SUBLEASE AGREEMENT

This  SUBLEASE  AGREEMENT is made as of this 1st day of October,  1998,  between
COPYRIGHT  CLEARANCE CENTER,  INC., a New York  not-for-profit  corporation duly
authorized  to do  business  in the  Commonwealth  of  Massachusetts,  with  its
principal office at 222 Rosewood Drive, Danvers,  Massachusetts 01923 (hereafter
referred to as  "Sublandlord")  and SIGNAL  TECHNOLOGY  CORPORATION,  a Delaware
Corporation duly authorized to do business in the Commonwealth of Massachusetts,
with its principal office at 222 Rosewood Drive,  Danvers,  Massachusetts  01923
(hereafter referred to as "Subtenant").


                                   WITNESSETH:

         WHEREAS, by a lease dated the 2nd day of August, 1993, and subsequently
amended  (hereafter  referred to as the "Prime  Lease"),  Sublandlord has leased
space from PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY,  as successor in interest
to Desmond  Taljaard and Howard Friedman,  Trustees of Northwoods  Business Park
Phase IV Realty Trust  (Phoenix  Home Life Mutual  Insurance  Company  hereafter
being referred to as "Landlord"), on the sixth, seventh, eighth, ninth and tenth
floors of 222 Rosewood Drive, Danvers, Massachusetts,  for a term terminating on
the 31st day of May, 2002, a copy of which Prime Lease (including amendments) is
attached hereto as "Exhibit A" and made a part hereof; and

         WHEREAS,  Sublandlord has agreed to grant,  and Subtenant has agreed to
accept, a sublease of the premises  identified below on the terms and conditions
stated herein;

         NOW, THEREFORE, it is mutually agreed by and between the parties hereto
that:

         1.  Sublandlord  subleases to Subtenant  and Subtenant  subleases  from
Sublandlord  the Premises  known and designated as Suite 1004 and located on the
tenth floor of the Building known as 222 Rosewood Drive, Danvers, Massachusetts,
consisting of approximately  4,313 rentable square feet as identified on Exhibit
B attached  hereto,  for a term commencing on the 1st day of October,  1998, and
terminating on the 31st day of July, 2001. The Premises are subleased,  in their
present  "as is,  where is"  condition,  by  Sublandlord  to  Subtenant  without
representation or warranty, express or implied, of any kind by Sublandlord,  its
employees or its agents.

         2. The sublease  granted  hereunder is  contingent  upon the  continued
right of  Sublandlord  to occupy the Premises  under the provisions of the Prime
Lease. Upon the termination of the Prime Lease for any reason, either at the end
of the term thereof or earlier,  this sublease shall also  terminate.  Subtenant
may also terminate this Sublease  Agreement  effective as of any day on or after
the 31st day of July,  2000,  by giving at least six (6) months'  prior  written
notice thereof to Sublandlord.

         3.  Subtenant  shall  pay to  Sublandlord  as rent for the  Premises  a
monthly  rental  of  SEVEN  THOUSAND   EIGHT  DOLLARS  and   SIXTY-THREE   CENTS
($7,008.63),  payable in advance and subject to adjustment for Subtenant's share
of the  Escalation  Charges as defined  in Section  1.3 of the Prime  Lease (and
Subtenant's  Tax and  Operating  Percentage  for the  Premises  is  2.310%  [the
rentable area of the Premises  divided by the rentable  area of the  Building]).
The


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first  payment  shall be made no later  than the  first  day of the term of this
Sublease  Agreement,  and  succeeding  payments shall be made on the same day of
each  month  thereafter  until  this  Sublease  Agreement  shall  terminate.  In
addition, Subtenant shall pay all utility charges as they become due.

         4. Upon execution of this Sublease  Agreement,  Subtenant has deposited
with Sublandlord the sum of FOURTEEN  THOUSAND  SEVENTEEN DOLLARS and TWENTY-SIX
CENTS  ($14,017.26)  as a security  deposit for the full  performance of all the
provisions of this Sublease Agreement. If at any time during the term hereof, or
any  extension  hereof  (which  extension  shall not occur  without  the express
written agreement of the parties),  Subtenant shall be in default in the payment
of rent or  additional  rent,  Sublandlord  may apply  all or a  portion  of the
security deposit to such payment. At the termination of this Sublease Agreement,
if it is necessary for Sublandlord to repair damage to or to clean the Premises,
in either case as a result of the use of the Premises by Subtenant,  Sublandlord
may apply the  security  deposit  as needed for such  cleaning  or  repairs.  If
Subtenant is not in default under the  provisions of this Sublease  Agreement at
the termination  hereof,  Sublandlord shall return the deposit, or any remaining
portion thereof,  to Subtenant.  Sublandlord  shall not be required to keep this
security  deposit  separate from its general funds,  and Subtenant  shall not be
entitled to interest on such deposit.

         5. Subtenant promises and agrees to abide by and comply with all terms,
agreements and conditions in the Prime Lease, including, but not limited to, the
default  provisions  and the  rent  escalation  provisions  relating  to  taxes,
insurance, operating expenses, etc. Nothing herein shall be deemed to constitute
a release of Sublandlord from its observance and performance as described in the
Prime Lease.

         6.  Subtenant   shall  not,   without  the  prior  written  consent  of
Sublandlord and of Landlord pursuant to Article 8 of the Prime Lease (Assignment
and Subletting),  assign this Sublease  Agreement or further sublet the Premises
or any part  thereof.  If  Subtenant  does  further  sublet the  Premises or any
portion  thereof,  and if  Subtenant  receives  rent  per  square  foot for such
subletting  which exceeds the rental per square foot  calculated  from Section 3
above,  such excess rent shall be payable monthly by Subtenant to Sublandlord as
additional rent.

         7. Subject to the termination provisions contained herein,  Sublandlord
covenants that it shall do nothing to disturb Subtenant's quiet enjoyment of the
Premises  during the term of this Sublease  Agreement if Subtenant shall observe
and perform the  covenants and  provisions  of this  Sublease  Agreement and the
Prime Lease as herein  provided,  and Subtenant  covenants that it shall provide
reasonable access to the Premises during  Subtenant's normal business hours upon
reasonable  prior  notice  (and,  in  emergencies,  during  other  hours and, if
necessary, without prior notice) in order to enable Sublandlord to carry out its
obligations  under the Prime  Lease as well as under  this  Sublease  Agreement,
provided that such activity does not materially  interfere with  Subtenant's use
of the Premises).

         8. Subtenant  promises and agrees to comply with and abide by all rules
and  regulations  for  occupants  of  the  Building  or  the  Premises  (however
denominated) as may be


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prescribed  from time to time  during  the term of this  Sublease  Agreement  by
Landlord and/or Sublandlord or its local representative.

         9.  Rent  due  from  Subtenant  to  Sublandlord  shall  be  paid to the
termination date of this Sublease  Agreement.  If (a) Subtenant  defaults in the
payment of rent,  and such default  continues  for ten (10)  business days after
notice of the default is given by Sublandlord to Subtenant; or (b) the leasehold
interest of Subtenant  be levied upon under  execution or be attached by process
of law;  then in any such  event  Sublandlord  may,  at its sole  election,  (i)
terminate  this Sublease  Agreement and  Subtenant's  right to possession of the
Premises;  or (ii)  without  terminating  this  Sublease,  attempt to re-let the
premises  on  such  terms  as  Sublandlord  determines.  Regardless  of  whether
Sublandlord  proceeds  under (i) or (ii),  nothing herein shall be considered as
relieving  Subtenant of any  obligation to pay the monthly rent owing under this
Sublease  Agreement from the date of a default to the original  termination date
set forth in Section 1 above.

         10. Subtenant shall carry liability insurance with a carrier acceptable
to  Sublandlord  in an amount  not less than the  amount  required  by the Prime
Lease.  Sublandlord  and Landlord shall be named as additional  insureds on such
liability  insurance  policy  and  Subtenant  shall  deliver  to  Sublandlord  a
certificate  from such  carrier no later than ten (10)  business  days after the
execution  hereof  evidencing (i) same and (ii) such carrier's  agreement not to
cancel or amend such insurance without giving  Sublandlord and Landlord at least
thirty (30) days' prior written notice of such cancellation or amendment. At the
commencement of the term of this Sublease Agreement,  Subtenant shall present to
Sublandlord a paid receipt  showing that the first year's premium has been paid.
No later  than  fifteen  (15)  days  prior to each  anniversary  of the  policy,
Subtenant  shall  furnish  Sublandlord  with a paid  receipt as  evidence of the
premium payment for the next full year of the policy.

         11.  Subtenant  hereby  indemnifies  and  agrees  to  hold  Sublandlord
harmless from any and all claims or demands  whatsoever  for injury or damage to
person or persons or property by accident or otherwise occurring on the Premises
or resulting from  Subtenant's  use thereof  (including  without  limitation any
reasonable expenses,  including attorneys' fees, in connection therewith) unless
such claim or demand shall arise from gross negligence or willful  misconduct on
the part of Sublandlord.

         12.  Sublandlord  shall  not be liable  to  Subtenant,  or to any other
person or persons  for or on account  of any injury or damage  occasioned  in or
about the  Premises  to persons or  property  of any nature or sort  whatsoever,
except as may arise from gross  negligence or willful  misconduct on the part of
Sublandlord.

         13. Any and all notices  provided herein shall be sent by registered or
certified  mail,  or  delivered  by  hand  in a  sealed  envelope  addressed  in
accordance  with  this  paragraph  to any  employee  or  agent of a party at its
respective  offices  during regular  business hours of that party.  If notice is
given to Sublandlord, it shall be addressed as follows:


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                                    Copyright Clearance Center, Inc.
                                    222 Rosewood Drive, Suite 910
                                    Danvers, Massachusetts 01923
                                    Attention: Vice President, Administration

If notice is given to Subtenant, it shall be addressed as follows:

                                    Signal Technology Corporation
                                    222 Rosewood Drive, Suite 1004
                                    Danvers, Massachusetts 01923
                                    Attention: President and CEO

         14. Sublandlord hereby represents and warrants that it has no knowledge
of any  default by itself or by Landlord  under the Prime  Lease;  that,  to its
knowledge,  the Prime  Lease is in full force and effect and that the  leasehold
interest  of  Sublandlord  under  the  Prime  Lease  is  not  encumbered;   that
Sublandlord  has done nothing to defeat or impair this Sublease  Agreement;  and
that the  term of the  Prime  Lease  (including  all  amendments)  is  currently
scheduled to expire on May 31, 2002.  Sublandlord further covenants that it will
pay all rents to  Landlord  as they  come due  under  the  Prime  Lease and that
Subtenant,  upon  performance  of its  obligations  hereunder and subject to the
provisions  hereof,  shall for the term  hereof  with  respect  to the  Premises
succeed to all rights of  Sublandlord  under the Prime Lease and will have quiet
possession and enjoyment of the Premises.

         15. This Sublease  Agreement  shall not be valid or in force unless and
until Landlord consents hereto by execution in the space provided below.

         16. Each of  Sublandlord  and Subtenant  represents and warrants to the
other that the warranting  party has dealt with no broker in connection with the
execution of this Sublease Agreement except for Corporate Facilities Group. Each
warranting party hereby  indemnifies and agrees to hold harmless the other party
from and against all loss,  cost and expense  resulting from any inaccuracy made
in the foregoing  warranty and  representation  as made by the warranting party.
Furthermore,  Sublandlord hereby indemnifies Subtenant against all amounts owing
to  Corporate  Facilities  Group on account of the  execution  of this  Sublease
Agreement.

         17. The following provisions of the Prime Lease shall not apply to this
Sublease Agreement: Article 3 (Basic Rent), that portion of Section 9.6 relating
to reserved parking spaces,  Section 14.25  ([Sublandlord]'s  Option to Extend),
Section 14.26  ([Sublandlord]'s  Right of First Offer),  First Amendment Section
3(e),  Second Amendment  Section 3, Second Amendment Section 5, all of the Third
Amendment  (no longer in force),  and all Exhibits  that are not relevant to the
Premises. As between Sublandlord and Subtenant, (i) in the event of any conflict
between the terms of the Prime Lease and the terms of this  Sublease  Agreement,
the


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terms  of  this  Sublease   Agreement  shall  govern,  and  (ii)  any  term  not
specifically  set forth herein shall be carried over from the Prime Lease unless
such term is demonstrably unreasonable in the circumstances.

         IN WITNESS  WHEREOF,  the parties hereto have set their hands and seals
as of the day first set forth above.


                                                Sublandlord:
                                                COPYRIGHT CLEARANCE CENTER, INC.

                                                By: /s/ Ronald G. Stimers
                                                    ----------------------------
                                                Name:  Ronald G. Stimers
                                                Title: Vice President


                                                Subtenant:
                                                SIGNAL TECHNOLOGY CORPORATION

                                                By: /s/ David S. Parker
                                                    ----------------------------
                                                Name:  David S. Parker
                                                Title: V.P. Human Resources and
                                                       Administration


Landlord hereby consents to this Sublease Agreement

                                                Landlord:
                                                PHOENIX HOME LIFE MUTUAL
                                                    INSURANCE COMPANY

                                                By: /s/ Pamela Greer
                                                    ----------------------------
                                                Name:  Pamela Greer
                                                Title: Director


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Exhibit B


                   [MAP OF THE TOWER AT NORTHWOODS, FLOOR 10]