AGREEMENT OF LEASE

                                    -between-

                             HOLLISTER '97, L.L.C.,
                     a New Jersey limited liability company

                                            Landlord,

                                      -and-

                       BEI MEDICAL SYSTEMS COMPANY, INC.,
                             a Delaware corporation,

                                            Tenant.

Premises: Part of 100 Hollister Road
          Teterboro, New Jersey
<PAGE>

                                TABLE OF CONTENTS

1.   LEASED PREMISES                                                           1

2.   TERM                                                                      1

3.   RENT                                                                      2

4.   TAXES                                                                     3

5.   UTILITIES                                                                 4

6.   INSURANCE                                                                 4

7.   DESTRUCTION                                                               4

8.   INSURANCE                                                                 5

9.   REPAIRS                                                                   6

10.  COMMON EXPENSES                                                           6

11.  ESTIMATED EXPENSE DISBURSEMENTS                                           8

12.  EMINENT DOMAIN                                                            9

13.  LANDLORD'S CONSTRUCTION AND POSSESSION                                    9

14.  QUIET ENJOYMENT                                                          11

15.  TENANT'S DEFAULT                                                         11

16.  ASSIGNMENT OR SUBLET                                                     12

17.  BROKERAGE COMMISSIONS                                                    13

18.  ALTERATIONS AND IMPROVEMENTS                                             13

19.  TENANT'S ASSUMPTION OF RISK                                              14

20.  LANDLORD NOT LIABLE                                                      14

21.  INDEMNIFICATION                                                          15

22.  MORTGAGE SUBORDINATION AND ATTORNMENT                                    15

23.  SERVICES INTERRUPTED                                                     16

24.  LANDLORD'S ACCESS-REPAIRS                                                16

25.  LANDLORD'S ACCESS-SHOW PREMISES                                          16

26.  SIGNS                                                                    16

27.  ABANDONMENT OF PROPERTY                                                  17

28.  STRICT PERFORMANCE                                                       17

29.  LAWS AND REGULATIONS                                                     17

30.  LANDLORD CURE                                                            17

31.  LIMITING LANDLORD'S LIABILITY                                            17


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<PAGE>

32.  ESTOPPEL CERTIFICATE                                                     18

33.  WAIVER OF SUBROGATION                                                    18

34.  INDUSTRIAL SITE RECOVERY ACT AND ENVIRONMENTAL LAWS.                     18

35.  HOLDOVER                                                                 22

36.  NON-INTERFERENCE                                                         22

37.  SECURITY DEPOSIT                                                         22

38.  TENANT'S REIMBURSEMENT                                                   23

39.  NOTICES                                                                  23

40.  NO SETOFF                                                                23

41.  FINANCIAL STATEMENTS                                                     23

42.  MORTGAGEE PROTECTION CLAUSE                                              23

43.  MODIFICATIONS REQUESTED BY MORTGAGEE                                     23

44.  LANDLORD'S CONSENT                                                       23

45.  FORCE MAJEURE                                                            24

46.  MODIFICATION AND PARTIAL INVALIDITY                                      24

47.  BINDING EFFECT                                                           24


                                       ii
<PAGE>

      THIS LEASE AGREEMENT, made and entered into this     day of , 1998, by and
between HOLLISTER '97, L.L.C., a New Jersey limited liability company, with
offices located at Suite 100, 235 Moore Street, Hackensack, New Jersey 07601, as
Landlord, and BEI MEDICAL SYSTEMS COMPANY, INC., a Delaware corporation, with
its about to be office at 100 Hollister Road, Teterboro, New Jersey 07608, as
Tenant.

                              W I T N E S S E T H:

      FOR VALUE RECEIVED, it is hereby agreed that:

      1. LEASED PREMISES. The Landlord by these presents does hereby lease and
rent to the Tenant, and said Tenant hereby agrees to lease and take upon the
terms and conditions set forth herein 24,412 square feet (the "leased premises")
in a building located at 100 Hollister Road, Teterboro, Bergen County, New
Jersey (said leased premises being shown in red outlining on the plan attached
hereto and marked Exhibit "A"). Tenant's right to use parking facilities shall
be restricted to ninety (90) spaces for use by passenger automobiles by its
employees and visitors and Tenant's service and delivery trucks, and parking
shall be in the areas designated on Exhibit "A" as permitted parking areas.
During the term of this lease after fifteen (15) days prior written notice to
Tenant, Landlord shall have the right to change the area or areas designated for
permitted parking by the Tenant, but Landlord shall not exercise this right
unless reasonably necessary to do so and in no event shall Landlord provide less
than ninety (90) spaces for Tenant's use which shall be in reasonable proximity
to the leased premises. Tenant shall not park abandoned vehicles in the parking
lot.

      The leased premises is to be used and occupied by Tenant and such other
entities which are controlled by, controlling and/or common control of Tenant
for light assembly and manufacturing, distribution, warehouse and related office
uses, subject to such uses being permitted by federal, state and local laws,
ordinances, rules and regulations; however, (i) hazardous wastes, as defined in
ISRA from time to time (ISRA is defined in Section 34 hereof), shall not be
generated in the leased premises, except Tenant may be a small quantity
generator as defined in the New Jersey environmental laws, and (ii) Tenant will
not have a Standard Industrial Classification Code as a chemical manufacturer
nor will hazardous substances, as defined in ISRA from time to time, be stored
or manufactured in the leased premises as a major product or as a major
component of a product manufactured in the leased premises.

      2. TERM. a. The term of this lease shall be for a period of approximately
six (6) years and three months, commencing on the date (the "Commencement Date")
on which Landlord properly notifies Tenant that it has substantially completed
the work to be performed pursuant to Section 13 hereof


                                      iii
<PAGE>

and a temporary certificate of occupancy or certificate of occupancy, if
required by the Borough of Teterboro, has been issued for the leased premises by
the Borough of Teterboro, but in no event earlier than March 1, 1998 nor later
than the date provided in Section 13 hereof, and terminating on the last day of
the month which occurs six (6) years and three (3) months later plus the
remainder of the calendar month in which such date occurs. "Substantial
completion" and "substantially completed" shall be deemed to have occurred when
the only items remaining to be performed are minor and insubstantial details of
construction, mechanical adjustment or decoration, the non-completion of which
does not materially interfere with Tenant's use of the leased premises.

                  b. Upon expiration of the term of the lease as set forth in
Article 1, Tenant shall have the right and option to extend the term of the
lease for one period of five (5) years. The right and option to extend the term
of the lease shall be subject to and contingent upon each and every of the
conditions set forth hereinafter. Tenant's right and option to extend the term
of the lease shall be exercisable by Tenant giving written notice of the
exercise of the right and option to Landlord at least nine (9) months prior to
the expiration of the original term. In the event Tenant fails to give written
notice of its intention to exercise its right and option as provided above
within the stated time periods, Tenant's right and option to extend the term of
the lease shall (upon the date by which written notice should have been received
by Landlord) be deemed to have been waived by Tenant and shall be of no further
force or effect. In the event Tenant exercises its right and option in
accordance with the provisions hereof the term of the lease shall be extended
accordingly, and all references contained in the lease to the term shall be
construed to refer to the original term of the lease, as extended, whether or
not specific reference is made thereto in the lease. Unless otherwise expressly
provided to the contrary, the extended term of the lease shall be upon the same
terms, conditions and covenants as set forth in the lease except that there
shall be no further right or option to extend the term of the lease. It is
important to Landlord that it know whether or not the options are exercised by
Tenant so that it may seek a replacement tenant to avoid loss of rent, and,
therefore, the time within which the option and acceptance of the rent must be
exercised is hereby made of the essence. The right and option to extend the term
of the lease shall be subject to and contingent upon each and every one of the
following conditions:

            (i) The lease is in full force and effect;

            (ii) There shall not then exist and be continuing an event of
      default by Tenant under any of the terms, provisions, covenants and
      conditions of the lease as provided in Section 15 of this lease; and

            (iii) In lieu of the sums set forth in Section 3a. of this lease,
      the monthly installments of rent to be paid by Tenant monthly during the
      option period shall be $28,073.80.

      3. RENT. a. Beginning with the Commencement Date (the "Rent Commencement
Date"), Tenant agrees to pay Landlord a fixed minimum annual rental, payable in
equal monthly installments in the following amounts, in advance on the first day
of every month:

                                  Monthly
      Period                   Installments
      ------                   ------------

First two (2) years             $20,711.18

Next one (1) year                22,745.52

Next one (1) year                22,377.67

Remainder of the term            24,412.00


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<PAGE>

Rent shall be prorated for partial months. Rent shall be abated for the first
ninety (90) days after the Commencement Date subject, however, to the provisions
of Paragraph 13. Simultaneously with the execution of this lease, Tenant has
paid to Landlord rent in the amount of $20,711.18, which will be applied to the
first rent accruing after the abatement period.

                  b. Said rental payments together with all other payments
required hereunder shall be payable to Landlord at:

                  c\o Marcus Associates Property Management, Inc.
                  235 Moore Street
                  Hackensack, New Jersey 07601

until further notice from Landlord.

                  c. In the event that installments of rent or any other
payments of money which may be due under this Lease are not received by Landlord
within eight (8) days after the applicable due date, there shall be added to
such payment, and simultaneously due and owing, a late charge equal to five (5%)
percent of the amount of each payment so in arrears, and if not paid within
thirty days after due, interest shall accrue on the amount of such payment and
be payable at a rate equal to five (5%) percent above the prime rate then
charged by Chase Manhattan Bank, N.A. to its most favored borrower and commonly
known as the "prime rate", as it is changed from time to time, adjusted on the
same day as the effective date of changes in the prime rate. The late payment
charge and interest are not intended as a penalty but are intended to compensate
Landlord, partially, for loss of interest on funds which it is to receive and/or
may advance to cure Tenant's default and for administrative and other expenses
it may incur to give Tenant notice of its default and to pursue various
remedies. The late charges and interest shall be paid to Landlord as additional
rent.

      4. TAXES.

            a. In addition to the fixed minimum rental set forth in Section 3
above and as additional rent, Tenant agrees to pay, as additional rent, as
provided in Section 11 hereof, Tenant's pro rata share of the annual taxes
levied against the entire building and land of which the leased premises are a
part. Tenant's pro rata share is 13.91%. Landlord shall furnish Tenant with a
photocopy of the then current tax bill or bills. If Landlord appeals the taxes,
Tenant's pro rata share of the reasonable expenses and fees incurred shall be
added to Tenant's adjusted payment, but in no event shall Tenant's share of such
expenses exceed Tenant's share of such tax refund. If Landlord receives a rebate
or reduction of taxes as a result of an appeal, Landlord will promptly rebate to
Tenant its pro rata share thereof, after deduction for Tenant's pro rata share
of the reasonable expenses and fees incurred not previously paid by Tenant under
this Section 4a. Such payment of taxes shall be proportionately adjusted for the
fraction of the calendar year involved at the beginning and end of the term of
this lease. Landlord represents that the monthly amount currently due from
Tenant under this Section 4 based upon the estimated real estate taxes for the
first half of 1998 are $958.63.

            b. The term "taxes" shall mean and include all taxes, assessments
and other governmental charges, general and special, ordinary and extraordinary,
of any kind and nature whatsoever, applicable to the property in which the
leased premises is situated, including but not limited to assessments for public
improvements or benefits which shall, during the term hereof, be laid, assessed,
levied, imposed upon, or become due and payable and a lien upon the premises or
any part thereof, but excluding franchise, estate, inheritance, succession,
capital, levy, transfer, income or excess profits tax imposed upon Landlord;
provided, if, at the time during the term of this lease, under the laws of the
State of New Jersey or any political subdivision thereof in which the premises
are or may be situated, a tax or excise on rents or other tax, however
described, is levied or assessed by the State of New Jersey or any political
subdivision against Landlord on account of the rent expressly reserved
hereunder, as a substitute in whole or in part


                                       3
<PAGE>

for taxes assessed or imposed by the State of New Jersey or any political
subdivision on land and buildings, or on land or buildings, or if a direct tax
on rents is levied or assessed by the State of New Jersey or any political
subdivision on the rent, whether or not it is in substitution in whole or part
for real estate taxes, such tax or excise on rents or other tax shall be
included within the definition of "taxes." All such substitute taxes, other than
a tax on rents, shall be included in "taxes" but only to the extent of the
amount thereof which is lawfully assessed or imposed upon Landlord and which was
so assessed or imposed as a direct result of Landlord's ownership of this lease,
or of the rent accruing under this lease. If any assessments for public
improvements or benefits are payable by law in installments, said assessments
shall be deemed payable not for the period in which the same are assessed but in
installments over the longest period in which installments thereof may be
payable by law, and only those installments which would fall due within the term
of this lease shall be included as taxes.

      5. UTILITIES. Tenant shall also be responsible for the cost of any and all
utilities, including electricity, water, and gas consumed at the leased
premises, all of which are separately metered for the leased premises, and
Tenant shall make payments directly to the utility companies in accordance with
bills rendered by those utility companies to Tenant.

      6. INSURANCE. Landlord shall keep all buildings and improvements in which
the leased premises is located insured with a broad-form fire insurance policy,
extended coverage, in an amount equal to the full replacement cost thereof and
rent loss insurance for one year. Landlord shall periodically increase the
insurance coverage to reflect increases in full insurable value. The Tenant
shall provide and keep in full force and effect through the term of this lease
insurance coverage against breakage and replacement of plate and window glass in
the leased premises and loss from sprinkler leakage damage to the leased
premises. Landlord shall provide such other insurance and in such amounts as may
from time to time be reasonably required by Landlord against other insurable
hazards which at the time are commonly issued in the case of premises similarly
situated in the State of New Jersey. Landlord shall maintain general public
liability insurance against claims for injury or death or property damage
occurring upon, in or about the entire property in which the leased premises is
situated (excluding the leased premises which will be covered by Tenant's
policy) and the adjoining parking areas, but not the leased premises, with
limits of $2,000,000.00 for liability and $2,000,000.00 for property damage.
Landlord will attempt to have its liability insurance policy state that it has
primary coverage, notwithstanding any secondary liability coverage which Tenant
may maintain, and, if Landlord cannot obtain such statement, it is agreed that
Landlord's coverage will be primary and Tenant's coverage secondary. Tenant
shall reimburse Landlord as additional rent for its pro rata share, 13.91%, of
the cost of insurance for the entire building as provided in Section 11 hereof.

      7. DESTRUCTION.

            a. If the leased premises shall be partially damaged by fire or
other cause the damage shall be repaired by and at the expense of Landlord and
the fixed minimum rent and additional rent until such repairs shall be made
shall be apportioned according to the part of the leased premises which is
usable by Tenant. No penalty shall accrue for any delay which may arise by
reason of adjustment of insurance on the part of Landlord and for any delay on
account of "labor troubles" or any other cause, similar or dissimilar, beyond
Landlord's control. Tenant shall give immediate notice to Landlord in case of
fire in the leased premises. If the leased premises are totally or substantially
damaged or are rendered wholly or substantially untenantable by fire or other
cause, and if Landlord shall decide not to restore or not to rebuild the same,
or if the building shall be substantially damaged so that Landlord shall decide
to demolish it or to rebuild it or to remodel it (whether or not the leased
premises have been damaged), then or in any of such events Landlord may, within
ninety (90) days after such fire or other cause, give Tenant a notice in writing
of such decision, and thereupon the term of this lease shall expire by lapse of
time upon the third day after such notice is given, and


                                       4
<PAGE>

Tenant shall vacate the leased premises and surrender the same to Landlord. If
the leased premises are not restored or rebuilt and substantially completed
within one hundredfifty days after the occurrence of the casualty, Tenant shall
have the right to terminate this lease within a period of thirty (30) days
thereafter, in the same manner as if Landlord had exercised its decision not to
rebuild or restore. If there shall not then exist and be continuing an event of
default of Tenant under Section 15 this lease, then, upon the termination of
this lease, under the conditions provided for in the sentence immediately
preceding, Tenant's liability for rent shall cease as of the day following the
casualty and any security or other money on deposit with Landlord and any
unearned rent or additional rent shall be paid to Tenant.

            b. No damages, compensation or claims shall be payable by Landlord
or Tenant for inconvenience, loss of business or annoyance arising from any
repair or restoration of any portion of the leased premises or of the building
except for rent abatement as provided in paragraph a of this Section 7.

      8. INSURANCE. The Tenant, at its sole cost, shall maintain, in addition to
the insurance provided by Landlord under Section 6 above:

            a. General public liability insurance against claims for injury or
death or property damage occurring upon, in or about the leased premises in such
limits as Landlord may reasonably require for personal injury to any one person
and to any number of persons arising out of one accident and for property
damage. General public liability insurance limit of $2,000,000.00 and property
damage insurance limits of $500,000.00 are deemed reasonable as of the date
hereof.

            b. At Tenant's option, the Tenant shall provide and keep in full
force and effect through the term of this lease insurance coverage against loss
to its personal property from sprinkler leakage damage, at Tenant's expense.

            c. Such other insurance and in such amounts as may from time to time
be reasonably required by Landlord against other insurable hazards which at the
time are commonly issued in the case of premises similarly situated in the State
of New Jersey, unless necessitated by another tenant.

            d. All insurance shall be effected under policies issued by insurers
of recognized responsibility authorized to do business in the State of New
Jersey and shall name Landlord and Tenant and any mortgagee, as their interest
may appear, as the insured. Upon the execution of this lease Tenant shall
deliver to Landlord a binder evidencing the required coverage and payment of
premiums and shall deliver an original policy or certificate of insurance where
appropriate and called for by the lease on the Commencement Date, and thereafter
not less than ten (10) days prior to the expiration dates of expiring policies,
originals of the policies or certificates evidencing the same bearing notations
evidencing the payment of premiums shall be delivered by Tenant to Landlord
except that whenever the leased premises shall be mortgaged by the Landlord,
such policies of insurance shall be lodged with the holder of the mortgage lien
and certified copies shall be delivered to the Landlord. Each such policy shall,
to the extent obtainable, contain a provision that such policy shall not be
cancelled or modified without at least ten (10) days prior written notice to the
Landlord and to any mortgagee named therein and contain a provision for waiver
of subrogation consistent with Section 33 hereof.

            e. Upon the default of the Tenant in effecting any such insurance or
procuring or delivering the policies therefor as directed by the Landlord, or in
paying the premiums therefor and any and all charges incidental thereto when the
same become payable, or in procuring the delivering to the Landlord renewals of
expired policies as provided above, the Landlord may procure any such insurance
and/or pay the premiums and other charges incidental thereto, and any and all
amounts so paid by Landlord, shall be additional rent hereunder to be added to
the next installment of rent thereafter to become due and the Landlord shall
have all rights and remedies including summary


                                       5
<PAGE>

proceedings, with respect to the same as with respect to rent.

      9. REPAIRS. Throughout the term of this lease, Landlord, at Landlord's
expense, shall be responsible to make all repairs and replacements to the
structure (including foundation, utility lines and equipment and exterior walls)
and roof (including decking and coverings) and shall be responsible to maintain
the exterior of the building in which the leased premises is located, including
landscaped and parking areas and entrance way and adjacent steps, in good
condition and repair, subject to reimbursement by Tenant as provided in Section
10 hereof. During the first twelve (12) months after the Commencement Date,
Landlord, at Landlord's expense, shall be responsible to make all repairs and
replacements to the HVAC system, without reimbursement by Tenant as provided in
Section 10 hereof. Tenant agrees, throughout the term of this lease, to take
good care of the leased premises and fixtures and the appurtenances therein and
shall make, at its own expense, repairs and replacements required to keep the
leased premises, HVAC systems servicing the leased premises exclusively (subject
to Landlord's obligation during the first twelve (12) months of the term
hereof), fixtures, plumbing and electrical systems and related fixtures and
equipment in good working order and condition, and Tenant will be responsible
for all glass breakage and damage due to sprinkler leakage. Landlord at
Landlord's expense, will maintain the lawn and all landscaping in good condition
and will remove all snow and ice from all parking areas, driveways, steps,
walkways and sidewalks, including sidewalks and driveways adjacent to the leased
premises and all of the common areas. Landlord shall assign to Tenant all
warranties and guarantees relating to the leased premises. Tenant shall
maintain, at Tenant's expense, from and after the Commencement Date, an annual
maintenance contract for the HVAC system with a reputable contractor reasonably
satisfactory to Landlord, and Tenant will furnish Landlord, prior to the
commencement date of the contract or prior to its annual renewal date, a copy of
the maintenance contract and evidence of payment of the annual charge. However,
Tenant will have no obligation to repair, replace, service or maintain those
HVAC units which are intended to service the leased premises exclusively but
which units Tenant elects not to use. Tenant shall maintain, at its own expense,
all light bulbs, fluorescent tubes and lighting fixtures in the leased premises,
including all component parts such as starters, ballasts, and lenses or grills.
All repairs made by Tenant shall be at least equal in quality to the original
work. Tenant shall make such alterations, additions or improvements as may be
permitted pursuant to Section 18 of this lease and all repairs only between such
hours and by such contractors or mechanics as may be approved in writing by
Landlord, which approval shall not be unreasonably withheld or delayed.

      10. COMMON EXPENSES.

            a. Throughout the term of this lease, Tenant shall pay to Landlord,
in the manner herein set forth as additional rent, as provided in Section 11
hereof, a charge equal to Tenant's pro rata share, 13.91%, of the total cost
(the "maintenance") of maintaining, operating, repairing and replacing (except
to the extent of recourse pursuant to third party warranties or proceeds of, and
deductibles or loss-sharing co-payments or shortfalls under, insurance or
condemnation awards are available therefor) the entire building and land
including the Common Area (the "Property") in which the leased premises is
located, other than those costs which Tenant is obligated to pay pursuant to
Sections 8 and 9 hereof.

            b. The maintenance cost of the Property shall mean all reasonable
costs and expenses of any kind and nature paid or incurred by Landlord in
operating, maintaining, repairing and replacing the Property, except (i) the
HVAC system during the first twelve (12) months of the term of this lease, (ii)
the foundation, (iii) the structure of the building, and (iv) the roof structure
and decking (excluding the roof covering). Excluding items of expense commonly
known as debt service, brokers' commissions, expenses relating to portions of
the Property not used by the tenants in general, or only by specific tenants in
particular, legal fees, capital improvements or repairs or replacements or
maintenance relating to a particular tenant's space, environmental remediation,
franchise taxes, income taxes, depreciation,


                                       6
<PAGE>

amortization and wages and salaries for persons other than workmen servicing the
Common Area, the costs and expenses paid or incurred by Landlord shall include,
but shall not be limited to, the reasonable cost of management, operating,
cleaning, maintaining, repairing and replacing (except to the extent proceeds of
insurance or condemnation awards are available therefor) lighting, heating,
ventilating and air-conditioning equipment and systems, roof covering, all
parking areas, driveways, curbs, sidewalks, medians, planters, drainage and
sanitary systems, water supply lines, identification and directory signs,
utility supply systems, fire protection systems, the roof, walls, ceilings and
floors, outside sweeping, snow removal, line painting, landscaping, removal of
garbage and other refuse, providing on-and off-site traffic direction and
parking control, providing security (but only if tenants in the building do not
maintain individual security systems), providing public liability, property
damage, fire and extended coverage and such other insurance as Landlord deems
appropriate, total compensation and benefits (including premiums for workmen's
compensation and other insurance) paid to or on behalf of employees who are
hired to perform maintenance and/or repairs to the Property for the general
benefit of the Property and its tenants, personal property taxes, supplies, fire
protection and hydrant charges, water and sewer charges, utility charges,
licenses and permit fees, and administrative cost equal to six (6%) percent of
the total cost and expense of all of the foregoing items. It is clearly
understood that the above definition of the cost shall not be construed as a
representation or warranty that items of equipment, facilities or services
listed thereon or from time to time will be in existence or available at the
Property and said definition is intended only to define such items that may
exist or may be available from time to time.

            c. The term "Common Area" shall mean all driveways, courts,
sidewalks, walkways, access roads, loading areas, garbage and refuse disposal
facilities, landscaped areas, maintenance and storage rooms, meter rooms, and,
without limitation, all other areas which are available for use in common by
occupants of the Property and their customers and invitees or which are used in
the maintenance and operation of the Property but not those dedicated
exclusively to Landlord, empty tenant spaces or any tenant or tenants. It is
clearly understood that the above definition of Common Area shall not be
construed as a representation or warrant that any such areas are or from time to
time will be available at the Property and said definition is intended only to
define such areas which may be available from time to time.

            d. In the event Landlord must make repairs or replacements to the
Property which are usually considered as capital improvements, then the
reasonable cost of such capital improvements shall be amortized over their
useful life, and only the cost of that portion of the useful life which falls
within the term of this lease shall be included in maintenance. "Useful life"
shall be determined in accordance with normally recognized accounting methods
and principles, consistent with the Internal Revenue Code as it may then apply.

      11. ESTIMATED EXPENSE DISBURSEMENTS.

            a. Beginning on the Rent Commencement Date, Tenant covenants and
agrees to pay Landlord, as additional rent, the sum of 1/12th of estimated
annual maintenance costs, taxes and insurance (to the extent billed separately
and not included in maintenance), in advance, on the first day of each calendar
month of the lease. Landlord intends to give Tenant written notice once a year
of the amount of estimated monthly payments for maintenance, taxes and
insurance, and Tenant will pay these amounts monthly without further notice or
billing. In the event that such annual costs of the Property for any calendar
year during the term hereof shall exceed the estimated sum, Tenant shall pay its
pro rata share of any such excess within thirty (30) days from written notice by
Landlord to Tenant. In the event the total estimated payments for the year
exceed Tenant's share of the actual costs, Landlord shall credit such excess
amount against the next due payments of fixed rent and additional rent. Within
ninety (90) days after the end of each calendar year Landlord shall furnish
Tenant with a statement in reasonable detail of


                                       7
<PAGE>

the actual costs of the Property for the preceding calendar year showing
computation of Tenant's pro rata share of the excess. Landlord has given to
Tenant schedules which show the actual real estate taxes, insurance and
maintenance expenses for the Property for 1996 and the estimated amounts for
1997. Said statement shall be rebuttable evidence of the actual amount of costs
of the Property as well as the amount, if any, due from Tenant. No further
evidence shall be required of Landlord by Tenant prerequisite to the making of
any payment to Landlord by Tenant as contemplated in this paragraph; provided,
however, the Tenant shall be provided with reasonable documentation setting
forth the costs of Landlord for same upon request thereof by Tenant. Tenant
shall have the right to inspect the applicable accounting records of Landlord at
the office of Landlord's managing agent upon reasonable prior notice. Any
payments to be made hereunder shall be made by Tenant within ten (10) days from
the date of billing from Landlord. Payments for partial year shall be prorated.
However, Landlord will have the right to bill Tenant for its pro rata share of
repairs and/or replacements when incurred if they exceed the estimated annual
budget for that category, and the budget and monthly estimated payments shall be
adjusted accordingly, if necessary. At the end of the term of this lease, and as
soon as the actual expense amounts have been determined, Tenant's pro rata share
of taxes, insurance and maintenance will be pro rated as of the termination date
and any overpayment or underpayment of Tenant's share resulting from estimated
payments will be paid to the other party promptly.

            b. Tenant shall have the right, at any reasonable time upon ten (10)
days' prior written notice to Landlord, to have its representative audit and
examine Landlord's books and records at the office of Landlord's managing agent
in New Jersey relating to maintenance costs, taxes, insurance costs and water
charges within one year after Tenant has received the annual statement of such
actual charges. All these costs shall be audited and examined at the same time.
If such audit shall disclose a liability of Landlord to reimburse Tenant for
overcharges of five (5%) percent or more of the total original charge, Landlord
shall promptly pay to Tenant the reasonable cost of such audit and the amount of
the deficiency plus interest from the date such excess shall have been refunded
to Tenant at the same rate of interest as provided in Section 3 of this lease.
If the overcharge is less than five (5%) percent, Landlord will credit the
amount of the overcharge against its next due installments of fixed minimum rent
and additional rent. After one year from the date Tenant has received the annual
statement of such annual charges, Tenant shall be deemed, automatically and
conclusively, to have approved and accepted such charges unless Tenant has
conducted an audit and has notified Landlord in writing, within the one-year
period, that it contests the charges and sets forth specific items and the
amount which it contends is incorrect.

            c. Tenant's pro rata share of 13.91% was calculated using the ratio
of 24,412 square feet to 175,500 square feet.

      12. EMINENT DOMAIN.

            a. In the event the entire building in which the leased premises are
located shall be appropriated or taken under the power of eminent domain by any
public or quasi-public authority, this agreement shall terminate and expire as
of the date of such taking and Tenant shall thereupon be released from any
further liability hereunder, and all money on deposit with Landlord and all
unearned rent and additional rent shall be promptly paid to Tenant.

            b. In the event that either a portion of the leased premises or the
building of which the premises are a part is condemned or taken by eminent
domain proceedings so as to render the leased premises substantially unusable,
then in such event Tenant shall have the right to cancel and terminate this
agreement as of the date of such taking upon giving to Landlord notice in
writing of such election within 30 days after the receipt by Tenant from
Landlord of written notice of such appropriation or taking. Landlord agrees that
it will give written notice to Tenant immediately upon appropriation or taking
hereunder. Any taking or appropriation by eminent domain proceedings shall be
deemed to render the leased premises substantially


                                       8
<PAGE>

unusable hereunder if such appropriation or taking results in Tenant's inability
to use the leased premises in the manner in which and for the purposes for which
it has been used or can be used under this agreement. In the event of such
cancellation, Tenant shall thereupon be released from any further liability
under this lease agreement. In the event of a partial condemnation or taking
which does not result in termination of this lease, the rent, including
additional rent, shall be reduced proportionate to the loss of interior space of
the leased premises.

            c. If this lease agreement is terminated in either manner
hereinabove provided, the fixed monthly advance rental for the last month of
Tenant's occupancy shall be prorated and Landlord agrees to refund to Tenant any
such fixed rental paid in advance. Unless local law shall permit the payment of
a damage award to be made directly to Tenant for loss of its interest, then the
entire damage award of the condemnation proceedings shall be paid to Landlord;
however, Tenant shall be entitled to seek the value of its loss of interest
directly from the condemning authority.

      13. LANDLORD'S CONSTRUCTION AND POSSESSION.

            A. The Landlord agrees to perform all the work described in Exhibit
"B" which is attached to this lease, and complete such work so as to make the
leased premises ready for occupancy by Tenant on or after March 1, 1998 but, in
no event, later than May 1, 1998, for which the Landlord agrees to pay the cost
thereof up to $150,000.00, including architectural and engineering fees, and
Tenant will pay a maximum amount of $50,000.00 in excess thereof. The ninety
(90) day rent abatement period shall be reduced, automatically, by a number of
days equal to the number of days transpiring between (a) the later of (i)
January 15, 1998 or (ii) three (3) days (including weekends and holidays) after
the date on which Landlord has given Tenant final architectural plans for
Landlord's Work, and (b) the date on which Tenant has given Landlord its
approval of the plans and specifications for Landlord's Work. Within two (2)
weeks after Tenant has approved the architectural plans, Landlord will obtain
and furnish Tenant with the contractor's, architect's and engineer's costs to
perform the work. If the total cost exceeds $200,000.00, the parties will
attempt to agree on changes which will reduce the total cost to $200,000.00 or,
without any obligation to do so, agree in writing to bear the cost in excess of
$200,000.00, in which event this lease will be deemed to have been amended by
such writing. If the parties do not agree on work changes or assumption of the
additional cost within seven (7) days after receipt of the contracts, this lease
will terminate, automatically. If the total cost is less than $200,000.00,
Tenant's obligation will be reduced by the amount of such reduced cost. If the
leased premises is not ready for occupancy by May 1, 1998, Tenant will have the
option, to be exercised by written notice received by Landlord on or before May
5, 1998, to (i) terminate this lease or (ii) take possession of the leased
premises as of May 1, 1998 and finish the work and offset the reasonable cost of
such work against the next due rent and additional rent. If Tenant does not
exercise its option or if Tenant elects to terminate this lease, then this lease
will terminate, automatically. Tenant's share of the costs will be paid to
Landlord as additional rent as follows: (i) 50% on the Commencement Date and
(ii) the balance in thirty-six (36) equal monthly installments (including
interest on the unpaid balance at the rate of ten (10%) percent per year) on the
first day of each month commencing on the day rent first becomes due and payable
after the rent abatement period. Landlord shall furnish Tenant with such
reasonable proof of the actual costs as Tenant may reasonable request. In the
event this lease terminates as provided in this Section 13A, neither party will
have any right or recourse against the other except for the immediate payment to
Tenant of all rent and Security Deposit received by Landlord.

            B. Tenant shall take actual possession of the leased premises on the
Commencement Date. In the event Tenant determines within thirty (30) days after
the Commencement Date that there are defects, Tenant shall provide Landlord with
a punch list of items remaining to be completed, which items shall be completed
within twenty (20) business days. Except to the extent


                                       9
<PAGE>

specifically provided in the punch list, Tenant's occupation of the leased
premises shall be conclusively presumed to operate to terminate all of
Landlord's obligations relating to the initial condition of the leased premises.
Tenant shall provide Landlord with a letter accepting the leased premises, in
form and substance satisfactory to comply with any requirements for same
contained in any mortgage constituting a lien on the premises of which the
leased premises are a part.

            C. Landlord represents and warrants the following, as of the
Commencement Date and for the following twelve (12) months:

                  (i) Air conditioning in the entire leased premises will
            maintain a temperature of 75(degrees)F plus or minus 5% if the
            outside temperature reaches 95(degrees)F to 100(degrees)F; and

                  (ii) Heating in the entire leased premises will maintain a
            temperature of 75(degrees)F plus or minus 5% if the outside
            temperature falls below 25(degrees)F.

            D. Landlord represents and warrants the following during the entire
term of this lease:

                  (i) Electrical service will be at least 800 amps at 480 volts.

            E. Tenant, at its own expense, will provide and install all window
treatments and locker room equipment including lockers which Tenant desires to
install in the leased premises.

      14. QUIET ENJOYMENT. The Landlord covenants that the Tenant, upon payment
of the rent and additional rent above reserved, upon the due performance of the
covenants and agreements herein contained, shall and may at all times during the
term hereby granted peaceably and quietly have, hold and enjoy the leased
premises for the term of this lease, subject to the mortgage subordination
provisions of this lease. This covenant shall not be personal but shall run with
the land and be binding upon any transferee, successor or assignee of the
Landlord.

      15. TENANT'S DEFAULT. The following events shall be considered events of
default by Tenant hereunder:

            a. Tenant shall fail to pay any installments of rent hereby reserved
and such failure shall continue for a period of ten (10) days after written
notice thereof to Tenant that such installment of rent is due pursuant hereto.

            b. Tenant shall fail to comply with any term, provision or covenant
of this lease, other than the payment of rent, and shall not cure such failure
within thirty (30) days after written notice thereof to Tenant; provided,
however, if the reasonable time to cure such failure shall be longer than thirty
(30) days, Tenant shall have as long as reasonably necessary to complete the
same if it commences to cure within the thirty (30) day period and diligently
continues thereafter to completion.

            c. Tenant files a voluntary petition in bankruptcy.

            d. A receiver or trustee shall be appointed for all or substantially
all of Tenant's assets and such receiver or trustee has not been discharged
within thirty (30) days.

            Upon the occurrence of any of such events of default, Landlord shall
have the option to pursue any one or more of the following remedies without
notice or demand whatsoever:

            (a) Terminate this lease, in which event Tenant shall immediately


                                       10
<PAGE>

surrender the leased premises to Landlord, and if Tenant fails so to do,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent or rent for the remainder of the lease term,
enter upon and take possession of the leased premises and expel or remove Tenant
and any other person who may be occupying said premises or any part thereof, by
all lawful means, without being liable for prosecution or any claim of damages
therefor, except those resulting from the gross negligence or willful misconduct
of Landlord or its employees, agents or contractors; and Tenant agrees to pay to
Landlord on demand the amount of all loss and damage which Landlord may suffer
by reason of such termination, whether through inability to relet the leased
premises on satisfactory terms or otherwise.

            (b) Enter upon and take possession of the leased premises and expel
or remove Tenant and any other person who may be occupying said premises or any
part thereof, by all lawful means, without being liable for prosecution or any
claim for damages therefor, except those resulting from the gross negligence or
willful misconduct of Landlord or its employees, agents or contractors, and
relet the leased premises and receive the rent therefor; and Tenant agrees to
pay to Landlord on demand any deficiency that may arise by reason of such
reletting.

            (c) Enter upon the leased premises by all lawful means without being
liable for prosecution or any claim for damages therefor, except those resulting
from the gross negligence or willful misconduct of Landlord or its employees,
agents or contractors, and do whatever Tenant is obligated to do under the terms
of this lease, and Tenant agrees to reimburse Landlord on demand for any
reasonable expenses which Landlord may incur in thus effecting compliance with
Tenant's obligations under this lease, and Tenant further agrees that Landlord
shall not be liable for any damage resulting to the Tenant from such action
provided the same is not caused by the gross negligence or wilful misconduct of
Landlord or its agents, employees or contractors or otherwise.

            Pursuit of any of the foregoing remedies shall not preclude pursuit
of any of the other remedies provided for herein or any other remedies provided
by law, all of which may be enforced cumulatively, nor shall pursuit of any
remedy provided for herein constitute a forfeiture or waiver of any rent due to
Landlord hereunder or of any damages accruing to Landlord by reason of the
violation of any of the terms, provisions and covenants herein contained. Tenant
shall remain obligated to pay all rent, additional rent and other reimbursements
to Landlord on the dates when due as provided in this lease. Failure by Landlord
to enforce one or more of the remedies herein provided upon any event of default
shall not be deemed or construed to constitute a waiver of such default, or of
any other violation or breach of any of the terms, provisions and covenants
herein contained.

      16. ASSIGNMENT OR SUBLET. The Tenant may not assign this lease or let or
sublet the whole or any part of the leased premises without obtaining in advance
the written consent of Landlord, which consent shall not be unreasonably
withheld or delayed; however, Landlord may arbitrarily refuse such consent if
occupancy by the assignee or subtenant will cause the leased premises to become
subject to ISRA (hereinafter defined), except as a small quantity generator as
defined under New Jersey laws and other than the use specifically permitted in
Section 1 hereof. Except as provided in the third paragraph of this Section 16,
in the event Tenant desires to assign this lease or let or sublet the whole or
any part of the leased premises, Tenant shall give written notice in advance of
its intention to do so to Landlord together with (i) a copy of the proposed
agreement of assignment or sublease wherein the proposed assignee assumes all of
the obligations of Tenant hereunder and containing the name and address of the
proposed assignee, (ii) the names and addresses of the principals of the
proposed assignee or subtenant, (iii) financial statements and bank and other
financial and business references of the proposed assignee or subtenant
reasonably sufficient to enable Landlord to ascertain the financial
responsibility of the proposed assignee or subtenant, and (iv) the federal
Standard Industrial Classification number of the proposed


                                       11
<PAGE>

assignee or subtenant in the form of an Environmental Affidavit and all other
information required pursuant to Paragraph 34 m of this lease. Within thirty
(30) days after its receipt of said notice, Landlord, at its option, may either
(i) terminate this lease upon the later of thirty (30) days' written notice to
Tenant or the date on which Tenant was to vacate the leased premises under the
terms of the proposed sublease or assignment and recover the leased premises (in
which event Tenant shall be released from all of its obligations and
responsibilities under this lease), or (ii) consent to the assignment or
subletting, in which event the rent due to Landlord under this lease shall
automatically be increased by seventy-five (75%) percent of the amount, if any,
which all rent or other consideration received by Tenant from such assignee or
subtenant (prorated on a square-foot basis for less than the entire leased
premises) exceeds the rent then due to Landlord pursuant to this lease less the
amount of real estate brokerage commissions and other expenses reasonably
related to the assignment or sublease (all prorated over the term of the
assignment or sublease) paid to unrelated third parties. Any such assignment or
subletting shall not relieve Tenant from all of its obligations and
responsibilities under this lease for the entire leased premises.

            The transfer of a majority of the issued and outstanding capital
stock of any corporate Tenant or a transfer of the total proprietary interest of
any partnership Tenant, however the same may be accomplished, and whether in
single transaction or in a series of related or unrelated transactions, shall be
deemed to be an assignment of this lease. Likewise, an increase in the number of
issued and/or outstanding shares of the capital stock of any corporate Tenant
and/or the creation of one or more additional classes of capital stock of any
corporate Tenant, however accomplished and whether in a single transaction or a
series of related or unrelated transactions, with the result that at least
fifty-one (51%) percent of the beneficial interest and record ownership in and
to such Tenant shall no longer be held by the beneficial and record owners of
the capital stock of such corporate Tenant as of the date hereof, or the date on
which such corporation shall become the Tenant hereunder (whichever is later),
shall be deemed to be an assignment of this lease.

            Notwithstanding any provision of this Section 16 to the contrary,
Landlord's consent shall not be required nor shall Landlord have the right to
terminate this lease and recover the leased premises nor shall the rent be
increased in the event Tenant (i) merges or consolidates with another entity, or
(ii) transfers substantially all of its assets or common stock to another
entity, or (iii) assigns this lease or sublets the leased premises to another
entity which is controlled by Tenant or is under common control of Tenant and
another entity, all provided that the entity to which this lease is assigned has
a net worth (excluding goodwill and similar intangible assets) at the time of
the assignment not less than fifty one (51%) percent of the net worth (excluding
goodwill and similar intangible assets) of Tenant on the date of signing of this
lease. However, if any of said events should occur, Tenant shall give prompt
written notice of the event to Landlord and shall furnish Landlord with the
information provided for in (i), (ii), (iii) and (iv) of the first paragraph of
this Paragraph 16 together with a current financial statement of the new entity
and a financial statement of the assignor as of the date provided in the next
preceding sentence.

      17. BROKERAGE COMMISSIONS. Landlord and Tenant represent that they have
not dealt with any real estate broker or other party who may claim or be
entitled to a commission in connection with this lease, except Colliers Houston
& Co., Marcus Associates, L.L.C. and James E. Hanson, Inc., whose fees and
commissions Landlord shall pay pursuant to a separate agreement. Each party
agrees to indemnify and hold harmless the other from any and all claims for any
such brokerage commissions, finder's fees or the like made by any other broker
or entity. It is agreed that if any claims for brokerage commissions or fees are
ever made against Landlord or Tenant in connection with this lease, all such
claims shall be handled and paid by the party whose actions or alleged
commitments form the basis of such claim, and the party whose actions or alleged
commitments form the basis of such claim shall indemnify and hold harmless the
other from and against any and all such claims


                                       12
<PAGE>

and demands, including reasonable attorneys' fees incurred in defending the
same, with respect to any brokerage fees or agent's commissions or other
compensation asserted by any person, firm or corporation in connection with this
lease.

      18. ALTERATIONS AND IMPROVEMENTS. The Tenant may make alterations,
additions or improvements to the leased premises without the consent of the
Landlord only if such alterations, additions or improvements do not require
structural changes in the leased premises, or do not lessen the value of the
leased premises. Tenant will furnish Landlord with plans and specifications for
all improvements and alterations, whether or not Landlord's consent is required,
at least twenty (20) days before the commencement of any work. In the event any
alterations, additions or improvements to be made require structural changes,
the same shall only be made upon the Tenant obtaining the prior written consent
of the Landlord, which consent the Landlord shall not unreasonably withhold,
provided the same do not lessen the value of the leased premises or does not
change the basic design and/or utility of the building. All such alterations,
additions or improvements shall be (i) only in conformity with applicable
governmental and insurance company requirements and regulations applicable to
the leased premises, (ii) all work will be performed by reputable contractors in
a manner and using materials substantially similar to those used in construction
of the building of which the leased premises are a part and fully paid by Tenant
so that the leased premises will be lien free, (iii) all work will be performed
in a continuous manner to completion without unreasonable delay, and (iv) Tenant
will furnish Landlord with written evidence that the appropriate governmental
agencies have approved the work. Tenant shall hold and save Landlord harmless
and indemnify Landlord against any claim for damages or injury in connection
with any of the foregoing work which Tenant may make as hereinabove provided.

            All alterations, decorations, installations, additions or
improvements upon the leased premises made by either party (including but not
limited to paneling, interior walls, railings and the like), except Tenant's
movable trade fixtures, equipment and furniture, shall, unless Landlord elects
otherwise (by notice in writing to Tenant given not less than thirty (30) days
prior to the expiration or other termination of this lease or of any renewal or
extension thereof) become the property of Landlord and shall remain upon, and be
surrendered with, said leased premises, as a part thereof, at the end of said
term or renewal term, as the case may be. If Landlord shall elect otherwise at
the time Tenant requests Landlord's consent, or if no such consent is required
or requested, then if requested by Landlord at least thirty (30) days prior to
the end of the term of this lease, Tenant shall remove at its expense such
alterations, installations, additions or improvements made by Tenant (including
the improvements set forth on Exhibit "B" attached hereto) upon the leased
premises as Landlord shall so elect, and Tenant shall repair and restore the
leased premises to original condition at its sole expense prior to the
expiration of the term.

            At the expiration or other termination of this lease, Tenant shall
remove all personal property not owned by Landlord and all debris and shall
leave the leased premises in a "broom clean" condition.

            Nothing herein contained shall be construed as a consent on the part
of the Landlord to subject the estate of the Landlord to liability under the
mechanic's lien law of the State of New Jersey, it being expressly understood
that the Landlord's estate shall not be subject to such liability.

      19. TENANT'S ASSUMPTION OF RISK. It is agreed that the Tenant shall assume
all risk of damage to its property, equipment and fixtures occurring in or about
the leased premises, whatever the cause of such damage or casualty, and that, in
any event, the Landlord shall not be liable for any damage or injury to property
or person as provided in Paragraph 20 of this lease.

      20. LANDLORD NOT LIABLE. Neither the Landlord nor its agents shall be
liable for any damage to property of the Tenant entrusted to employees of the
building, nor to any property, goods, or things contained in the leased


                                       13
<PAGE>

premises or stored in any part of the building, or in the parking areas, unless
such injury or damage is due to affirmative acts of negligence (acts of
commission) on the part of the Landlord or its employees, servants or agents but
there shall be no liability for acts of omission unless such acts of omission
themselves are a breach of Landlord's obligations at law or under this lease.
Except also as the same may be attributable solely to the affirmative acts of
negligence of the Landlord, its employees, servants or agents, the Landlord
shall not be liable for any injury or damage to persons or property in the
building of which the leased premises forms a part, or to the business of the
Tenant, or any interruption thereof, resulting from theft, burglary, explosion,
wind or accident, falling plaster, steam, gas, electricity, water, rain or snow,
leakage from any part of the building or from pipes, appliances, or plumbing
works in the building or from the street or subsurface thereof or from any other
source, or from dampness, or from damage occasioned by workmen engaged in making
repairs or alterations in or upon the building or land on which it is located,
or from damage by other Tenants or persons in the building, or for interference
with the light or other incorporeal hereditaments, or caused by operations in
the construction of any public or quasi-public work, or for any other cause of
whatsoever nature, unless such acts of omission themselves are a breach of
Landlord's obligations at law or under this lease.

      21. INDEMNIFICATION. The Tenant shall indemnify and save harmless the
Landlord from, and shall reimburse the Landlord as additional rent for all
expenses, damages, or fines incurred or suffered by the Landlord by reason of
any breach, violation, or non-performance by the Tenant, or the Tenant's
servants, employees or agents, of any covenant or provision of this lease, or by
reason of damage or injury to persons or property caused by the Tenant's moving
property in or out of the building, or by the installation or removal of
furniture or other property of the Tenant, or arising out of the occupancy or
use by the Tenant of the leased premises or the building of which they form a
part, or from any other cause due to the carelessness, negligence or improper
conduct of the Tenant or the Tenant's servants or agents, but excluding expenses
and/or damages for which there is insurance and to which the wavier of
subrogation applies. Tenant shall have no obligation to Landlord for Tenant's
acts of omission unless such acts of omission themselves are a breach of
Tenant's obligations at law or under this lease.

      22. MORTGAGE SUBORDINATION AND ATTORNMENT. This lease is and shall be
subject and subordinated to the lien of the mortgage now affecting the leased
premises, at the date hereof, and to any mortgage or mortgages hereafter made
affecting the leased premises, and to all renewals, modifications,
consolidations, replacements, or extensions thereof, irrespective of the time of
recording such mortgage, provided that such mortgagees agree in a written
document, in a form attached hereto as Exhibit "B" with regard to the presently
existing mortgage and substantially the same substantive provisions with regard
to future mortgages, that Tenant's occupancy and all rights pursuant to this
lease shall not be disturbed nor terminated so long as Tenant is not in default
of its obligations hereunder beyond any cure periods. With regard to presently
existing mortgage, Landlord shall use its best efforts to obtain the consent of
the mortgagee to this lease and the subordination, attornment and
non-disturbance agreement, which agreement shall be executed by Tenant. Any fees
charged by the mortgagee will be paid by Tenant. In the event Landlord does not
obtain such consent and agreement within twenty (20) days after the date hereof,
this lease shall terminate. In the event of such termination, neither party
shall have any further right or recourse against the other except for the
immediate return to Tenant of any advance rent payments made to Landlord. Tenant
and Landlord shall execute and deliver such further instruments as may be
reasonable to effectuate such future subordination, attornment and
non-disturbance agreements.

            In the absence of a subordination, attornment and non-disturbance
agreement and in the event that any holder of any mortgage or anyone claiming
from or through any such holder or any purchaser of holder's estate in any
foreclosure sale shall enter into and lawfully become possessed of the leased
premises or shall otherwise succeed to the rights of Landlord under this lease,
either through foreclosure of any mortgage or the acquisition of the


                                       14
<PAGE>

estate of Landlord thereby mortgaged, Tenant agrees to attorn to such successor
landlord and recognize successor landlord as its landlord under this lease and
to execute, upon request of such successor landlord, an attornment agreement.
Such an attornment provision will also be included in any subordination,
attornment and non-disturbance agreement entered into with a mortgagee.

      23. SERVICES INTERRUPTED. This lease and the obligation of the Tenant to
pay rent hereunder and perform all of the other covenants and agreements
hereunder on the part of the Tenant to be performed shall in nowise be affected,
impaired or excused because the Landlord is unable to supply or is delayed in
supplying any service expressly or impliedly to be supplied or is unable to
make, or is delayed in making any repairs, additions, alterations or decorations
or is unable to supply or is delayed in supplying equipment or fixtures if the
Landlord is prevented or delayed from so doing by reason of governmental
preemption in connection with a National Emergency declared by the President of
the United States or in connection with any rule, order or regulation of any
department or subdivision thereof of any governmental agency or by reason of the
conditions of supply and demand which have been or are affected by war, strike
or other emergency.

      24. LANDLORD'S ACCESS-REPAIRS. The Tenant agrees that the Landlord, and
its agents and other representatives, shall have the right to enter into and
upon the leased premises, or any part thereof, upon reasonable prior notice and
without disrupting Tenant's business, at all reasonable hours for the purpose of
examining same, or making such repairs or alterations therein as may be
necessary for the safety and preservation thereof; provided, however, Landlord's
right to enter the leased premises shall be exercised only upon reasonable
notice to Tenant and shall be carried out in a manner and fashion which will not
unduly interfere with Tenant's use and enjoyment of the leased premises and
shall not extend to areas where governmental security clearance is required.

      25. LANDLORD'S ACCESS-SHOW PREMISES. The Tenant also agrees to permit the
Landlord, or its agents, or other representatives to show the leased premises to
persons wishing to lease, mortgage or purchase the same; provided, however,
Landlord's right to enter the leased premises shall be exercised only upon
reasonable notice to Tenant and shall be carried out in a manner and fashion
which will not unduly interfere with Tenant's use and enjoyment of the premises
and shall not extend to areas where governmental security clearance is required.

      26. SIGNS. The Tenant shall neither place, nor cause, nor allow to be
placed, any sign or signs of any kind whatsoever at, in or about the entrance to
the leased premises nor any other part of same except in or at such place or
places as may be indicated by the Landlord and consented to by the Landlord in
writing, as to design, color, size and location, which consent shall not be
unreasonably withheld or delayed. Landlord hereby consents to the installation,
by Tenant and at Tenant's expense, of one (1) sign on the canopy above the
entrance to the leased premises with a sign two feet by six feet and matching
the signs of other tenants in the building and one (1) sign with a size of one
foot by one foot above the loading bay. Tenant may install a sign on the
directory for the entire building near Hollister Road using the same size and
type as the other tenants. In case the Landlord or its agents or other
representatives shall deem it necessary to remove any such sign or signs in
order to paint or make any other repairs, alterations or improvements in or upon
the leased premises or the building wherein same is situated or any part
thereof, the Landlord shall have the right to do so, providing the same be
removed and replaced at the Landlord's expense whenever the said repairs,
alterations or improvements shall have been completed. If Landlord notifies
Tenant that any such signs must be removed at the end of the lease, Tenant will
cause them to be removed and any damage to the leased premises repaired, all at
Tenant's expense.

      27. ABANDONMENT OF PROPERTY. If after default in payment of rent or
violation of any other provisions of this lease, the Tenant moves out or is


                                       15
<PAGE>

dispossessed and fails to remove any trade fixtures or other property prior to
such said default, removal, or the issuance of the final order or execution of
the warrant, then and in that event, the said fixtures and property shall be
deemed abandoned by the Tenant and shall become the property of the Landlord.
Upon expiration of the term of this lease Tenant shall have thirty days within
which to remove its property prior to same being abandoned pursuant to this
section.

      28. STRICT PERFORMANCE. The failure of the Landlord or Tenant to insist
upon strict performance of any of the terms, covenants or conditions of this
lease or to exercise any option herein conferred in any one or more instances,
shall not be construed as a waiver or relinquishment for the future of any such
covenants, conditions or options, but the same shall be and remain in full force
and effect.

      29. LAWS AND REGULATIONS. The Tenant, during the term of this lease, shall
promptly execute and comply with all statutes, ordinances, regulations and
requirements of the federal, state and local governments and all of their
departments, bureaus and agencies applicable to said leased premises, for the
correction, prevention, and abatement of nuisances, violations or other
grievances, in, upon or connected with the leased premises during the term of
this lease; and Tenant shall also comply at its own cost and expense with and
execute all rules, orders and regulations of the Board of Fire Underwriters, or
any other similar body, for the prevention of fires in the leased premises;
provided, however that Tenant shall have no liability to make any structural
repairs, replacements or new construction under any of the foregoing which are
not related to Tenant's specific use of the leased premises and shall not be
responsible to remediate any environmental condition not caused by Tenant, as to
which Landlord shall be solely liable and at Landlord's expense.

      30. LANDLORD CURE. In case the Tenant, within thirty (30) days (or such
shorter period if required under the circumstances) after receiving notice to
comply, shall fail or neglect to comply with the aforesaid statutes, ordinances,
rules, orders, regulations and requirements or any of them, or in case the
Tenant shall fail or neglect to make any necessary repairs, then the Landlord or
its agents may enter said leased premises and make said repairs and comply with
any and all of the said statutes, ordinances, rules, orders, regulations or
requirements, at the cost and expense of the Tenant and in case of the Tenant's
failure to pay therefor, the said cost and expense shall be added to the next
month's rent and be due and payable as such, or the Landlord may deduct the same
from the balance of any security deposit in the Landlord's hands. This provision
is in addition to the right of the Landlord to terminate this lease by reason of
any default on the part of the Tenant.

      31. LIMITING LANDLORD'S LIABILITY. Anything in this lease to the contrary
notwithstanding, Tenant agrees that Tenant shall look solely to the estate and
property of Landlord in the property in which the leased premises is located,
and subject to the prior rights of any Mortgagee of the property, for the
collection of any judgment (or other judicial process) requiring the payment of
money by Landlord in the event of any default or breach by Landlord with respect
to any of the terms, covenants and conditions of this lease to be observed
and/or performed by Landlord, and no other assets of Landlord nor its partners,
members, managers, trustees, officers, directors, stockholders or beneficiaries
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies.

      32. ESTOPPEL CERTIFICATE. Tenant agrees at any time and from time to time
upon not less than ten (10) days' prior notice by Landlord or any Mortgagee to
execute, acknowledge and deliver to Landlord or such Mortgagee, as the case may
be, or any other party specified by Landlord or such Mortgagee, a statement in
writing certifying that this lease is unmodified and in full force and effect
(or if there have been modifications, that the same is in full force and effect
as modified and stating the modifications) and the dates to which the Rent and
other charges have been paid in advance, if any, and stating whether or not to
the best knowledge of the signer of such certificate Tenant or Landlord is in
default in performance of any covenant,


                                       16
<PAGE>

agreement or condition contained in this lease, and, if so, specifying each such
default of which the signer may have knowledge, it being intended that any such
statement delivered pursuant to this paragraph may be relied upon by any
prospective purchaser of the fee or any mortgagee thereof or any assignee of any
Mortgage.

      33. WAIVER OF SUBROGATION. Each party hereto does hereby remise, release
and discharge the other party hereto and any officer, agent, employee, or
representative of such party, of and from any liability whatsoever hereafter
arising from loss, damage, or injury caused by fire or other casualty normally
covered by extended coverage policy for which insurance (permitting waiver of
liability and containing a waiver of subrogation) is carried by the injured
party at the time of such loss, damage or injury to the extent of any recovery
by the injured party under such insurance. Whenever (a) any loss, cost, damage
or expense resulting from fire, explosion or any other casualty or occurrence is
incurred by either of the parties to this lease in connection with the leased
premises or the building in which the leased premises is located, and (b) such
party is then covered, in whole or in part, by insurance with respect to such
loss, cost, damage or expense, then, the party so insured hereby releases the
other party from any liability it may have on account of such loss, cost, damage
or expense to the extent of any amount recovered by reason of such insurance,
and waives any right of subrogation which might otherwise exist in or accrue to
any person on account thereof, provided that such release of liability and
waiver of the right of subrogation shall not be operative in any case where the
effect thereof is to invalidate such insurance coverage or increase the cost
thereof (provided that in the case of increased cost, the other party shall have
the right, within thirty (30) days following written notice, to pay such
increased cost, thereupon keeping such release and waiver in full force and
effect).

      34. INDUSTRIAL SITE RECOVERY ACT AND ENVIRONMENTAL LAWS.

            a. Tenant shall, at Tenant's own expense, comply with all federal,
state and local laws, rules and regulations relating to environmental matters
affecting the leased premises and the Industrial Site Recovery Act, N.J.S.A.
13:1K-6 et seq. and the regulations promulgated thereunder ("ISRA") for which
Tenant is obligated pursuant to this lease. Tenant shall, at Tenant's own
expense, make all submissions to, provide all information to, and comply with
all requirements of, the New Jersey Department of Environmental Protection or
its replacement or similar department, agency, bureau or division ("NJDEP") with
regard to its use and occupancy of the leased premises and with regard to any
spills or discharges of hazardous waste or substance caused by Tenant or the
employees, agents, contractors or invitees (together the "Tenant's
Responsibility"). Should any division of NJDEP determine under ISRA that a
remediation action work plan be prepared and that a remediation be undertaken
because of any spills or discharges of hazardous substances or wastes at the
building or land in or on which the leased premises is located (the "Property")
which occur during the term of this lease which are Tenant's Responsibility,
then Tenant shall, at Tenant's own expense, prepare and submit the required
plans and financial assurances, and carry out the approved plans. Tenant's
obligations under this paragraph shall arise if there is any closing,
terminating or transferring of operations of an industrial establishment at the
Property or a sale or transfer of title of the Property by Landlord, all
pursuant to ISRA. Notwithstanding the foregoing, if the Property is being sold
or transferred by Landlord, Landlord shall bear the expense of such applications
and submissions, but as to any spills or discharges which are Tenant's
Responsibility, Tenant shall prepare and file, at Tenant's expense, all
applications, tests, reports and remediation required by the NJDEP pertaining to
such. At no expense to Landlord, Tenant shall promptly provide all information
requested by Landlord for preparation of documents supporting an application for
a determination by the NJDEP of non-applicability of ISRA to Tenant or
submission of an application for a de minimis exception or a no-further-action
letter to the NJDEP and shall promptly sign and submit such documents when
requested by Landlord. Landlord shall indemnify, defend and save harmless Tenant
from all fines, suits, procedures, claims and actions of any kind arising out of
or in any way connected


                                       17
<PAGE>

with any spills or discharges of hazardous substances or wastes at the Property
which are not Tenant's Responsibility and from all reasonable expenses incurred
for legal, engineering and expert fees, and from all fines, suits, procedures,
claims and actions of any kind arising out of Landlord's failure to provide all
information, make all submissions and take all actions required by the ISRA or
any division of NJDEP concerning ISRA or any other environmental law. Tenant
shall indemnify, defend and save harmless Landlord from all fines, suits,
procedures, claims and actions of any kind arising out of or in any way
connected with any spills or discharges of hazardous substances or wastes at the
Property which are Tenant's Responsibility and from all reasonable expenses
incurred for legal, engineering and expert fees, and from all fines, suits,
procedures, claims and actions of any kind arising out of Tenant's failure to
provide all information, make all submissions and take all actions required by
ISRA or any division of NJDEP concerning ISRA or any other environmental law.
Tenant shall furnish a surety bond or other financial security which will
guarantee the implementation of the remediation action work plan for Tenant's
Responsibility if same is required under ISRA. Tenant's obligations and
liabilities under this paragraph shall continue so long as Landlord remains
obligated for compliance with ISRA regarding any spills or discharges of
hazardous substances or wastes at the Property which are Tenant's
Responsibility. Either Landlord's or Tenant's failure to abide by the terms of
this paragraph shall be restrainable by injunction.

            b. Notwithstanding anything to the contrary contained above, Tenant
will have no obligation pursuant to this Section 34 and all other provisions of
this lease with regard to environmental matters resulting from any environmental
condition which occurs at anytime which is not Tenant's Responsibility.

            c. Each of Landlord and Tenant shall promptly supply to the other
all reports and notices made by Tenant pursuant to the Hazardous Substance
Discharge--Reports and Notices Act, N.J.S.A. 13:1K-15 et seq. and the
regulations promulgated thereunder ("Reports and Notices Act").

            d. Each of Landlord and Tenant shall promptly supply the other with
any notices, correspondence and submissions made by Tenant to NJDEP, the United
States Environmental Protection Agency (EPA), the United States Occupational
Safety and Health Administration (OSHA), or any other local, state or federal
authority which requires submission of any information concerning environmental
matters or hazardous wastes or substances.

            e. Each of Landlord and Tenant shall promptly comply with all
requirements of the Spill Compensation and Control Act (N.J.S.A. 58:10-23.11 as
amended) and supply the other with copies of all notices, reports, tests or
filings in relation thereto whether received from any governmental agency or
promulgated by Tenant.

            f. Each of Landlord and Tenant shall promptly comply with all
requirements of the Hazardous and Solid Waste Amendment of 1984 Pub. L98-616 (42
U.S.C. 699) and adopted by New Jersey for registration of underground storage
tanks pursuant to N.J.S.A. 58:10A-21, et seq., and supply to the other copies of
all notices, reports, questionnaires, registration statements, tests, or filings
in relation thereto whether received from any governmental agency or promulgated
by either. In connection herewith, Tenant shall not install or remove any
underground or above-ground storage tanks without first obtaining the express
written consent of Landlord.

            g. Each of Landlord and Tenant shall promptly furnish to the other
true and complete copies of all documents, submissions and correspondence
provided by each of Landlord and Tenant to the NJDEP and all documents, reports,
directives and correspondence provided by the NJDEP to each of Landlord and
Tenant. Each of Landlord and Tenant shall also promptly furnish to the other
true and complete copies of all sampling and test results obtained from samples
and tests taken at and around the Property.

            h. Within thirty (30) days prior to the termination of this


                                       18
<PAGE>

lease, Tenant will furnish Landlord with (i) evidence that Tenant has
satisfactorily complied with ISRA for the cessation of its operations, or (ii) a
letter of non-applicability to ISRA issued by the NJDEP. Tenant shall also
furnish Landlord, without expense to Landlord, copies of all applications,
tests, submissions and correspondence to and from NJDEP and others relating to
these matters.

            i. Tenant further agrees to implement and execute all of the
provisions of this paragraph in a timely manner so as to coincide with the
termination of this lease or to coincide with the vacating of the leased
premises by the Tenant at any time during the term of this lease.

            j. With regard to Tenant's Responsibility pursuant to this Section
34, in the event that Landlord shall seek to sell or transfer title to the
Property or engage in any other transaction which initiates the obligation to
comply with ISRA and Landlord applies to the NJDEP for a remediation agreement
("RA"), Tenant agrees that it shall furnish a surety bond, Letter of Credit or
such other financial security which would guarantee the implementation of any
potential remediation at the leased premises, as required by the NJDEP to the
extent of Tenant's Responsibility and to execute any and all documents and
furnish such information as may be reasonably necessary in connection with
Landlord's application. As with all other aspects of any ISRA application by
Tenant respecting Tenant's use and occupancy of the leased premises, to the
extent of Tenant's Responsibility, Tenant shall bear all costs in connection
with same, and perform all other acts necessary or required by the NJDEP in
order to obtain an RA.

            k. In the event the Tenant shall have failed to comply in any
respect with the terms and conditions of this Section 34, including failing to
obtain such final ISRA clearance of the Property as of the date of expiration of
this lease as ISRA may require, then upon such failure to comply, it shall be
deemed the Tenant has remained in possession of the leased premises, and shall
be considered as a holdover tenant as provided in Section 35 hereof. These
rights are in addition to any other rights and remedies the Landlord may have
under law.

            l. As a condition precedent to Tenant's right to sublease the leased
premises or to assign the lease, Tenant shall have received from the NJDEP
either (i) no-further-action letter, (ii) a de minimis exception, or (iii) a
non-applicability letter, for which Tenant shall promptly apply pursuant to
ISRA. If this condition shall not be satisfied, then Landlord shall have the
right to withhold consent to sublease or assignment.

            m. Simultaneously with execution of this lease, Tenant shall supply
to Landlord an affidavit of an officer of Tenant ("Environmental Affidavit"),
setting forth Tenant's federal Standard Industrial Classification number and a
detailed description of the operation and processes Tenant will undertake at the
leased premises, organized in the form of a narrative report, including a
description and quantification of hazardous substances and wastes generated,
manufactured, refined, transported, treated, stored, handled or disposed of at
the leased premises. During the lease term, Tenant shall notify Landlord by way
of Environmental Affidavit as to any changes in Tenant's operation, federal
Standard Industrial Classification number or use and generation of hazardous
substances and wastes, by way of a supplemental Environmental Affidavit. Tenant
shall also supplement and update Environmental Affidavit upon each January 1st
of the lease term. Nothing herein shall be construed as permitting Tenant to use
the leased premises for any purpose other than as originally intended and set
forth in Section 1.

            n. If Landlord has reasonable cause to believe that a spill or
discharge has occurred which is Tenant's Responsibility and Landlord makes
written demand to Tenant sitting forth the basis of its cause, Tenant will
obtain, at its own expense, and furnish to Landlord, without charge, within
thirty (30) days after receipt of Landlord's demand a Phase I environmental
report prepared by a recognized environmental engineer which will show the
status of the leased premises with regard to all environmental conditions. In


                                       19
<PAGE>

the event that the report shows or indicates the presence or possibility of the
presence of any environmental condition which violates the laws, rules,
regulations or ordinances of the State of New Jersey which is Tenant's
Responsibility, then Tenant will obtain such additional inspections, reports and
tests as may be required to determine the nature and scope of the environmental
condition which is Tenant's Responsibility and what will be required to remedy
the condition and the cost thereof. Tenant, at its expense, will remediate the
environmental condition to the satisfaction of all governmental agencies, etc.
and to the reasonable satisfaction of Landlord. If the Phase I or later report
confirms that the condition is not Tenant's Responsibility, Landlord shall
reimburse Tenant for its reasonable costs of compliance with this paragraph.

            o. Provided that the use of the Property is not adversely affected,
Landlord and Tenant may use restricted remediation standards (non-residential
standards) in the remediation of the Property and engineering or institutional
controls, and each will cooperate with such remediation and execute
institutional controls as required.

            p. The obligations of Landlord pursuant to paragraphs c, d, e, f and
g of this Section 34 to furnish Tenant with copies of documents will apply only
to events and occurrences relating to the leased premises and the Common Area
(as defined in Section 10 hereof).

            q. Landlord represents that, to the best of its knowledge,a there is
only one (1) underground storage tank on the Property, which tank services the
backup generator used by AT & T and which tank is located under one of the
parking spaces in front of the AT & T space located between Kinetic Concepts and
Spring in the rear wing of the building.

      35. HOLDOVER. If Tenant remains in possession of the leased premises after
the expiration of the original term of this lease or of any option term, except
pursuant to an exercise of an option to extend, or after Tenant's right of
occupancy has been properly terminated by Landlord, such possession shall be
considered as a tenant at sufferance of Landlord, and the possession may be
terminated Landlord at any time upon three days' prior written notice to Tenant.
During such period of occupancy as a tenant at sufferance of Landlord, rent
shall be payable on the first day of every month, in advance, at a rate equal to
two times the rent for the last month of the term in addition to the additional
rent for expense reimbursement which shall continue to be payable as provided in
this lease. The increased rent is not intended to be a penalty but is intended
to be an agreed amount in order to avoid a controversy over the determination of
fair market rent or similar phrase, nor shall the acceptance of rent by Landlord
be construed as consent to continued occupancy.

      36. NON-INTERFERENCE. Landlord may improve the land and building in which
the leased premises is located. Although Landlord will attempt to have the work
performed in such a manner as not to inconvenience Tenant or interfere with its
use and occupancy of the leased premises, Tenant understands that there may be
temporary interferences with Tenant's use and occupancy. Such interferences
shall not be cause for Tenant to terminate this lease nor receive a reduction or
abatement of rent. Landlord shall not permit major interruptions or
interferences with Tenant's use and occupancy of the leased premises.

      37. SECURITY DEPOSIT. The Tenant has deposited with the Landlord the sum
of $137,000.00 simultaneously with the execution and delivery of this lease,
said deposit to be security for the full and faithful performance by Tenant of
all the terms, covenants and conditions of this lease on the part of the Tenant
to be performed. The unreturned or unapplied balance of the security deposit
shall bear interest at the rate of two and one-half (2-1/2%) percent per year
(not compounded), and Landlord shall not be required to maintain the deposit in
a separate account, but Landlord may commingle it with


                                       20
<PAGE>

its own funds. Provided that Tenant is not then in default of its obligations
pursuant to this lease, Landlord will return to Tenant out of the security the
amount of $22,833.33 on March 1, 2000, March 1, 2001 and March 1, 2002. The said
balance of security and all earned interest shall be returned to the Tenant by
the Landlord after the expiration of the term of this lease, provided Tenant has
fully and faithfully performed all of the terms, covenants and conditions of
this lease on its part to be performed. In the event of a bona fide sale of the
leased premises, subject to this lease, the Landlord shall have the right to
transfer the security and earned interest to its vendee for the benefit of the
Tenant, and the Landlord shall be considered released by the Tenant from all
liability for the return of such security and interest; and the Tenant agrees to
look to the new landlord solely for the return of such security and interest and
the parties hereto agree that the foregoing shall apply to every transfer or
assignment made of the security and interest to a new landlord. Tenant shall not
be entitled to any interest on said security deposited except as specifically
provided in this Section. Landlord may use, apply or return the whole or any
part of the security deposit and interest to the extent required for the payment
of any rent, additional rent or any other sums which Tenant may owe as a result
of its default in the provisions of this lease. In the event Landlord applies
all or any portion of the security deposit and interest in payment of Tenant's
obligations hereunder because of Tenant's partial or total default, Tenant shall
restore the security deposit to its original amount within ten (10) days after
receipt of written notice from Landlord stating the amount of security deposit
which Landlord applied in payment of Tenant's obligations.

      38. TENANT'S REIMBURSEMENT. Tenant shall reimburse Landlord for the
actual, reasonable attorneys' fees incurred by Landlord in connection with each
review of any requested consent for subletting or assignment, and for the
preparation or review of any documents or instruments pertaining to the same,
and for any action to enforce Tenant's obligation pursuant to this lease,
including, but not limited to, collection of rent and/or additional rent,
dispossess actions and distraint.

      39. NOTICES. All notices, demands and requests required under this lease
shall be in writing. All such notices, demands and requests shall be deemed to
have been properly given if sent by United States certified mail, return receipt
requested, postage prepaid or by public courier with charges prepaid, addressed
to the addressees shown on the first page of this lease. Notices shall be
effective upon receipt by the addressee or refusal to accept delivery or the
unavailability of anyone at the address to accept or refuse delivery during
normal business hours. Landlord or Tenant may from time to time change the
address for receipt of notice by giving notice thereof to the other in
accordance with the provisions of this paragraph.

      40. NO SETOFF. Tenant shall not be entitled to assert any claim, credit or
right of setoff against Landlord in any action to dispossess Tenant for
non-payment of rent or other default hereunder, and Tenant's sole remedy shall
be to pursue such claims in a separate lawsuit against Landlord. The rent due
hereunder, whether fixed or additional, and all money to become due and owing to
Landlord, shall be paid without credit or setoff, except for such amount as may
be due and owing by Landlord to Tenant pursuant to a judgment entered in a court
of competent jurisdiction.

      41. FINANCIAL STATEMENTS. Tenant shall, if requested by Landlord or
Landlord's mortgagee or any future mortgagee, or prospective mortgagee or
prospective purchaser, submit to Landlord, any prospective mortgagee or
purchaser, without cost to Landlord, a copy of Tenant's financial statement
which shall be considered "confidential" by the recipient. Tenant shall also,
without cost to Landlord, submit to any prospective mortgagee or purchaser such
prior statements as it may have, as and when required by Landlord or Landlord's
mortgagee or prospective mortgagee or prospective purchaser.

      42. MORTGAGEE PROTECTION CLAUSE. Tenant agrees to give all mortgagees, by
certified mail, a copy of any notice of default served on Landlord, provided
that prior to such notice Tenant has been notified, in writing (by


                                       21
<PAGE>

way of notice of assignment of rents and leases or otherwise), of the name and
address of such mortgagees. The mortgagees shall have the same time within which
to cure such default as is given to Landlord under this Lease.

      43. MODIFICATIONS REQUESTED BY MORTGAGEE. In the event that a prospective
mortgagee of the leased premises or the property of which it is a part shall
request a change in the language of the terms of this lease, or the execution of
any document in connection therewith, Tenant agrees to make such change or
execute such document provided the same shall not increase Tenant's obligations
or liabilities under this lease.

      44. LANDLORD'S CONSENT. If in this lease it is provided that Landlord's
consent or approval as to any matter will not be unreasonably withheld, and it
is established by a court or body having final jurisdiction thereover that
Landlord has been unreasonable, the only effect of such finding shall be that
Landlord shall be deemed to have given its consent or approval.

      45. FORCE MAJEURE. Neither Landlord nor Tenant shall be required to
perform any term, condition, or covenant in this lease so long as such
performance is delayed or prevented by force majeure, which shall mean acts of
God, strikes, lockouts, material or labor restrictions by any governmental
authority, civil riot, floods, and any other cause not reasonably within the
control of Landlord or Tenant and which by the exercise of due diligence
Landlord or Tenant is unable, wholly or in part, to prevent or overcome.

      46. MODIFICATION AND PARTIAL INVALIDITY. This lease contains the entire
agreement between the parties and shall not be modified in any manner except by
an instrument in writing executed by the parties. If any term or provision of
this lease, or the application thereof, to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this lease shall be valid and be enforced
to the fullest extent permitted by law.

      47. BINDING EFFECT. This lease shall be binding upon and inure to the
benefit of the Landlord and Tenant and their respective successors and proper
assigns.

      IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year first above written to this lease agreement.

WITNESS:                            Hollister '97, L.L.C.
                                    By: Lyndhurst Properties Associates
                                    L.P., its Manager

______________________              By:_________________________________
                                    Stanley H. Marcus, its
                                    General Partner


WITNESS:                            BEI Medical Systems Company, Inc.

______________________              By:_________________________________


                                       22
<PAGE>

                                   EXHIBIT "B"

                                 Landlord's Work

      1. All walls will be made "paint ready".

      2. In production area, strip and re-wax vinyl flooring which is in good
condition; replace with new matching vinyl flooring all areas that cannot be
reasonably restored.

      3. Replace all worn ceiling tiles.

      4. Fix bathroom flooring.

      5. The following in accordance with plans and specifications as agreed
between Landlord and Tenant:

            (a) Distribution of electrical power and lighting to work areas and
      drops to benches.

            (b) Installation of a cafeteria, including plumbing and counter
      tops.

            (c) Install venting equipment.

            (d) Demolition and reconstruction as required.

      6. Repair and/or replace, with similar, the flooring in the lobby area.

      7. Furnish and install (2) sinks in the production area and the plumbing
to connect them.

      8. Repair or replace any damaged cove base in tiled areas.

      9. Epoxy seal front entrance steps.

      10. Replace broken plate glass window near front entrance.