STATE OF NEW JERSEY :
                         SS:
 COUNTY OF BERGEN    :

         Samuel Dickstein, of full age, upon his oath deposes and says:

         1. I am the Vice  President  of BEI Medical  Systems  Company,  Inc., a
Delaware corporation (hereinafter called "Tenant").

         2. Upon and after the commencement date, Tenant will occupy Part of 100
Hollister  Road,   Teterboro,   New  Jersey   (hereinafter  called  the  "Leased
Premises").

         3. Tenant  maintains  an office at the Leased  Premises  engaged in the
activity of the sale and corporate management of light manufacturing,  sales and
distribution of medical products.

         4. The primary  business  activity of Tenant is light  manufacturing of
medical products, and its Federal Standard Industrial Classification Numbers are
3845 and 3841.

         5. Except Tenant does not  manufacture,  generate,  refine,  transport,
treat,  store,  handle or dispose of hazardous  substances or hazardous waste at
the Leased Premises,  as hazardous substances and hazardous waste are defined in
the laws, statutes, rules and regulations as promulgated by the United States of
America and the State of New Jersey.

                                             /s/ Samuel Dickstein
                                             -----------------------------------
                                             Samuel Dickstein
                                             VP New Business Development &
                                             Technology

SWORN TO AND SUBSCRIBED
BEFORE ME ON THIS 20th DAY
OF January, 1998
     LORRAINE T. MONTEMURRO
   NOTARY PUBLIC OF NEW JERSEY
My Commission Expires Aug. 3, 1998
----------------------------------
Notary Public

/s/ Lorraine T. Montemurro

<PAGE>
                               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

32.    ESTOPPEL CERTIFICATE ...............................................  18
         
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<PAGE>
         
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 20th day of January,
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.

                                   WITNESSETH:

         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
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.

                                       1

<PAGE>

                  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

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.

                                       2


<PAGE>

                  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 for taxes assessed or

                                       3

<PAGE>

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 broadform  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

                                       4
<PAGE>

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 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

                                       5
<PAGE>

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
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

                                       6
<PAGE>

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,
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.

                                       7
<PAGE>

                  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 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

                                       8
<PAGE>

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  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)

                                       9
<PAGE>

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 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 degree F plus or minus 5% if
                  the outside  temperature  reaches 95 degree F to 100 degree F;
                  and

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

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

                                       10
<PAGE>

                           (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 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.

                                       11
<PAGE>

                  (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 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

                                       12
<PAGE>
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 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

                                       13
<PAGE>

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 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

                                       14
<PAGE>

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

                                       15
<PAGE>

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 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  nondisturbance  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

                                       16
<PAGE>
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
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

                                       17
<PAGE>

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, 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

                                       18
<PAGE>

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 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

                                       19

<PAGE>

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
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

                                       20
<PAGE>

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.

                  1. 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
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).

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<PAGE>

                  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 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

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<PAGE>

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 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

                                       23
<PAGE>


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


/s/ Mitchell Marcus                     By: /s/ Stanley H. Marcus
---------------------------------           ------------------------------------
Mitchell Marcus                             Stanley H. Marcus, its
                                             General Partner


WITNESS:                                BEI Medical Systems Company, Inc.

/s/ ???????????????                     By: /s/ Thomas W. Fry
---------------------------------           ------------------------------------
                                            Secretary


                                       24
<PAGE>


                         MAP OF LOCATION OF BEI MEDICAL







                                   Exhibit "A"


<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.



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