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                                                                    Exhibit 10.7


                                 LEASE AGREEMENT
                                 ---------------

                                     Between

                    NIAGARA FRONTIER TRANSPORTATION AUTHORITY
                    -----------------------------------------

                                       And

                            SIERRA RESEARCH DIVISION
                            ------------------------
                            SIERRA TECHNOLOGIES, INC.
                            -------------------------

                                       At

                            AIRPORT BUSINESS COMPLEX
                            ------------------------

                  THIS AGREEMENT executed the 18TH day of December, 1992, but
effective as of the 1st day of April, 1992 between NIAGARA FRONTIER
TRANSPORTATION AUTHORITY, a body corporate and politic, constituting a public
benefit corporation, organized and existing pursuant to Chapter 717 of the Laws
of 1967 of the State of New York, as amended, with its principal office for the
transaction of business at 181 Ellicott Street, in the City of Buffalo, County
of Erie and State of New York (hereinafter referred to as "NFTA") and SIERRA
RESEARCH DIVISION, SIERRA TECHNOLOGIES, INC., a domestic corporation with its
principal office for the transaction of business at 485 Cayuga Road,
Cheektowaga, New York (hereinafter referred to as "Sierra").

                               W I T N E S S E T H
                               -------------------

                  WHEREAS, NFTA is owner of certain premises located at 485
Cayuga Road, Cheektowaga, New York commonly known as "Plant 3"; and of certain
other premises located at 247 Cayuga Road, Cheektowaga, New York commonly known
as "Plant 1"; and

                  WHEREAS, Sierra Research Corporation, as predecessor of
"Sierra", entered into a lease agreement dated July 30, 1976 with Airport
Industrial Park, Inc. for space in Plant 3, which lease has been modified by
amendment dated January 1, 1977, amendment #2 dated March 1, 1978, amendment #3
dated March 23, 1978, amendment #4 dated January 19, 1979, and a further Lease
Agreement dated December 29, 1981 under which said Sierra Research Corporation
became the sole tenant in Plant 3 which Lease was modified by a First
Supplemental Agreement dated April 27, 1982, a Second Supplemental Agreement
dated March 16, 1984,

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a Third Supplemental Agreement dated December 27, 1984 and an Amendment dated
August 29, 1991 extending the term of the Lease through March 31, 1992; and

                  WHEREAS, said Sierra Research Corporation has also during such
periods occupied "Plant 1" under separate lease agreements; and

                  WHEREAS, the parties hereto desire to enter into a lease
agreement to provide for Sierra to occupy "Plant 3" as the sole tenant therein
and to enter into a Management Agreement under which Sierra will occupy a
portion or portions of "Plant 1" and will provide the management services
hereinafter described for the entire "Plant 1" premises; and

                  WHEREAS,Sierra intends to continue the use of the premises at
"Plant 3" for the production and development of materials and equipment
associated with the manufacturing of aerospace products for defense and civilian
industry; including the manufacturing of aviation navigation equipment, the
retrofitting of both commercial and military aircraft with such navigational
systems, and the production of other electronic equipment incidental to one or
more of the above mentioned activities, which, because of the production and
installation of these products, requires access to the Greater Buffalo
International Airport's field including taxiways, apron, and runways by Sierra's
aircraft so that Sierra may test their products and equipment.

                  NOW, THEREFORE, the parties hereto agree as follows:

                                  PLANT 3 LEASE
                                  -------------

         1. NFTA hereby leases to Sierra and Sierra hereby hires and takes from
NFTA those premises outlined in Exhibit A, including use of the aircraft tarmac
area adjoining the north east corner of the building generally known as Bay 7,
attached hereto and made a part hereof, together with appurtenances and ingress
and egress at Plant 3 (the "demised premises") for a term of five (5) years
commencing April 1, 1992 and ending on March 31, 1997. Sierra agrees to pay NFTA
during the term hereof annual rental of Eight Hundred Six Thousand, Four Hundred
and no/100 Dollars ($806,400.00), payable in equal monthly installments of
Sixty-seven Thousand, Two Hundred and 00/100 Dollars ($67,200.00), in advance
and without notice on the first day of each month during the term hereof, except
that the first installment shall be paid upon execution hereof, plus increases
annually based on the Buffalo-area consumer price index for all

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urban consumers as reported by the U.S. Bureau of Labor Statistics ("BCPI"),
such that the rent will be increased as follows:

<Table>
<Caption>

                                     TABLE 1
                                     -------

<S>                    <C>
1st YEAR   =  1992                    $806,400    =   RENT 1
2nd YEAR   =  1993     (RENT 1 + BCPI 12/31/92)   =   RENT 2
3rd YEAR   =  1994     (RENT 2 + BCPI 12/31/93)   =   RENT 3
4th YEAR   =  1995     (RENT 3 + BCPI 12/31/94)   =   RENT 4
5th YEAR   =  1996     (RENT 4 + BCPI 12/31/95)   =   RENT 5
</Table>


Such rental is based on the agreement that the premises include 224,000 square
feet of ground level building space with an annual rental rate of $3.60 per
square foot as well as additional space on the second floor of such building for
which no additional charge is currently allocated.

FIRST RENEWAL

         2. NFTA agrees to renew this lease for an additional term of five (5)
years at the option of Sierra at the same annual rental adjusted by the BCPI for
the period from April 1, 1992 through March 31, 1997 plus the increase, if any,
in the BCPI as of December 31, 1996 and thereafter annually increased in a
manner as described in Table 1, above, throughout the renewal period. Such
rental shall be payable in equal monthly installments in advance and without
notice on the first day of each month during the renewal term. Except as to
rental and subject to such charge which the parties shall in good faith
negotiate for. the above mentioned additional space on the second floor of the
building on premises, the leasing shall be upon the same terms and conditions
hereof, provided that Sierra has duly performed the agreements, terms and
conditions herein set forth and provided that Sierra shall give to NFTA notice
in writing of its election to renew no later than ninety (90) days prior to the
expiration of the lease.

SECOND RENEWAL

         3. If the option to renew provided for in Paragraph 2 is exercised,
NFTA agrees to renew this lease for a third term of five (5) years for an annual
rental calculated in the same manner as for the option in Paragraph 2, above, at
the option of Sierra, provided that Sierra shall give to NFTA notice in writing
of its election to renew no later than one hundred and

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twenty (120) days prior to the expiration of the then existing term.

PARKING

         4. Sierra shall have the right to use, during the term hereof and any
renewal thereof, the parking area provided by NFTA for Plant 3 and outlined in
Exhibit A, attached hereto and made a part hereof, for parking for its employees
and invitees. NFTA further agrees that Sierra shall have the right of first
refusal to occupy or utilize for such parking the area marked "optional parking"
on Exhibit A.

UTILITY, MAINTENANCE AND REPAIR COSTS (ESCROW)

         5. Sierra, at its sole expense and in addition to the rental and
additional rent herein otherwise required, SHALL PAY FOR ALL UTILITIES (EXCEPT
WATER PENDING RESERVOIR REPAIRS) and provide all maintenance, upkeep and repair
of the demised premises except structural repairs to the perimeter walls and
roof, repairs to the driveways and parking lots, repairs to the fire protection
reservoir and snow plowing and snow removal. Such snow plowing and snow removal
shall, however, be provided by Sierra on an interim basis subject to
reimbursement of the cost thereof from the ESCROW FUND hereinafter described.

                  Sierra further agrees, from and after completion of certain
roof and wall restorations, paving and repairs to the fire protection reservoir
as provided in Paragraph 6, below, to maintain the exterior perimeter walls,
roofs, roads, driveways, and parking lots and perform snow plowing and fire
protection reservoir repairs and maintenance up to the amount of escrow funding,
as defined below. The parties agree that the estimated cost for Sierra to
perform this maintenance is Seventy-eight Thousand Four Hundred Dollars
($78,400) annually based on additional rent of No and 35/100 Dollars ($0.35) per
square foot plus increases based on the BCPI as calculated in accordance with
Table 1, above.

                  This escrow amount shall be paid in equal monthly installments
by Sierra to NFTA as an additional rent and held by NFTA in escrow in an
interest bearing account and separately accounted such that the escrow fund is
to be applied solely to payments made by Sierra for such maintenance to said
exterior walls, roofs, fire protection reservoir, roads, driveway, and parking
lots and to snow plowing and removal. In the event that additional funding may
be necessary for Sierra to fully maintain the exterior perimeter walls, roofs,
fire protection reservoir,

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roads, driveways, and parking lots and provide snow plowing and removal, Sierra
will so advise NFTA and NFTA will have the prerogative of either separately
funding such efforts or delaying such effort until a subsequent renewal term of
this lease. Sierra will submit its invoices detailing the costs incurred in
performing such maintenance to NFTA's Manager of Property, or his delegate, for
reimbursement of such expenses. Reimbursement of all such approved amounts will
be made within thirty (30) days or Sierra will be entitled to deduct such
amounts from its next monthly rental payment provided that there are moneys
available in the maintenance escrow. The parties agree that the maintenance
activity to be performed by Sierra will include all costs to perform the
required maintenance activity. The parties further agree that if there is any
balance remaining in the maintenance escrow at the expiration of the initial
term, or any subsequent renewal term, the balance shall be carried forward to
the next renewal term or, if there is no renewal, the escrow account will be
retained by NFTA to be used to benefit the demised premises or as NFTA may deem
appropriate.

STRUCTURAL ROOF AND WALL RESTORATION, AND PAVING (CAPITAL)

         6. Sierra shall be responsible to accomplish certain specific
structural restoration in accordance with the design and statement of work
outlined in ATTACHMENT 1 To include structural and watertight roof repairs, fire
protection reservoir repairs, and paving. Such repairs shall be subject to prior
written NFTA approval of plans and specifications and to periodic review and
inspection by representatives of NFTA who shall be responsible for assuring that
the resulting repairs meet all applicable building codes. Sierra shall be
responsible for performing the work to the satisfaction of NFTA's
representatives and paying for the work, including competitively procuring the
services of subcontractors as necessary and paying such subcontractors. NFTA
shall promptly reimburse Sierra for performing such work including the cost for
Sierra personnel who are utilized to accomplish this work. NFTA shall provide
such reimbursement no later than sixty (60) days following acceptance of such
work by NFTA and submission by Sierra of an itemized voucher with supporting
documents and appropriate receipts. If such payment is not made within such
sixty (60) day period, Sierra may elect to deduct the amount due from its
monthly rental. NFTA shall, after acceptance of such structural restorations,
release Sierra from liability for defects in design or in materials or
workmanship used in construction thereof except that Sierra shall cooperate and
participate with NFTA in enforcing liability of any architects or contractors

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performing such design or such restoration and in enforcing warranties furnished
by material suppliers or manufacturers.

ELECTRICAL SERVICE

         7. NFTA agrees to provide during the term hereof, or any renewal term,
electrical service including transformer equipment to provide nominally four
hundred sixty (460) volts, sixty (60) cycle, three (3) phase, eighteen hundred
(1800) ampere (1500 KVA) to the Plant 3 for use by Sierra. In the event Sierra
requires additional electrical service, Sierra agrees to bear the cost of
installing such additional service.

WATER DISTRIBUTION SYSTEM

         8. NFTA agrees to provide an adequate water distribution system in
accordance with standards of the National Fire Protection Association to the
walls of the Plant 3 premises. Sierra shall maintain the sprinkler system (to
same requirements) within the Plant 3 premises from points of connection at the
plane of the demising walls. In addition, Sierra will maintain the pump house
facility and all equipment found therein as well as the fire protection
reservoir, to exclude all pipes or other elements of the water supply and
distribution system outside the walls of the pump house, or the reservoir, and
will, under the terms of Paragraph 5, pay all costs for water so long as the
pump house is supplying water solely to the Plant 3 premises.

FORCE MAJEURE

         9. In case of damage by fire or other action by the elements to either
Plant 3 or Plant 1, and if the damage is so extensive as to amount practically
to the total destruction of the demised premises or any portion thereof or of
Plant 1 and NFTA shall within a reasonable time decide not to rebuild, this
lease shall cease and come to an end as to said Plant 3 or Plant 1,
respectively, and rent shall be apportioned to the time of the damage. In other
cases where the demised premises are partially damaged, NFTA shall repair the
damage with reasonable dispatch after notice of damage, and if the damage has
rendered the premises untenantable, in whole or in part, there shall be an
apportionment of the rent until the damage has been repaired. In determining
what constitutes reasonable dispatch, consideration shall be given to any delay
caused by strikes, adjustment of insurance and other causes beyond NFTA's
reasonable control.


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         10. NFTA and Sierra hereby release the other from any and all liability
or responsibility to the other or anyone claiming through or under them by way
of subrogation or otherwise for any loss or damage to property covered by fire
insurance or any of the extended coverage of supplementary casualties contract
maintained by either party, even if such fire or casualty was caused by the
negligence of the herein benefited party or anyone for whom such party may be
responsible.

FIRE INSURANCE

         11. NFTA agrees to keep the demised premises fully insured against fire
and other risks covered by standard New York fire policy with extended coverage
during the term hereof. NFTA shall deliver to Sierra certificates of insurance
evidencing such coverage on request. Fire and casualty insurance coverage for
contents owned by Sierra shall be the sole responsibility of Sierra. Sierra
agrees that it will continue to maintain the fire truck loaned to Sierra for
fire emergency assistance, and to use this fire truck solely for the purpose of
assisting in fires at NFTA structures and the parties agree that it is primarily
intended to be back-up assistance for such fires that may arise during a major
aircraft or other catastrophe that taxes the capacity of the fire fighting
equipment maintained by NFTA in the Greater Buffalo International Airport. Any
other use is subject to NFTA's prior approval and NFTA's agreement that such use
is deemed necessary to support such extraordinary emergencies.

COMPLIANCE WITH APPLICABLE LAWS

         12. Sierra shall promptly execute and comply with all statues,
ordinances, rules, orders, regulations and requirements of the Federal, State,
and local governments and of any and all of their departments and bureaus
applicable to the demised premises, or to Plant 1, and shall also promptly
comply with and execute all rules, orders and regulations of the New York State
Board of Fire Underwriters for the prevention of fires at Sierra's own cost and
expense; except that in the event compliance with such governmental statues,
ordinances, rules, orders, regulations and requirements or the rules, orders and
regulations of such Board would require structural alterations to the demised
premises beyond those provided for in Paragraphs 5 and 6, above, same shall be
made by NFTA.

TAXES
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         13. Unless otherwise provided herein, Sierra shall pay any and all
taxes assessed and levied against the demised premises, as well as any special
assessment imposed for any purpose whatsoever during the term hereof or any
renewal, provided however, that NFTA's current status as to tax exemption is not
changed. Taxes related solely to the property exclusive of Sierra's use are to
be paid by NFTA.

ALTERATIONS

         14. Sierra shall have the right to make alterations to the demised
premised during the term, regardless of whether same are structural or
non-structural; provided that the value of the demised premises is not lessened
thereby and provided that in the event of structural alterations, plans and
specifications shall be subject to prior written approval of NFTA, which
approval shall not be unreasonably withheld, and Sierra shall install same in
accordance therewith. Sierra shall protect and save NFTA harmless from any
liability for any claim of persons performing services or furnishing materials
for use in the performance of such alterations and shall pay all such claims to
prevent the filing of liens. If any such liens are filed, Sierra shall remove
same by bond or otherwise within thirty (30) days after notice thereof.
Improvements made to the demised premises shall become part of the real
property, except for any trade fixtures or any personal property of Sierra, and
NFTA specifically waives any right, title, lien or claim on same, regardless of
whether such trade fixtures or personal property could be construed as
"Leasehold Improvements" and regardless of the method of attaching same to the
demised premises. Upon removal of any such trade fixtures or personal property,
Sierra shall, at its sole cost and expense, restore the premises and the
improvements which shall have become a part of the real property to the
condition in which such premises and improvements would have existed but for
such removal.

EXPIRATION OF LEASE

         15. At the expiration of the term hereof or any renewal term, Sierra
shall vacate the demised premises and surrender the same in as good order and
condition as when received, reasonable wear and tear, and damage from the
elements and act of God excepted. If Sierra shall fail to remove any trade
fixtures or other personal property upon expiration of the term hereof, or any
renewal term, then in that event, the said fixtures and personal property shall
be deemed abandoned by Sierra and shall become the property of NFTA, or in the
alternative, at the sole

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option of NFTA, may be removed and disposed of by NFTA and any cost incurred in
connection with such removal and disposition shall be paid by Sierra.

SUBLEASES

         16. Sierra shall have the right to sublet any part of the demised
premises during the term hereof or any renewal term to any person, or
corporation that shall meet with the prior written approval of NFTA, which
approval shall not be unreasonably withheld. Permission is hereby granted to
Sierra upon prior written notice to NFTA, to sublet to any government agencies
or other companies engaged in aeronautical fields or taking part in the National
Defense Program without the necessity of obtaining NFTA prior written approval.

INSPECTION

         17. Sierra agrees that NFTA and its agents and other representatives
shall have the right to enter into and upon the demised premises or any part
thereof, at all reasonable hours, for the purpose of inspecting same or making
such repairs or alterations therein as may be necessary for the safety and
preservation thereof.

SIGNS

         18. Sierra shall not place or cause or allow to be placed any sign or
signs of any kind whatsoever in or about the entrance of the demised premises or
any other part of the exterior thereof, except in or at such place or places as
may be consented to by NFTA in writing, which consent shall not be unreasonably
withheld. NFTA hereby approves the now existing signs of Sierra.

GLASS REPLACEMENT

         19. In the event that any of the glass in any of the windows contained
in the demised premises shall be broken during the term of this lease or any
renewal term, the same shall be replaced with like kind and quality by Sierra at
its own expense, unless such breakage is caused by the act or omission of NFTA
or its employees, agents, servants or invitees in which event same shall be
repaired by NFTA.

INDEMNIFICATION


<Page>

         20. Sierra shall indemnify, defend, and save harmless NFTA from and
against any and all liability, penalties, damages, expenses and judgments by
reason of any injury or claim of injury to persons or property of any nature
whatsoever arising out of the use, occupation and control of the demised
premises by Sierra at any time during the term hereof or any renewal, including
those resulting from any work in connection with alterations, changes, new
construction or demolition related thereto performed by Sierra unless otherwise
agreed to; provided that Sierra shall not be so liable for any such liability,
penalties, damages, expenses and judgments occasioned by the negligence of NFTA,
its employees, agents, servants, or invitees. Sierra is hereby subrogated to any
rights of NFTA against any other parties whosoever in connection therewith. NFTA
shall promptly notify Sierra of any claim asserted against NFTA on account of
any such injury or claimed injury to persons or property and shall promptly
deliver to Sierra the original or a true copy of any summons or process,
pleading or notice served in any suit or other proceeding to assert or enforce
any such claim. Sierra shall have the right to defend any such suit with
attorneys of its own selection. NFTA shall have the right, if it sees fit, to
participate in such defense at NFTA's expense.

                  NFTA shall indemnify and save Sierra harmless from and against
any and all liabilities, penalties, damages, expenses or judgments arising out
of the violation or alleged violation of any environmental laws, whether
federal, state or local with respect to Plant 1 and with respect to Plant 3
unless said violation solely arose out of the action or failure to act on the
part of Sierra or on the part of Sierra Research Corporation or its successors
during occupancy of premises as predecessors of Sierra.

INSURANCE REQUIREMENTS

         21. At all times throughout the term or any renewal term of this
agreement, Sierra shall keep in force a policy of general liability insurance
issued by an insurer authorized to do business in the State of New York which
shall protect Sierra and shall name the NFTA as an additional insured against
losses imposed by law or assumed in any written contract (including contractual
liability assumed by Sierra under this agreement) and arising from injury or
death of a person or persons or damage to the property of others. Such insurance
shall be in a minimum amount of Two Million Dollars ($2,000,000) aggregate
coverage per occurrence, and may be effected by overall blanket, umbrella or
excess coverage policies provided, however, that at

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least Five Hundred Thousand Dollars ($500,000) is effected by a comprehensive
liability insurance policy.

                  To the extent not covered by the liability insurance listed
above, Sierra shall, during any period of construction, reconstruction or
remodeling on premises or any part thereof, maintain in effect a policy of
Owners and Contractors Protective Liability Insurance naming NFTA as an
additional insured in limits equal to those above prescribed for general
liability insurance coverage.

                  Sierra shall also maintain in effect Workers Compensation
Insurance and other employee benefit insurance as may be required by law
together with such other or additional insurance in such amounts and covering
such other insurable hazards as NFTA may, from time to time, reasonably require.

                  All of such insurance shall be evidenced by a Certificate of
Insurance reciting coverage for NFTA as an additional insured except with
respect to Workers Compensation insurance which certificate shall be furnished
to NFTA within ten (10) days of the execution of this agreement and shall at
least thirty (30) days written notice to NFTA of any proposed nonrenewal,
cancellation, lapse or material change in coverage under any such policy. NFTA
shall have the further right to request and have delivered to it duplicates of
such insurance policies for the purpose of determining compliance with the above
listed insurance requirements.

AVAILABILITY OF UTILITY SERVICES

         22. NFTA's obligation to supply utilities to the demised premises or to
Plant 1 is subject to and contingent upon the availability of the utilities to
NFTA.

SUSPENSION OF UTILITY SERVICES

         23. NFTA reserves the right to suspend utility services to the demised
premises or to Plant 1 for a reasonable length of time with respect to heating,
plumbing and electrical system components located outside of the demising walls
when necessary by reason of accident or to make emergency repairs. Any
suspension of such services and systems for normal alterations or replacement of
such outside lines shall be done when and for such period of time as is mutually
agreed upon between NFTA and Sierra.

CANCELLATION


<Page>

         24. NFTA may cancel this agreement by giving Sierra sixty (60) days
prior written notice upon or after the happening of any one of the following
events, and Sierra's failure to remedy such event of default within the period
of the written notice so given by NFTA:

                  (a)      filing by Sierra of a voluntary petition in
                           bankruptcy or the adjudication of Sierra as bankrupt
                           pursuant to voluntary or involuntary proceedings to
                           the extent such filing does not preclude cancellation
                           of this Agreement by NFTA;

                  (b)      the appointment of a receiver for Sierra's assets;

                  (c)      the divestiture of Sierra's estate herein by other
                           operation of law or as provided herein;

                  (d)      the default by Sierra in the performance of any
                           covenant or any other agreement required to be
                           performed, except nonpayment of rent, for which
                           Sierra shall have only a ten (10) day period to cure
                           any default in payment of rent after receipt of
                           written notice of default thereof from NFTA.

NON-DISCRIMINATION, AFFIRMATIVE ACTION, AND DISADVANTAGED BUSINESS ENTERPRISES

         25. Sierra agrees to comply with Public Authorities Law Section 2604
and Sections 2875 and 2876 of such law and New York State provisions of law and
regulation concerning non-discrimation which are to be considered as
incorporated in this agreement, as well as Federal regulations regarding
discrimination, Affirmative Action, and Disadvantaged Business Enterprises as
described in the Exhibit C, hereto annexed, which are likewise herein
incorporated.

PEACEFUL POSSESSION

         26. Sierra upon paying the rental and subject to all the terms and
covenants of this lease on Sierra's part being kept and performed, shall have
quiet and peaceful possession of the demised premises without hindrance or
molestation by any person.

                          PLANT 1 MANAGEMENT AGREEMENT
                          ----------------------------
<Page>

         27. NFTA hereby agrees to allow Sierra to continue to occupy those
premises in Plant 1 as outlined in Exhibit B including parking spaces as noted
therein for approximately eighty (80) vehicles, attached hereto and made a part
hereof, for a period of no longer than ONE (1) YEAR COMMENCING APRIL 1, 1992 AND
ENDING NO LATER THAN MARCH 31, 1993. This occupancy is solely for the
convenience of the parties since Sierra is preparing available space in Plant 3
to move its remaining personnel currently located in Plant 1, and NFTA has not
yet located new tenants. In consideration for allowing Sierra to continue such
occupancy, Sierra agrees to pay NFTA during the term hereof a payment calculated
on the basis of $1.76 per square foot for 30,250 square feet in equal monthly
installments of $4,436.67 in advance and without notice on the first day of each
month during the term hereof, except that the first installment shall be paid
upon execution hereof. Sierra and NFTA agree that NFTA may find additional
tenants for Plant 1 and Sierra agrees that to accommodate such additional
tenants it will adjust the space occupied by Sierra either by further reducing
its occupancy, and thereby being entitled to a pro-rata rental reduction, or by
shifting its occupancy within Plant 1 at no expense to NFTA to accommodate such
new tenant. Sierra may also further reduce its occupancy within Plant 1, and its
payment at the same square foot payment rate, to meet its needs but in no event
will it REDUCE ITS OCCUPANCY IN PLANT 1 DURING THE TERM BELOW 10,000 SQUARE
FEET.

                  A credit of Seven Thousand Eight Hundred Thirty-six and no/100
Dollars ($7,836.00) will be granted to Sierra for reduction in its occupancy of
space in Plant 1 during the month of March, 1992 from approximately 80,000
square feet to 30,250 square feet. Such credit shall be applied at the same time
as adjustments are made to reflect differences between payments due for
occupancy of Plant 1 and Plant 3 under the terms of this agreement as compared
with actual payments made by Sierra during the months of April, 1992, through
November, 1992, inclusive, for such occupancy. All such adjustments shall be
determined promptly after final execution of this agreement and net credits due
to Sierra shall be deducted from payments due and payable for the month of
December, 1992.

                  From and after March 31, 1993, Sierra may extend this
agreement on the same terms and conditions on a month-to-month basis until such
time as either party shall give the other party written notice of termination to
be effective not sooner than 30 days after the date of such notice. During such
extension of this agreement, Sierra may from time to time, upon 30 days

<Page>

advance written notice to NFTA, reduce its occupancy to such area of less than
10,000 square feet as Sierra shall determine is adequate to its needs.

PLANT 1 UTILITIES

         28. Sierra shall pay the cost of all utilities for Plant 1 and the
surrounding facility throughout the term of this lease subject to the following
conditions:

                  (a)      Sierra shall maintain the level of utilities in the
                           most efficient manner and has the right, so long as
                           it is the sole tenant, to turn off any utilities it
                           is not using to the extent practical so long as such
                           utilities are not needed to minimally maintain the
                           surrounding facility in good working order, including
                           any outside lights either on the building or in the
                           parking area.

                  (b)      In the event a new tenant begins to occupy any
                           portion of Plant 1 NFTA agrees to require such new
                           tenant to establish separate utility meters at no
                           expense to Sierra or pay a pro-rated share if more
                           practical. The parties will negotiate in good faith
                           whether the addition of a new tenant reasonably
                           requires Sierra to continue to pay the cost of the
                           utilities to minimally maintain the balance of the
                           facility in good working order.

                  (c)      Any new tenant will be required to establish a
                           telephone system without tying to Sierra's existing
                           telephone system.

                  (d)      Sierra will continue to pay any applicable property
                           tax in full through December 31, 1992 except that any
                           new tenant will be required by NFTA to pay a pro-rata
                           share based on space occupied relative to the entire
                           facility space which the parties agree to be 80,000
                           square feet. After December 31, 1992 either NFTA or
                           any such new tenants) shall be responsible for any
                           property tax.

PLANT 1 NEW TENANT ASSISTANCE

         29. Sierra further agrees to provide assistance to NFTA under the terms
of this Management Agreement to provide support to NFTA in making space in both
Plant 1 and the surrounding

<Page>

facility suitable for new tenants as such new tenants may require. Such
assistance will include but not be limited to providing design services and/or
building additional walls to separate new tenant's area, separation of utility
lines, and building interior office spaces. Such assistance as may be provided
shall be reimbursable to Sierra by NFTA on an at-cost basis approvable by NFTA's
General Manager of Engineering or his designee.

                  IN WITNESS HEREOF, the parties hereto have executed this
Agreement on the day and year first above written.

                                       NIAGARA FRONTIER TRANSPORTATION AUTHORITY

                                       By: /s/
                                          --------------------------------------
                                          Executive Director


                                       Date:  1/4/93
                                            ------------------------------------


                                       SIERRA RESEARCH DIVISION
                                       SIERRA TECHNOLOGIES INC.


                                       By: /s/ John T. Buck
                                          --------------------------------------
                                          John T. Buck
                                          President

                                       Date: DECEMBER 18, 1992
                                            ------------------------------------

<Page>


                  ACKNOWLEDGEMENT OF PRINCIPAL - IF CORPORATION
                  ---------------------------------------------

STATE OF NEW YORK          )
COUNTY OF ERIE             ) SS:

                  On this 18TH day of DECEMBER, 1992, before me personally came
and appeared JOHN T. BUCK, to me known, who, being duly sworn, did depose and
say that he/she resides at ______________________________________________ that
he/she is the PRESIDENT of SIERRA TECHNOLOGIES, SIERRA RESEARCH DIVISION the
corporation described in and which executed the foregoing instrument, that
he/she knows the seal of said corporation, that one of the impressions affixed
to said instrument is an impression of such seal, that it was so affixed by
order of the directors of said corporation, and that he/she signed his/her name
thereto by like order.

                                                     /s/ Roger D. Cleary
                                                     ---------------------------
                                                     Notary Public

STATE OF NEW YORK           )
COUNTY OF ERIE              )
CITY OF BUFFALO             )


                  On this 4TH day of JANUARY, 1993, before me the subscriber,
personally came RICHARD T. SWIST, to me known, who being by me duly sworn, did
depose and say that he is the Executive Director of the NFTA and exeucted the
foregoing Instrument.

                                                     /s/ James L. Lovallo
                                                     ---------------------------
                                                     Notary Public


<Page>


                                  ATTACHMENT I
                                 485 Cayuga Road

                (NFTA/Sierra Lease Agreement - 4/1/92 to 3/31/97)

General Statement - Sierra is responsible for accomplishing the projects
identified below as prescribed in Paragraph 6 of the subject lease.

1.       ROOF STRUCTURAL REPAIR

         A study of the roof structure deficiencies was made by Trautman
         Associates in March of 1987 and subsequently amended by a supplemental
         report in January 1988 for the purposes of phasing the structural
         repairs.

         The report of 1988 delineated five phases for the permanent repairs of
         the roof structure. Phases 1 and 2 were completed in 1988 (East and
         West wings). Phases 3, 4, and 5 remain to be accomplished.

         Sierra will accomplish these remaining structural repairs by soliciting
         an architect who will design the method of repair, with appropriate
         drawings and develop a statement of work along with estimated costs for
         the total repair. Sierra will establish the priority for the work, such
         that the roof over Bay 2 is accomplished as soon as possible. The
         repair will be to the satisfaction of the NFTA and shall commence upon
         final approval of plans, specifications and cost by the NFTA. Sierra
         Facilities Engineering may act as Administrator and Construction
         Manager for the duration of this project to minimize impact on employee
         displacement during actual repairs.

1a.      ROOF WATERTIGHTNESS

         One element of the above stated roof structure repair work is
         replacement of a significant number of structural roof slabs. As a
         result, the roof membrane will need to be removed and replaced. Under
         this activity Sierra is to assure that upon completion of this
         structural element of the roof repair that the entire roof is returned
         to a watertight condition. Supplemental to the flat deck
         watertightness, Sierra shall cap the exterior building columns and
         parapet walls, and shall assure watertightness of the east wing roof
         and the star building roof.

2.       PARKING LOT REPAVING

         Roadway and parking lot areas at 485 Cayuga Road which have been
         identified as in need of major repair are depicted on Exhibit A as
         Areas 1, 1A, and 2 through 6. The total

<Page>

         estimated square footage in need of repair, as stated on Exhibit A, is
         approximately 89,600 square feet. Estimates for the cost of this
         repaving amount to approximately $100,000.

3.       FIRE PROTECTION RESERVOIR REPAIR

         In order to assure proper fire protection, leaks that have been
         detected in the fire protection reservoir are in need of repair. Past
         engineering studies, performed during the redesign of the fire
         protection pump house, recommended that the fire protection reservoir
         be repaired with an impermeable liner. Sierra may hire an appropriate
         design firm and, in conjunction with the NFTA, determine the best
         method of repair or replacement. Consultation with the respective fire
         insurance underwriters representing Sierra and NFTA will be required.



<Page>


                                                              September 16, 1996

VI.      (B)      (h)     RENEWAL OF LEASE AGREEMENT, SIERRA TECHNOLOGIES, INC.,
                          ------------------------------------------------------
                          FACILITIES AT 485 AND 247 CAYUGA ROAD, BUFFALO, NY
                          ------------------------------------------------------

RECOMMENDATION:

         Staff recommends the Board authorize renewal of the Agreement between
NFTA and Sierra Technologies, Inc., providing for the continued lease and
management of NFTA property and facilities at 485 and 247 Cayuga Road, Buffalo,
NY, for the five (5) year term commencing April 1, 1997.

BACKGROUND:

         The agreement between NFTA and Sierra Research, Inc., entered into in
1992, provides for the lease and management of facilities at 247 and 485 Cayuga
Road and included two (2) options for renewal for periods up to five (5) years
each.

         The proposed renewal agreement includes a five (5) year term commencing
April 1, 1997 and extends through March 31, 2002. In addition to the specific
provisions of the 1992 agreement, Sierra Research, Inc., has agreed that rental
payments to the Authority under this renewal shall be no less than $5,037,660.
Rental payments will include adjustments based on changes in the CPI for Buffalo
(BCPI) and computed in the following manner:,

<Table>
<Caption>

                                     TABLE 1
                                     -------

<S>             <C>                              <C>
First Year      $918,252 +BCPI                   12/31/96     =     RENT 1
Second Year     Rent 1 + BCPI                    12/31/97     =     RENT 2
Third Year      Rent 2 + BCPI                    12/31/98     =     RENT 3
Fourth Year     Rent 3 + BCPI                    12/31/99     =     RENT 4
Fifth Year      Rent 4 + BCPI                    12/31/00     =     RENT 5
</Table>

         Further an additional rent of no less than $89,280 ($5.40 per sq. ft.
plus BCPI 12/31/96) shall be paid in the first year for certain costs associated
with the operation and maintenance of the facilities at 485 Cayuga Road. For
years 2-5 the additional rent shall be calculated in the same manner in
accordance with TABLE 1 above. Sierra will continue to provide assistance and


<Page>

                                                              September 16, 1996
VI.      (B)       (h) continued

support to NFTA so as to effectively manage and operate these and other Property
Management facilities in accordance with the lease renewal agreement.

FUNDING:

         No funding is required.

         After discussion, it was moved by Commissioner Greenfield, seconded by
Commissioner Martino, that the following Resolution be adopted:

                         "RESOLVED, that the Board hereby authorizes renewal of
                         the Agreement between NFTA and Sierra Technologies,
                         Inc., for the lease, operation, management, and
                         maintenance of facilities located at 247 and 485 Cayuga
                         Rd., Buffalo, NY, for the period commencing April 1,
                         1997 through March 31, 2002; and

                         BE IT FURTHER RESOLVED, that the Executive Director,
                         his designee and/or the Chairman be and hereby are
                         authorized to enter into a renewal Agreement with
                         Sierra Technologies, Inc., said Agreement providing for
                         the lease, operation, management, and maintenance of
                         facilities located at 247 and 485 Cayuga Rd., Buffalo,
                         NY, consistent with terms and conditions set forth in
                         the Agreement between the parties dated December 18,
                         1992, for lease of said facilities, as referenced
                         hereinabove, and as negotiated by the parties for the
                         period commencing April 1, 1997 through March 31, 2002;
                         and

                         BE IT FURTHER RESOLVED, that said Renewal Agreement
                         shall include such additional terms, covenants and
                         safeguards to the Authority as deemed appropriate by
                         General Counsel."

AYES:                    GIOIA, WADSWORTH, WESSEL, WILLIAMSON, GREENFIELD,
                         ANTHONY, MARTINO, GISEL, KAHL

NOES:                    NONE
                                     ADOPTED
                                     -------


<Page>


                            FIRST AMENDMENT TO LEASE
                                    AGREEMENT

         THIS AMENDMENT TO LEASE AGREEMENT is made this 30TH day of October,
2000, between the Niagara Frontier Transportation Authority, a public benefit
corporation established by Chapter 717 of the Laws of 1967 of the State of New
York, (hereinafter referred to as "NFTA") and SierraTech, Inc., formally known
as Sierra R & Z Acquisition Corp., a Delaware Corporation, (hereinafter referred
to as "Lessee").

         WHEREAS, the NFTA and Sierra Research Division/Sierra Technologies,
Inc., (hereinafter referred to as "Sierra") have heretofore entered into a
certain Lease Agreement dated December 18, 1992, renewed on September 16, 1996
pursuant to which Sierra leased certain premises from NFTA at the Airport
Business Complex (the "Agreement") which Agreement was assigned to Sierra R & Z
Acquisition Corp., now known as SierraTech, Inc., pursuant to an Assignment and
Assumption of Lease dated June 30, 1999; and

         WHEREAS, parties wish to amend and/or supplement certain terms and
conditions of the Agreement to provide for the extension to term of the
Agreement and a cap to the annual rent escalator; and

         NOW THEREFORE, in consideration of the extension of the term and the
capping to the rent escalator and the mutual covenants and promises hereinafter
contained, and other good and valuable consideration, receipt whereof is hereby
acknowledged, the parties agree as follows:

         1. All capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Agreement.

         2. Paragraphs numbered 1, 2 and 3 respectively are hereby deleted in
their entirety and replaced with the following paragraphs:

         NFTA hereby leases to Lessee and Lessee hereby hires and takes from
NFTA those premises outlined in Exhibit A (previously attached and incorporated
into the Agreement), including use of the aircraft tarmac area adjoining the
north east corner of the building generally known as Bay 7 together with
appurtenances and ingress and egress at Plant 3 (the "demised premises") for a
term commencing on April 3, 1992 and ending on March 31, 2007. Lessee agrees to
pay NFTA during the term hereof annual rental of Eight Hundred Six Thousand,
Four Hundred and 00/100 Dollars ($806,400.00), payable in equal monthly
installments of Sixty-seven Thousand, Two Hundred and 00/100 Dollars
($67,200.00), in advance and without notice on the first day of each month
during the term hereof plus increases annually based upon the consumer price
index for all urban consumers northeast region as reported by the U.S. Bureau of
Labor Statistics ("CPI") as set forth in Table 1 below or beginning in the tenth
lease year, two percent 2% of the annual rent for the previous lease year,
whichever is lower.


<Page>


<Table>
<Caption>

                                     TABLE I
                                     -------

<S>                   <C>
1st YEAR       =                   $806,400        =      RENT 1
2nd YEAR       =     (RENT 1 + CPI 12/31/92)       =      RENT 2
3rd YEAR       =     (RENT 2 + CPI 12/31/93)       =      RENT 3
4th YEAR       =     (RENT 3 + CPI 12/31/94)       =      RENT 4
5th YEAR       =     (RENT 4 + CPI 12/31/95)       =      RENT 5
6th YEAR       =     (RENT 5 + CPI 12/31/96)       =      RENT 6
7th YEAR       =     (RENT 6 + CPI 12/31/97)       =      RENT 7
8th YEAR       =     (RENT 7 + CPI 12/31/98)       =      RENT 8
9th YEAR       =     (RENT 8 + CPI 12/31/99)       =      RENT 9
10th YEAR      =     (RENT 9 + CPI 12/31/00)       =      RENT 10
11th YEAR      =     (RENT 10 + CPI 12/31/01)      =      RENT 11
12th YEAR      =     (RENT 11 + CPI 12/31/02)      =      RENT 12
13th YEAR      =     (RENT 12 + CPI 12/31/03)      =      RENT 13
14th YEAR      =     (RENT 13 + CPI 12/31/04)      =      RENT 14
15th YEAR      =     (RENT 14 + CPI 12/31/05)      =      RENT 15
</Table>

         Such rental is based on the agreement that the demised premises include
224,000 square feet of ground level building space with an annual rental rate of
$3.60 per square foot as well as additional space on the second floor of such
building for which no additional charge is currently allocated.

         3. EFFECTIVENESS AND RATIFICATION. This Amendment to Agreement provided
herein shall be effective on the day and year first above-written. Except as
expressly provided herein, the remainder of the Agreement shall be unaffected
hereby and shall otherwise remain in full force and effect.

         IN WITNESS WHEREOF, the parties have executed This Amendment on the day
and year first above-written.

NIAGARA FRONTIER                          SIERRATECH, INC.
TRANSPORTATION AUTHORITY


/s/ Lawrence M. Mecklre                   /s/ Kenneth Jenkins
--------------------------------------    --------------------------------------
BY:    Lawrence M. Meckler                BY:    Kenneth Jenkins
TITLE: Executive Director                 TITLE: PRESIDENT/ CEO




<Page>


STATE OF NEW YORK      )
COUNTY OF ERIE         )

                  On the 30TH day of OCTOBER in the year 2000 before me, the
undersigned, a notary public in and for said state, personally appeared KENNETH
M. JENKINS, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is(are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s) or the person upon behalf of which the
individual(s) acted, executed the instrument.

                                             /s/ Sharon M. Stiffler
                                             -----------------------------------


<Page>

STATE OF NEW YORK      )
COUNTY OF ERIE         )

                  On the 30TH day of OCTOBER in the year 2000 before me, the
undersigned, a notary public in and for said state, personally appeared LAWRENCE
M. MECKLER, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity and that by his
signature on the instrument, the individual or the person upon behalf of which
the individual acted executed the instrument.

                                                     /s/ Mary E. Perla
                                                     ---------------------------