BOS2: 63298_2.28256.3











                                      LEASE


                                     BETWEEN


                            ANGELA C. MAFFEO, TRUSTEE
                                UNDER THE WILL OF
                                JOHN CAPOBIANCO,
                                   as Landlord


                                       AND


                         MANCHESTER EQUIPMENT CO., INC.,
                                    as Tenant






                           Dated: as of June 30, 1997




<PAGE>



                                       -i-
                                   LEASE INDEX

                                                                         Page

SCHEDULE..................................................................1
1. DEMISE AND TERM........................................................1
2. RENT...................................................................1
3. USE....................................................................1
4. CONDITION OF PREMISES..................................................1
5. BUILDING SERVICES......................................................1
6. RULES AND REGULATIONS..................................................1
7. CERTAIN RIGHTS RESERVED TO LANDLORD....................................1
8. MAINTENANCE AND REPAIRS................................................1
9. ALTERATIONS.............................................................1
10. INSURANCE..............................................................1
11. WAIVER AND INDEMNITY...................................................1
12. FIRE AND CASUALTY......................................................1
13. CONDEMNATION...........................................................1
14. ASSIGNMENT AND SUBLETTING..............................................1
15. SURRENDER..............................................................1
16. DEFAULTS AND REMEDIES..................................................1
17. HOLDING OVER...........................................................1
18. SECURITY DEPOSIT.......................................................1
19. [INTENTIONALLY OMITTED]................................................1
20. ESTOPPEL CERTIFICATES..................................................1
21. SUBORDINATION..........................................................1
22. QUIET ENJOYMENT........................................................1
23. BROKER.................................................................1
24. NOTICES................................................................1
25. DIRECTORY; SIGNS.......................................................1
26. PARKING................................................................1
27. MISCELLANEOUS..........................................................1
EXHIBIT "A" - FLOOR PLAN...................................................1
EXHIBIT "A-1" - LEGAL DESCRIPTION OF LAND..................................1
EXHIBIT "B" - RULES AND REGULATIONS........................................1
EXHIBIT "C" - TENANT IMPROVEMENT WORK......................................1



<PAGE>



                                                       -18-
                                      LEASE


         THIS LEASE (this "Lease") is made as of the ______ day of June, 1997 by
and between Angela C. Maffeo, Trustee under the Will of John Capobianco,  having
an address at 801 Three Islands Boulevard,  No. 206,  Hallendale,  Florida 33009
("Landlord"),  and Manchester Equipment Co., Inc., a New York corporation having
an address at 161 Highland Avenue, Needham,  Massachusetts 02194 ("Tenant"), for
space in the building  known as or located at 25-27  Christina  Street,  Newton,
Massachusetts (such building,  together with the land (the "Land") upon which it
is  situated,  being  herein  referred to as the  "Building").  The Land is more
particularly  described in Exhibit "A-1" attached hereto and incorporated herein
by this reference.  The following  schedule (the  "Schedule") sets forth certain
basic terms of this Lease:

SCHEDULE

         1. Premises: A portion of the first floor of the Building consisting of
approximately 3,008 rentable square feet of floor area as shown cross-hatched on
the  floor  plan  (the  "Floor  Plan")   attached  hereto  as  Exhibit  "A"  and
incorporated herein by this reference.

         2. Annual  Minimum Rent:  $48,128.00  per year for the first Lease Year
(as defined  below);  $48,128.00 per year for the second Lease Year;  $48,128.00
per year for the third  Lease  Year;  $51,136.00  per year for the fourth  Lease
Year; and $51,136.00 per year for the fifth Lease Year.

         3. Monthly Minimum Rent:  $4,010.67 per month for each month during the
first Lease Year;  $4,010.67  per month for each month  during the second  Lease
Year;  $4,010.67 per month for each month during the third Lease Year; $4,261.33
per month for each month during the fourth Lease Year;  and  $4,261.33 per month
for each month during the fifth Lease Year.

         4. Tenant's Operating Expenses  Proportionate  Share: Eleven and 38/100
percent (11.38%).

         5. Tenant's Taxes Proportionate Share: Five and 69/100 percent (5.69%).

         6. Base Expense Year:  Calendar Year 1996 (i.e., January 1, 1996 -
                                 December 31, 1996).


         7. Base Tax Year:Fiscal Year 1997 (i.e., July 1, 1996 - June 30, 1997).


         8. Security Deposit:  $8,522.66.

         9. Brokers: Rose Associates, Inc., Casler & Company and Nealon Company.

         10.  Commencement  Date:  The earlier of (i) the date on which  Tenant,
pursuant to  permission  therefor  duly given by Landlord,  commences use of the
Premises or any portion  thereof,  or (ii) the  Substantial  Completion Date (as
defined  in  Exhibit  "C"  attached  hereto  and  incorporated  herein  by  this
reference).

         11.  Expiration  Date:  The day prior to the fifth  anniversary  of the
Commencement Date.

         12.    Notice  Address of Landlord:   Angela C. Maffeo, Trustee
                                         under  the Will of John    Capobianco
                                         801 Three  Islands Boulevard, No. 206
                                         Hallendale, Florida 33009

                                         with a copy in like manner to:

                                         Rose Associates, Inc.
                                         One Financial Center
                                         Boston, Massachusetts 02111
                                         Attention:  Philip Rogers

         13. Notice Address of Tenant:
                                         Manchester Equipment Co., Inc.
                                         161 Highland Avenue
                                         Needham, Massachusetts 02194
                                         Attention:  Steven Reibstein

                                         with a copy in like manner to:

                                         David Roth, Esquire
                                         Kressel Rothtein & Roth
                                         684 Broadway
                                         Massapequa, New York 11758

                                         with a copy in like manner to:

                                         Manchester Equipment Co., Inc.
                                         50 Marcus Boulevard
                                         Hauppauge, New York 11788
                                         Attention:  Joseph Looney

         1. DEMISE AND TERM.  Landlord hereby leases to Tenant and Tenant hereby
leases from  Landlord the premises (the  "Premises")  described in Item 1 of the
Schedule and shown on the Floor Plan,  subject to the covenants  and  conditions
set forth in this Lease,  for a term (the  "Term")  commencing  on the date (the
"Commencement  Date")  described  in Item 10 of the Schedule and expiring on the
date  (the  "Expiration  Date")  described  in Item 11 of the  Schedule,  unless
terminated  earlier as otherwise  provided in this Lease. Upon the determination
of the Commencement Date, Landlord and Tenant shall memorialize the Commencement
Date and the Expiration Date in a written instrument.

         2.        RENT.

         (a) Definitions.  For purposes of this Lease, the following terms shall
         have the following meanings:

          (i) "Base Expense Year" shall mean the year set forth in Item 6 of the
Schedule.

          (ii)  "Base Tax Year"  shall  mean the year set forth in Item 7 of the
Schedule.

          (iii) "Base  Expenses"  shall mean the amount of Expenses  (as defined
below) for the Base Expense Year.

          (iv) "Base  Taxes"  shall mean the amount of Taxes (as defined  below)
for the Base Tax Year.

          (v) "Expenses" shall mean all expenses, costs and disbursements (other
than Taxes) paid or incurred  by  Landlord  in  connection  with the  ownership,
management,  maintenance,  operation,  replacement  and repair of the  Building.
Expenses  shall  not  include:  (a) costs of  tenant  alterations;  (b) costs of
capital  improvements  (except  for costs of any  capital  improvements  made or
installed for the purpose of reducing Expenses or made or installed  pursuant to
governmental  requirement  or  insurance  requirement,   which  costs  shall  be
amortized  by  Landlord  in  accordance  with sound  accounting  and  management
principles);  (c) interest and principal  payments on mortgages (except interest
on the cost of any capital  improvements for which  amortization may be included
in the  definition  of  Expenses)  or any rental  payments on any ground  leases
(except  for  rental  payments  which  constitute  reimbursement  for  Taxes and
Expenses);  (d) advertising  expenses and leasing  commissions;  (e) any cost or
expenditure for which Landlord is reimbursed,  whether by insurance  proceeds or
otherwise,  except through  Adjustment Rent (as defined below);  (f) the cost of
any kind of service furnished to any other tenant in the Building which Landlord
does not generally make available to all tenants in the Building;  and (g) legal
expenses  of  negotiating  leases.  Expenses  shall be  determined  on a cash or
accrual basis, as Landlord may elect.

          (vi) "Lease Year" shall mean a one (1) year period  commencing  on the
Commencement Date or any anniversary thereof and expiring at midnight on the day
prior to the next anniversary thereof.

          (vii) "Rent" shall mean  Minimum Rent (as defined  below),  Adjustment
Rent and any other sums or charges due by Tenant hereunder.

          (viii) "Taxes" shall mean all taxes,  assessments and fees levied upon
the Building,  the property of Landlord  located  therein or the rents collected
therefrom, by any governmental entity based upon the ownership, leasing, renting
or operation of the Building, including all costs and expenses of protesting any
such taxes, assessments or fees. Taxes shall not include any net income, capital
stock,  succession,  transfer,  franchise,  gift,  estate or inheritance  taxes;
provided,  however, if at any time during the Term, a tax or excise on income is
levied or assessed by any  governmental  entity,  in lieu of or as a  substitute
for, in whole or in part, real estate taxes or other ad valorem taxes,  such tax
shall constitute and be included in Taxes. For the purposes of determining Taxes
for any given  year,  the amount to be included  for such year (a) from  special
assessments payable in installments shall be the amount of the installments (and
any  interest)  due and payable  during such year,  and (b) from all other Taxes
shall at Landlord's election either be the amount accrued, assessed or otherwise
imposed for such year or the amount due and payable in such year.

          (ix) "Tenant's Operating Expenses  Proportionate Share" shall mean the
percentage set forth in Item 4 of the Schedule.

          (x) Tenant's Taxes Proportionate  Share" shall mean the percentage set
forth in Item 5 of the Schedule.

         (b) Components of Rent.  Tenant agrees to pay the following  amounts to
Landlord  at the  office of the  Building  or at such  other  place as  Landlord
designates:

          (i) Minimum rent ("Minimum  Rent") to be paid in monthly  installments
in the  amount set forth in Item 3 of the  Schedule  in advance on or before the
first day of each  month of the Term,  except  that  Tenant  shall pay the first
month's Minimum Rent upon execution of this Lease.

          (ii)  Adjustment  rent  ("Adjustment  Rent")  in an  amount  equal  to
Tenant's  Proportionate  Share of (a) the  increase in Expenses for any calendar
year over the Base  Expenses and (b) the increase in Taxes for any calendar year
over the Base Taxes.  Prior to each calendar  year,  Landlord shall estimate the
amount of  Adjustment  Rent due for such  year,  and Tenant  shall pay  Landlord
one-twelfth  of such  estimate on the first day of each month  during such year.
Such  estimate  may be  revised by  Landlord  whenever  it  obtains  information
relevant to making such estimate more  accurate.  After the end of each calendar
year,  Landlord  shall  deliver  to Tenant a report  setting  forth  the  actual
Expenses  and Taxes for such  calendar  year and a  statement  of the  amount of
Adjustment Rent that Tenant has paid and is payable for such year. Within thirty
(30) days  after  receipt  of such  report and  statement,  Tenant  shall pay to
Landlord  the amount of  Adjustment  Rent due for such  calendar  year minus any
payments of Adjustment Rent made by Tenant for such year. If Tenant's  estimated
payments of  Adjustment  Rent exceed the amount due Landlord  for such  calendar
year,  Landlord  shall  apply such  excess as a credit  against  Tenant's  other
obligations  under this Lease or  promptly  refund  such excess to Tenant if the
Term has already expired,  provided Tenant is not then in default hereunder,  in
either case without interest to Tenant.

         (c) Payment of Rent. The following  provisions shall govern the payment
of Rent:  (i) if this Lease  commences or ends on a day other than the first day
or last day of a  calendar  year,  respectively,  the Rent for the year in which
this  Lease so begins or ends shall be  prorated  and the  monthly  installments
shall be adjusted  accordingly;  (ii) all Rent shall be paid to Landlord without
offset or deduction,  and the covenant to pay Rent shall be independent of every
other covenant in this Lease; (iii) if during all or any portion of any year the
Building  is not  fully  rented  and  occupied,  Landlord  may  elect to make an
appropriate  adjustment of Expenses for such year to determine the Expenses that
would have been paid or incurred by Landlord had the Building  been fully rented
and occupied for the entire year and the amount so determined shall be deemed to
have been the  Expenses  Taxes for such  year;  (iv) any sum due from  Tenant to
Landlord  which is not paid  within  ten (10)  days  after the due date for such
payment  shall bear interest from the date due until the date paid at the annual
rate of  eighteen  percent  (18%) per  annum,  but in no event  higher  than the
maximum rate  permitted by law (the "Default  Rate");  and, in addition,  Tenant
shall pay Landlord a late charge for any Rent  payment  which is not paid within
ten (10) days after its due date equal to five percent (5%) of such payment; (v)
if changes are made to this Lease or the Building  changing the number of square
feet  contained  in the  Premises  or in the  Building,  Landlord  shall make an
appropriate  adjustment to Tenant's  Proportionate Share; (vi) Tenant shall have
the right to inspect  Landlord's  accounting  records  relative to Expenses  and
Taxes during normal business hours at any time within thirty (30) days following
the furnishing to Tenant of the annual statement of Adjustment Rent; and, unless
Tenant shall take written  exception  to any item in any such  statement  within
such thirty (30) day period,  such  statement  shall be  considered as final and
accepted by Tenant; (vii) in the event of the termination of this Lease prior to
the  determination  of any Adjustment Rent,  Tenant's  agreement to pay any such
sums and Landlord's  obligation to refund any such sums (provided  Tenant is not
in default  hereunder)  shall survive the  termination of this Lease;  (viii) no
adjustment  to the  Rent by  virtue  of the  operation  of the  rent  adjustment
provisions  in this Lease  shall  result in the payment by Tenant in any year of
less than the Minimum Rent shown on the Schedule;  (ix) Landlord may at any time
change the fiscal year of the Building;  (x) each amount owed to Landlord  under
this Lease for which the date of payment is not expressly  fixed shall be due on
the same date as the Rent listed on the  statement  showing  such amount is due;
(xi) if Landlord  fails to give Tenant an estimate of  Adjustment  Rent prior to
the beginning of any calendar year, Tenant shall continue to pay Adjustment Rent
at the  rate  for the  previous  calendar  year  until  Landlord  delivers  such
estimate;  and (xii) if, after Tenant shall have made any payment of  Adjustment
Rent to Landlord  pursuant to Section 2(b),  Landlord  shall receive a refund of
any  portion of Taxes paid by Tenant with  respect to any tax period  during the
Term of this Lease as a result of abatement of such Taxes by legal  proceedings,
settlement or otherwise,  Landlord shall credit to Tenant Tenant's Proportionate
Share of such  refund  (less  the  proportional  pro rata  reasonable  expenses,
including  reasonable  attorneys' fees and appraisers' fees incurred by Landlord
in connection with obtaining such refund), as it relates to Taxes paid by Tenant
to Landlord with respect to any such period for which a refund is obtained.

         3. USE. Tenant agrees that it shall occupy and use the Premises only as
business  offices  and for no  other  purposes.  Tenant  shall  comply  with all
federal, state and municipal laws, ordinances and regulations and all covenants,
conditions and restrictions of record applicable to Tenant's use or occupancy of
the  Premises.  Without  limiting the  foregoing,  Tenant  shall not cause,  nor
permit, any hazardous or toxic substances to be brought upon, produced,  stored,
used,  discharged or disposed of in, on or about the Premises  without the prior
written  consent of Landlord  and then only in  compliance  with all  applicable
environmental laws.

         4. CONDITION OF PREMISES.  Tenant's  taking  possession of the Premises
shall  be  conclusive  evidence  that  the  Premises  were  in  good  order  and
satisfactory condition when Tenant took possession.  No agreement of Landlord to
alter, remodel,  decorate,  clean or improve the Premises or the Building (or to
provide Tenant with any credit or allowance for the same), and no representation
regarding  the condition of the Premises or the Building or the  suitability  of
the Premises for Tenant's  proposed use thereof,  have been made by or on behalf
of Landlord or relied upon by Tenant, except as provided in Exhibit "C" attached
hereto and incorporated herein by this reference.

         5.        BUILDING SERVICES.

         (a) Basic Services.  Landlord shall furnish the following services: (i)
heating and air  conditioning to provide a temperature  condition  required,  in
Landlord's reasonable judgment,  for comfortable occupancy of the Premises under
normal  business  operations,  daily from 8:00 A.M. to 6:00 P.M.  (Saturday from
8:00  A.M.  to 12:00  P.M.),  Sundays  and  holidays  excepted;  (ii)  water for
drinking, and, subject to Landlord's approval, water at Tenant's expense for any
private  restrooms  and office  kitchen  requested  by Tenant;  (iii)  men's and
women's  restrooms at locations  designated by Landlord and in common with other
tenants of the  Building;  (iv) daily  janitorial  service in the  Premises  and
common areas of the Building, weekends and holidays excepted; and (v) electrical
current other than for special  lighting,  equipment that requires more than 110
volts or other  equipment whose  electrical  energy  consumption  exceeds normal
office usage.

         (b)  Telephones.  Tenant shall arrange for telephone  service  directly
with one (1) or more of the public  telephone  companies  servicing the Building
and shall be solely  responsible  for  paying  for such  telephone  service.  If
Landlord acquires ownership of the telephone cables in the Building at any time,
Landlord  shall  permit  Tenant to  connect  to such  cables  on such  terms and
conditions  as  Landlord  may  prescribe.  In no event  does  Landlord  make any
representation  or warranty  with respect to telephone  service in the Building,
and Landlord shall have no liability with respect thereto.

         (c) Additional Services. Landlord shall not be obligated to furnish any
services other than those stated above. If Landlord  elects to furnish  services
requested  by Tenant in addition to those stated  above  (including  services at
times  other  than  those  stated  above),  Tenant  shall  pay  Landlord's  then
prevailing  charges for such additional  services.  If Tenant shall fail to make
any such payment,  Landlord may, without notice to Tenant and in addition to all
other remedies available to Landlord,  discontinue any such additional services.
No discontinuance  of any such additional  service shall result in any liability
of  Landlord to Tenant or be  considered  as an  eviction  or a  disturbance  of
Tenant's  use of  the  Premises.  In  addition,  if  Tenant's  concentration  of
personnel  or equipment  adversely  affects the  temperature  or humidity in the
Premises or the Building,  Landlord may install  supplementary  air conditioning
units in the  Premises;  and Tenant shall pay for the cost of  installation  and
maintenance thereof.

         (d)  Failure  or Delay  in  Furnishing  Services.  Tenant  agrees  that
Landlord  shall not be liable for damages for failure or delay in furnishing any
service stated above if such failure or delay is caused, in whole or in part, by
any one or more of the events stated in Section 27(j) below,  nor shall any such
failure or delay be considered to be an eviction or  disturbance of Tenant's use
of the Premises, or relieve Tenant from its obligation to pay any Rent when due,
or from any other obligations of Tenant under this Lease.

         6. RULES AND  REGULATIONS.  Tenant  shall  observe and comply and shall
cause its subtenants,  assignees, invitees, employees, contractors and agents to
observe  and  comply,  with the rules and  regulations  listed  on  Exhibit  "B"
attached  hereto  and  incorporated  herein  by this  reference  and  with  such
reasonable modifications and additions thereto as Landlord may make from time to
time.  Landlord shall not be liable for failure of any person to obey such rules
and  regulations.  Landlord  shall not be  obligated  to enforce  such rules and
regulations  against any person, and the failure of Landlord to enforce any such
rules and  regulations  shall not  constitute a waiver thereof or relieve Tenant
from compliance therewith.

         7. CERTAIN RIGHTS RESERVED TO LANDLORD. Landlord reserves the following
rights, each of which Landlord may exercise without notice to Tenant and without
liability to Tenant,  and the exercise of any such rights shall not be deemed to
constitute  an eviction or  disturbance  of Tenant's  use or  possession  of the
Premises  and shall not give rise to any claim for set-off or  abatement of rent
or any other claim:  (a) to change the name or street address of the Building or
the suite number of the Premises; (b) to install, affix and maintain any and all
signs  on the  exterior  or  interior  of the  Building;  (c) to  make  repairs,
decorations,  alterations,  additions,  or improvements,  whether  structural or
otherwise,  in and about the  Building,  and for such purposes to enter upon the
Premises, temporarily close doors, corridors and other areas in the Building and
interrupt or  temporarily  suspend  services or use of common areas,  and Tenant
agrees to pay Landlord for overtime and similar  expenses  incurred if such work
is done other than during ordinary  business hours at Tenant's  request;  (d) to
retain at all  times,  and to use in  appropriate  instances,  keys to all doors
within and into the  Premises;  (e) to grant to any  person or to  reserve  unto
itself the exclusive  right to conduct any business or render any service in the
Building;  (f) to show or inspect  the  Premises  at  reasonable  times and,  if
vacated or abandoned,  to prepare the Premises for reoccupancy;  (g) to install,
use and maintain in and through the Premises,  pipes, conduits,  wires and ducts
serving the Building, provided that such installation,  use and maintenance does
not  unreasonably  interfere with Tenant's use of the Premises;  and (h) to take
any  other  action  which  Landlord  deems  reasonable  in  connection  with the
operation, maintenance or preservation of the Building.

         8. MAINTENANCE AND REPAIRS.  Tenant, at its expense, shall maintain and
keep the  Premises  in good  order and repair at all times  during the Term.  In
addition,  Tenant  shall  reimburse  Landlord for the cost of any repairs to the
Building  necessitated  by the acts or  omissions  of  Tenant,  its  subtenants,
assignees,  invitees, employees,  contractors and agents, to the extent Landlord
is not  reimbursed for such costs under its insurance  policies.  Subject to the
preceding  sentence,  Landlord shall perform any maintenance or make any repairs
to the  Building  as Landlord  shall  desire or deem  necessary  for the safety,
operation or  preservation  of the  Building,  or as Landlord may be required or
requested to do by any  governmental  authority or by the order or decree of any
court or by any other proper authority.

          Landlord,  throughout the Term, shall keep and maintain or cause to be
kept and  maintained in good order and repair the  structural  components of the
Building (including,  without limitation,  the roof and the roof membranes,  the
exterior  walls and the  windows),  all common  areas of the  Building,  and all
Building  systems  (excluding only those  non-standard  portions of the Building
systems  which are (a) located  within the  Premises  and (b)  service  only the
Premises,  which  systems shall be maintained by Tenant in good order and repair
at all times during the Term).

         9.        ALTERATIONS.

         (a)  Requirements.  Tenant shall not make any replacement,  alteration,
improvement  or  addition  to or  removal  from the  Premises  (collectively  an
"alteration") without the prior written consent of Landlord, which consent shall
not  be  unreasonably  withheld.  In the  event  Tenant  proposes  to  make  any
alteration,  Tenant  shall,  prior to  commencing  such  alteration,  submit  to
Landlord for prior written approval: (i) detailed plans and specifications; (ii)
sworn statements, including the names, addresses and copies of contracts for all
contractors;   (iii)  all  necessary  permits  evidencing  compliance  with  all
applicable governmental rules,  regulations and requirements;  (iv) certificates
of insurance in form and amounts  required by Landlord,  naming Landlord and any
other parties designated by Landlord as additional  insureds;  and (v) all other
documents and information as Landlord may reasonably  request in connection with
such alteration.  Tenant agrees to pay Landlord's  reasonable charges for review
of all such items and  supervision of any  alteration.  Neither  approval of the
plans and  specifications  nor  supervision  of the alteration by Landlord shall
constitute  a  representation  or  warranty  by  Landlord  as to  the  accuracy,
adequacy,  sufficiency  or  propriety  of such plans and  specifications  or the
quality of workmanship or the compliance of such alteration with applicable law.
Tenant  shall  pay the  entire  cost of the  alteration  and,  if  requested  by
Landlord,  shall  deposit  with  Landlord  prior  to  the  commencement  of  the
alteration,  security for the payment and  completion of the  alteration in form
and amount required by Landlord.  Each  alteration  shall be performed in a good
and workmanlike manner, in accordance with the plans and specifications approved
by Landlord, and shall meet or exceed the standards for construction and quality
of  materials  established  by Landlord  for the  Building.  In  addition,  each
alteration shall be performed in compliance with all applicable governmental and
insurance company laws,  regulations and requirements.  Each alteration shall be
performed  by union  contractors  if required by  Landlord  and in harmony  with
Landlord's employees,  contractors and other tenants.  Each alteration,  whether
temporary or permanent in  character,  made by Landlord or Tenant in or upon the
Premises (excepting only Tenant's furniture, equipment and trade fixtures) shall
become Landlord's  property and shall remain upon the Premises at the expiration
or termination of this Lease without compensation to Tenant; provided,  however,
that Landlord shall have the right to require  Tenant to remove such  alteration
at Tenant's sole cost and expense in accordance  with the  provisions of Section
15 of this Lease.

         (b) Liens.  Upon  completion of any  alteration,  Tenant shall promptly
furnish  Landlord with sworn  owner's and  contractors  statements  and full and
final  waivers  of lien  covering  all  labor  and  materials  included  in such
alteration.  Tenant shall not permit any mechanic's lien to be filed against the
Building,  or any part  thereof,  arising out of any  alteration  performed,  or
alleged to have been performed,  by or on behalf of Tenant.  If any such lien is
filed,  Tenant shall within ten (10) days  thereafter have such lien released of
record or deliver to  Landlord  a bond in form,  amount,  and issued by a surety
satisfactory  to  Landlord,   indemnifying   Landlord   against  all  costs  and
liabilities   resulting  from  such  lien  and  the   foreclosure  or  attempted
foreclosure thereof. If Tenant fails to have such lien so released or to deliver
such bond to  Landlord,  Landlord,  without  investigating  the validity of such
lien,  may pay or discharge the same; and Tenant shall  reimburse  Landlord upon
demand for the amount so paid by  Landlord,  including  Landlord's  expenses and
attorneys' fees.

         10.  INSURANCE.  Tenant,  at its expense,  shall  maintain at all times
during the Term the following insurance policies: (a) fire insurance,  including
extended coverage,  vandalism,  malicious mischief,  sprinkler leakage and water
damage coverage and demolition and debris removal, insuring the full replacement
cost of all  improvements,  alterations  or additions  to the  Premises  made at
Tenant's expense,  and all other property owned or used by Tenant and located in
the Premises; (b) Commercial General Liability insurance,  contractual liability
insurance  and property  damage  insurance  with respect to the Building and the
Premises,  with limits to be set by Landlord  from time to time but in any event
not less than $3,000,000.00 combined single limit for personal injury,  sickness
or death or for damage to or destruction of property for any one occurrence; and
(c) insurance against such other risks and in such other amounts as Landlord may
from  time  to time  reasonably  require.  The  form of all  such  policies  and
deductibles thereunder shall be subject to Landlord's reasonable prior approval.
All such  policies  shall be issued  by  insurers  acceptable  to  Landlord  and
licensed to do business in the State in which the Premises are located and shall
contain a waiver of any  rights of  subrogation  thereunder.  In  addition,  the
policies  shall name  Landlord and any other  parties  designated by Landlord as
additional  insureds,  shall  require at least  thirty (30) days' prior  written
notice to Landlord of termination or  modification  and shall be primary and not
contributory.  Tenant  shall,  at least ten (10) days prior to the  Commencement
Date,  and  within ten (10) days prior to the  expiration  of each such  policy,
deliver to Landlord  certificates  evidencing the foregoing insurance or renewal
thereof, as the case may be.

         11.       WAIVER AND INDEMNITY.

         (a) Waiver.  Tenant releases  Landlord,  its property manager and their
respective  agents and  employees  from,  and waives all claims  for,  damage or
injury  to person or  property  and loss of  business  sustained  by Tenant  and
resulting from the Building or the Premises or any part thereof or any equipment
therein  becoming in disrepair,  or resulting  from any accident in or about the
Building.  This paragraph  shall apply  particularly,  but not  exclusively,  to
flooding, damage caused by Building equipment and apparatus, water, snow, frost,
steam, excessive heat or cold, broken glass, sewage, gas, odors, excessive noise
or vibration or the bursting or leaking of pipes, plumbing fixtures or sprinkler
devices.  Without  limiting the generality of the  foregoing,  Tenant waives all
claims and rights of recovery against  Landlord,  its property manager and their
respective  agents  and  employees  for any loss or  damage to any  property  of
Tenant,  which  loss or damage is insured  against,  or  required  to be insured
against,  by Tenant  pursuant  to Section 10 above,  whether or not such loss or
damage is due to the fault or  negligence of Landlord,  its property  manager or
their respective agents or employees,  and regardless of the amount of insurance
proceeds collected or collectible under any insurance policies in effect.

         (b)  Indemnity.  Tenant agrees to  indemnify,  defend and hold harmless
Landlord,  its property manager and their respective agents and employees,  from
and against any and all claims, demands,  actions,  liabilities,  damages, costs
and expenses (including attorneys' fees), for injuries to any persons and damage
to or theft or  misappropriation  or loss of property  occurring in or about the
Building  and arising  from the use and  occupancy  of the  Premises or from any
activity,  work, or thing done,  permitted or suffered by Tenant in or about the
Premises (including,  without limitation,  any alteration by Tenant) or from any
breach or default on the part of Tenant in the  performance  of any  covenant or
agreement on the part of Tenant to be  performed  under this Lease or due to any
other act or omission of Tenant, its subtenants, assignees, invitees, employees,
contractors and agents. Without limiting the foregoing,  Tenant shall indemnify,
defend and hold Landlord harmless from any claims,  liabilities,  damages, costs
and expenses  arising out of the use or storage of hazardous or toxic  materials
in the Building by Tenant.  If any such proceeding is filed against  Landlord or
any such  indemnified  party,  Tenant agrees to defend Landlord or such party in
such proceeding at Tenant's sole cost by legal counsel  reasonably  satisfactory
to Landlord, if requested by Landlord.

         12. FIRE AND CASUALTY.  If all or a substantial part of the Premises or
the  Building  is  rendered  untenantable  by reason of fire or other  casualty,
Landlord may, at its option,  either  restore the Premises and the Building,  or
terminate  this Lease  effective as of the date of such fire or other  casualty.
Landlord  agrees to give Tenant  written notice within sixty (60) days after the
occurrence  of any such  fire or other  casualty  designating  whether  Landlord
elects to so restore or terminate  this Lease.  If Landlord  elects to terminate
this Lease,  Rent shall be paid through and  apportioned  as of the date of such
fire or other casualty. If Landlord elects to restore,  Landlord's obligation to
restore the Premises  shall be limited to restoring  those  improvements  in the
Premises  existing as of the date of such fire or other casualty which were made
at Landlord's  expense and shall  exclude any  furniture,  equipment,  fixtures,
additions,  alterations or improvements in or to the Premises which were made at
Tenant's expense. If Landlord elects to restore,  Rent shall abate for that part
of the Premises which is  untenantable on a per diem basis from the date of such
fire or other casualty until Landlord has substantially completed its repair and
restoration work, provided that Tenant does not occupy such part of the Premises
during said period.

         13.  CONDEMNATION.   If  the  Premises  or  the  Building  is  rendered
untenantable  by reason of a condemnation  (or by a deed given in lieu thereof),
then  either  party  may  terminate  this  Lease by  giving  written  notice  of
termination to the other party within thirty (30) days after such  condemnation,
in which  event  this Lease  shall  terminate  effective  as of the date of such
condemnation.  If this  Lease so  terminates,  Rent  shall be paid  through  and
apportioned as of the date of such  condemnation.  If such condemnation does not
render the Premises or the Building  untenantable,  this Lease shall continue in
effect and  Landlord  shall  promptly  restore the portion not  condemned to the
extent reasonably  possible to the condition existing prior to the condemnation.
In such event,  however,  Landlord  shall not be required to expend an amount in
excess of the  proceeds  received by  Landlord  from the  condemning  authority.
Landlord reserves all rights to compensation for any condemnation. Tenant hereby
assigns to Landlord any right Tenant may have to such  compensation,  and Tenant
shall  make  no  claim  against   Landlord  or  the  condemning   authority  for
compensation for termination of Tenant's  leasehold interest under this Lease or
interference with Tenant's business.

         14.       ASSIGNMENT AND SUBLETTING.

         (a)  Landlord's  Consent.  Tenant shall not,  without the prior written
consent of Landlord:  (i) assign,  convey,  mortgage or otherwise  transfer this
Lease or any interest hereunder,  or sublease the Premises, or any part thereof,
whether  voluntarily  or by  operation  of law;  or (ii)  permit  the use of the
Premises by any person other than Tenant and its employees or any  subsidiary of
Tenant and its employees.  Any such  transfer,  sublease or use described in the
preceding sentence (a "Transfer") occurring without the prior written consent of
Landlord  shall be void and of no effect.  Landlord's  consent  to any  Transfer
shall not constitute a waiver of Landlord's right to withhold its consent to any
future Transfer.  Landlord's  consent to any Transfer or acceptance of rent from
any party  other than  Tenant  shall not  release  Tenant  from any  covenant or
obligation under this Lease.  Landlord may require as a condition to its consent
to any assignment of this Lease that the assignee execute an instrument in which
such assignee assumes the obligations of Tenant  hereunder.  For the purposes of
this paragraph,  the transfer  (whether direct or indirect) of all or a majority
of the capital stock in a corporate Tenant (other than the shares of the capital
stock of a  corporate  Tenant  whose  stock is  publicly  traded) or the merger,
consolidation  or  reorganization  of such Tenant and the transfer of all or any
general  partnership  interest in any  partnership  Tenant shall be considered a
Transfer.  As used herein,  the phrase "any subsidiary of Tenant" shall mean any
corporation or partnership that is wholly owned by Tenant.

         (b) Standards for Consent. If Tenant desires the consent of Landlord to
a Transfer,  Tenant shall submit to Landlord,  at least sixty (60) days prior to
the proposed  effective  date of the Transfer,  a written  notice which includes
such  information  as Landlord may require  about the proposed  Transfer and the
transferee.  If Landlord  does not  terminate  this Lease,  in whole or in part,
pursuant to Section 14.C below,  Landlord  shall not  unreasonably  withhold its
consent to any  assignment  or  sublease.  Landlord  shall not be deemed to have
unreasonably  withheld  its consent if, in the  judgment  of  Landlord:  (i) the
transferee  is of a character  or engaged in a business  which is not in keeping
with the standards or criteria  used by Landlord in leasing the  Building;  (ii)
the  financial  condition of the  transferee  is such that it may not be able to
perform its  obligations  in connection  with this Lease;  (iii) the purpose for
which the  transferee  intends  to use the  Premises  or  portion  thereof is in
violation  of the terms of this  Lease or the  lease of any other  tenant in the
Building;  (iv) the  transferee  is a tenant of the  Building;  or (v) any other
bases which  Landlord  reasonably  deems  appropriate.  If  Landlord  wrongfully
withholds  its  consent to any  Transfer,  Tenant's  sole and  exclusive  remedy
therefor,  shall be to seek specific  performance  of  Landlord's  obligation to
consent to such Transfer. If Landlord consents to any Transfer, Tenant shall pay
to Landlord all rent and other consideration received by Tenant in excess of the
Rent paid by Tenant  hereunder  for the portion of the Premises so  transferred.
Such rent shall be paid as and when  received  by Tenant.  In  addition,  Tenant
shall pay to Landlord any reasonable  attorneys'  fees and expenses  incurred by
Landlord in  connection  with any  proposed  Transfer,  whether or not  Landlord
consents to such Transfer.

         (c) Recapture. Landlord shall have the right to terminate this Lease as
to that portion of the Premises covered by a Transfer,  except for a Transfer to
an Affiliate or to a Successor  Entity,  for which  Landlord  shall have no such
right to  terminate.  Landlord  may  exercise  such right to terminate by giving
notice to Tenant at any time  within  thirty  (30) days  after the date on which
Tenant has  furnished to Landlord all of the items  required  under Section 14.B
above. If Landlord exercises such right to terminate, Landlord shall be entitled
to recover  possession  of, and Tenant  shall  surrender  such  portion  of, the
Premises (with appropriate demising partitions erected at the expense of Tenant)
on the later of (i) the effective date of the proposed  Transfer,  or (ii) sixty
(60) days  after the date of  Landlord's  notice  of  termination.  In the event
Landlord  exercises  such right to terminate,  Landlord  shall have the right to
enter into a lease with the proposed  transferee without incurring any liability
to Tenant on account thereof. As used herein, the term "Affiliate shall mean any
entity which  controls,  is controlled by or is under common control with Tenant
and the phrase  "Successor  Entity" shall mean any entity which purchases all or
substantially  all of the  assets of  Tenant or any  entity  which  succeeds  to
Tenant's   business  by  merger,   consolidation  or  other  form  of  corporate
reorganization.

         15. SURRENDER.  Upon the expiration or earlier  termination of the Term
or  Tenant's  right to  possession  of the  Premises,  Tenant  shall  return the
Premises to Landlord in good order and  condition,  ordinary  wear and damage by
fire or other  casualty  excepted.  If  Landlord  requires  Tenant to remove any
alterations pursuant to Section 9, then such removal shall be done in a good and
workmanlike  manner;  and upon such removal Tenant shall restore the Premises to
its condition prior to the installation of such alterations.  If Tenant does not
remove such alterations after request to do so by Landlord,  Landlord may remove
the same and restore the Premises; and Tenant shall pay the cost of such removal
and restoration to Landlord upon demand. Tenant shall also remove its furniture,
equipment,  trade  fixtures  and all other items of personal  property  from the
Premises prior to the termination of the Term or Tenant's right to possession of
the Premises. If Tenant does not remove such items, Tenant shall be conclusively
presumed to have conveyed the same to Landlord without further payment or credit
by Landlord to Tenant;  or at Landlord's  sole option such items shall be deemed
abandoned,  in which  event  Landlord  may cause such  items to be  removed  and
disposed of at Tenant's expense, without notice to Tenant and without obligation
to compensate Tenant.

         16.       DEFAULTS AND REMEDIES.

         (a) Default.  The occurrence of any of the following shall constitute a
default (a  "Default")  by Tenant under this Lease:  (i) Tenant fails to pay any
Rent when due and such failure is not cured within five (5) business  days after
notice from Landlord;  (ii) Tenant fails to perform any other  provision of this
Lease and such failure is not cured within thirty (30) days (or  immediately  if
the failure involves a hazardous  condition)  after notice from Landlord;  (iii)
the  leasehold  interest of Tenant is levied upon or attached  under  process of
law; (iv) Tenant or any guarantor of this Lease dissolves;  (v) any voluntary or
involuntary  proceedings are filed by or against Tenant or any guarantor of this
Lease under any  bankruptcy,  insolvency or similar laws and, in the case of any
involuntary proceedings, are not dismissed within thirty (30) days after filing.

         (b) Right of Re-Entry.  Upon the occurrence of a Default,  Landlord may
elect to terminate this Lease,  or, without  terminating  this Lease,  terminate
Tenant's  right to possession of the Premises,  in either case by written notice
thereof to Tenant. Upon any such termination, Tenant shall immediately surrender
and vacate the  Premises  and deliver  possession  thereof to  Landlord.  Tenant
grants to Landlord the right,  without notice to Tenant,  to enter and repossess
the  Premises  and to expel  Tenant  and any  others  who may be  occupying  the
Premises and to remove any and all property  therefrom,  without being deemed in
any manner  guilty of trespass and without  relinquishing  Landlord's  rights to
Rent or any other right given to Landlord hereunder or by operation of law.

         (c) Reletting.  If Landlord  terminates Tenant's right to possession of
the Premises without terminating this Lease,  Landlord may relet the Premises or
any part thereof.  In such case,  Landlord shall use reasonable efforts to relet
the  Premises  on such terms as  Landlord  shall  reasonably  deem  appropriate;
provided, however, Landlord may first lease Landlord's other available space and
shall not be required  to accept any tenant  offered by Tenant or to observe any
instructions  given by Tenant  about  such  reletting.  Tenant  shall  reimburse
Landlord for the costs and expenses of reletting the Premises including, but not
limited to, all  brokerage,  advertising,  legal,  alteration and other expenses
incurred  to  secure  a new  tenant  for  the  Premises.  In  addition,  if  the
consideration  collected by Landlord upon any such  reletting,  after payment of
the expenses of reletting the Premises which have not been reimbursed by Tenant,
is insufficient to pay monthly the full amount of the Rent,  Tenant shall pay to
Landlord  the  amount of each  monthly  deficiency  as it becomes  due.  If such
consideration is greater than the amount necessary to pay the full amount of the
Rent,  the full amount of such excess shall be retained by Landlord and shall in
no event be payable to Tenant.

         (d) Termination of Lease. If Landlord terminates this Lease pursuant to
Section  16.B above,  Landlord  may recover  from Tenant and Tenant shall pay to
Landlord,  on demand,  as and for liquidated  and final damages,  an accelerated
lump  sum  amount  equal  to the  amount  by which  Landlord's  estimate  of the
aggregate  amount of Rent owing from the date of such  termination  through  the
Expiration Date plus Landlord's reasonable estimate of the aggregate expenses of
reletting  the  Premises,  exceeds  Landlord's  reasonable  estimate of the fair
rental value of the Premises for the same period (after deducting from such fair
rental value the time needed to relet the Premises and the amount of concessions
which would normally be given to a new tenant), both discounted to present value
at the rate of five percent (5%) per annum.

         (e) Other Remedies.  Landlord may but shall not be obligated to perform
any obligation of Tenant under this Lease; and, if Landlord so elects, all costs
and expenses  paid by Landlord in  performing  such  obligation,  together  with
interest  at the  Default  Rate,  shall be  reimbursed  by Tenant to Landlord on
demand.  Any and all remedies set forth in this Lease:  (i) shall be in addition
to any and all other remedies Landlord may have at law or in equity,  (ii) shall
be cumulative, and (iii) may be pursued successively or concurrently as Landlord
may  elect.  The  exercise  of any  remedy  by  Landlord  shall not be deemed an
election of remedies or preclude  Landlord from exercising any other remedies in
the future.

         (f)  Bankruptcy.  If Tenant becomes  bankrupt,  the bankruptcy  trustee
shall  not have the right to assume or assign  this  Lease  unless  the  trustee
complies  with all  requirements  of the  United  States  Bankruptcy  Code;  and
Landlord expressly reserves all of its rights, claims, and remedies thereunder.

         (g) Waiver of Trial by Jury. Landlord and Tenant waive trial by jury in
the event of any action,  proceeding or counterclaim  brought by either Landlord
or Tenant against the other in connection with this Lease.

         17.  HOLDING OVER. If Tenant  retains  possession of the Premises after
the  expiration  or  earlier  termination  of the  Term  or  Tenant's  right  to
possession  of the  Premises,  Tenant shall pay Rent during such holding over at
double the rate in effect immediately  preceding such holding over computed on a
monthly basis for each month or partial month that Tenant remains in possession.
Tenant shall also pay, indemnify and defend Landlord from and against all claims
and damages,  consequential  as well as direct,  sustained by reason of Tenant's
holding over.  The provisions of this Section do not waive  Landlord's  right of
re-entry  or right to regain  possession  by  actions at law or in equity or any
other  rights  hereunder,  and any receipt of payment by  Landlord  shall not be
deemed a consent by Landlord to Tenant's remaining in possession or be construed
as creating  or  renewing  any lease or right of tenancy  between  Landlord  and
Tenant.

         18.  SECURITY  DEPOSIT.  Upon  execution  of this Lease,  Tenant  shall
deposit the security  deposit set forth in Item 8 of the Schedule (the "Security
Deposit") with Landlord as security for the performance of Tenant's  obligations
under this Lease.  Landlord may use all or any part of the Security  Deposit (i)
for the  payment  of any Rent not paid  when due if such  failure  to pay is not
cured within five (5) business days after notice from Landlord,  or (ii) for the
payment of any  amount  which  Landlord  may pay or become  obligated  to pay by
reason of a  Default,  or (iii) to  compensate  Landlord  for any loss or damage
which Landlord may suffer by reason of a Default, or (iv) to compensate Landlord
for any loss or damage which Landlord may suffer or cost or expense Landlord may
incur by reason of Tenant's failure to perform its obligations  under Section 15
of this Lease upon the  expiration  or earlier  termination  of the Term of this
Lease. If any portion of the Security Deposit is used,  Tenant shall within five
(5) business days after written demand therefor deposit cash with Landlord in an
amount  sufficient  to restore  the  Security  Deposit to its  original  amount.
Landlord  shall not be required to keep the Security  Deposit  separate from its
general  funds,  and Tenant  shall not be entitled  to interest on the  Security
Deposit.  In no event  shall the  Security  Deposit be  considered  an  advanced
payment of Rent,  and in no event shall  Tenant be entitled to use the  Security
Deposit for the payment of Rent. If no default by Tenant exists  hereunder,  the
Security  Deposit or any balance  thereof  shall be  returned  to Tenant  within
thirty (30) days after the  expiration  of the Term and vacation of the Premises
by Tenant. Landlord shall have the right to transfer the Security Deposit to any
purchaser of the Building.  Upon such transfer of the Security  Deposit,  Tenant
shall look solely to such  purchaser  for return of the  Security  Deposit;  and
Landlord  shall be  relieved  of any  liability  with  respect  to the  Security
Deposit.

         19.       [INTENTIONALLY OMITTED].

         20. ESTOPPEL  CERTIFICATES.  Tenant agrees that, from time to time upon
not less than ten (10) days' prior request by Landlord, Tenant shall execute and
deliver to  Landlord a written  certificate  certifying:  (i) that this Lease is
unmodified and in full force and effect (or if there have been modifications,  a
description  of such  modifications  and that this Lease as  modified is in full
force and effect); (ii) the dates to which Rent has been paid; (iii) that Tenant
is in possession of the Premises, if that is the case; (iv) that Landlord is not
in default under this Lease, or, if Tenant believes Landlord is in default,  the
nature  thereof in detail;  (v) that  Tenant has no  off-sets or defenses to the
performance of its obligations under this Lease (or if Tenant believes there are
any off-sets or defenses,  a full and complete  explanation  thereof);  and (vi)
such  additional  matters as may be requested by Landlord,  it being agreed that
such certificate may be relied upon by any prospective  purchaser,  mortgagee or
other person having or acquiring an interest in the Building. If Tenant fails to
execute  and deliver any such  certificate  within ten (10) days after  request,
Tenant  shall be deemed  to have  irrevocably  appointed  Landlord  as  Tenant's
attorney-in-fact to execute and deliver such certificate in Tenant's name.

         21.  SUBORDINATION.  This Lease is and shall be  expressly  subject and
subordinate  at all times to (a) any  present or future  ground,  underlying  or
operating lease of the Building, and all amendments,  renewals and modifications
to any such lease, and (b) the lien of any present or future mortgage or deed of
trust  encumbering fee title to the Building  and/or the leasehold  estate under
any such lease.  If any such mortgage or deed of trust be foreclosed,  or if any
such lease be terminated, upon request of the mortgagee,  beneficiary or lessor,
as the case may be, Tenant will attorn to the purchaser at the foreclosure  sale
or to the lessor under such lease, as the case may be. The foregoing  provisions
are declared to be self-operative  and no further  instruments shall be required
to effect such subordination and/or attornment;  provided,  however, that Tenant
agrees upon request by any such mortgagee,  beneficiary,  lessor or purchaser at
foreclosure, as the case may be, to execute such subordination and/or attornment
instruments  as may be  required by such  person to confirm  such  subordination
and/or  attornment on the form customarily  used by such party.  Notwithstanding
the foregoing to the contrary,  any such  mortgagee,  beneficiary  or lessor may
elect to give the rights and  interests  of Tenant  under this Lease  (excluding
rights in and to insurance  proceeds and condemnation  awards) priority over the
lien of its  mortgage  or deed of trust or the estate of its lease,  as the case
may be. In the event of such  election and upon the  mortgagee,  beneficiary  or
lessor  notifying  Tenant of such  election,  the rights and interests of Tenant
shall be deemed  superior to and to have priority over the lien of said mortgage
or deed of trust or the estate of such lease,  as the case may be,  whether this
Lease is dated  prior to or  subsequent  to the date of such  mortgage,  deed of
trust or lease.  In such  event,  Tenant  shall  execute  and  deliver  whatever
instruments may be required by such mortgagee,  beneficiary or lessor to confirm
such  superiority on the form customarily used by such party. If Tenant fails to
execute any  instrument  required to be executed by Tenant under this Section 21
within ten (10) days after request,  Tenant irrevocably appoints Landlord as its
attorney-in-fact, in Tenant's name, to execute such instrument.

         22.  QUIET  ENJOYMENT.  As  long as no  Default  exists,  Tenant  shall
peacefully  and  quietly  have and enjoy the  Premises  for the Term,  free from
interference by Landlord, subject, however, to the provisions of this Lease. The
loss  or  reduction  of  Tenant's  light,  air or  view  will  not be  deemed  a
disturbance  of Tenant's  occupancy of the Premises nor will it affect  Tenant's
obligations under this Lease or create any liability of Landlord to Tenant.

         23.  BROKER.  Tenant  represents to Landlord that Tenant has dealt only
with  the  brokers  set  forth  in Item 9 of the  Schedule  (the  "Brokers")  in
connection  with this Lease and that,  insofar as Tenant knows,  no other broker
negotiated  this Lease or is entitled to any commission in connection  herewith.
Tenant agrees to indemnify,  defend and hold Landlord,  its property manager and
their  respective  employees  harmless  from and against any claims for a fee or
commission made by any broker, other than the Brokers, claiming to have acted by
or on behalf of Tenant in connection with this Lease.

         24.  NOTICES.  All  notices and demands to be given by one party to the
other party under this Lease shall be given in writing,  mailed or  delivered to
Landlord or Tenant,  as the case may be, at the address or  addresses  set forth
above or at such other address as either party may hereafter designate.  Notices
shall be delivered by hand or by United  States  certified or  registered  mail,
postage  prepaid,  return  receipt  requested,  or  by a  nationally  recognized
overnight  air courier  service.  Notices shall be considered to have been given
upon the  earlier  to occur of actual  receipt  or two (2)  business  days after
posting in the United States mail.

         25. DIRECTORY; SIGNS. Landlord will place Tenant's name on the Building
standard  directory.  Except  for signs  which are  located  wholly  within  the
interior  of the  Premises  and which are not visible  from the  exterior of the
Premises,  and  except  for  signs on office  doors,  no sign  shall be  placed,
erected,  maintained  or painted by Tenant at any place upon the Premises or the
Building.

         26. PARKING.  Tenant shall have the right to use, in common with others
entitled thereto, the parking area associated with the Building, subject to such
terms,  conditions and  regulations as are from time to time applicable to users
of such parking  area.  Notwithstanding  any of the  foregoing to the  contrary,
Tenant  may not use any  parking  spaces in such  parking  area  which have been
designated  for exclusive use by other Building  tenants.  Tenant's right to use
the parking spaces in such parking area shall be on an unassigned,  non-reserved
basis.

         27.       MISCELLANEOUS.

         (a) Successors and Assigns.  Subject to Section 14 of this Lease,  each
provision  of this  Lease  shall  extend  to,  bind and inure to the  benefit of
Landlord and Tenant and their respective legal  representatives,  successors and
assigns;  and all  references  herein to Landlord  and Tenant shall be deemed to
include all such parties.

         (b) Entire Agreement.  This Lease, and the riders and exhibits, if any,
attached  hereto  which are  hereby  made a part of this  Lease,  represent  the
complete  agreement  between  Landlord  and  Tenant;  and  Landlord  has made no
representations  or warranties  except as expressly set forth in this Lease.  No
modification  or  amendment  of or waiver under this Lease shall be binding upon
Landlord or Tenant unless in writing signed by Landlord and Tenant.

         (c) Time of Essence.  Time is of the essence of this Lease and each and
all of its provisions.

         (d)  Execution  and  Delivery.   Submission  of  this   instrument  for
examination or signature by Tenant does not constitute a reservation of space or
an option for lease,  and it is not  effective  until  execution and delivery by
both  Landlord  and Tenant.  Execution  and  delivery of this Lease by Tenant to
Landlord shall  constitute an irrevocable  offer by Tenant to lease the Premises
on the terms and conditions set forth herein, which offer may not be revoked for
fifteen (15) days after such delivery.

         (e) Severability.  The invalidity or  unenforceability of any provision
of this Lease shall not affect or impair any other provisions.

         (f)  Governing  Law.  This Lease shall be governed by and  construed in
accordance with the laws of the State in which the Premises are located.

         (g)  Attorneys'  Fees.  Tenant  shall  pay to  Landlord  all  costs and
expenses, including reasonable attorneys fees, incurred by Landlord in enforcing
this  Lease or  incurred  by  Landlord  as a result of any  litigation  to which
Landlord becomes a party as a result of this Lease.

         (h) Delay in Possession. In no event shall Landlord be liable to Tenant
if Landlord  is unable to deliver  possession  of the  Premises to Tenant on the
Commencement Date for causes outside Landlord's  reasonable control. If Landlord
is unable to deliver  possession  of the Premises to Tenant by the  Commencement
Date,  the  Commencement  Date shall be  deferred  until  Landlord  can  deliver
possession  to Tenant,  and the  Expiration  Date shall be deferred for an equal
number of days.

         (i) Joint and Several  Liability.  If Tenant is  comprised of more than
one party,  each such party shall be jointly and  severally  liable for Tenant's
obligations under this Lease.

         (j) Force  Majeure.  Landlord  shall not be in  default  hereunder  and
Tenant shall not be excused from performing any of its obligations  hereunder if
Landlord is prevented from  performing any of its  obligations  hereunder due to
any accident,  breakage,  strike,  shortage of  materials,  acts of God or other
causes beyond Landlord's reasonable control.

         (k)       [Intentionally Omitted]

         (l) Captions. The headings and titles in this Lease are for convenience
only and shall have no effect upon the  construction or  interpretation  of this
Lease.

         (m) No Waiver.  No  receipt  of money by  Landlord  from  Tenant  after
termination  of this  Lease or after  the  service  of any  notice  or after the
commencing  of any suit or after final  judgment for  possession of the Premises
shall renew, reinstate, continue or extend the Term or affect any such notice or
suit.  No waiver of any default of Tenant  shall be implied from any omission by
Landlord to take any action on account of such default if such default  persists
or be repeated,  and no express  waiver shall affect any default  other than the
default  specified  in the express  waiver and then only for the time and to the
extent therein stated.

         (n) No  Recording.  Tenant  shall not record this Lease in any official
records.  Landlord and Tenant shall, upon request of either, execute and deliver
a notice of this Lease in such recordable form as may be permitted by applicable
law.

         (o) Definition of Landlord;  Landlord's Liability.  The term "Landlord"
is used herein to include the Landlord named above as well as its successors and
assigns, each of whom shall have the same rights, remedies,  powers, authorities
and  privileges  as it would  have had if it  originally  signed  this  Lease as
Landlord.  Any such person, whether or not named herein, shall have no liability
hereunder  after it ceases to hold title to the Premises  except for obligations
which  may  have  theretofore  accrued.   Neither  Landlord,  nor  any  trustee,
beneficiary,  principal,  employee or partner of Landlord,  nor any owner of the
Building,  whether disclosed or undisclosed,  shall have any personal  liability
with respect to any of the provisions of this Lease or the Premises, and neither
Landlord,  nor any  trustee,  beneficiary,  principal,  employee  or  partner of
Landlord  shall have any personal  liability  to Tenant for any  liability of or
claim  against  Landlord  under this Lease  beyond the equity of Landlord in the
Building  nor  shall any  recourse  be had to any  other  property  or assets of
Landlord.

         (p) No Presumption  Against Preparer;  Freely Negotiated.  Landlord and
Tenant hereby  understand,  agree and  acknowledge  that (i) this Lease has been
freely  negotiated  by both parties  hereto and (ii) that,  in any  controversy,
dispute or contest  with  regard to the  meaning,  interpretation,  validity  or
enforceability  of this Lease or any of the terms and provisions  hereof,  there
shall be no inference, presumption or conclusion drawn whatsoever against either
party  hereto by virtue of that  party  (or its  professional  advisers)  having
drafted this Lease or any portion thereof.

         IN WITNESS  WHEREOF,  Landlord and Tenant have executed this Lease as a
sealed instrument as of the day and year first above written.

                                      LANDLORD:


                                      ss: Angela C. Maffeo
                                      --------------------
                                      Angela C. Maffeo, Trustee under the Wil
                                      of John Capobianco and not individually


                                      TENANT:

                                      MANCHESTER EQUIPMENT CO., INC.,
                                      a New York corporation



                                      By:_ss: Barry Steinberg
                                            -----------------
                                              Barry Steinberg
                                              President



<PAGE>



                                   EXHIBIT "A"

                                   FLOOR PLAN
(Floor plan attached)



<PAGE>




                                  EXHIBIT "A-1"

                            LEGAL DESCRIPTION OF LAND


A certain  parcel of land together with the buildings  thereon  situated in that
part of Newton, Massachusetts,  called Newton Upper Falls and being shown as Lot
B on a plan  entitled  "Plan of Land in  Newton,  Mass.",  prepared  by Henry F.
Bryant and Son, Inc.,  dated May 29, 1962 duly recorded with the Middlesex South
District Registry of Deeds and bounded and described as follows:

         NORTHEASTERLY                by  Christina  Street by five  lines,  one
                                      hundred  and  88/100  (100.88)  feet,  one
                                      hundred  eighty-two  and  58/100  (182.58)
                                      feet,   two  hundred   ninety  and  57/100
                                      (290.57)   feet,  one  hundred  forty  and
                                      20/100  (140.20) feet, and sixty-seven and
                                      95/100 (67.95) feet, respectively;

         NORTHWESTERLY                by Lot A on said plan, two hundred and
                                      sixty-four (264) feet;
         -------------

         SOUTHERLY                    by the thread of the Charles River, eight
         ---------                    hundred forty-three (843) feet

                                      more or less; and

         EASTERLY                     by land of Patrick and Eileen Mulhern,  as
                                      indicated  on said plan,  by three  lines,
                                      sixty    and    82/100    (60.82)    feet,
                                      eighty-eight  and 20/100  (88.20) feet and
                                      seven and 3/10 (7.3) feet, respectively.



<PAGE>



                                   EXHIBIT "B"

                              RULES AND REGULATIONS


         1. Tenant shall not make any  room-to-room  canvas to solicit  business
from other tenants in the Building and shall not exhibit, sell or offer to sell,
use,  rent or  exchange  any item or  services  in or from the  Premises  unless
ordinarily  included  within  Tenant's  use of the  Premises as specified in the
Lease.

         2. Tenant shall not make any use of the Premises which may be dangerous
to person or property or which shall  increase  the cost of insurance or require
additional insurance coverage.

         3.  Tenant  shall  not  paint,  display,  inscribe  or affix  any sign,
picture, advertisement,  notice, lettering or direction or install any lights on
any part of the outside or inside of the Building,  other than the Premises, and
then  not on any part of the  inside  of the  Premises  which  can be seen  from
outside the Premises, except as approved by Landlord in writing.

         4.  Tenant  shall not use the name of the  Building in  advertising  or
other publicity,  except as the address of its business, and, without Landlord's
prior written approval, which approval shall not be unreasonably withheld, shall
not use pictures of the Building in advertising or publicity.

         5.  Tenant  shall not  obstruct  or place  objects on or in  sidewalks,
entrances,  passages,  courts,  corridors,   vestibules,  halls,  elevators  and
stairways  in and about the  Building.  Tenant shall not place  objects  against
glass  partitions or doors or windows or adjacent to any open common space which
would be  unsightly  from the  Building  corridors  or from the  exterior of the
Building.

         6.  Bicycles  shall not be  permitted  in the  Building  other  than in
locations designated by Landlord.

         7. Tenant shall not allow any animals,  other than seeing eye dogs,  in
the Premises or the Building.

         8. Tenant shall not disturb  other  tenants or make  excessive  noises,
cause disturbances,  create excessive vibrations,  odors or noxious fumes or use
or operate any  electrical  or  electronic  devices or other  devices  that emit
excessive  sound waves or are dangerous to other tenants of the Building or that
would  interfere  with the  operation  of any  device or  equipment  or radio or
television  broadcasting  or reception from or within the Building or elsewhere,
and shall not place or install  any  projections,  antennae,  aerials or similar
devices outside of the Building or the Premises.

         9.  Tenant  shall not waste  electricity  or water and shall  cooperate
fully with  Landlord to assure the most  effective  operation of the  Building's
heating and air  conditioning,  and shall refrain from  attempting to adjust any
controls except for the thermostats  within the Premises.  Tenant shall keep all
doors to the Premises closed.

         10. Unless Tenant  installs new doors to the Premises,  Landlord  shall
furnish two (2) sets of keys for all doors to the  Premises at the  commencement
of the Term.  Tenant shall furnish  Landlord with  duplicate keys for any new or
additional  locks on doors  installed by Tenant.  When the Lease is  terminated,
Tenant shall deliver all keys to Landlord and will provide to Landlord the means
of opening any safes, cabinets or vaults left in the Premises.

         11. Except as otherwise provided in the Lease, Tenant shall not install
in the Premises or Building any signal, communication, alarm or other utility or
service system or equipment without the prior written consent of Landlord, which
consent shall not be unreasonably withheld.

         12.  Tenant  shall  not use any  draperies  or other  window  coverings
instead of or in addition to the Building  standard window coverings  designated
and approved by Landlord for exclusive use throughout the Building.

         13.  Landlord  may  require  that all  persons  who  enter or leave the
Building  identify  themselves  to  watchmen,   by  registration  or  otherwise.
Landlord,  however,  shall have no  responsibility  or liability  for any theft,
robbery or other crime in the Building.  Tenant shall assume full responsibility
for protecting the Premises,  including keeping all doors to the Premises locked
after the close of business.

         14.  Tenant  shall  not  overload  floors;   and  Tenant  shall  obtain
Landlord's  prior  written  approval  as to size,  maximum  weight,  routing and
location  of business  machines,  safes,  and heavy  objects.  Tenant  shall not
install or operate machinery or any mechanical  devices of a nature not directly
related to Tenant's ordinary use of the Premises.

         15. In no event shall Tenant bring into the Building  inflammables such
as gasoline,  kerosene,  naphtha and benzene,  or  explosives or firearms or any
other articles of an intrinsically dangerous nature.

         16.  Furniture,  equipment and other large articles may be brought into
the Building only at the time and in the manner  designated by Landlord.  Tenant
shall  furnish  Landlord  with a list of  furniture,  equipment  and other large
articles  which are to be removed  from the  Building,  and Landlord may require
permits  before  allowing  anything  to be  moved  in or out  of  the  Building.
Movements  of  Tenant's  property  into or out of the  Building  and  within the
Building are entirely at the risk and responsibility of Tenant.

         17. No person or  contractor,  unless  approved  in advance by Landlord
(which  appraisal shall not be unreasonably  withheld),  shall be employed to do
janitorial  work,  interior  window  washing,  cleaning,  decorating  or similar
services in the Premises.

         18. Tenant shall not use the Premises for lodging,  cooking (except for
microwave reheating and coffee makers) or manufacturing or selling any alcoholic
beverages or for any illegal purposes.

         19. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

         20. Tenant shall cooperate and  participate in all reasonable  security
programs affecting the Building.

         21.  Tenant shall not loiter,  eat,  drink,  sit or lie in the lobby or
other  public  areas in the  Building.  Tenant shall not go onto the roof of the
Building or any other  non-public  areas of the Building  (except the Premises),
and Landlord  reserves all rights to control the public and non-public  areas of
the Building. In no event shall Tenant have access to any electrical, telephone,
plumbing or other mechanical closets without Landlord's prior written consent.

         22.  Tenant shall not use the freight or passenger  elevators,  loading
docks or receiving areas of the Building  except in accordance with  regulations
for their use established by Landlord.

         23. Tenant shall not dispose of any foreign  substances in the toilets,
urinals, sinks or other washroom facilities,  nor shall Tenant permit such items
to be used other than for their  intended  purposes;  and Tenant shall be liable
for all damage as a result of a violation of this rule.

         24. If Tenant  designates  non-smoking  areas in the  Premises,  Tenant
shall also designate sufficient smoking areas in the Premises for its employees,
and in no event shall Tenant allow its  employees to use the public areas of the
Building as smoking areas.


<PAGE>



                                   EXHIBIT "C"

                             TENANT IMPROVEMENT WORK


         1. On or before June 13, 1997, Tenant shall provide to Landlord for its
approval final working drawings  ("final working  drawings" shall mean the plans
prepared by David  Saltzman,  dated  6/9/97,  subject to the agreed to revisions
evidenced  by the  diagram  annexed  hereto.)  prepared by David  Saltzman  (the
"Architect") of all  improvements  that Tenant proposes to have installed in the
Premises;  such working  drawings  shall include the partition  layout,  ceiling
plan,  electrical  outlets and  switches,  telephone  outlets,  drawings for any
modifications  to the  mechanical  and  plumbing  systems of the  Building,  and
detailed  plans and  specifications  for the  construction  of the  improvements
called for in this Exhibit "C", in accordance  with all applicable  governmental
laws,  codes,  rules and  regulations.  Landlord  shall  reasonably  approve  or
disapprove  such working  drawings  within ten (10) days after their  receipt by
Landlord. If Landlord disapproves such working drawings,  Landlord shall specify
the reasons for such disapproval in reasonable  particularity,  and Tenant shall
cause the  Architect to make  conforming  revisions  thereto and  resubmit  such
working drawings to Landlord for re-review in accordance with the same procedure
set forth above, except that Landlord must complete its review and notify Tenant
of its approval or disapproval of such revised working drawings within seven (7)
days after their  receipt by Landlord.  Landlord  and Tenant  shall  initial the
working  drawings  after  the same  have  been  finally  approved  by  Landlord.
Landlord's  approval  of Tenant's  working  drawings  shall not be  unreasonably
withheld,  provided that (a) they comply with all applicable  governmental laws,
codes,  rules and  regulations,  and (b) such working  drawings are sufficiently
detailed to allow  construction of the improvements  specified therein in a good
and workmanlike  manner. As used herein,  the phrase "Tenant's Plans" shall mean
the final working drawings approved by Landlord pursuant to this Paragraph 1, as
amended from time to time by any changes thereto  approved by Landlord,  and the
phrase  "Landlord's  Work" shall mean the work specified in Tenant's Plans.  All
changes in Tenant's  Plans must receive the prior written  approval of Landlord.
The total cost of preparation of Tenant's Plans shall be paid by Landlord within
thirty (30) days after  receipt by Landlord  of a detailed  itemization  of such
costs.

         2. Promptly after Landlord's approval of Tenant's Plans, Landlord shall
in good faith solicit bids for the  performance of Landlord's  Work.  Based upon
such bids, Landlord and Tenant shall select a contractor to construct Landlord's
Work. Promptly after the selection of such contractor, Landlord shall cause such
contractor  to  commence  construction  of  Landlord's  Work  and to  diligently
prosecute to completion the construction of Landlord's Work so as to prepare the
Premises for Tenant's occupancy on or prior to August 15, 1997, but Tenant shall
have no claim  against  Landlord for failure so to complete  Landlord's  Work by
such date, nor shall such failure affect the validity of this Lease.  Landlord's
Work shall be performed in a good and workmanlike manner.

         3. The "Substantial Completion Date" shall be the first business day as
of which Landlord's Work has been completed except for minor items of work (and,
if  applicable,  adjustment of equipment and fixtures)  which do not  materially
interfere  with  Tenant's  use of the  Premises  for the  purposes  set forth in
Section 3 of the Lease  and can be  completed  after  occupancy  has been  taken
without  causing undue  interference  with  Tenant's use of the Premises  (i.e.,
so-called "punch-list" items).  Landlord shall complete as conditions permit all
"punch-list"  items, and Tenant shall afford Landlord access to the Premises for
such purposes.

         4.  Except to the extent to which  Tenant  shall  have  given  Landlord
notice not later than three (3) months from the Commencement Date of respects in
which  Landlord has not performed  Landlord's  Work,  Tenant shall have no claim
that Landlord has failed to perform any of Landlord's Work.

         5. The total cost of  construction  of Landlord's Work shall be paid by
Landlord.  Upon final completion of Landlord's  Work,  Landlord shall certify to
Tenant the total cost of  construction  of Landlord's Work and the total cost of
preparation of Tenant's Plans (such total cost of  construction  and preparation
being  hereinafter  referred to as the "Total Cost").  Landlord shall provide to
Tenant an  allowance  in the  amount of  $39,300.00  (the  "Allowance")  for the
construction of Landlord's  Work, for the preparation of Tenant's Plans, and for
the  preparation  of the  preliminary  plan that was prepared by or on behalf of
Landlord with respect to the initial improvements to the Premises.  If the Total
Cost exceeds the Allowance,  Tenant shall  reimburse  Landlord for the amount of
such excess  within ten (10) days after  receipt by Tenant of the  certification
referred to in the second sentence of this Paragraph 5, and such excess shall be
deemed to be additional Rent under this Lease.

         6. Tenant shall pay to Landlord a  construction  management  fee in the
amount of the lesser of (i)  $3,000.00  and (ii) five  percent (5%) of the total
cost of construction of Landlord's Work. Such construction  management fee shall
be due and payable within thirty (30) days after the Substantial Completion Date
and shall be deemed to be additional Rent under the Lease.

         7. With the prior  consent of  Landlord,  Tenant may enter the Premises
prior to the  Substantial  Completion  Date to undertake such work as Tenant may
choose to perform  (subject  to the  provisions  of Section 9 of this  Lease) in
order to prepare the Premises for Tenant's occupancy. Such entry shall be at the
sole risk of Tenant.  In no event shall  Tenant use any  contractor  if Landlord
reasonably  determines  that such  contractor  will cause a labor dispute at the
Building,  or otherwise  materially  interfere with any construction  work being
performed  by or on  behalf  of  Landlord  in or around  the  Building.  Without
limiting  the  generality  of  the  foregoing,  Tenant  shall  comply  with  all
reasonable  instructions issued by Landlord's contractors relative to the moving
of Tenant's  equipment  and other  property  into the Premises and shall pay any
actual  fees  or  costs  incurred  by  Landlord  in  connection  therewith.   If
noncompliance by Tenant with any instructions  issued by Landlord's  contractors
results  in a work  stoppage  or  other  job  action  by any  employees  of such
contractors or subcontractors  thereof  performing work at the Building,  Tenant
and its contractors shall cease performance of such work.