  shall not remove any
part of the  Facility  outside of the  jurisdiction  of the Agency and shall (i)
keep the  Facility in as  reasonably  safe  condition  as its  operations  shall
permit;  (ii)  make all  necessary  repairs  and  replacements  to the  Facility
(whether  ordinary or extraordinary,  structural or  nonstructural,  foreseen or
unforeseen); and (iii) operate the Facility in a sound and economic manner.

     (b) With the written  consent of the Agency and the Mortgagee,  the Company
from  time  to  time  may  make  any  structural  additions,   modifications  or
improvements  to the Facility or any part thereof,  provided such actions do not
adversely  affect the  structural  integrity or value of the Facility.  All such
additions, modifications or improvements made by the Company shall become a part
of the Facility and the Property of the Agency, The Company agrees to deliver to
the Agency all documents  which may be necessary or appropriate to convey to the
Agency  title  to such  Property  and to  perfect  or  protect  the  Lien of the
Mortgage.

     Section 6.2 Installation of Additional Equipment. Subject to the provisions
of Section 8.10 hereof,  the Company or any  permitted  sublessee of the Company
from time to time may install additional machinery,  equipment or other personal
property in the Facility (which may be attached or affixed to the Facility), and
such  machinery,  equipment or other personal  property shall not become,  or be
deemed to become,  a part of the  Facility.  The  Company  from time to time may
create or permit to be created any Lien on such  machinery,  equipment  or other
personal property.  Further,  the Company from time to time may remove or permit
the removal of such  machinery,  equipment and other personal  property from the
Facility,  provided that any such removal of such machinery,  equipment or other
personal  property shall not occur (i) if any Event of Default has occurred;  or
(ii) if any such removal shall adversely affect the structural  integrity of the
Facility or impair the overall  operating  efficiency  of the  Facility  for the

                                       9
<PAGE>

purposes for which it is intended,  and provided further,  that if any damage is
occasioned  to the  Facility by such  removal,  the  Company  agrees to promptly
repair such damage at its own expense.

     Section 6.3 Taxes. Assessments and Utility Charges.


     (a) The Company  agrees to pay, as the same become due and before any fine,
penalty,  interest  (except interest which is payable in connection with legally
permissible  installment  payments) or other cost may be added thereto or become
due or be imposed  by  operation  of law for the  non-payment  thereof,  (i) all
taxes, payments in lieu of taxes and governmental charges of any kind whatsoever
which may at any time be lawfully  assessed or levied against or with respect to
the Facility and any machinery, equipment or other Property installed or brought
by the Company therein or thereon, including, without limiting the generality of
the  foregoing,  any sales or use taxes  imposed with respect to the Facility or
any part or component thereof, or the rental or sale of the Facility or any part
thereof and any taxes  levied upon or with  respect to the income or revenues of
the Agency from the  Facility;  (ii) all utility  and other  charges,  including
service  charges,  incurred  or imposed  for or with  respect to the  operation,
maintenance,  use, occupancy,  upkeep and improvement of the Facility; (iii) all
assessments and charges of any kind whatsoever lawfully made by any governmental
body for public  improvements;  and (iv) all payments under the Pilot Agreement;
provided that, with respect to special assessments or other governmental charges
that may lawfully be paid in  installments  over a period of years,  the Company
shall be obligated under this Lease  Agreement to pay only such  installments as
are required to be paid during the Lease Term.

     (b) The Company may in good faith contest any such taxes,  assessments  and
other charges. In the event of any such proceedings,  the Company may permit the
taxes,  assessments  or other  charges so contested to remain  unpaid during the
period of such proceedings and any appeal therefrom, provided, however, that (i)
neither the Facility nor any part  thereof or interest  therein  would be in any
immediate danger of being sold,  forfeited or lost by reason of such proceedings
and (ii) the Company  shall have set aside on its books  adequate  reserves with
respect  thereto  and shall have  furnished  such  security,  if any,  as may be
required in such proceedings or requested by the Agency or the Mortgagee.

     (c)  The  Agency  agrees  that if it or the  Company  contests  any  taxes,
assessments  or other  charges  provided for in paragraph  (b) hereof,  all sums
returned, as a result thereof, will be promptly transmitted by the Agency to the
Company and that the Company shall be entitled to retain all such amounts.

     (d) Within  thirty (30) days of receipt of written  request  therefor,  the
Company shall deliver to the Agency and the Mortgagee  official  receipts of the
appropriate  taxing  authorities or other proof  reasonably  satisfactory to the
Agency and the Mortgagee evidencing payment of any tax.

     Section 6.4 Insurance  Required.  At all times  throughout  the Lease Term,
including,  when indicated herein,  during the Construction  Period, the Company
shall,  at its  sole  cost and  expense,  maintain  or  cause  to be  maintained
insurance  against  such risks and for such amounts as are  customarily  insured
against by  businesses  of like size and type and shall pay,  as the same become
due  and  payable,  all  premiums  with  respect  thereto,  including,  but  not
necessarily limited to:

                                       10
<PAGE>

     (a)  Insurance  against  loss  or  damage  by  fire,  lightning  and  other
casualties  customarily  insured  against,  with  a  uniform  standard  extended
coverage  endorsement,  such insurance to be in an amount not less than the ful1
replacement  value of the  completed  Improvements,  exclusive  of footings  and
foundations,  as determined by a recognized appraiser or insurer selected by the
Company,  but in no event less than the principal amount of the Loan. During the
Construction  Period,  such policy shall be written in the so-called  "Builder's
Risk Completed Value  Non-Reporting Form" and shall contain a provision granting
the insured permission to complete and/or occupy.

     (b) Workers' compensation insurance, disability benefits insurance and each
other form of insurance which the Company or any permitted sublessee is required
by law to provide, covering loss resulting from injury, sickness,  disability or
death of employees of the Company or any permitted  sublessee who are located at
or assigned to the Facility. This coverage shall be in effect from and after the
Completion  Date or on such  earlier date as any  employees of the Company,  any
permitted sublessee, any contractor or subcontractor first occupy the Facility.

     (c) Insurance  protecting the Agency and the Company against loss or losses
from liability imposed by law or assumed in any written contract  (including the
contractual  liability  assumed by the  Company  under  Section  8.2  hereof) or
arising from personal injury, including bodily injury or death, or damage to the
property of others,  caused by an accident or other occurrence,  with a limit of
liability  of not less titan  $1,000,000  (combined  single  limit for  personal
injury,  including bodily injury or death, and property  damage);  comprehensive
automobile  liability  insurance covering all owned,  non-owned and hired autos,
with a limit of liability of not less than $1,000,000  (combined single limit or
equivalent for personal  injury,  including bodily injury or death, and property
damage);  and  blanket  excess  liability  coverage,  in an amount not less than
$5,000,000  combined  single limit or equivalent,  protecting the Agency and the
Company against any loss or liability or damage for personal  injury,  including
bodily  injury or death,  or property  damage.  This  coverage  shall also be in
effect during the Construction Period.

     (d) During the Construction Period (and for at least one year thereafter in
the case of Products and Completed  Operations as set forth below),  the Company
shall cause the general contractor to carry liability  insurance of the type and
providing the minimum limits set forth below:

          (i) Workers'  compensation  and  employer's  liability  with limits in
          accordance with applicable law.

          (ii) Comprehensive general liability providing coverage for:

               Premises and Operations
               Products and Completed Operations
               Owners Protective
               Contractors Protective
               Contractual Liability
               Personal Injury Liability
               Broad Form Property Damage
               (including completed operations)
               Explosion Hazard

                                       11
<PAGE>

               Collapse Hazard
               Underground Property Damage Hazard


     Such insurance  shall have a limit of liability of not less than $1,000,000
(combined  single limit for personal  injury,  including bodily injury or death,
and property damage).

          (iii) Comprehensive auto liability, including all owned, non-owned and
          hired autos,  with a limit of  liability  of not less than  $1,000,000
          (combined single limit for personal injury1 including bodily injury or
          death, and property damage).

          (iv) Excess  "umbrella"  liability  providing  liability  insurance in
          excess of the  coverages in (i), (ii) and (iii) above with, a limit of
          not less than $5,000,000.

     (e) A policy or policies of flood  insurance in an amount not less than the
principal amount of the Loan or the maximum amount of flood insurance  available
with respect to the Facility under the Flood Disaster Protection Act of 1973, as
amended, whichever is less, This requirement will be waived upon presentation of
evidence  satisfactory  to the Mortgagee  that no portion of the Land is located
within  an  area  identified  by  the  U.S.  Department  of  Housing  and  Urban
Development as having special flood hazards.

     Section 6.5 Additional Provisions Respecting Insurance.

     (a) All  insurance  required  by Section 6.4 hereof  shall be procured  and
maintained in financially sound and generally recognized  responsible  insurance
companies  authorized  to write such  insurance in the State and selected by the
entity required to procure the same, The company  issuing the policies  required
by Section 6,4(a) and (c) shall be rated "A" or better by A.M. Best Co., Inc. in
Best's Key Rating Guide.  Such insurance may be written with deductible  amounts
comparable to those on similar  policies  carried by other companies  engaged in
businesses  similar in size,  character and other respects to those in which the
procuring entity is engaged.  All policies  evidencing the insurance required by
Sections   6,4(a)  and  (e)   hereof   shall   contain  a   standard   New  York
non-contributory mortgagee clause showing the interest of the Mortgagee as first
mortgagee,  shall  provide for payment to the  Mortgagee  of the Net Proceeds of
insurance  resulting  from any  claim  for  loss or  damage  thereunder  and all
policies of insurance  required by Section 6.4 hereof shall provide for at least
thirty  (30) days  prior  written  notice of the  restriction,  cancellation  or
modification thereof to the Agency and the Mortgagee.  The policy evidencing the
insurance  required  by  Section  6.4(c)  hereof  shall  name the Agency and the
Mortgagee as additional  named insureds.  All policies  evidencing the insurance
required  by Sections  6.4(d)(ii),  (iii) and (iv) shall name the Agency and the
Company as additional named insureds.  The Company  acknowledges that a mortgage
and security  interest in the policies of insurance  required by Section  6.4(a)
and the Net  Proceeds  thereof  have been or may be granted by the Agency to the
Mortgagee  pursuant to the  Mortgage  and the  Company  consents  thereto,  Upon
request of the Mortgagee,  the Company will assign and deliver (which assignment
shall be deemed to be automatic and to have  occurred upon the  occurrence of an
Event of Default under the Mortgage) to the Mortgagee, the policies of insurance
required under Section 6.4(a), so and in such manner and form that the Mortgagee
shall at all times, upon such request and until the payment in full of the Loan,
have and hold said policies  and the Net Proceeds  thereof,  as collateral  and
further security under the Mortgage for the payment of the Loan. The policies

                                       12
<PAGE>

under Section 6.4(a) shall contain appropriate  waivers of subrogation.  Nothing
contained in this Lease  Agreement is intended to limit or modify any  insurance
requirements set forth in the Mortgage

     (b) The policies  (or  certificates  or binders) of  insurance  required by
Sections  6.4(a) and (e) hereof  shall be  deposited  with the  Mortgagee  on or
before the  Closing  Date.  A copy of the policy (or  certificate  or binder) of
insurance  required by Section 6.4(c) hereof shall be delivered to the Agency on
or before the C1osing Date. A copy of the policies (or  certificates or binders)
of  insurance  required by Sections  6.4(d)(ii),  (iii) and (iv) hereof shall be
delivered to the Agency on or before the Closing Date. The company shall deliver
to the Agency and the Mortgagee  before the first  Business Day of each calendar
year thereafter a certificate  dated not earlier than the immediately  preceding
month  reciting that there is in full force and effect,  with a term covering at
least  the next  succeeding  calendar  year,  insurance  of the types and in the
amounts  required  by  Section  6.4  hereof and  complying  with the  additional
requirements  of Section  6.5(e)  hereof.  Prior to the  expiration of each such
policy or  policies,  the  Company  shall  furnish  to the  Agency and any other
appropriate  Person on new policy or policies of insurance or evidence that such
policy or policies  have been  renewed or replaced or are no longer  required by
this Lease  Agreement,  The Company shall provide such further  information with
respect to the insurance coverage required by this Lease Agreement as the Agency
and the Mortgagee may from time to time reasonably require.

     Section 6.6  Application of Net Proceeds of Insurance.  The Net Proceeds of
the insurance  carried pursuant to the provisions of Section 6.4 hereof shall be
applied as follows:  (i) the Net Proceeds of the insurance  required by Sections
6.4(e) and (e) hereof  shall be applied as provided  in Section 7.1 hereof,  and
(ii) the Net Proceeds of the insurance  required by Sections 6.4(b), (c) and (d)
hereof shall be applied toward  extinguishment  or satisfaction of the liability
with respect to which such insurance proceeds may be paid.

     Section 6.7 Right of Mortgage to Pay Taxes,  Insurance  Premiums  and Other
Charges.  If the Company fails to pay any tax, together with any fine,  penalty,
interest or cost which may have been added thereto or become due or been Imposed
by  operation  of law for  nonpayment  thereof,  or  payments  in lieu of  taxes
pursuant  to the  PILOT  Agreement,  assessment  or  other  governmental  charge
required  to be paid by Section  6.3  hereof,  (ii) to  maintain  any  insurance
required  to be  maintained  by  Section  6.4  hereof,  (iii) to pay any  amount
required to be paid by any law or ordinance  relating to the use or occupancy of
the Facility or by any requirement,  order or notice of violation thereof issued
by any governmental person, (iv) to pay any mechanic's Lien which is recorded or
filed against the Facility or any part thereof  (unless  contested in accordance
with the provisions of Section 8.9(b) hereof), or (v) to pay any other amount or
perform  any act  hereunder  required  to be paid or  performed  by the  Company
hereunder,  the Agency or the  Mortgagee may pay or cause to be paid such tax or
payments in lieu of taxes pursuant to the PILOT  Agreement,  assessment or other
governmental  charge or the premium for such insurance or any such other payment
or may perform any such act. No such payment  shall be made or act  performed by
the Agency or the  Mortgagee  until at least ten (10) days  shall  have  elapsed
since notice shall have been given by the  Mortgagee to the Agency,  with a copy
of such  notice  being given to the Company (or by the Agency to the Company and
the Mortgagee), and in the case of any tax, assessment or governmental charge or
the amounts specified in paragraphs (iii) and (iv) hereof, no such payment shall
be made in any event if the Company is contesting  the same in good faith to the

                                       13
<PAGE>

extent and us  permitted by this Lease  Agreement an Event of Default  hereunder
shall have  occurred  and be  continuing.  No such  payment by the Agency or the
Mortgagee  shall  affect or impair any rights of the Agency  hereunder or of the
Mortgagee  under the  Mortgage  arising in  consequence  of such  failure by the
Company. The Company shall, on demand, reimburse the Agency or the Mortgagee for
any amount so paid or for expenses or costs  incurred in the  performance of any
such act by the Agency or the  Mortgagee  pursuant to this Section  (which shall
include alt  reasonable  legal fees and  disbursements),  together with interest
thereon from the date of payment of such amount expense or cost by the Agency or
the  Mortgagee  at two Percent (2%) in excess of the rate set forth in the Note,
and  such  amount,   together  with  such  interest,   shall  become  additional
indebtednes5 secured by the Mortgage.

                                   ARTICLE VII

                          DAMAGE, DESTRUCTION AND CONDEMNATION

     Section 7.1 Damage or Destruction of the Facility.

     (a) If the  Facility or any part or component  thereof  shall be damaged or
destroyed (in whole or in part) at any time during the Lease Term:

          (i) the Agency shall have no obligation to replace,  repair,  rebuild,
          restore or relocate the Facility: and

          (ii) there shall be no abatement  or reduction in the amounts  payable
          by the  Company  under this  Lease  Agreement  or the PILOT  Agreement
          (whether or not the Facility is replaced,  repaired, rebuilt, restored
          or relocated); and

          (iii) the Company shall  promptly give written  notice  thereof to the
          Agency and the Mortgagee; and

          (iv)  upon  the  occurrence  of such  damage  or  destruction  the Net
          Proceeds derived from the insurance shall be paid to the Mortgagee and
          except as  otherwise  provided  in  Section 11 .1 and  subsection  (d)
          hereof,  applied  by  the  Mortgagee  pursuant  to  the  terms  of the
          Mortgage; and

          (v) if the Facility is not  replaced  repaired,  rebuilt,  restored or
          relocated, as provided herein and in Section 7.1(b) hereof, this Lease
          Agreement  shall be  terminated  at the  option of the  Agency and the
          provisions of Sections 11.2, 11.3 and 11.4 hereof shall apply,

     (b) Any replacements  repairs,  rebuilding,  restorations or relocations of
the Facility by the Company after the  occurrence of such damage or  destruction
shall be subject to the following conditions:

          (i) the Facility  shall be in  substantially  the same  condition  and
          value  as an  operating  entity  as  existed  prior to the  damage  or
          destruction;

          (ii) the  Facility  shall  continue to  constitute a "project" as such
          term is defined in the Act;


                                       14
<PAGE>

          (iii) the Facility will be subject to no Liens,  other than  Permitted
          Encumbrances; and

          (iv) any other conditions the Mortgagee may reasonably impose.

     (c) All such repair, replacement,  rebuilding, restoration or relocation of
the Facility  shall be effected  with due  diligence  in a good and  workmanlike
manner in compliance with all applicable legal  requirements,  shall be promptly
and fully paid for by the Company in accordance with the terms of the applicable
contracts,  and shall automatically become a part of the Facility as if the same
were specifically provided herein.

     (d) If the  Company  shall  exercise  its  option to  terminate  this Lease
Agreement pursuant to Section 11.1. hereof such Net Proceeds shall be applied to
the payment of the amounts  required to be paid by Section  11.2  hereof.  If an
Event of Default  hereunder  shall have  occurred and the  Mortgagee  shall have
exercised  its remedies  under  Section  10.2 hereof such Net Proceeds  shall be
applied to the  payment of the amounts  required to be paid by Section  10.2 and
Section 10.4 hereof,

     (e) If the entire  amount of the Loan and  interest  thereon has been fully
paid, all such remaining Net Proceeds shall be paid to the Company.

     (f) If the Facility has been substantially  damaged or destroyed and is not
replaced,  repaired,  rebuilt,  restored  or  relocated,  the  Facility  will be
reconveyed to the Company subject to the Mortgage.

     Section 7.2 Condemnation.

     (a) If title to or use of the Facility shall be taken by  Condemnation  (in
whole or in part) at any time during the Lease Term:

          (i) the Agency shall have no obligation to replace,  repair,  rebuild,
          restore or  relocate  the  Facility  or acquire,  by  construction  or
          otherwise, facilities of substantially the same nature as the Facility
          ("Substitute Facilities"); and

          (ii) there shall be no abatement  or reduction in the amounts  payable
          by the  Company  under this  Lease  Agreement  or the PILOT  Agreement
          (whether or not the Facility is replaced,  repaired, rebuilt, restored
          or relocated or Substitute Facilities acquired); and

          (iii) the Company shall  promptly give written  notice  thereof to the
          Agency and the Mortgagee; and

          (iv)  upon  the  occurrence  of such  Condemnation,  the Net  Proceeds
          derived  therefrom  shall  be  paid to the  Mortgagee  and  except  as
          otherwise provided in Section 11 .1 and subsection (d) hereof, applied
          by the Mortgagee pursuant to the terms of the Mortgage; and

          (v) if the Facility is not replaced,  repaired,  rebuilt,  restored or
          relocated,  or Substitute  Faci1lties acquired, as provided herein and
          in Section 7.2(h) hereof,  this Lease Agreement shall be terminated at
          the option of the Agency and the provisions of Section 11 .2, 11.3 and
          11.4 hereof shall apply.


                                       15
<PAGE>

     (b) Any replacements,  repairs, rebuilding,  restorations or relocations of
the Facility or acquisitions  of Substitute  Facilities by the Company after the
occurrence of such Condemnation shall ho subject to the following conditions;

          (i)  the   Facility  or  the   Substitute   Facilities   shall  be  in
          substantially  the same condition and value as an operating  entity as
          existed prior to the Condemnation;

          (ii) the  Facility  or the  Substitute  Facilities  shall  continue to
          constitute a "project" as such term is defined in the Act;

          (iii) the Facility or the Substitute  Facilities will be subject to no
          Liens, other than Permitted Encumbrances; and

          (iv) any other conditions the Mortgagee may reasonably impose,

     (c) All such repair, replacement,  rebuilding, restoration or relocation of
the Facility or acquisition of Substitute  Facilities shall be effected with due
diligence in a good and  workmanlike  manner in compliance  with all  applicable
legal  requirements,  shall be  promptly  and fully  paid for by the  Company in
accordance with the terms of the applicable  contracts,  and shall automatically
become a part of the Facility as if the same were specifically described herein.

     (d) If the  Company  shall  exercise  its  option to  terminate  this Lease
Agreement  pursuant to Section 11.1 hereof such Net Proceeds shall be applied to
the payment of the amounts  required to be paid by Section 11.2  hereof.  If any
Event of Default  hereunder  shall have  occurred and the  Mortgagee  shall have
exercised  its remedies  under Section 10.2 hereof such.  Net Proceeds  shall be
applied to the  payment of the amounts  required to be paid by Section  10.2 and
Section 10,4 hereof

     (e) If the entire  amount of the Loan and  interest  thereon has been fully
paid, all such remaining Net Proceeds shall be paid to the Company.

     (f) If the Facility has been  substantially  condemned and is not replaced,
repaired,  rebuilt,  replaced or relocated  or if a  Substitute  Facility is not
acquired,  constructed  and  equipped,  the Facility  will be  reconveyed to the
Company subject to the Mortgage.

     Section 7.3  Condemnation of Company-Owned  Property.  The Company shall be
entitled to the proceeds of any  Condemnation  award or portion thereof made for
damage to or taking of any Property which, at the time of such damage or taking,
is not part of the Facility.

     Section 7.4 Waiver of Real  Property Law Seption  227.  The Company  hereby
waives the  previsions of Section.  227 of the Real Property Law of the State or
any law of 111cc import now or hereafter in effect.


                                       16
<PAGE>

                                  ARTICLE VIII

                                SPECIAL COVENANTS

     Section 8.1 No Warranty of Condition or Suitability  by Agency.  THE AGENCY
MAKES NO  WARRANTY,  EITHER  EXPRESS  OR IMPLIED  AS TO THE  CONDITION,  DESIGN,
OPERATION,  MERCHANTABILITY  OR FITNESS OF, OR TITLE TO. THE FACILITY OR THAT IT
IS OR WILL BE SUITABLE FOR THE COMPANY'S PURPOSES OR NEEDS.

     Section 8.2 Hold Harmless Provisions.

     (a) The Company agrees that the Agency, its directors,  members,  officers,
agents (except the Company) and employees  shall not be liable for and agrees to
defend,  indemnify,  release  and  hold  the  Agency,  its  directors,  members,
officers,  agents (except the Company) and employees  harmless from and against
any and all (i)  liability  for loss or damage to Property or injury to or death
of any and all Persons that may be occasioned by,  directly or  indirectly,  any
cause  whatsoever  pertaining  to the  Facility  or  arising  by reason of or in
connection  with the occupation or the use thereof or the presence of any Person
or Property on, in or about the Facility or the Land or (ii)  liability  arising
from or expense  incurred by the Agency's  financing,  acquiring,  constructing,
equipping,  owning and leasing of the Facility,  including  without limiting the
generality of the  foregoing,  all claims arising from the breach by the Company
of any of its  covenants  contained  herein,  the exercise by the Company of the
authority  conferred upon It pursuant to Section 4.1(c) of this Lease  Agreement
and all causes of action and  attorneys'  fees (whether by reason of third party
claims or by reason of the  enforcement of any provision of this Lease Agreement
(including  without  limitation  this  Section)  or any of the  other  documents
delivered on the Closing Date by the Agency), and any other expenses incurred in
defending any claims, suits or actions which may arise as a result of any of the
foregoing,  provided that any such losses,  damages,  liabilities or expenses of
the  Agency  are not  incurred  or do not result  from the gross  negligence  or
intentional  or  willful  wrongdoing  of the  Agency  or  any of its  directors,
members,  agents  (except the Company) or employees.  The foregoing  indemnities
shall apply  notwithstanding  the fault or negligence in part of the Agency,  or
any of its members, directors, officers, agents or employees and irrespective of
the  breach  of a  statutory  obligation  or  the  application  of any  rule  of
comparative or apportioned liability. The foregoing indemnities are limited only
to the extent of any  prohibitions  imposed by law, and upon the  application of
any such  prohibition by the final judgment or decision of a competent  court of
law, the remaining  provisions of these  indemnities  shall remain in full force
and effect.

     (b)  Notwithstanding  any other  provisions  of this Lease  Agreement,  the
obligations  of the Company  pursuant to this  Section 8.2 shall  remain in full
force and  effect  after  the  termination  of this  Lease  Agreement  until the
expiration of the period stated in the applicable  statute of limitations during
which a claim,  cause of action or  prosecution  relating to the matters  herein
described may be brought and payment in full or the  satisfaction of such claim,
cause of action or prosecution  relating to the matters herein described and the
payment of all  expenses  and charges  incurred by the Agency,  or its  members,
directors,  officers,  agents and employees,  relating to the enforcement of the
provisions herein specified.

     (c) In the event of any claim against the Agency or its members, directors,
officers,  agents or employees by any employee or  contractor  of the Company or


                                       17
<PAGE>

anyone  directly or indirectly  employed by any of them or anyone for whose acts
any of them may be liable, the obligations of the Company hereunder shall not be
limited  in  any  way by any  limitation  on the  amount  or  type  of  damages,
compensation, disability benefits or other employee benefit acts.

     Section 8.3 Right to Inspect Facility. The Agency and the Mortgagee and the
duly authorized  agents of either of them shall have the right at all reasonable
times to inspect the Facility.

     Section 8.4  Company to Maintain  Its  Existence.  The Company  agrees that
during the Lease Term it will  maintain  its  existence  and will not  dissolve,
liquidate or otherwise dispose of substantially all of its assets.

     Section 8.5  Qualification in State, The Company  throughout the Lease Term
shall continue to be duly authorized to do business in the State.

     Section 8.6 Agreement to File Annual  Statements  and Provide  Information.
The  Company  shall  file with the New York State  Department  of  Taxation  and
Finance  an annual  statement  of the value of all sales and use tax  exemptions
claimed in connection  with the Facility in compliance  with Sections 874(8) and
(9) of the New York State General Municipal Law. The Company shall submit a copy
of such annual statement to the Agency at the time of filing with the Department
of Taxation and Finance.  The Company further agrees  whenever  requested by the
Agency to  provide  and  certify  or cause to be  provided  and  certified  such
information concerning the Company, its finances, its operations, its employment
and its affairs  necessary  to enable the Agency to make any report  required by
law,  governmental  regulation  or  any  of  the  Agency  Documents  or  Company
Documents.  Such information shall be provided within thirty (30) days following
written request from the Agency.

     Section 8.7 Books of Record and Account,  Financial Statements. The Company
at all times agrees to maintain proper accounts, records and books in which full
and  correct  entries  shall be made,  in  accordance  with  generally  accepted
accounting  principles,  of all transactions and events relating to the business
and affairs of the Company,  The Company  shall furnish to the Agency and to the
Mortgagee  within  thirty (30) days of their filing,  copies of all reports,  if
any,  filed  with the  Securities  and  Exchange  Commission,  pursuant  to the
Securities Exchange Act of 1934, as amended, relative to the Company.

     Section 8.8 Compliance With Orders, Ordinances, Etc.

     (a) The Company,  throughout  the Lease Term,  agrees that it will promptly
comply, and cause any sublessee or occupant of the Facility to comply,  with all
statutes,   codas,  laws,  acts,   ordinances,   orders,   judgments,   decrees,
injunctions, rules, regulations, permits, licenses,  authorizations,  directions
and requirements,  ordinary or extraordinary, which now or at any time hereafter
may be  applicable  to the Facility or arty part thereof or to the  acquisition,
construction and equipping thereof, or to any use, manner of use or condition of
the Facility or any part  thereof,  all federal,  state,  county,  municipal and
other  governments,   departments,  commissions,  boards,  courts,  authorities,
officials and officers having  jurisdiction to the Facility or any part thereof,
or to the acquisition, construction and equipping thereof, or to any use, manner
of use or  condition  of the  Facility or any part  thereof or to  companies  or
associations insuring the premises.


                                       18
<PAGE>

     (b) The  company  shall  keep or  cause  the  Facility  to be kept  free of
Hazardous  Substances.  Without  limiting the  foregoing,  the Company shall not
cause or  permit  the  Facility  to be used to  generate,  manufacture,  refine,
transport, treat, store, handle, dispose, transfer, produce or process Hazardous
Substances,  except in compliance with all applicable  federal,  state and local
laws or regulations,  nor shall the Company cause or permit,  as a result of any
intentional or unintentionial  act or omission on the part of the Company or any
contractor,   subcontractor,   tenant  or  subtenant,  a  release  of  Hazardous
Substances  onto the  Facility or onto any other  properly.  The  Company  shall
comply with and ensure  compliance by all contractors,  subcontractors,  tenants
and subtenants with all applicable  federal,  state and local laws,  ordinances,
rules and regulations,  whenever and by whomever triggered, and shall obtain and
comply  with,  and ensure  that all  contractors,  subcontractors,  tenants  and
subtentans  obtain and comply  with,  any and all  approvals,  registrations  or
permits  required  thereunder.  The Company  shall (a) conduct and  complete all
investigations,  studies, sampling, and testing, and all remedial,  removal, and
other  actions  necessary to clean up and remove all Hazardous  Substances,  on,
from, or affecting the Facility (i) in accordance  with all applicable  federal,
state, and local laws, ordinances, rules, regulations, and policies, (ii) to the
satisfaction  of the Mortgagee  and the Agency and (iii) in accordance  with the
orders and directives of all federal, state, and local governmental authorities;
and (b) defend, indemnify, and hold harmless the Mortgagee and the Agency, their
employees, agents, officers, members and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs, or expenses
of whatever kind or nature, known or unknown,  contingent or otherwise,  arising
out of,  or in any  way  related  to (i) the  presence,  disposal,  release,  or
threatened  release of any hazardous  Substances which are on, from or affecting
the soil, water, vegetation,  buildings, personal property, persons, animals, or
otherwise, (ii) any bodily injury, personal injury (including wrongful death) or
property  damage (real or personal)  arising out of or related to such Hazardous
Substances,  (iii) any lawsuit  brought or threatened,  settlement  reached,  or
government  order  relating  to  such  Hazardous  Substances,  and/or  (iv)  any
violation of laws, orders, regulations,  requirements,  or demands of government
authorities,  or any policies or  requirements  of the Mortgagee and the Agency,
which  are  based  upon or in any way  related  to  such  Hazardous  Substances,
including,  without limitation,  attorney and consultant fees, investigation and
laboratory fees, court costs, and litigation expenses. In the event the Mortgage
is foreclosed, or the Company tenders a deed in lieu of foreclosure, the Company
shall deliver the Facility free of any and all Hazardous  Substances so that the
condition of the Facility shall conform with all applicable  federal,  state and
local  laws,  ordinances,  rules or  regulations  affecting  the  Facility.  The
provisions of this Section shall be in addition to any and all other obligations
and  liabilities  the Company may have to the Agency and the Mortgagee at common
law, and shall survive the transactions contemplated herein,

     (c)  Notwithstanding  the provisions of subsections (a) and (b) hereof, the
Company may in good  faith  Contest the  validity or the  applicability  of any
requirement  of the  nature  referred  to in  such  subsections  (a)  and (b) by
appropriate legal proceedings conducted in good faith and with due diligence, in
such event,  the Company may fail to comply with the requirement or requirements
so contested during the period of such contest and any appeal therefrom,  unless
the Agency or the  Mortgagee  shall notify the Company that by failure to comply
with such requirement or requirements,  the Lien of the Mortgage as to any part
of the Facility may be materially endangered or the Facility or any part thereof
may be subject to loss  (including  loss of value),  penalty or  forfeiture,  in
which event the Company shall promptly take such action with respect  thereto or
provide  such  security as shall be  satisfactory  to the  Mortgagee  and to the


                                       19
<PAGE>

Agency. If at any time the then existing use or occupancy of the Facility shall,
pursuant to any zoning or other law, ordinance or regulation,  be permitted only
so long as such use or occupancy shall continue,  the Company shall use its best
efforts to not cause or permit such use or occupancy to be discontinued  without
the prior written consent of the Agency and the Mortgagee.

     (d)  Notwithstanding  the  provisions of this Section 8.8, if, because of a
breach or violation of the provisions of subsections  (a) or (b) hereof (without
giving effect to subsection (c) hereof),  either the Agency,  the Mortgagee,  or
any of their respective  members,  directors,  officers,  agents,  or employees,
shall be threatened with a fine, liability, expense or imprisonment,  then, upon
notice from the Agency or the Mortgagee,  the Company shall immediately  provide
legal  protection  and/or pay amounts  necessary in the opinion of the Agency or
the  Mortgagee,  as the case may be, and their  respective  members,  directors,
officers,  agents and  employees  deem  sufficient,  to the extent  permitted by
applicable  law,  to remove  the  threat of such  fine,  liability,  expense  or
imprisonment.

     (e)  Notwithstanding  any provisions of this Section 8.8, the Mortgagee and
the Agency each retain the right to defend  themselves  in any action or actions
which are based upon or in any way related to such  Hazardous  Substances in any
such defense of themselves, the Mortgagee and the Agency shall each select their
own  counsel,  and  any and  all  costs  of  such  defense,  including,  without
limitation,  attorney and consultant  fees,  investigation  and laboratory fees,
court costs, and litigation expenses, shall be paid by the Company.

     Section 8.9 Discharge of Liens and Encumbrances.

     (a) The Company,  throughout the Lease Term,  shall not permit or create or
suffer to be permitted or created any Lien,  except for Permitted  Encumbrances,
upon the  Facility  or any part  thereof  by reason of any  labor,  services  or
materials  rendered or  supplied  or claimed to he  rendered  or  supplied  with
respect to the Facility or any part thereof.

     (b)  Notwithstanding  the provisions of subsection (a) hereof,  the Company
may in good faith  contest any such Lien in such  event,  the Company may permit
the items so contested to remain  undischarged and unsatisfied during the period
of such  contest and any appeal  therefrom,  unless the Agency or the  Mortgagee
shall notify the Company that by nonpayment of any such item or items,  the Lien
of the Mortgage may be materially endangered or the Facility or any part thereof
may be subject to loss (including  toss of value) or forfeiture,  in which event
the Company shall  promptly  secure payment of all such unpaid items by filing a
bond,  in form and  substance  satisfactory  to the  Mortgagee  and the  Agency,
thereby  causing such Lien to be removed or by taking such other  actions as may
be  satisfactory  to the Mortgagee  and the Agency to protect  their  respective
interests,  Mechanics'  Liens shall be  discharged  or bonded within thirty (30)
days of the filing or perfection thereof.

     Section 8.10  Indemnification  of Equipment.  All Equipment which is or may
become the  Property  of the Agency  pursuant  to the  provisions  of this Lease
Agreement  shall be  properly  identified  by the  Company  by such  appropriate
records,  including  computerized  records, as may be approved by the Agency and
the Mortgagee.  All Equipment and other  Property of whatever  nature affixed or
attached to the Land or used or to be used by the Company in connection with the
Land or the  Improvements  shall  be  deemed  presumptively  to be  owned by the


                                       20
<PAGE>

Agency,  rather than the Company,  unless the same were utilized for purposes of
construction  of the Facility or were installed by the Company and title thereto
was  retained by the Company as provided in Section 6.2 of this Lease  Agreement
and  such  Equipment  and  other  Property  were  properly  identified  by  such
appropriate records as were approved by the Agency and the Mortgagee.

     Section 8.11 Depreciation Deductions and Investment Tax Credit. The parties
agree that, as between them,  the Company shall be entitled to all  depreciation
deductions  with respect to any  depreciable  property  comprising a part of the
Facility and to any investment credit with respect to any part of the Facility.

     Section  8.12  Employment  Opportunities,   Notice  of  Jobs.  The  Company
covenants and agrees that, in consideration  of the  participation of the Agency
in the transactions  contemplated  herein, it will, except as otherwise provided
by collective  bargaining  contracts or agreements to which it is a party, cause
any new employment  opportunities  created in connection with the Facility to be
listed with the New York State Department of Labor,  Community Services Division
and with the administrative entity of the service delivery area created pursuant
to the Job Training Partnership Act FPL 97.300) in which the Facility is located
(collectively,  the "Referral Agencies").  The Company also agrees that it will,
except as otherwise provided by collective bargaining contracts or agreements to
which it is a party,  first  consider  for  such  new  employment  opportunities
persons eligible to participate in federal job training partnership programs who
shall be referred by the Referral Agencies.

                                   ARTICLE IX

              RELEASE OF CERTAIN LAND; ASSIGNMENTS AND SUBLEASING;
                        MORTGAGE AND PLEDGE OF INTERESTS

     Section 9.1 Restriction of Sale of Facility; Release of Certain Land.

     (a) Except as  otherwise  specifically  provided in this  Article IX and in
Article X hereof,  the Agency  shall not sell,  convey,  transfer,  encumber  or
otherwise dispose of the Facility or any part thereof or any of its rights under
this Lease  Agreement,  without the prior written consent of the Company and the
Mortgagee.

     (b) With the  prior  written  consent  of the  Mortgagee  given at the sole
discretion  of the  Mortgagee,  the Agency and the Company from time to time may
release from the provisions of this Lease  Agreement  and the leasehold  estate
created  hereby any part of, or  interest  in, the Land which is not  necessary,
desirable  or  useful  for the  Facility,  In such  event,  the  Agency,  at the
Company's  sole cost and expense,  shall  execute and  deliver,  and request the
Mortgagee  to  execute  and  deliver,  any and  all  instruments,  necessary  or
appropriate to so release such part of, or interest in, the Land and convey such
title thereto or interest  therein,  free from the Lien of the Mortgage,  to the
Company or such other  Person as the Company may  designate.  As a condition  to
such  conveyance,  the Mortgagee shall be provided with a copy of the instrument
transferring  such title or interest in such Land, an instrument  survey (if the
Mortgagee so requests) of the Land to be conveyed,  together  with a certificate
of an Authorized  Officer of the Company  stating that there is then no Event of
Default under this Lease Agreement and such part of, or interest in, the Land is
not necessary, desirable or useful for the Facility.


                                       21
<PAGE>

     (c) No conveyance  of any part of, or interest in, the Land effected  under
the provisions of this Section 9.1 shall entitle the Company to any abatement or
diminution  of the  rents  payable  by it  under  this  Lease  Agreement  or any
abatement or diminution of the amounts payable by it under the PILOT Agreement.

     Section 9.2 Removal of Equipment.

     (a) The  Agency  shall not be under any  obligation  to  remove,  repair or
replace  any  inadequate,   obsolete,  worn  out,  unsuitable,   undesirable  or
unnecessary item of Equipment. In any instance where the Company determines that
any item of Equipment has become  inadequate,  obsolete,  worn out,  unsuitable,
undesirable or unnecessary,  the Company,  with the prior written consent of the
Mortgagee (which consent may not be unreasonably  withheld but may be subject to
such reasonable  conditions us the Mortgagee may deem  appropriate),  may remove
such items from the  Facility  and may sell,  trade-in,  exchange  or  otherwise
dispose of the same, as a whole or in part,  free from the Lien of the Mortgage,
provided  that such  removal  will not  materially  impair the  operation of the
Facility  for the  purpose  for which it is intended or change the nature of the
Facility so that it does not constitute a "project" under the Act.

     (h) The Agency  shall  execute and  deliver to the Company all  instruments
necessary or appropriate  to enable the Company to sell or otherwise  dispose of
any such item of Equipment.  The Company shall pay any costs (including  counsel
fees) incurred in transferring  title to any item of Equipment  removed pursuant
to this Section 9.2.

     (c) The removal of any item of Equipment pursuant to this Section shall not
entitle the Company to any  abatement or  diminution  of the rents payable by it
under this Lease Agreement or any abatement or diminution of the amounts payable
by it under the PILOT Agreement.

     Section 9.3 Assignment, Subleasing and Encumbering.

     (a) This Lease Agreement may not be assigned,  in whole or in part, and the
Facility  may not be  subleased,  in whole or in part  (except  pursuant  to the
Sublease Agreement),  without the prior written consent of the Mortgagee and the
Agency in each  instance.  Any  assignment or sublease shall be on the following
conditions, as of the time of such assignment or sublease:

          (i) no assignment  or sublease  shall relieve the Company from primary
          liability for any of its obligations hereunder;

          (ii) the assignee or sublessee  (except in the case of a true sublease
          in the ordinary  course of business)  shall assume the  obligations of
          the  Company  hereunder  to the  extent of the  interest  assigned  or
          subleased;

          (iii) the  Company  shall,  within  ten (10) days  after the  delivery
          thereof,  furnish  or cause to be  furnished  to the Agency and to the
          Mortgagee a true and complete copy of such  assignment or sublease and
          the instrument of assumption;


                                       22
<PAGE>

          (iv)  neither  the  validity  nor  the  enforceability  of  the  Lease
          Agreement or any of the Loan  Documents  shall be  adversely  affected
          thereby;

          (v) the  Facility  shall  continue to  constitute  a "project" us such
          quoted term is defined in the Act; and

          (vi) the  sublessee  will  execute  and  deliver an agency  compliance
          agreement, in form and substance satisfactory to the Agency.

     (b) If the  Mortgagee or the Agency shall so request,  as of the  purported
effective date of any assignment or sublease  pursuant to subsection (a) of this
Section 9.3, the Company at its cost shall furnish the Mortgagee and the Agency,
with an opinion,  in form and  substance  satisfactory  to the Mortgagee and the
Agency (i) of Transaction  Counsel as to item (v) above, and (ii) of Independent
Counsel as to Items (i), (ii) and (iv) above.

     (c) The Company shall not create or permit any Liens,  mortgages,  security
Interests or other encumbrances of, on or in the Facility, or any part
thereof, except for Permitted Encumbrances, without the express written consent
of the Agency, Which shall not be unreasonably withheld.

     Section 9.4 Mortgage and Pledge of Agency's  Interests  to  Mortgagee.  The
Agency  shall (I) mortgage  its  interest in the  Facility,  and (ii) pledge and
assign its rights to and  interest  in this Lease  Agreement  and in all amounts
payable by the Company  pursuant to Section 5.3 hereof and all other  provisions
of this Lease  Agreement  (other than  unassigned  Rights) to the  Mortgagee  as
security  for the payment of the  principal  of and  interest  on the Loan.  The
Company hereby acknowledges and consents to such mortgage, pledge and assignment
by the Agency.  Notwithstanding the foregoing,  all indemnities herein contained
shall subsequent to such mortgage,  pledge and assignment continue to run to the
Agency for its benefit as well as for the benefit of the Mortgagee.

     Section 9.5 Pledge of Company's  Interest to  Mortgagee.  The Company shall
pledge  and assign its rights to and  interest  in this Lease  Agreement  to the
Mortgagee  as security  for the payment of the  principal of and interest on the
Loan. The Agency hereby  acknowledges and consents to such pledge and assignment
by the Company.

         Section 9.6         Merger of Agency.

     (a)  Nothing   contained  in  this  Lease   Agreement   shall  prevent  the
consolidation  of the Agency with,  or merger of the Agency into, or transfer of
title  to the  entire  Facility  to any  other  public  benefit  corporation  or
political  subdivision  which  has the  legal  authority  to own and  lease  the
facility, provided that upon any such consolidation, merger or transfer, the due
and punctual  performance and observance of all the agreements and conditions of
this Lease  Agreement to be kept and performed by tire Agency shall be expressly
assumed in writing by the public benefit  corporation  or political  subdivision
resulting  from such  consolidation  or  surviving  such  merger or to which the
Facility shall be transferred.

     (b)  Within   thirty  (30)  days  after  the   consummation   of  any  such
consolidation, merger or transfer of title, the Agency shall give notice thereof
in  reasonable  detail to the Company and the Mortgagee and shall furnish to the
Company  and the  Mortgagee,  at the sole cost and  expense  of the  Company,  a
favorable opinion of Independent Counsel as to compliance with the provisions of

                                       23
<PAGE>

Section  9.6(a)  hereof.  The Agency  promptly  shall  furnish  such  additional
information with respect to any such transaction as the Company or the Mortgagee
may reasonably request.

                                    ARTICLE X

                            EVENTS OF DEFAULT AND REMEDIES

     Section 10.1 Events of Default Defined.

     (a) The following shall be "Events of Default" under this Lease Agreement:

          (i) the  failure by the Company to pay or cause to be paid on the date
          due, the amount  specified to be paid  pursuant to Section  5.3(u) and
          (h) hereof;

          (ii) the failure by the  Company to observe  and perform any  covenant
          contained in Sections 6,4, 6.5, 8.4 and 9.3 hereof;

          (iii) the  failure  by the  Company  to pay or cause to be paid on the
          dates due,  the  amounts  specified  to be paid  pursuant to the PILOT
          Agreement;

          (iv) the  invalidity,  illegality  or  unenforceability  of the  PILOT
          Agreement;  or the  failure by the  Company to observe and perform any
          covenant contained in the PILOT Agreement;

          (v) any  representation or warranty of the Company herein or in any of
          the Company  Documents shall prove to have been false or misleading in
          any material respect;

          (vi) the failure by the  Company to observe and perform any  covenant,
          condition  or  agreement  hereunder  on its  part  to be  observed  or
          performed  (except  obligations  referred to in  10.l(a)(i),  (ii) and
          (iii))  for a  period  of  thirty  (30)  days  after  written  notice,
          specifying such failure and requesting  that It be remedied,  given to
          the Company by the Agency or the Mortgagee;

          (vii) the dissolution or liquidation of the Company; or the failure by
          the Company to release,  stay,  discharge,  lift or bond within thirty
          (30) days any execution,  garnishment,  judgment or attachment of such
          consequence  as may impair its ability to eany on its  operations;  or
          the failure by the Company  generally  to pay it~ debts as they become
          due; or an assignment by the Company for the benefit of creditors; the
          commencement by the Company (as the debtor) of a case in Bankruptcy or
          any proceeding  under any other insolvency law; or the commencement of
          a case in Bankruptcy or any proceeding  under any other insolvency law
          against the Company  (as the debtor) and a court  having  jurisdiction
          in the  premises  enters a decree or order  for  relief  against  the
          Company  as the  debtor  in such case or  proceeding,  or such case or
          proceeding is consented to by the Company or remains  undismissed  for
          forty (40) days,  or the Company  consents  to or admits the  material
          allegations  against it in any such case or proceeding;  or a trustee,
          receiver or agent  (however  named) is appointed or authorized to take
          charge of  substantially  all of the  property  of the Company for the


                                       24
<PAGE>

          purpose of enforcing a lien  against such  Property or for the purpose
          of  general  administration  of  such  Property  for  the  benefit  of
          creditors;

          (viii) an Event of Default under the Mortgage shall, have occurred and
          be continuing

          (ix) an Event of Default under the Loan Documents shall have occurred
          and be continuing;

          (x) the invalidity,  illegality or unenforceability of any of the Loan
          Documents; or

          (xi) a breach of any covenant or  representation  contained in Section
          8,8 hereof with respect to environmental matters.

     (b)  Notwithstanding  the  provisions of Section  10.1(a),  if by reason of
force  majeure any party hereto shall be unable in whole or in part to carry out
its  obligations  under Sections 4.1 and 6.1 of this Lease Agreement and if such
party shall give notice and full particulars of such force majeure in writing to
the  other  party  and to the  Mortgagee,  within a  reasonable  time  after the
occurrence of the event or cause relied upon, such obligations  under this Lease
Agreement of the party giving such notice (and only such obligations), so far as
they are affected by such force majeure shall be suspended during continuance of
the  inability,  which shall  include a  reasonable  time for the removal of the
effect thereof.  The term "force majeure" as used herein shall include,  without
limitation,  acts of God,  strikes,  lockouts or other industrial  disturbances,
acts of public enemies, acts, priorities or orders of any kind of the government
o1 the United  States of  America  or of the State or any of their  departments,
agencies,  governmental  subdivisions,  or  officials,  any  civil  or  military
authority,  insurrections, riots, epidemics, landslides, lightning, earthquakes,
fire, hurricanes,  storms, floods,  washouts.  droughts,  arrests,  restraint of
government and people, civil disturbances,  explosions,  breakage or accident to
machinery,  transmission  pipes or canals,  shortages  of labor or  materials or
delays of carriers,  partial or entire failure of utilities,  shortage of energy
or any other  cause or event not  reasonably  within  the  control  of the party
claiming  such  inability  and not due to its  fault.  The party  claiming  such
inability shall remove the cause for the same with all reasonable promptness. It
is  agreed  that the  settlement  of  strikes,  lookouts  and  other  industrial
disturbances  shall be  entirely  within  the  discretion  of the  party  having
difficulty,  and the party having difficulty shall not be required to settle any
strike, lockout and other industrial  disturbances by acceding to the demands of
the opposing party or parties.

     Section 10.2 Remedies on Default.

     (a) Whenever any Event of Default  shall have  occurred,  the Agency or the
Mortgagee  may take,  to the  extent  permitted  by law,  any one or more of the
following remedial steps:

          (i) declare,  by written notice to the Company,  to be immediately due
          and  payable,  whereupon  the same shall  become  immediately  due and
          payable:  (A) all unpaid  installments  of rent  payable  pursuant  to
          Section 5.3(a) and (b) hereof, (B) all unpaid and past due payments in
          lieu of  taxes  pursuant  to the  PILOT  Agreement  and (C) all  other


                                       25
<PAGE>

          payments due under this Lease Agreement; provided, however, that if an
          Event of Default specified in Section  10.l(a)(vii)  hereof shall have
          occurred,  such installments of rent and other payments due under this
          Lease  Agreement  shall  become  immediately  due and payable  without
          notice to the Company or the taking of any other  action by the Agency
          or the Mortgagee;

          (ii) re-enter and take  possession  of the Facility,  on ten (10) days
          written  notice  to  the  Company,   without  terminating  this  Lease
          Agreement  and without  being  liable for any  prosecution  or damages
          therefor,  and  sublease  the Facility for the account of the Company,
          holding  the  Company  liable  for the  amount,  if any,  by which the
          aggregate  of the rents  and  other  amounts  payable  by the  Company
          hereunder  exceeds  the  aggregate  of the  rents  and  other  amounts
          received from the sublessee under such sublease.

          (iii)  terminate,  on ten (10)  days  written  notice  to the  Company
          (provided, however, that no notice of termination to the Company shall
          be  required  upon the  occurrence  of an Event o Default  pursuant to
          Section  i0.l(a)(ix) or (x) hereof),  the Lease Term and all rights of
          the Company under this Lease  Agreement and,  without being liable for
          any  prosecution  or  damages  therefor,   exclude  the  Company  from
          possession  of the Facility  and lease the Facility to another  Person
          for the account of the  Company,  holding  the Company  liable for the
          amount,  if any, by which the aggregate of the rents and other amounts
          payable by the Company  hereunder  exceeds the  aggregate of the rents
          and other amounts received from such other Person under the new lease;

          (iv)  enter  upon  the  Facility   and   complete   the   acquisition,
          construction  and equipping  of the Facility in  accordance  with the
          Plans and Specifications  (with such changes as the Mortgagee may deem
          appropriate)  and  in  connection  therewith  (a)  engage  architects,
          contractors,  materialmen,  laborers  and  suppliers  and others,  (b)
          employ  watchmen to protect and preserve the Facility,  (c) assume any
          contract  relating  to the  Facility  and take over and use all labor,
          materials,   supplies  and   equipment,   whether  or  not  previously
          incorporated  into the Facility,  (d) pay,  settle or  compromise  all
          bills or  claims,  (e)  discontinue  any work or change  any course of
          action already  undertaken with respect to the Facility,  and (f) take
          or refrain  from taking such action  hereunder as the  Mortgagee  rosy
          from time to time determine;

          (v)  terminate  this Lease  Agreement  reconvey  the  Facility to the
          Company  subject to the Mortgage  (unless same have been  satisfied or
          released) and terminate the PILOT Agreement. The Agency shall have the
          right to execute an appropriate  deed with respect to the Facility and
          to place the same on record in the Suffolk County Clerk's  Office,  at
          the  expense  of the  Company  and in such event the  Company  waives
          delivery and acceptance of such deed and the Company  hereby  appoints
          the  Agency  Its true and  lawful  agent and  attorney-in-fact  (which
          appointment shall be deemed to be an agency coupled with an interest),
          with full power of  substitution to file on its behalf all affidavits,
          questionnaires  and other  documentation  necessary to accomplish  the
          recording of such deed; or


                                       26
<PAGE>

                 (vi) take any other action at law or in equity which may appear
                 necessary or desirable to collect the payments then due or
                 thereafter to become due hereunder and under the PILOT
                 Agreement, to secure possession of the Facility, and to enforce
                 the obligations1 agreements or covenants of the Company under
                 this Lease Agreement and under the PILOT Agreement.

     (b) In the event the  Facility  is  subleased  or leased to another  Person
pursuant to Section l0.2(a)(ii) or (iii) hereof, the Agency or the Mortgagee, as
appropriate,  may (but  shall be under no  obligation  to) make such  repairs or
alterations  in or to the Facility as it may deem necessary or desirable for the
Implementation  of such  sublease or lease,  and the Company shall he liable and
agrees  to pay the  costs  of  such  repairs  or  alterations  and the  expenses
incidental to the effecting of such sublease or lease, together with interest on
such costs and expense paid by either the Agency or the Mortgagee at the rate at
one percent (1%) in excess of the rate set forth in the Note, but in no event at
a rate higher than the maximum lawful  prevailing  rate,  from the date on which
such costs and expenses  were  incurred  until the date on which such payment is
made,  notwithstanding  that the Lease Term and all rights of the Company  under
this Lease Agreement may have been terminated  pursuant to Section  10.2(a)(iii)
hereof.

     (c) Any sums  payable to the Agency as a  consequence  of any action  taken
pursuant to this Section 10,2 (other than those sums  attributable to Unassigned
Rights) shall be paid to the Mortgagee and applied to the payment of the Loan.

     (d) No action taken pursuant to this Section 10.2  (including  repossession
of the  Facility)  shall  relieve the Company  from its  obligation  to make all
payments required by Section 5.3 hereof.

     (e) After an Event of Default shall have  occurred,  the Company shall have
the right upon notice to the Agency and the Mortgagee to enter the Facility with
agents  or  representatives  of the  Agency  and the  Mortgagee  to  remove  any
equipment  or  other  personalty  owned  by the  Company  if such  equipment  or
personalty is not part of the Facility.

     Section  10.3  Remedies  Cumulative.  No remedy  herein  conferred  upon or
reserved to the Agency or the Mortgagee is intended to be exclusive of any other
available  remedy,  but each and every such remedy  shall be  cumulative  and in
addition  to every  other  remedy  given  under this Lease  Agreement  or now or
hereafter  existing at law or in equity.  No delay or  omission to exercise  any
right or power accruing upon any default shall impair any such right or power or
shall be construed to be a. waiver thereof,  but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Agency or the  Mortgagee,  as  appropriate,  to exercise  any remedy
reserved to it in this  Article X, it shall not be necessary to give any notice,
other  Than such  notice  as may be  herein  expressly  required  in this  Lease
Agreement.

     Section 10.4 Agreement to Pay Attorneys' Fees and Expenses.

     (a) In the event the Company  should default under any of the provisions of
this Lease  Agreement  and the Agency  should  employ  attorneys  or incur other
expenses for the collection of amounts  payable  hereunder or the enforcement of
performance  or observance of any  obligations or agreements on the part of the
Company herein  contained,  the Company shall,  on demand  therefor,  pay to the


                                       27
<PAGE>

Agency  the  reasonable  fees of such  attorneys  and  such  other  expenses  so
incurred.

     (b) In the event the Company  should default under any of the provisions of
this Lease  Agreement and the Mortgagee  should employ  attorneys or incur other
expenses for the collection of amounts  payable  hereunder or the enforcement of
performance  or observance of any  obligations  or agreements on the part of the
Company herein  contained,  the Company  shall,  on demand there for, pay to the
Mortgagee  the  reasonable  fees of such  attorneys  and such other  expenses so
incurred.

     Section 10.5 No Additional  Waiver Implied by One Waiver.  In the event any
agreement contained herein should be breached by any party and thereafter waived
by any other  party,  such waiver shall be limited to the  particular  breach so
waived and shall not be deemed to waive any other breach hereunder,

                                   ARTICLE Xl

                      EARLY TERMINATION OF LEASE AGREEMENT;
                            OPTION N FAVOR OF COMPANY

     Section 11.1 Early  Termination of Lease Agreement.  The Company shall have
the option to terminate this Lease  Agreement at any time that the Loan has been
paid in full or is subject to prepayment  in whole  pursuant to the terms of the
Note and upon tiling with the Agency and the Mortgagee a  certificate  signed by
an Authorized  Representative of the Company stating the Company's  intention to
do so pursuant to this Section and the date upon which such payments required by
Section  11.2 hereof shall be mode (which date shall not be less than 45 nor mob
than 90 days from the date such  certificate is filed) and upon  compliance with
the requirements set forth in Section 11.2 hereof.

     Section 11.2  Conditions to Early  Termination of Lease  Agreement.  In the
event the Company  exercises  its option to  terminate  this Lease  Agreement In
accordance with the provisions of Section 11.1.  hereof,  the Company shall make
the following payments;

     (a) To the  Mortgagee:  an amount  certified by the Mortgagee  that will be
sufficient  to  pay  the  principal  of  and  interest  and  any  other  amounts
outstanding under the Loan.

     (b) To the Agency or the Taxing Authorities (as such term is defined in the
PILOT Agreement),  as appropriate  pursuant to the PILOT Agreement:  all amounts
due and  payable  under the  PILOT  Agreement  as of the date of the  conveyance
described in Section 1.1 .3 hereof.

     (c) To the Agency:  an amount certified by the Agency sufficient to pay all
unpaid fees and expenses of the Agency incurred under the Agency Documents.

     (d) To the appropriate  Person: an amount sufficient to pay oil other fees,
expenses or charges,  if any, due and payable or to become due and payable under
the Loan Documents.


                                       28
<PAGE>

     Section  11.3  Obligation  to  Purchase   Facility.   Upon  termination  or
expiration of the Lease Term,  in  accordance  with Sections 5.2 or 11.1 hereof,
the Company  shall be obligated to purchase the Facility from the Agency for the
purchase  price of One Dollar  $l.00) plus all unpaid  payments in lieu of taxes
pursuant to the PILOT Agreement through the date upon which this Lease Agreement
terminates or expires. The Company shall purchase the Facility by giving written
notice  to the  Agency  and to the  Mortgagee  (which  may be  contained  in the
certificate  referred to in Section 11.1  hereof) (i)  declaring  the  Company's
election to purchase  and (ii) fixing the date of closing such  purchase,  which
shall be the date on which this Lease Agreement is to be terminated.

     Section 11.4 Conveyance on Purchase.  At the closing of any purchase of the
Facility pursuant to Section 11.3 hereof,  the Agency shall, upon receipt of the
purchase price,  deliver and request the Mortgagee to deliver to the Company all
necessary  documents  (i) to convey to the Company  title to the Property  being
purchased, as such Property exists, subject only to the following: (A) any Liens
to which title to such Property was subject when conveyed to the Agency. (B) any
Liens  created  at the  request of the  Company,  to the  creation  of which the
Company  consented or in the creation of which the Company  acquiesced,  (C) any
Permitted  Encumbrances  (other than the Lien of the Mortgage) and (D) any Liens
resulting  from the  failure of the  Company  to  perform or observe  any of the
agreements  on its part  contained in this Lease  Agreement or arising out of an
Event of Default hereunder, (ii) to release and convey to the Company all of the
Agency's  rights and interest in and to any rights of action or any Net Proceeds
of  insurance  or  Condemnation  awards with  respect to the  Facility  (but not
including any Unassigned Rights) and (iii) to discharge and release the Mortgage
and any other security  interest held by the  Mortgagee.  Upon the conveyance of
the  Facility by the Agency to the Company  pursuant to this  Article  XI.,  the
PILOT Agreement shall terminate.

                                   ARTICLE XII

                                  MISCELLANEOUS

     Section 12.1 Notices.  All notices,  certificates and other  communications
hereunder shall be in writing and shall be either  delivered  personally or sent
by certified  mail,  postage  prepaid,  return receipt  requested,  addressed as
follows  or to such  other  address  as any party may  specify in writing to the
other:

         To the Agency:

                 Town of Islip Industrial Development Agency
                 40 Nassau Avenue
                 Islip, New York 11751
                 Attention:   Administrative Director

         To the Company:

                 EPG Realty Co., L.LC
                 134 Remington Boulevard
                 Ronkonkoma, New York 11779
                 Attention:   Member

         To the First Mortgagee:


                                       29
<PAGE>

                 American Community Bank
                 Commercial Loan Department
                 300 Glen Street
                 Glen Cove, New York 11542
                 Attention:   Executive Vice President

     Section  12.2  Binding  Effect.  This Lease  Agreement  shall  inure to the
benefit of and shall be binding upon the parties and their respective successors
and assigns.

     Section  12.3  Severability.  In the  event,  any  provision  of this Lease
Agreement  shall be held  invalid  or  unenforceable  by any court of  competent
jurisdiction,  such holding  shall not  invalidate or render  unenforceable  any
other provision hereof.

     Section 12.4 Amendments,  Changes and  Modifications.  This Lease Agreement
may not be amended, changed, modified, altered or terminated except in a writing
executed by the parties hereto and without the concurring written consent of the
Mortgagee.

     Section  12.5  Execution  of  Counterparts.  This  Lease  Agreement  may be
executed in several counterparts,  each of which shall be an original and all of
which shall constitute but one and the same instrument.

         Section 12.6 Applicable Law. This Lease Agreement shall be governed
exclusively by the applicable laws of the State, without regard or reference to
its conflict of laws principles.

     Section 12.7 List of Additional Equipment; Further Assurances.

     (a)  Upon  the  Completion  Date  with  respect  to the  Facility  and  the
installation  of all of the  Equipment  therein,  the Company  shall prepare and
deliver to the Agency and the Mortgagee a schedule  listing all of the Equipment
not previously described In this Lease Agreement.  If requested by the Agency or
the  Mortgagee,  the  Company  shall  thereafter  furnish  to the Agency and the
Mortgagee,  within  sixty  (60) days  after  the end of each  calendar  year,  a
schedule  listing all of the  Equipment  not  theretofore  previously  described
herein or in the aforesaid schedule.

     (b) The Agency and the Company  shall  execute and deliver all  instruments
and shall furnish all information necessary or appropriate to perfect or protect
any security  interest  created or  contemplated by this Lease Agreement and the
Mortgage.

     Section 1 2.8 Survival Obligations.  This Lease Agreement shall survive the
making of the Loan and the performance of the obligations of the Company to make
payments required by Section 5.3 and all indemnities shall survive the foregoing
and army  termination  or expiration of this Lease  Agreement and the payment of
the Loan.

     Section 12.9 Table of Contents and Section  Headings Not  Controlling.  The
Table of  Contents  and the  headings  of the  several  Sections  in this  Lease
Agreement  have been prepared for  convenience  of reference  only and shall not
control  or  affect  the  meaning  of or he  taken as an  interpretation  of any
provision of this Lease Agreement.

                                       30
<PAGE>

     IN WITNESS  WRERBOF,  the Agency and the  Company  have  caused  this Lease
Agreement  to be executed  in their  respective  names by their duly  authorized
officers, all as of February 1, 2004.

                                           TOWN OF ISLIP INDUSTRIAL
                                           DEVELOPMENT AGENCY



                                           By:
                                              ----------------------------------
                                           Name:    William G. Mannix
                                           Title:   Administrative Director


                                           HPG REALTY CO., LLC


                                           By:
                                              ----------------------------------
                                           Name:    Helene A. Giarraputo
                                           Title:   Member


                                       31
<PAGE>

STATE OF NEW YORK )
                   SS.:
COUNTY OF NASSAU  )

     On the 4th day of February in the year 2004, before me, the undersigned,  a
Notary  Public in and for said State,  personally  appeared  William G.  Mannix,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the individual  whose name is subscribed to the within Lease  Agreement,  and
acknowledged  to me that he executed the same in his  capacity,  and that by his
signature on the Lease  Agreement,  the  individual,  or the person or entity on
behalf of which the individual acted, executed the instrument.


                                             -----------------------------------
                                                        Notary Public




                                       32
<PAGE>


STATE OF NEW YORK )
                   SS.:
COUNTY OF NASSAU  )

     On the 4th day of February in the year 2004, before me, the undersigned,  a
Notary Public in and for said State,  personally  appeared Helene A. Giarraputo,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the individual  whose name is subscribed to the within Lease  Agreement.  and
acknowledged  to me that she executed the same in her capacity,  and that by her
signature on the Lease  Agreement,  the  individual,  or the person or entity on
behalf of which the individual acted, executed the instrument.


                                             -----------------------------------
                                                        Notary Public



                                       33
<PAGE>

                                    EXHIBIT A

                       Legal Description of Real Property


ALL that certain plot, piece, or parcel of land situate,  lying and being in the
Town of Islip,  County of Suffolk and State of New York,  designated  as Tax Lot
002.001 in Block 03.00 Section 105.00 in District 0500 on the Suffolk County Tax
Map, more particularly bounded and described as follows;

BEGINNING at a point on the northerly line of Marconi Avenue (Fifth Street) said
point being 388.00 feet distant westerly us measured along the northerly line of
Marconi  Avenue,  from the westerly end of a curve having a radius of 30.00 feet
and a length of 47.12 feet connecting the westerly line of Smithtown  Avenue and
the northerly line of Marconi Avenue and the proceeding  thence  from-said point
a. beginning the following four courses and distances;

RUJNNING THENCE south 82 degrees 45 minutes 32 seconds west a distance of 132.00
feet along the northerly line of Marconi Avenue (Fifth Street) to a point;

THENCE north 01 degrees 21 minutes 07 seconds east, a distance  333.75 feet to a
point;

THENCE north 82 degrees 45 minutes 32 seconds east, 132.00 feet to a point;

THENCE south 01 degrees 21 minutes 07 seconds west,  333.75 feet to the point of
place of BEGINNING.


<PAGE>

                                    EXHIBIT B

                                    Equipment


     All  equipment,  fixtures,  machinery,  building  materials  and  items  of
personal  property  acquired,  constructed  or installed  and/or to be acquired,
constructed  or installed in  connection  with the  completion of the HPG Realty
Co.,  LLC/Tri-Start  Electronics,  Inc.  2004  Facility  located at 979  Marconi
Avenue, Ronkonkoma,  Town of Islip, Suffolk County, New York, including, but not
limited to, furnishings and fixtures.



<PAGE>


                                   SCHEDULE A

                             SCHEDULE OF DEFINITIONS

     "Act" means, collectively, Title 1 of Article 18-A of the General Municipal
Law of the State,  enacted  into law as Chapter  1030 of the Laws of 1969 of the
State, as amended, together with Chapter 47 of the Laws of 1974 of the State, as
amended.

     "Agency" means (i) the Town of Islip  Industrial  Development  Agency,  its
successors and assigns,  and (ii) any local  governmental body resulting from or
surviving any  consolidation or merger to which the Agency or its successors may
be a party.

     "Agency Compliance Agreement" means the Agency Compliance Agreement,  dated
as of February 1, 2004, by and between the Agency and the Sublessee.

     "Agency Documents" means the Lease Agreement,  the Environmental Compliance
and Indemnification Agreement, the PILOT Agreement, the Mortgage, the Assignment
of Rents and Leases and the Agency Compliance Agreement.

     "Approving  Resolution"  means the resolution  adopted by the Agency on the
3rd day of February,  2004  authorizing the execution and delivery of the Agency
Documents, as such resolution may be amended and supplemented from time to time.

     "Assignment  of Rents and Leases" means the Assignment of Rents and Leases,
dated the Closing Date, from the Company and the Agency to the Mortgagee,

     "Authorized Representative" means, in the case of the Agency, the Chairman,
the Vice Chairman, the Secretary,  the Assistant Secretary or the Administrative
Director of the Agency;  in the case of the Company,  any Member; in the case of
the  Sublessee,  the  President,  any  Vice  President,  the  Treasurer  or  the
Secretary,  and, in the case of any of them, such additional  persons as, at the
time,  are  designated  to act on  behalf of the  Agency,  the  Company,  or the
Sublessee as the case may be, by written certificate  furnished to the Mortgagee
and to the Agency, Company or the Sublessee,  as the case may be, containing the
specimen signature of each such person and signed on behalf of (i) the Agency by
the Chairman, the Vice Chairman,  the Secretary,  the Assistant Secretary or the
Administrative  Director  of the  Agency,  (ii) the Company by any Member of the
Company,  or (iii) the  Sublessee  by the  President,  any Vice  President,  the
Treasurer or the Secretary.

     "Bill of Sale" means the Bill of Sale, dated the Closing Date, given by the
Company to the Agency with respect to the equipment,  us the same may be amended
from time to time.

     "Bridge Loan" shall mean the loan by the First  Mortgagee to the Company in
the  amount  of  $520,000,  representing  the  principal  amount  of the  Bridge
Mortgage,  in  connection  with  the  Facility  and  shall  include  any and all
amendments,   modifications  and  extensions  thereof  and  supplements  thereto
hereafter made in conformity therewith.

     "Bridge  Loan  Mortgage  Note"  shall mean the Bridge  Loan  Mortgage  Note
evidencing   the  Bridge  Loan  and  shall  include  any  and  all   amendments,
modifications and extensions  thereof and supplements  thereto hereafter made in

<PAGE>

conformity with the First Mortgage.

     "Bridge  Mortgage"  means the Bridge Loan Mortgage and Security  Agreement,
dated  February  4,  2004,  given by the  Agency  and the  Company  to the First
Mortgagee,  in the aggregate principal amount of $520,000.00,  and shall include
any and all  amendments,  modifications  and extensions  thereof and supplements
thereto hereafter made in conformity therewith.

     "Business  Day"  means any day other  than a  Saturday,  a Sunday,  a legal
holiday or a day on which banking institutions In New York, New York or any city
in which the principal  office of the Mortgagee is located are authorized by law
or executive order to remain closed.

     "Closing Date" means the date of delivery of the Deed.

     "Company"  means HPG Realty  Co.,  LLC, a limited  liability  company  duly
organized and validly  existing under the laws of the State of New York, and its
successors and assigns.

     "Company  Documents" means the Bill of Sale, the Deed, the Lease Agreement,
the  Environmental   Compliance  and   Indemnification   Agreement,   the  PILOT
Agreement, the Sublease Agreement and the Loan Documents.

     "Completion Date" means the date of completion of the Facility as certified
pursuant to Section 4.3 of the Lease Agreement.

     "Condemnation"  means the taking of title to, or the use of, Property under
the exercise of the power of eminent domain by any governmental  entity or other
Person acting under governmental authority.

     "Construction  Period" means the period (a) beginning on the earlier of (i)
the date of  commencement  of  acquisition,  construction  and  equipping of the
Facility,  which  date shall not he prior to May 6,  2003,  or (ii) the  Closing
Date, and (b) ending on the Completion Date.

     "Deed" means the Bargain and Sale Deed,  dated the Closing  Date,  given by
the Company to the Agency with respect to the Land and the existing improvements
thereon.

     "Environmental   Compliance  and   Indemnification   Agreement"  means  the
Environmental Compliance and indemnification  Agreement, dated as of February 1,
2004, among the Agency, the Company and the Sublessee.

     "Equipment" means all machinery, equipment and other personal property used
and to be used in connection with the Facility, as described in Exhibit B to the
Lease Agreement.

     "Event of Default" (a) when used with respect to the Lease Agreement, means
any of the events  defined  as Events of  Default  by Section  10.1 of the Lease
Agreement,  and (b) when used with  respect  to the  Mortgage,  means any of the
events defined as Events of Default in the Mortgage.

     "Facility" means the Land, the Improvements and the Equipment leased to the
Company under the Lease Agreement.


                                  Schedule A-2
<PAGE>

     "Facility  Services"  means all  services  necessary  for the  acquisition,
construction and equipping of the Facility.

     "First Mortgage" means the Mortgage and Security Agreement,  dated February
4,  2004,  given by the Agency and the  Company to the First  Mortgagee,  in the
aggregate  principal  amount  of  $650,000.00,  and  shall  include  any and all
amendments,   modifications  and  extensions  thereof  and  supplements  thereto
hereafter made in conformity therewith.

     "First  Mortgagee"  shall  mean (i)  American  Community  Bank,  a  federal
association  duly  organized  under the laws of the State of New York,  (ii) its
successors or assigns,  or (iii) any surviving,  resulting or transferee banking
institution authorized to do business in the State.

     "First  Mortgage  Loan" shall mean the loan by the First  Mortgagee  to the
Company in the amount of  $650,000,  representing  the  principal  amount of the
First  Mortgage,  in connection  with the Facility and shall include any and all
amendments,   modifications  and  extensions  thereof  and  supplements  thereto
hereafter made in conformity therewith.

     "First  Mortgage  Note" shall mean the First  Mortgage Note  evidencing the
First Mortgage Loan and shall include any and all amendments,  modifications and
extensions thereof and supplements thereto hereafter made in conformity with the
First Mortgage.

     "Hazardous Substance" means, without limitation,  any flammable explosives,
radon,  radioactive  materials,  asbestos,  urea  formaldehyde  foam insulation,
polychlorinated biphenyls,  petroleum and petroleum products, methane, hazardous
materials,  hazardous wastes, hazardous or toxic substances or related materials
as  defined  in  the  Comprehensive  Environmental  Response,  Compensation  and
Liability  Act of 1980,  as amended  (42 U.S.C.  Sections  9601,  et seq.),  the
Resource  Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, et
seq.),  the  Hazardous  Materials  Transportation  Act,  as  amended  (49 U.S.C.
Sections 1801, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Sections 2601, et seq.),  Articles 17 and 27 of the New York State Environmental
Conservation Law, or any other applicable  Environmental Law and the regulations
promulgated thereunder.

     "Improvements"  means all those  buildings,  improvements,  structures  and
other related  facilities  (i) affixed or attached to the Land and (ii) not part
of the Equipment, all as they may exist from time to time,

     "Independent  Counsel"  means an attorney or  attorneys or firm or firms of
attorneys duly admitted to practice law before the highest court of any state of
the United  States of America or in the District of Columbia and not a full time
employee of the Agency, the Company, the Sublessee or the Mortgagee.

     "Land" means the real property leased by the Agency to the Company pursuant
to the tease  Agreement  and more  particularly  described in Exhibit A attached
thereto.

     "Lease Agreement" means the Lease Agreement,  dated as of February 1, 2004,
between the Agency, as lessor, and the Company,  as lessee,  with respect to the
Facility, as the saint may he amended from time to time.


                                  Schedule A-3
<PAGE>

     "Lease  Term" means the  duration of the  leasehold  estate  created by the
Lease Agreement as specified in Section 5.2 of the Lease Agreement.

     "Lien"  means any  interest in Property  securing an  obligation  owed to a
Person,  whether such interest is based on the common law,  statute or contract,
and including but not limited to the security  interest arising from a mortgage,
encumbrance,  pledge,  conditional sale or trust receipt or a lease, consignment
or  bailment  for  security  purposes.  The term "Lien"  includes  reservations,
exceptions,  encroachments,  easements,  rights-of-way,  covenants,  conditions,
restrictions,  leases  and other  similar  title  exceptions  and  encumbrances,
including  but  not  limited  to  mechanics',   materialmen's,   warehousemen's,
carriers' and other  similar  encumbrances,  affecting  real  property.  For the
purposes  of this  definition,  a Person  shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional  sale agreement
or other  arrangement  pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.

     "Loan" means the loan in the aggregate  amount of $1,170,000,  given by the
Mortgagee to the Company pursuant to the terms of the Loan Documents.

     "Loan Agreement" means the Building Loan Agreement, dated the Closing Date,
between the Company and the Mortgagee.

     "Loan Documents" means, collectively, the Mortgage, the Loan Agreement, the
Assignment of Rents and Leases,  the Note, the Guaranty and any other  documents
executed and delivered to the Mortgagee In connection with the Loan.

     "Mortgage"  means  collectively  (i) the First  Mortgage,  (ii) the  Second
Mortgage, and (iii) the Bridge Mortgage, each covering,  among other things, the
Facility  and each  given by the  Agency and the  Company  to the  Mortgagee  as
security for the Loan, as the same may be modified, amended, renewed or extended
from time to time.

     "Mortgagee"  shall mean,  collectively,  (i)  American  Community  Bank,  a
federal association duly organized under the laws of the State of New York, (ii)
Long Island  Development  Corp.  and/or the U.S. Small Business  Administration,
(iii) any of their successors or assigns,  and (iv) any surviving,  resulting or
transferee banking institution authorized to do business in the State.

     "Net  Proceeds"  means so much of the gross  proceeds with respect to which
that term is used us  remain  after  payment  of all  expenses,  costs and taxes
(including attorneys' fees) incurred in obtaining such gross proceeds.

     "Note" means  collectively  (i) the First  Mortgage  Note,  (ii) the Second
Mortgage  Note,  and (iii) the Bridge  Note,  each  given by the  Company to the
Mortgagee evidencing the Loan for the Facility.

     "Permitted  Encumbrances"  means (I) exceptions to title set forth,  in the
Title Report, (ii) the Mortgage, (iii) the Lease Agreement, (iv) utility, access
and other easements and  rights-of-way,  restrictions and exceptions that do not
materially  impair the utility or the value of the Property affected thereby for
the  purposes  for  which  it  is  intended,   (v)  mechanics',   materialmen's,
warehousemen's,  carriers' and other similar Liens which are approved in writing


                                  Schedule A-4
<PAGE>

by the  Mortgagee or its Counsel,  (vi) Liens for taxes not yet  delinquent  and
(vii) the Sublease Agreement.

     "Person" or `Persons" means an individual,  partnership,  limited liability
company, corporation,  trust or unincorporated organization, and a government or
agency or political subdivision or branch thereof.

     "PILOT Agreement" means the  Payment-in-Lieu-of-Tax  Agreement, dated as of
February 1, 2004,  among the Company,  the Sublessee and the Agency,  as amended
from time to time.

     "Plans  and  Specifications"  means he  plans  and  specifications  for the
Improvements,  prepared  for the Company and approved by the  Mortgagee  and the
Agency, as revised From time to time in accordance with the Lease Agreement.

     "Prime Rate" means the rate  designated by the Mortgagee  from time to time
as its "prime rate."

     "Property"  means any  interest in any kind of  property or asset,  whether
real, personal or mixed, or tangible or intangible.

     "Public  Purposes"  shall mean the State's  objective to create  industrial
development agencies for the benefit of the several counties,  cities,  villages
and towns in the State and to empower  such  agencies,  among other  things,  to
acquire, construct,  reconstruct,  lease, improve, maintain, equip and sell land
and any building or other  improvement,  and all real and  personal  properties,
including,  but not limited to,  machinery  and  equipment  deemed  necessary in
connection  therewith,  whether or not now in existence  or under  construction,
which shall be suitable for manufacturing,  warehousing,  research,  commercial,
recreation or industrial  facilities,  including  industrial  pollution  control
facilities,  in order to advance job opportunities,  health,  general prosperity
and the  economic  welfare  of the  people  of the State  and to  improve  their
standard of living.

     "Schedule  of  Definitions"  means  the  words  and terms set forth in this
Schedule  of  Definitions  attached to the Lease  Agreement,  as the same may be
amended from time to time.

     "Second  Mortgagee" shall mean (I) Long Island Development Corp. and/or the
U.S. Small Business Administration, (Ii) its successors or assigns, or (iii) any
surviving, resulting or transferee banking institution authorized to do business
in the State.,

     "Second  Mortgage" means the Second Mortgage to be given to the Long Island
Development  Corp., or its successors or assigns,  by the Agency and the Company
after the Closing Date and to be subordinate to the First Mortgage and including
any and  nil  amendments  thereof  and  supplements  thereto  hereafter  made in
conformity therewith.

     "Second  Mortgage Loan" shall mean the loan by the Second  Mortgagee to the
Company in the  amount of  $520,000  representing  the  principal  of the Second
Mortgage in connection with the facility.


                                  Schedule A-5
<PAGE>

     "Second  Mortgage Note" shall mean the Second  Mortgage Note evidencing the
Second  Mortgage  Loan and shall  include  any and all  amendments  thereof  and
supplements thereto hereafter made in conformity with the Second Mortgage.

     "SEQR  Act"  means  the  State  Environmental  Quality  Review  Act and the
regulations thereunder.

     "State" means the State of New York.

     "Sublease"  or "Sublease  Agreement"  means a certain  Sublease  Agreement,
dated the Closing Date, between the Company, as sublessor, and the Sublessee, as
sublessee, as amended from time to time.

     "Sublessee" means Tri-Start Electronics,  Inc., a business corporation duly
organized  and  existing  wider  the  laws of the  State  of New  York,  and its
successors and assigns.

     "Sublessee  Documents"  means the  Sublease  Agreement,  the  Environmental
Compliance  and  Indemnification  Agreement,  the PILOT  Agreement,  the  Agency
Compliance Agreement and certain of the Loan Documents.

     "Substitute  Facilities"  means facilities of substantially the same nature
as the proposed Facility.

     "Title Report" means Certificate of Title No. 03-8183-S issued by First New
York Title and Abstract, Ltd. to the Mortgagee and the Agency on May 6, 2003, as
amended on December 16, 2003, redated and recertified on the Closing Date.

     "Transaction Counsel" means the law firm of Nixon Peabody LLP.

     "Transaction Documents" means the Agency Documents,  the Company Documents,
the Sublessee Documents and the Loan Documents.

     "Unassigned  Rights"  means the rights of the  Agency  and  moneys  payable
pursuant to and under Sections 5.3(b),  6.4(b) and (c), 6.7, 8.1, 8.2, 8.8, 8.9,
8.12,  10.2(a)(i)(B)  and  l0.2(a)(v) (in each case with respect to Section 10.2
upon a continuing  default in payment by the Company under the PILOT Agreement),
10.4(a), 11.2(b) and (c) and 12.8 of the Lease Agreement.


                                  Schedule A-6