Document:

Master Lease Agreement
Lease No. 2557

THIS MASTER LEASE AGREEMENT ("Lease") is made this 28th day of December, 2000,
by and between PNC LEASING. LLC ("Lessor"), a subsidiary of PNC Bank, National
Association (the "Bank"), with an address at Two PNC Plaza, 13th Floor, 620
Liberty Avenue, Pittsburgh, Pennsylvania 15222-2719, and SUPREMA SPECIALTIES
NORTHWEST, INC. ("Lessee"), with its principal place of business at 510 East
35th Street, Paterson, New Jersey 07543-0280.

     1    LEASE AGREEMENT. Lessor hereby leases to Lessee, and Lessee hereby
rents from Lessor, all the machinery, equipment and other personal property
(individually an "Item of Equipment" and collectively the "Equipment") described
in Schedules of Leased Equipment which may be executed by Lessor and Lessee and
attached hereto or incorporated herein by reference ("Schedules"). "Equipment"
shall mean the Equipment described in a specific Schedule, unless the context
clearly indicates otherwise. The disposition of any rights or obligations of
either party under this Lease in conjunction with any Schedule shall not affect
the rights and/or obligations with either party under any other Schedule, so
long as Lessee is not in default under this Lease or any Schedule beyond any
applicable cure period. In the event of any such default by Lessee beyond any
applicable cure period, Lessor may declare this Lease and any Schedule to be in
default hereunder and Lessor may proceed with its remedies against Lessee in
accordance with paragraph 24 herein, with respect to any particular Schedule or
all Schedules. The terms of this Lease are also modified by any one or more
Supplements which are attached to and which make reference to this Lease (a
"Supplement"). A Supplement contains terms and conditions applicable to the type
of equipment leasing product described therein. An executed counterpart of this
Lease (including any Schedules, Supplements, amendments, addenda or riders
thereto) or a photocopy thereof, together with an executed original of any
numbered Schedule (marked "Lessor," if more than one counterpart of such
Schedule is executed), shall be the original "lease" for the Equipment described
in such Schedule and together they shall constitute a separate and enforceable
lease. All other executed counterparts (if any) shall be marked and considered a
"Duplicate". Facsimiles will be considered "originals" upon receipt and
countersignature by Lessor for all evidentiary purposes including any
requirement of a "writing" under applicable Statute of Frauds provisions. To the
extent this Lease constitutes chattel paper, as that term is defined in the
Uniform Commercial Code as adopted and in effect in the Commonwealth of
Pennsylvania ("UCC"), no security interest in the Lease may be created through
the transfer of possession of any counterpart other than Lessor's counterpart of
the numbered Schedule.

     2    TERM. The obligations under this Lease begin with Lessor's written
acceptance and shall end upon full performance and observance of all terms,
conditions and covenants of the Lease and any extensions. The rental term for
Equipment begins on the date indicated on the related Schedule and shall end on
the last day of the term stated in such Schedule. Lessee may not terminate the
Lease or any Schedule prior to the last day of the term except as otherwise
provided in such Schedule. Any interim rental term shall be set forth in any
such Schedule.

     3    RENT. The rent, including interim rental payments, for the Equipment
shall be the amount stated in the applicable Schedule (the "Rent"). Rent is an
absolute obligation of

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Lessee due as specified in each applicable Schedule irrespective of any claims,
demands, set-offs, actions, suits or proceedings that Lessee may have or assert
against Lessor or any vendor of Equipment. Rent shall be payable to Lessor at
P.O. Box 640306, Pittsburgh, PA 15264-0306, or at such other place as Lessor or
its assigns may designate in writing to Lessee.

     4    DELINQUENT RENT PENALTY. If any Rent or other amount due is not paid
when due for ten (10) days following receipt of Lessor's invoice, Lessee agrees
to pay a delinquent rent penalty of three percent (3%) on the amount of such
Rent or other amount due, but not exceeding the lawful maximum, if any.
Delinquent interest at a rate per annum equal to the Bank's prime rate shall be
payable on demand with respect to all such delinquent amounts. Interest shall
accrue whether or not judgment has been entered.

     5    ADVANCES. Before the beginning date of the base lease term, Lessor may
in its sole discretion make such advances, deposits and reimbursements as may be
required for purchase of the Equipment. Before Lessor makes any advance, Lessee
agrees to sign and deliver a Progress Payment Addendum and any other documents
Lessor may reasonably request, such as certified resolutions, incumbency
certificates or other evidence of authority and opinions of counsel in form and
substance reasonably satisfactory to Lessor.

     6    DELIVERY AND INSTALLATION. Lessee will select the Equipment and the
supplier, and in reliance thereon, Lessor will order the Equipment, or Lessor
may, at its option, accept from Lessee an assignment of any existing purchase
order. Lessor shall not be liable for loss or damage for any reason, such as
failure of or delay in delivery, delivery to wrong location, delivery of
improper equipment or property other than the Equipment, defects in or damage to
the Equipment, governmental regulations, strikes, embargoes or other causes,
circumstances or events. If the cost of any Item of Equipment differs from the
price set forth in the purchase order, the periodic rental shall be changed to
fully reflect any such difference.

     7    WARRANTY OF LESSEE'S QUIET POSSESSION. Lessor covenants, subject to
the disclaimer of warranties set forth immediately below, that so long as Lessee
faithfully performs this Lease, Lessee may quietly possess and use the Equipment
without interference by Lessor, or by any party claiming by or through Lessor.

     8    DISCLAIMER OF WARRANTIES. LESSEE ACKNOWLEDGES AND AGREES THAT (i) THE
EQUIPMENT AND EACH PART THEREOF IS OF A SIZE, DESIGN, CAPACITY, AND MANUFACTURE
SELECTED BY AND ACCEPTABLE TO LESSEE, (ii) LESSEE IS SATISFIED THAT THE
EQUIPMENT AND EACH PART THEREOF IS SUITABLE FOR ITS RESPECTIVE PURPOSE, (iii)
LESSOR IS NOT A MERCHANT, MANUFACTURER OR A DEALER IN PROPERTY OF SUCH KIND,
(iv) THE EQUIPMENT AND EACH PART THEREOF IS LEASED HEREUNDER SUBJECT TO ALL
APPLICABLE LAWS AND GOVERNMENTAL REGULATIONS NOW IN EFFECT OR HEREAFTER ADOPTED
AND IN THE STATE AND CONDITION WHEN THE SAME FIRST BECAME SUBJECT TO TIES LEASE,
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND BY LESSOR AND (v) LESSOR LEASES
THE EQUIPMENT, AS IS, WITHOUT WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO (A) THE CONDITION, FITNESS, DESIGN, QUALITY, CAPACITY,
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WORKMANSHIP, OPERATION, AND MERCHANTABILITY OF THE EQUIPMENT, (B) LESSOR'S TITLE
THERETO, OR (C) ANY OTHER MATTER WHATSOEVER, IT BEING AGREED THAT ALL SUCH
RISKS, AS BETWEEN LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE, AND THE BENEFITS
OF ANY AND ALL IMPLIED WARRANTIES AND REPRESENTATIONS OF LESSOR ARE HEREBY
WAIVED BY LESSEE. Lessor is not responsible or liable for any direct, indirect,
incidental, or consequential damage to, or loss resulting from, the
installation, operation, or use of the Equipment or any product manufactured
thereby. Lessee's recourse for breach of any representation or warranty of the
vendor or supplier is limited to such vendor or supplier. Lessee will be
subrogated to Lessor's claims, if any, against the manufacturer or supplier of
the Equipment for breach of any warranty or representation and, upon written
request from Lessee, Lessor shall take all reasonable action requested by Lessee
to enforce any such warranty, express or implied, applicable to any of the
Equipment, which is enforceable by Lessor in its own name, provided, however,
that (a) Lessee is not in default and (b) Lessor shall not be obligated to
resort to litigation to enforce any such warranty unless Lessee shall pay all
expenses in connection therewith. Notwithstanding the foregoing, Lessee's
obligations to pay the rentals or otherwise under this Lease shall be and are
absolute and unconditional. All proceeds of any such warranty recovery from the
manufacturer or supplier of the Equipment shall first be used to repair the
affected Equipment

     9    NATURE OF EQUIPMENT. The Equipment shall remain personal property even
if it is affixed to any real property. Lessee shall obtain and cause to be
recorded, where appropriate, at its own expense, from each landlord, owner,
mortgagee or any person or entity having an encumbrance or lien upon the real
property where any of the Equipment is located, a waiver of any lien,
encumbrance or interest which such third party might have or hereafter obtain or
claim with respect to the Equipment. Lessee, at its expense, will protect and
defend Lessor's title to the Equipment and will do everything required to keep
the Equipment free and clear of all claims, levies, liens and encumbrances.
Lessor assumes no liability and makes no representation as to the treatment by
Lessee of this Lease, the Equipment, or the rental payments for financial
accounting or tax purposes.

     10   LESSOR'S RIGHT OF INSPECTION. Lessor, or its authorized agents, shall
have the right during normal business hours to enter upon the premises where the
Equipment is located for the purpose of inspection. Provided no Event of Default
has occurred and is continuing, Lessor shall provide Lessee prior notice of such
inspection.

     11   USE OF EQUIPMENT. Lessee represents that it is leasing the Equipment
for a business or commercial purpose and not for personal, family or household
use.  Lessee must use the Equipment in a careful and proper manner in conformity
with (i) all statutes and regulations of each governmental authority having
jurisdiction over Lessee and/or the Equipment and its use, and (ii) all policies
of insurance relating to the Equipment and/or its use. In addition, Lessee shall
not (i) use the Equipment in any manner that would impair the applicability of
manufacturer's warranties or render the Equipment unfit for its originally
intended use; (ii) permit anyone other than authorized and competent personnel
to operate the Equipment; nor (iii) terminate the use of the Equipment prior to
the last day of the term indicated in the applicable Schedule except as
otherwise expressly provided for in this Agreement.

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     12   ALTERATIONS. Without Lessor's prior written consent, Lessee may only
make alterations, modifications or attachments to the Equipment which maintain
or improve its economic value, economic and useful life, or functional utility.
To the extent alterations, modifications and attachments made to the Equipment
are not removed upon the termination of the Lease, they shall automatically
become Lessor's property. Under no circumstances shall any such alteration,
modification or attachment be subject to third party financing or encumbered by
Lessee or result in the creation of a mechanic's or materialman's lien, except
as may arise by operation of law pending payment within ordinary business terms.

     13   MAINTENANCE AND REPAIRS. At its expense Lessee shall maintain,
operate, repair and make all modifications to the Equipment in accordance with
good industry practice, manufacturer's warranty requirements and specifications
and Lessee's established operation, maintenance and repair programs, without
discrimination as to leased equipment, so as to keep the Equipment in good
working order for commercial purposes, and so as to comply with all applicable
laws, regulations or governmental actions and so as not to incur liability
(whether or not there is a lack of compliance) under any environmental law or
otherwise account for any release of, or exposure to, any hazardous material.
Lessor shall not be required to maintain, repair or replace the Equipment or
part thereto and Lessee hereby waives the right, however arising, to (i) require
Lessor to maintain, repair or replace any of the Equipment or part thereto, or
(ii) make repairs at Lessor's expense pursuant to any applicable law. Lessor
may, upon reasonable advance notice to Lessee, review Lessee's established
operating procedures and maintenance records to assure compliance with this
section. Upon installation, title to replacement parts shall pass to Lessor, and
be deemed part of the Equipment.

     14   RISK OF LOSS, DAMAGE AND THEFT.

          A. Lessee will bear all risk of loss, damage, theft or destruction,
     partial or complete, to the Equipment from and after delivery of the
     Equipment to a carrier FOB point of origin, whether the terms of shipment
     require or authorize the Equipment to be shipped by carrier, to be
     delivered to Lessee's place or places of business, or provide that Lessee
     accept possession of or title to the Equipment at any other location.
     Lessee shall promptly notify Lessor of any theft of or loss or material
     damage to the Equipment

          B. Neither total nor partial loss of use or possession of the
     Equipment shall abate the rent.

          C. The Equipment shall be deemed subjected to total loss (i) if it has
     disappeared regardless of the reason for disappearance or (ii) if it has
     sustained physical damage and the estimated cost of repair exceeds 75% of
     its fair market value on the date of damage. Lessee's duty to pay Rent for
     the Equipment subjected to total loss shall be discharged by paying to
     Lessor, on demand, ail accrued but unpaid Rent for such Equipment as of the
     date of disappearance or damage, plus the greater of: (i) Lessor's book
     value of the Equipment, which shall be deemed to be the Equipment's cost as
     set forth in the applicable Schedule minus straight-line depreciation based
     on recognized physical life prorated to the date of disappearance or
     damage, or (ii) the fair market value of the Equipment as of the date of
     disappearance or damage. The amount of applicable

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     insurance proceeds, if any, actually received by Lessor shall be subtracted
     from the amount for which Lessee is liable under this paragraph 14.

          D. Lessee shall cause the Equipment subjected to partial loss to be
     restored to original capability. Lessor shall, as such restoration proceeds
     upon terms and conditions reasonably acceptable to Lessor, pay to Lessee
     the proceeds of any insurance or compensation received by Lessor, by reason
     of such partial loss.

          E. Lessor shall not be obligated to undertake the collection of any
     claim against any person for either total or partial loss of the Equipment.
     After Lessee discharges its obligations to Lessor under either paragraph
     14(c) or 14(d) above, Lessee may, for Lessee's own account, proceed to
     recover from third parties and shall be entitled to retain any amount
     recovered. Lessor shall supply Lessee with any necessary assignment of
     claim.

     15   INDEMNIFICATION.

          A. Non-Tax Liability. Lessee agrees to indemnify each of Lessor, its
     directors, officers and employees and each legal entity, if any, who
     controls Lessor (the "Indemnified Parties") and to hold each Indemnified
     Party harmless from and against any and all claims, damages, losses,
     liabilities and expenses (including all reasonable fees and charges of
     internal or external counsel with whom any Indemnified Party may consult
     and all reasonable expenses of litigation or preparation therefor) which
     any indemnified Parry may incur or which may be asserted against any
     Indemnified Party in connection with or arising out of the Lease or any
     related document by any person, entity or governmental authority (including
     any person or entity claiming derivatively on behalf of Lessee), whether
     (a) arising from or incurred in connection with any breach of a
     representation, warranty or covenant by Lessee, (b) the manufacture,
     installation, use, condition (including, but not limited to, latent and
     other defects and whether or not discoverable by Lessee or Lessor),
     operation, ownership, selection, delivery, leasing, removal or return of
     the Equipment, regardless of where, how and by whom operated, or (c)
     arising out of or resulting from any suit, action, claim, proceeding or
     governmental investigation, pending or threatened, whether based on
     statute, regulation or order, or tort, or contract or otherwise, before any
     court or governmental authority, which arises out of or relates to the
     Lease or any related document; provided, however, that the foregoing
     indemnity agreement shall not apply to claims, damages, losses, liabilities
     and expenses to the extent attributable to an Indemnified Party's gross
     negligence or willful misconduct. The indemnity agreement contained in this
     Section shall survive the termination of this Lease, payment of any amounts
     due and assignment of any rights hereunder. Lessee may participate at its
     expense in the defense of any such action or claim.

          B. Direct Tax Costs. Lessee agrees to indemnify, protect, and hold
     harmless each Indemnified Party, from and against any and all taxes,
     license fees, assessments and other governmental charges, fees, fines or
     penalties of whatsoever kind or character and by whomsoever payable, which
     are levied, assessed, imposed or incurred during the lease

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     term, (i) on or relating to the Equipment, including any tax on the sale,
     ownership, use, leasing, shipment, transportation, delivery or operation
     thereof, (ii) on the exercise of any option, election or performance of any
     obligation by Lessee hereunder, (iii) of the kind generally referred to in
     items (i) and (ii) above which may remain unpaid as of the date of delivery
     of the Equipment to Lessee irrespective of when the same may have been
     levied, assessed, imposed or incurred, and (iv) by reason of all gross
     receipts and like taxes on or measured by Rents payable hereunder levied by
     any state or local taxing authority having jurisdiction where the Equipment
     is located. Lessee agrees to comply with all state and local laws requiring
     the filing of ad valorem tax returns relating to the Equipment. Any
     statements for taxes received by Lessor shall be promptly forwarded to
     Lessee. This subparagraph shall not be deemed to obligate Lessee to pay (i)
     any taxes, fees, assessments and charges which may have been included in
     Lessor's cost of the Equipment as set forth in Schedule(s) hereto, or (ii)
     any income or like taxes against Lessor on or measured by the net income
     from the Rents payable hereunder. Lessee shall not be obligated to pay any
     amount under this subparagraph so long as it shall, at its expense and in
     good faith and by appropriate proceedings, contest the validity or the
     amount thereof unless such contest would adversely affect the title of
     Lessor to the Equipment or would subject the Equipment to forfeiture or
     sale. Lessee agrees to indemnify each Indemnified Party against any loss,
     claim, demand and expense including reasonable legal expense resulting from
     such nonpayment or contest.

          C. Indemnity Payment. The amount payable pursuant to subparagraphs
     15(a) and 15(b) shall be payable upon demand of Lessor accompanied by a
     statement describing in reasonable detail such loss, liability, injury,
     claim, expense or tax and setting forth the computation of the amount so
     payable and such other information as Lessee may reasonably request.

          D. Survival. The indemnities and assumptions of liabilities and
     obligations of this paragraph 15 shall continue in full force and effect
     notwithstanding the expiration or other termination of this Lease.

     16   LESSEE'S ASSIGNMENT. Without Lessor's prior written consent, Lessee
shall not assign, bail, sublease, hypothecate, transfer or dispose of the
Equipment or any interest in this Lease nor impair Lessor's title to the
Equipment. No assignment, whether or not with Lessor's consent, shall release
Lessee or any guarantor from any of its respective obligations or otherwise
materially adversely affect an-, rights or remedies of Lessor under the Lease.
Any attempted assignment without Lessor's written consent shall be void and of
no effect. Lessee shall not assign this Lease, nor shall this Lease or any
rights under this Lease or in the Equipment inure to the benefit of any trustee
in bankruptcy, receiver, creditor, or other successor of Lessee whether by
operation of law or otherwise. Notwithstanding the foregoing. Lessee may,
without Lessor's prior consent, replace all or any portion of the Equipment,
provided that the value of the replacement equipment is equal to or greater than
the value of the replaced Equipment.

     17   LESSOR'S ASSIGNMENT. All rights of Lessor hereunder in the Rents and
in the Equipment may be assigned, pledged, mortgaged, transferred, or otherwise
disposed of,

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either in whole or in part, following notice to Lessee. No such assignee shall
be obligated to perform any duty, covenant, or condition required to be
performed by Lessor under the terms of this Lease unless such assignee expressly
assumes such obligations. Lessor shall remain liable to Lessee hereunder to
perform such duty, covenant, and condition unless such assignee expressly
assumes Lessor's obligations, in which event Lessee hereby releases Lessor from
such obligations. Such assignee shall have all rights, powers and remedies given
to Lessor by this Lease, and shall be named as lender loss payee or co-insured
under all policies of insurance maintained pursuant to paragraph 18 hereof. If
Lessor assigns this Lease or the monies due or to become due hereunder or any
other interest herein, Lessee agrees not to assert against Lessor's assignee any
defense, set-off, recoupment, claim or counterclaim which Lessee may have
against Lessor, whether arising under this Lease or any other transaction
between Lessor and Lessee. Subject to paragraph 16 hereof and this paragraph 17,
this Lease inures to the benefit of, and is binding upon the heirs, personal
representatives, successors and assigns of the parties hereto.

     18   INSURANCE. Lessee will at its own expense insure the Equipment in
compliance with the terms and conditions of the applicable Supplement, in form,
in an amount and subject to deductibles as are commercially reasonable in
Lessor's good faith judgment, with insurance carriers reasonably approved by
Lessor. The proceeds of any insurance claim due to the theft or loss of or
damage to the Equipment shall be applied as provided in paragraph 14 hereof In
addition to the compliance with the terms and conditions of the applicable
Supplement and the other terms and conditions of this paragraph 18, Lessee shall
comply with the following conditions:

          A. Lessee, prior to the inception of the term, shall deliver to Lessor
     all required policies of insurance or other proper binding evidence of
     insurance, which shall be sufficiently detailed to advise Lessor of all
     types of coverage and inclusions;

          B. Lessee shall cause each insurer to agree by endorsement to the
     policies that each insurer will give at minimum thirty (30) days' written
     notice to Lessor before any policy will be altered or cancelled for any
     reason, including Lessee's failure to pay premiums;

          C. All coverage must be in effect upon delivery, or when Lessee
     assumes the risk of loss, whichever is earlier, and will provide coverage
     without geographic limitation;

          D. All policies must provide that Lessor is an additional insured for
     all aspects of general liability insurance, and is lender loss payee for
     all aspects of insurance relating to the theft or loss of or damage to the
     Equipment;

          E. Lessee will famish renewal policies or renewal evidence of
     insurance listing Lessor as an additional insured and lender loss payee, as
     required by this Lease, no later than thirty (30) days prior to the
     expiration of any insurance required hereby;

          F. Lessee appoints Lessor its attorney-in-fact to apply any insurance
     proceeds received with respect to the Equipment in accordance with this
     Agreement.

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     19   ADDITIONAL DOCUMENTS. If Lessor shall so request, Lessee shall execute
and deliver to Lessor such documents, including UCC financing, amendment and
continuation statements, as Lessor shall, in its reasonable judgment, deem
necessary or desirable for purposes of continuing this Lease or recording or
filing to protect the interest of Lessor in the Equipment. By its signature
hereon, Lessee hereby authorizes Lessor to execute and file against Lessee any
such UCC financing, amendment and continuation statements. Any such filing or
recording shall not be deemed evidence of any intent to create a security
interest. All filing fees and expenses shall be borne by Lessee.

     20   FURNISHING FINANCIAL INFORMATION. During the term of this Lease and
any extensions or renewals hereof, Lessee will furnish to Lessor:

          A. As soon as available, but in any event within ninety (90) days
     after the last day of each of its fiscal year ends, the Form 10-K report of
     Suprema Specialties, Inc. (the "Parent") and its subsidiaries, including
     Lessee, Suprema Specialties West, Inc., and Suprema Specialties Northeast,
     Inc. (collectively, the "Subsidiaries") as at the end of such fiscal year
     and statements of income and retained earnings and cash flows for such
     fiscal year, each prepared in accordance with GAAP and audited by a firm of
     independent certified public accountants reasonably satisfactory to the
     Lessor (with such audit to be accompanied by an unqualified opinion of such
     independent certified public accountant (other than immaterial
     qualifications) without limitation as to the scope of such audit), together
     with management prepared consolidated and consolidating balance sheets.
     Management shall provide an itemized statement of capitalized expenses,
     which shall be broken out on the management balance sheet, and any expenses
     related thereto shall be itemized on the management income statement.
     Management shall also provide a breakdown of selling, general and
     administrative expenses. Notwithstanding the foregoing, if the Parent has
     been granted an extension from filing its Form 10-K report by the
     Securities and Exchange Commission, then the reports required hereunder
     shall be due simultaneously with the filing thereof, but in no event later
     than one hundred ten (110) days from the last day of its fiscal year.

          B. As soon as available, but in any event within forty-five (45) days
     after the close of each of the first three quarters of each fiscal year,
     Form I O-Q report and management prepared consolidated and consolidating
     balance sheets, statements of income and retained earnings and cash flows
     of the Parent and the Subsidiaries as of the last day of and for such
     quarter and for the period of the fiscal year ended as of the close of the
     particular quarter, all such quarterly statements to be certified by the
     chief financial or accounting officer of the Parent as having been prepared
     in accordance with GAAP (subject to year-end adjustments and other
     exceptions specified therein). Management shall provide an itemized
     statement of capitalized expenses, which shall be broken out on the
     prepared balance sheet, and any expenses related thereto shall be itemized
     on the prepared income statement. Management shall also provide a breakdown
     of selling. general and administrative expenses. Notwithstanding the
     foregoing, if the Parent has been granted an extension from filing its Form
     10Q report by the Securities and Exchange Commission, then the reports
     required hereunder shall be due simultaneously

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     with the filing thereof, but in no event later than fifty (50) days from
     the last day of its fiscal year.

     All such financial statements required by this paragraph 20 (the "Financial
Statements") are to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except (i) as
approved by such accountants or the chief financial officer of the Parent, as
the case may be, and disclosed therein and (ii) with respect to any interim
statements which may not include all disclosure required by GAAP).

          C. At the same time as Lessee delivers the financial statements called
     for by subparagraphs (a) and (b) above, the Parent shall deliver to Lessor
     the certificate of its chief financial officer as called for in Section
     10.2 of the Syndicated Revolving Credit Facility, as that agreement is
     defined in paragraph 21 below, as the same may be amended from time to
     time.

     21   INCORPORATION OF COVENANTS BY REFERENCE. Any and all affirmative,
negative and financial covenants which may be set forth in any credit agreement,
loan agreement, promissory note, guaranty or other agreement, instrument or
document entered into between Lessee (or any of its affiliates) as borrower and
any affiliate of Lessor, as lender (whether directly as a lender to Lessee or as
one lender in a bank syndicate agreeing to lend to Lessee, or as holder of a
participation in a loan by another lender to Lessee), including, without
limitation, that certain Third Amended Restated Revolving Loan, Guaranty and
Security Agreement dated September 23, 1999, between Lessee and Fleet National
Bank, et al. (the "Syndicated Revolving Credit Facility") (the "Loan
Documents"), are hereby incorporated herein by this reference as if set forth
herein at length, as any of the foregoing may be amended or supplemented from
time to time (the "Incorporated Provisions"). Any amendments, modifications,
waivers or other changes in the terms of any of the Incorporated Provisions
shall automatically constitute an amendment to this Lease without any need for
further action or documentation. Notwithstanding the foregoing, any such changes
to any Incorporated Provision which operate to waive or prevent the occurrence
of a default or Event of Default under any Loan Document shall not be effective
unless consented to in writing by Lessor in its sole discretion. If any Loan
Document terminates or otherwise ceases to be in full force and effect (a
"Termination"), all of the Incorporated Provisions of such Loan Document shall
survive the Termination and shall continue in full force and effect as a part of
this Lease. At any time after a Termination, Lessee shall promptly upon Lessor's
request execute and deliver to Lessor an amendment to this Lease, which
amendment will expressly incorporate into this Lease all or any number of the
Incorporated Provisions of the terminated Loan Document as Lessor in its sole
discretion shall select, as such Incorporated Provisions are in effect
immediately prior to the date of Termination.

     22   PERFORMANCE OF OBLIGATIONS OF LESSEE BY LESSOR. If Lessee fails to
promptly perform any of its obligations (other than payment obligations) under
this Lease for more than thirty (30) days following notice from Lessor, Lessor
may perform the same for the account of Lessee without waiving Lessee's failure
as a default All sums paid or expense or liability incurred by Lessor in such
performance (including reasonable legal fees) together with interest thereon at
the highest contract rate enforceable against Lessee. but never at a higher rate

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than fifteen percent (15%) per annum simple interest, shall be payable by Lessee
upon demand as additional rent.

     23   EVENTS OF DEFAULT. Any of the following events or conditions shall
constitute an event of default ("Event of Default") hereunder and entitle
Lessor, at its option, to avail itself of the remedies more fully set forth in
paragraph 24 hereof:

          A. Non-payment by Lessee of any Rent or other amount provided for in
     this Lease when due, which continues for a period of ten (10) days
     following the date of invoicing from Lessor;

          B. Lessee shall (i) fail to perform any covenant or requirement
     relating to insurance or environmental matters; (ii) fail to keep the
     Equipment free and clear of any claims, levies, liens and encumbrances;
     (iii) fail to prevent the Equipment from being subjected to a foreclosure
     or forfeiture proceeding, execution or attachment; or (iv) terminate the
     Lease or any Schedule prior to the last day of the term;

          C. Death or judicial declaration of incompetency of Lessee, if an
     individual, or death or judicial declaration of incompetency of an
     individual partner or member, if Lessee is a partnership or limited
     liability company;

          D. The filing by or against Lessee of any proceeding in bankruptcy,
     receivership, insolvency, reorganization, liquidation. conservatorship, or
     similar proceeding (and in the case of any such proceeding instituted
     against Lessee, such proceeding is not dismissed or stayed within ninety
     (90) days of the commencement thereof, provided that Lessor shall not be
     obligated to advance additional funds during such period);

          E. Lessee shall make an assignment for the benefit of creditors, or
     any levy, garnishment, attachment or similar proceeding is instituted
     against any property of Lessee held by or deposited with Lessor;

          F. A final judgment for the payment of money in excess of $250,000 is
     rendered against Lessee, or any attachment proceedings are instituted with
     respect to any significant portion of Lessee's assets or property, and the
     same shall remain undischarged for a period of ninety (90) days during
     which execution shall not be effectively stayed;

          G. Lessee, or any affiliate of Lessee, shall default in the payment of
     principal and/or interest when due (whether by acceleration or otherwise)
     or shall default in the performance of any obligation or indebtedness owed
     to the Bank or to any subsidiary or affiliate of the Bank (whether directly
     as a lender to Lessee or as one lender in a bank syndicate agreeing to lend
     to Lessee or Lessee's affiliate, or as holder of a participation in a loan
     by another lender to Lessee or lessee's affiliate), which obligation shall
     remain in default for lack of performance or which indebtedness shall
     remain unpaid and unsatisfied following the conclusion of any applicable
     grace period in respect to such obligation or indebtedness;

<PAGE>

          H. If (i) the Lessee ceases to be a wholly owned subsidiary of Suprema
     Specialties, Inc. ("Suprema"); or (ii) either Mark Cocchiola or Paul
     Lauriero is no longer actively involved in the day-to-day management of
     Suprema and the Lessee as President and Executive Vice President,
     respectively, in substantially the same manner as presently exist; or (iii)
     Suprema and the Lessee shall fail to continue to engage principally in the
     businesses of the same general type now conducted by them and preserve,
     renew and keep in full force and effect their respective corporate
     existences and take all reasonable action to maintain all rights,
     privileges, licenses and franchises necessary or desirable as determined in
     the normal conduct of their respective businesses and comply in all
     material respects with all material contractual obligations and
     requirements of law;

          I. Any event described in subparagraphs 23(c) through 23(g) hereof
     shall occur with respect to any guarantor or any other party liable for
     payment or performance of this Lease;

          J. Any certificate, or written statement, representation, warranty or
     financial statement furnished pursuant to or in connection with this Lease
     by or on behalf of Lessee or any guarantor or other party liable for
     payment or performance of this Lease is false in any material respect at
     the time as of which the facts therein set forth were stated or certified,
     or omits any substantial contingent or unliquidated liability or claim
     against Lessee or any such guarantor or other party, or, upon the date of
     execution of this document or any Schedule, there shall have been any
     materially adverse change in any of the facts disclosed by any such
     certificate, statement, representation or warranty, which shall not have
     been disclosed in writing to Lessor at or prior to the time of execution of
     this document or such Schedule;

          K. An event of default shall have occurred under any other lease
     agreement wherein Lessor is, at the time of such default, the "lessor" and
     Lessee is the "lessee";

          L. An event of default shall have occurred under the Syndicated
     Revolving Credit Facility;

          M. Lessee shall fail to perform any non-monetary covenant, obligation,
     term or condition of this Lease not described in this Paragraph 23 which
     failure continues for a period of thirty (30) days following the date of
     written notice thereof to Lessee by Lessor; provided, however, if such
     default is of a nature that it cannot reasonably be cured within thirty
     (30) days, if Lessee fails to (i) commence curing such default within
     thirty (30) days and (ii) diligently pursue the curing of such default.

     24   REMEDIES. Upon the occurrence of any Event of Default hereunder, the
rights and duties of the parties shall be as set forth in this paragraph, Lessor
may elect, in its sole discretion, to do one or more of the following upon the
occurrence of an Event of Default and at any time thereafter:

          A. Upon written notice to Lessee terminate this Lease as to any or all
     of the Schedules then in effect;

<PAGE>

          B. Demand that Lessee return the Equipment to Lessor whereupon Lessee
     shall promptly deliver the Equipment to Lessor to the place or places
     designated by Lessor. If Lessee does not so deliver the Equipment, Lessee
     shall make the Equipment available for retaking and authorizes Lessor, its
     employees and agents to enter Lessee's premises and any other premises
     (insofar as Lessee can permit) for the purpose of retaking. In the event of
     retaking, Lessee expressly waives all rights to possession and all claims
     for injuries to persons or property suffered through or loss caused by
     retaking. Any repossession accomplished under this paragraph 24(b) shall
     not release Lessee from liability for damages of Lessor sustained by reason
     of Lessee's default hereunder.

          C. Lessor may revoke Lessee's privilege of paying Rent in installments
     causing acceleration of all remaining Rents through the remaining term of
     the Lease, and, upon Lessor's demand, as liquidated damages, and not as a
     penalty, Lessee shall promptly pay to Lessor the aggregate of (i) all Rent
     accrued and unpaid prior to the date of such Event of Default, (ii) all
     future Rent due through the end of the basic term or through the end of the
     current renewal term, as the case may be, discounted to present value, the
     discount rate to be applied equal to the discount rate of the Federal
     Reserve Bank of Cleveland then in effect on the earlier of the date of
     entry of judgment on such claim or the date of payment of such sum by
     Lessee, (iii) all costs and expenses incurred by Lessor in the
     repossession, recovery, storage, repair, inspection, appraisal,
     refurbishing, sale, release or other disposition of the Equipment, (iv)
     reasonable attorney's fees and costs, including any fees or costs incurred
     by Lessor in defending any action relating to this Lease or participating
     in any bankruptcy or insolvency proceeding to which Lessee is a party, or
     otherwise incurred due to Lessee's default, (v) the estimated residual
     value of the Equipment as of the end of the current term of the Lease, if
     any, and (vi) any claim for indemnity under paragraph 15 of this Agreement
     or under the Supplement, if any, in favor of Lessor hereunder. In the event
     that any court having jurisdiction shall determine that in calculating
     damages hereunder as a result of a default by Lessee that sums payable in
     the future under the Lease, other than future Rent, must be discounted to
     present value, the discount rate to be applied equal to the discount rate
     of the Federal Reserve Bank of Cleveland then in effect on the earlier of
     the date of entry of judgment on such claim or the date of payment of such
     sum by Lessee.

          D. In its sole discretion, Lessor may sell or release the Equipment or
     any part thereof, at public auction or by private sale or lease at such
     time or times and upon such terms as Lessor may determine, free and clear
     of any rights of Lessee and, if notice thereof is required by law, any
     notice in writing of such sale or lease by Lessor to Lessee given not less
     than ten (10) days prior to the date thereof shall constitute reasonable
     notice thereof to Lessee. All proceeds of the sale or releasing, or both,
     less (i) all expenses incurred in retaking the Equipment, making necessary
     repairs to the Equipment and enforcing this Lease, (ii) all damages that
     Lessor shall have sustained by reason of Lessee's default, and (iii)
     reasonable attorney's fees and expenses shall be credited against Lessee's
     liability hereunder as and when received by Lessor. Sums in excess of
     Lessee's liability shall belong to Lessor. Lessee shall be liable for any
     deficiency.

<PAGE>

          E. The provisions of this paragraph 24 shall not prejudice Lessor's
     right to recover or prove damages for unpaid Rent accrued prior to default,
     or bar an action for a deficiency as herein provided, and the bringing of
     an action with an entry of judgment against Lessee shall not bar Lessor's
     right to repossess any or all of the Equipment

          F. Lessor's remedies shall be available to Lessor's successors and
     assigns, shall be in addition to all other remedies provided to it under
     the UCC (specifically, the remedies set forth in 13 Pa. C.S. ss.ss.
     2A523(a), (b) and (c), or by any other applicable law, and may be exercised
     concurrently or consecutively. LESSEE WAIVES ANY AND ALL RIGHTS TO NOTICE
     AND TO JUDICIAL HEARING WITH RESPECT TO THE REPOSSESSION OF THE EQUIPMENT
     BY LESSOR IN THE EVENT OF A DEFAULT HEREUNDER BY LESSEE.

          G. Lessor shall use commercially reasonable efforts to mitigate its
     damages under this Agreement.

     25   LESSEE REPRESENTATIONS AND WARRANTEES. In order to induce Lessor to
enter into this Lease and to lease the Equipment to Lessee, Lessee represents
and wan-ants, as of the date hereof, and as of the date of execution of each
Schedule hereunder, that:

          A. If not a natural person, Lessee is duly organized, validly existing
     and in good standing under the laws of the jurisdiction of its organization
     with full power and authority to conduct its business as such business is
     presently being conducted, to own or hold property under lease and to enter
     into and perform its obligations under this Lease. Lessee is duly qualified
     to do business and is in good standing as a foreign entity in all states
     where its failure to so qualify would have a material adverse effect on its
     ability to perform its obligations under this Lease.

          B. Lessee has full power and authority to enter into the transactions
     provided for in this Lease and has been duly authorized to do so by all
     necessary and appropriate action and, when executed and delivered by
     Lessee, this Lease will constitute the legal, valid and binding obligations
     of Lessee, enforceable in accordance with its terms.

          C. The execution, delivery, and performance by Lessee of this Lease
     and all related instruments and the consummation by Lessee of the
     transactions contemplated hereby: (i) do not require any stockholder
     approval or the consent of any trustee or holder of any indebtedness or
     obligation of Lessee or any consent, authorization, or approval of, any
     filing of or registration with, or other action in respect to any federal,
     state, governmental authority or agency (or, if so required, such approval
     or consent has been obtained), (ii) do not and will not result in any
     material violation of any term of any agreement, instrument, judgment,
     decree, franchise, permit, order, law, statute, rule, or governmental
     regulation presently applicable to it, (iv) are not in conflict with and do
     not constitute a default under any of the terms or provisions of, or
     subject the leased Equipment or any part thereof to any lien of, any
     indenture, mortgage, lease, contract, or other agreement or instrument
     (other than this Lease) to which Lessee is a party or by

<PAGE>

     which it or its property is bound or affected, and (v) do not and will not
     contravene Lessee's articles of incorporation and by-laws or other
     organizational documents.

          D. There are no pending actions or proceedings to which Lessee is a
     party, and there are no other pending or threatened actions or proceedings
     of which Lessee has knowledge, before any court, arbitrator, or
     administrative agency, which would materially adversely affect the
     financial condition of Lessee or the ability of Lessee to perform its
     obligation hereunder. Further, Lessee is not in default under any material
     obligations for the payment of borrowed money, for the deferred purchase
     price of property or for the payment of any Rent which would have the same
     such effect.

          E. Under the laws of the state(s) in which the Equipment is to be
     located, the Equipment consists solely of personal property.

          F. Lessee's financial statements (copies of which have been furnished
     to Lessor) have been prepared in accordance with generally accepted
     accounting principles consistently applied, and accurately and completely
     present Lessee's financial condition and the results of its operations as
     of the date of and for the period covered by such statements, and since the
     date of such statements there has been no material adverse change in such
     conditions or operations.

          G. The address stated on page one of this Lease is the chief place of
     business and chief executive office of Lessee; and Lessee does not conduct
     business under a trade, assumed, or fictitious name.

          H. Prior to the year 2000, Lessee reviewed the areas within its
     business and operations which could be adversely affected by, and developed
     a program to address on a timely basis, the risk that certain computer
     applications used by Lessee may be unable to recognize and properly perform
     date-sensitive functions involving dates prior to and after December 31,
     1999 (the "Year 2000 Problem"). The Year 2000 Problem did not result in,
     and is not reasonably expected to result in, any material adverse effect on
     the business, properties, assets, financial condition, results of
     operations or prospects of Lessee, or the ability of Lessee to duly and
     punctually pay or perform its obligations hereunder and under the related
     documents.

     26   FINANCE LEASE.

          A. Acknowledgment. The Lease is intended as a "Finance Lease" as that
     term is defined in Section 2A103 of the UCC. Lessee acknowledges that
     Lessor has not selected, manufactured or supplied the Equipment; that
     Lessor has acquired the Equipment at the direction of Lessee and solely for
     the purpose of leasing the Equipment to Lessee; and that (i) Lessee has
     selected the supplier or vendor of the Equipment, (ii) as provided in
     paragraph 8, Lessee is entitled to directly enforce against the supplier or
     vendor of the Equipment, any and all warranties and promises made to Lessor
     by the supplier or vendor, and (iii) Lessee may communicate directly with
     the vendor or supplier

<PAGE>

     to obtain a complete and accurate statement of all such warranties or
     promises, including any disclaimers or limitations thereof

          B. Waiver of Certain of Lessee's Remedies. In recognition that this is
     a Finance Lease and that Lessor has not sold, selected or delivered the
     Equipment to Lessee and has made no warranties or representations in
     respect thereto, to the extent permitted by applicable law, Lessee, for
     itself and for its successors and assigns, hereby waives any and all rights
     or remedies afforded a lessee by Sections 2A503 through 2A522 inclusive, of
     the UCC, including, without limitation, Lessee's right to (i) cancel,
     terminate or repudiate this Lease or any Schedules hereto; (ii) reject or
     revoke acceptance of the Equipment; (iii) recover damages from Lessor for
     any breach of warranty or representation in respect to the Equipment; (iv)
     assert any security interest in the Equipment in Lessee's possession or
     control; (v) deduct, recoup or offset of any claimed damages due to
     Lessor's default; (vi) accept partial delivery of the Equipment or to
     "cover" by purchasing or leasing replacement equipment; (vii) recover any
     general, incidental or consequential damages (including without limitation,
     expenses and commissions in connection with the inspection, receipt, caring
     for, storing, repair or disposal of any Equipment or (viii) assert a claim
     by way of replevin, detinue, sequestration, claim, delivery, or the like,
     for any Equipment.

     27   GOVERNING LAW AND JURISDICTION. This Lease has been delivered and
accepted and will be deemed to be made in the State where Lessor's office
indicated above is located. THIS LEASE AND ALL AGREEMENTS, INSTRUMENTS AND
DOCUMENTS HERETOFORE, NOW OR HEREAFTER EXECUTED BY LESSEE AND DELIVERED TO
LESSOR RELATING TO THIS LEASE OR THE TRANSACTIONS CONTEMPLATED HEREBY WILL BE
INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE WHERE LESSOR'S OFFICE INDICATED ABOVE IS
LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. Lessee hereby irrevocably
consents to the exclusive jurisdiction of any state or federal court in the
county or judicial district where Lessor's office indicated above is located;
provided that nothing contained in this Lease will prevent Lessor from bringing
any action, enforcing any award or judgment or exercising any rights against
Lessee individually, against any security or against any of Lessee's property
within any other county, state or other foreign or domestic jurisdiction. Lessor
and Lessee agree that the venue provided above is the most convenient forum for
both parties. Lessee waives any objection to venue and any objection based on a
more convenient forum in any action instituted under this Lease.

     28   NOTICES. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder must be in writing and will be
effective upon receipt. Such notices and other communications may be
hand-delivered, sent by facsimile transmission with confirmation of delivery and
a copy sent by first-class mail, or sent by nationally recognized overnight
courier service, to a party's address set forth above or to such other address
as any party may give to the other in writing for such purpose. Copies of all
notices to Lessee shall be sent to Blank Rome Tenzer Greenblatt, LLP, 405
Lexington Avenue, New York, NY 10174, Attention: Martin Luskin, Esq.

<PAGE>

     29   MISCELLANEOUS.

          A. Whenever the context of this Lease requires, the neuter gender
     includes the masculine and feminine, and the singular number includes the
     plural. Whenever the word Lessor is used herein, it shall include all
     assignees of Lessor. If this Lease is executed by more than one party as
     Lessee, the obligations of such persons or entities will be joint and
     several.

          B. References to agreements and other contractual instruments shall be
     deemed to include all subsequent amendments and other modifications to such
     instruments, but only to the extent such amendments and other modifications
     are not prohibited by the terms of this Lease. Section headings in this
     Lease are included for convenience of reference only and shall not
     constitute a part of this Lease for any other purpose. Unless otherwise
     specified in this Lease, all accounting terms shall be interpreted and all
     accounting determinations shall be made in accordance with GAAP.

          C. Time is of the essence in the performance of this Lease and each
     and all of its provisions.

          D. If any provision of this Lease is held invalid or unenforceable,
     the remaining provisions will not be affected thereby, and to this end, the
     provisions of this Lease are declared severable.

          E. If there is any conflict between the terms of any Schedule and this
     document or between any Schedule and any other document, the terms of the
     Schedule shall control.

          F. This document, the Schedule(s), the Supplement(s), the Addendum(s)
     and the Acceptance(s) executed by Lessor and Lessee constitute the. entire
     agreement between Lessor and Lessee with respect to the Equipment and the
     subject matter of this Lease and supersede all other prior agreements and
     understandings whether oral or written between the parties with respect to
     the subject matter hereof. This Lease may not be changed, waived, amended
     or terminated except by a written agreement signed by both Lessor and
     Lessee, except that Lessor may insert on the appropriate Schedule the
     serial numbers of the Equipment after delivery thereof. No express or
     implied waiver by Lessor of any Event of Default hereunder shall in any way
     be, or be construed to be, a waiver of any future and/or subsequent Event
     of Default whether similar in kind or otherwise but shall be effective only
     in the specific instance and for the purpose for which given. No notice to
     or demand on Lessee in any case will entitle Lessee to any other or further
     notice or demand in the same, similar or other circumstance.

          G. Lessee hereby authorizes Lessor to make appropriate announcements
     of the leasing arrangements entered into between Lessor and Lessee,
     including but not limited to announcements which are commonly known as
     tombstones, in such publications and to such selected parties as Lessor
     deems appropriate in its sole and absolute discretion. Lessee shall not
     issue any press releases or other public disclosures,

<PAGE>

     either written or oral, of the existence or terms of this Lease without
     Lessor's prior written consent; provide , that the foregoing shall not
     prohibit Lessee from making any disclosures to or filings with any
     governmental authority, or from disclosing this Lease to Lessee's
     accountants, attorneys and other agents or to Lessee's lenders, or from
     reflecting the terms of this Lease in any financial or accounting
     statements or reports made public in the ordinary course of Lessee's
     business.

     30   SECURITY INTEREST. If the Lease is deemed at any time to be a lease
intended as security, Lessee hereby grants to Lessor a security interest in the
Equipment to secure all sums due hereunder, as well as any other obligations or
sums due by Lessee to Lessor, whether now existing or hereafter contracted for
or hereafter arising.

     31   COUNTERPARTS. This Lease may be signed in any number of counterpart
copies and by the parties hereto on separate counterparts, but all such copies
shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Lease by facsimile transmission shall be
effective as delivery of a manually executed counterpart. Any party executing
this Lease by facsimile transmission shall promptly deliver a manually executed
counterpart, provided that any failure to do so shall not affect the validity of
the counterpart executed by facsimile transmission.

     32 WAIVER OF JURY TRIAL. EACH OF LESSOR AND LESSEE HEREBY WAIVES ANY RIGHT
TO DEMAND A JURY TRIAL WITH RESPECT TO ANY ACTION OR PROCEEDING INSTITUTED BY
LESSOR OR LESSEE IN CONNECTION WITH THIS LEASE OR ANY TRANSACTION RELATED
HERETO. LESSEE AND LESSOR ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND
VOLUNTARY.

Lessee acknowledges that it has read and understood all the provisions of this
Lease, including the waiver of jury trial, and has been advised by counsel as
necessary or appropriate.

<PAGE>

WITNESS the due execution hereof with the intent to be legally bound.

ATTEST:                                 SUPREME SPECIALTIES
                                         NORTHWEST, INC., LESSEE

                                        By:  /s/ Mark Cocchiola           (SEAL)
----------------------------------         -------------------------------------
Name:                                   Name: Mark Cocchiola
      ----------------------------           -----------------------------------
Title:                                  Title:  President
       ---------------------------            ----------------------------------
                                        Federal Tax I.D.#
                                                          ----------------------

                                        Accepted at Pittsburgh, Pennsylvania by:

                                        PNC LEASING, LLC, LESSOR

                                        By: /s/ Michael J. Woodring       (SEAL)
                                            ------------------------------------
                                        Name: Michael J. Woodring
                                              ----------------------------------
                                        Title: President
                                               ---------------------------------

<PAGE>

<TABLE>
<CAPTION>
Schedule of Leased Equipment
(First Amendment Tax Lease)                                          PNC LEASING

<S>                                 <C>
                                    Master Lease Agreement Number: 2557
Schedule Number: 1                  Master Lease Agreement Date: December 28, 2000
Schedule Date: December 28,2000     Supplement (First Amendment) Date: December 28, 2000
</TABLE>

     1    SCHEDULE: This Schedule is attached to and made a part of that certain
Master Lease Agreement as described above between PNC LEASING, LLC as Lessor and
SUPREMA SPECIALTIES NORTHWEST, INC. as Lessee, as modified by a Supplement
(First Amendment Tax Lease) between Lessor and Lessee as identified above (the
"Lease").

     2    EQUIPMENT DESCRIPTION AND LOCATION: See Equipment descriptions and
locations on Exhibit A, attached hereto and made a part hereof. The Equipment
described on the original copy of Exhibit A in Lessor's possession shall be
conclusively presumed to be true and correct

     3    CAPITALIZED COSTS:

     ================== ===================== ==================
       Equipment Cost     Upfront Sales Tax         Total
     ------------------ --------------------- ------------------
       $5,957,400.00             -0-            $5,957,400.00
     ================== ===================== ==================

     4    INTERIM RENT AND PROGRESS PAYMENT FACTORS: During any interim rent
term (as defined in the Supplement), Interim Rent shall be calculated based on a
Daily Lease Rate Factor of 0 percentage points (0%). During any progress payment
term (as defined in the Supplement), Progress Payments shall be calculated based
on the Prime Rate [plus/minus] a Progress Payment Factor of 0 percentage points
(0%).

     5    BASE LEASE TERM: The base term of the Lease for the Equipment
described in this Schedule is eighty-four (84) months commencing on December 28,
2000 and terminating on December 28, 2007, unless sooner terminated under the
Lease. A Termination Value Table is attached hereto as Exhibit "B" and made a
part hereof.

     6    RENT: Total rent of $6,689,620.22, exclusive of applicable sales
taxes, is due and payable as follows:

<TABLE>
<CAPTION>
     =============================== =================== ============ ===================
             Number and Type            Date Payments     Amount of     Date Payments
               Of Payments                 Commence        Payments       Terminate
     ------------------------------- ------------------- ------------ -------------------
<S>                                   <C>                 <C>          <C>
     84 monthly payments, in advance  December 28, 2000   $79,638.34   November 28, 2007
     =============================== =================== ============ ===================
</TABLE>

     7    SALES TAX: Upfront sales tax on the lease transaction in the amount of
$-0- is due from Lessee on the commencement date of the base term of the Lease.

     8    EARLY TERMINATION OPTION: In accordance with paragraph 8 of the
Supplement referenced above, Lessee may terminate the Lease on the last day of
the twelfth

<PAGE>

(12th) month of the base term by returning all (but not less than all) of the
Equipment to Lessor, and paying to Lessor a termination fee equal to 80.10 % of
the Equipment Cost.

     9    EARLY BUYOUT OPTION: In accordance with paragraph 11 of the Supplement
referenced above, Lessee may purchase all (but not less than all) of the
Equipment on the last day of the seventy-second (72nd) month of the base term
for a purchase price equal to thirty-five percent (35%) of the Equipment Cost.

     10   PURCHASE OPTION: In accordance with subparagraph 12(a) of the
Supplement referenced above, Lessee may purchase all, but not less than all, of
the Equipment described herein, by paying to Lessor on the last day of the base
term of the Lease, an amount equal to the greater of (i) the fair market value
of the Equipment determined as provided in subparagraph 12(b) of the Supplement
referenced above, or (ii) twenty percent (20%) of the Equipment cost.

     11   RENEWAL: In accordance with subparagraph 12(c) of the Supplement
referenced above, Lessee may extend the Lease for a Renewal Term of sixteen (16)
months with a monthly rent equal to 1.33680 percent of the Equipment cost, plus
applicable taxes, with the first such rent being due and payable by Lessee on
December 28, 2007.

     12 DEPRECIATION RECOVERY PERIOD: For purposes of Sections 168(e)(3) and
168(c) of the Code (as defined hereafter), the Equipment constitutes seven (7)
year recovery property.

Lessee Acceptance Certificate
This Lessee Acceptance Certificate ("Acceptance") is hereby made a part of the
Lease referenced above, the terms and conditions of which are incorporated
herein by reference. All of the Equipment on Exhibit A was received by us and is
in good order and condition, installed to our satisfaction and acceptable to us.
We reaffirm all of the terms of Paragraph 8 of the Master Lease. We approve the
payment of the invoice(s) covering the Equipment for the amount(s) shown
thereon. We represent and warrant (a) that the representations and warranties as
set forth in paragraph 25 of the Lease are true and correct as of the date
hereof; (b) that we have satisfied or complied with all requirements set forth
in the Lease to be satisfied or complied with on or prior to the date hereof;
and (c) that no Event of Default under the Lease has occurred and is continuing
on the date hereof. All of the Equipment has been fully delivered and installed
at the location where it will be used as of the following date: December 28,
2000

WITNESS the due execution hereof with the intent to be legally bound.

PNC LEASING, LLC, Lessor            SUPREME SPECIALTIES NORTHWEST, INC., Lessee
By: /s/ Michael J. Woodring         By: /s/ Mark Cocchiola
    --------------------------          ----------------------------------------

Title:   Vice President             Title: President
      ------------------------            --------------------------------------

<PAGE>

upplement to Master Lease Agreement                          PNC LEASING
(First Amendment Tax Lease)

                        Lessee: SUPREMA SPECIALTIES NORTHWEST, INC.
                        Supplement Date: December 28,2000
                        Master Lease Agreement No.: 2557
                        Master Lease Agreement Date: December 28, 2000

     1 SUPPLEMENT. This Supplement to Master Lease Agreement ("Supplement") is
hereby made a part of the Lease referenced above between the undersigned Lessor
and Lessee. All terms and conditions of said Lease are incorporated herein by
reference.

     2 EQUIPMENT. The Equipment which is subject to the Lease is or will be
described on one or more Schedule(s) of Leased Equipment which make reference to
the Lease and this Supplement, and includes all products (including without
limitation insurance proceeds) of the Equipment, and all additions and
accessions thereto, substitutions therefor and replacements thereof.

     3 TITLE OF EQUIPMENT. At Lessee's request, Lessor has purchased the
Equipment as a buyer in the ordinary course of business for value. Title to the
Equipment leased hereunder shall remain with the Lessor at all times. Lessee
shall have no right, title or interest in or to the Equipment except as
expressly set forth in the Lease.

     4 EQUIPMENT LOCATION. The Equipment shall be located at the address stated
in the applicable Schedule and shall not be removed without Lessor's prior
written consent.

     5 INTERIM RENT TERM. The interim rent term of the Lease as respects any
Equipment described in the applicable Schedule shall commence on the earlier of
(a) the date of Lessor's first advance of funds for the purchase of such
Equipment and (b) the date of Lessee's acceptance of such Equipment, and shall
terminate on the day before the commencement of the base lease term for such
Schedule.

     6 INTERIM RENT. During the interim rent term, Lessee shall pay Lessor as
additional Rent Interim Rent for each Item of Equipment, an amount equal to the
product of Lessor's capitalized cost for such Item times the number of days in
the interim rent term times the Daily Lease Rate Factor provided for in the
applicable Schedule. Interim Rent shall be due and payable monthly in arrears
during the interim rent term.

     7 LEASE TERM. The base term of the Lease as respects the Equipment is set
forth in the applicable Schedule.

     8 EARLY TERMINATION OPTION. After ninety (90) days prior written notice to
Lessor, provided that no Event of Default exists under the Lease, and further
provided Lessor has received Lessee's twelfth (12th) monthly rental payment,
Lessee shall have the option to terminate the Lease and return all (but not less
than all) of the Equipment to Lessor. Lessee shall

<PAGE>

exercise such option by paying to Lessor, on the last day of the twelfth (12th)
month of the base term, a termination fee in immediately available funds equal
to 80.10% of the Equipment Cost as set forth in the applicable Schedule. Upon
return of all the Equipment in accordance with paragraph 13 below, and payment
of the termination fee to Lessor, the Lease shall be terminated; subject,
however, to the post-termination survival of such indemnitees, liabilities and
obligations as may be required under the Lease. This early termination option
shall be available to Lessee only in the time period set forth in this paragraph
8. available to Lessee only in the time period set forth in this paragraph 8.

     9 RENT. The Lessee agrees to pay basic rent for the Equipment in the amount
and on the dates set forth in the applicable Schedule plus applicable taxes, if
any.the dates set forth in the applicable Schedule plus applicable taxes, if
any.

     10 TAX INDEMNIFICATION. 10 TAX INDEMNIFICATION.

          A. Tax Assumptions. This Lease has been entered into on the basis that
     Lessor is entitled to such federal, state and local income tax deductions,
     credits and other benefits (the "Tax Benefits') as are provided to an owner
     of property including, without limitation: (A) the Recovery Deductions (as
     defined herein); and (B) the interest deduction under the Internal Revenue
     Code of 1986, as amended (the "Code') in the fall amount of any interest
     paid or accrued by Lessor, using Lessor's method of tax accounting, for any
     indebtedness incurred by Lessor in financing its purchase of the Equipment
     (the "Interest Deductions").

          B. Tax Representations. Lessee represents and warrants to Lessor (the
     "Tax Representations") that: (A) for purposes of Section 168(e)(3) and
     168(c) of the Code, each Item of Equipment constitutes an
     --------------------- asset described in the "property class" and
     "applicable recovery period" as designated in paragraph 10 of the
     applicable Schedule; (B) the Lessor shall be entitled to claim federal,
     state and local depreciation deductions (the "Recovery Deductions" which
     are based upon, and will fully recover, the total cost of each Interim of
     Equipment, including, for federal income tax purposes, modified accelerated
     cost recovery system deductions computed pursuant Supplement to Code
     Section 168(b)(1)(A) and (B) and 168(e)(3) based upon 100% of Lessor's
     original cost of each Item of Equipment; (C) each Item of Equipment is not
     "limited use property" within the meaning of Revenue Procedure 76-30
     (1976-2 Cum. Bull. 647), and no improvements, changes, additions, or
     alterations made by or at the request of Lessee will cause such Item of
     Equipment to be "limited use property"; (D) this Lease, including any and
     all Schedules, constitutes a true lease" for federal, state and local
     income tax purposes and Lessor will be the "true owner" of each Item of
     Equipment entitled to claim the Recovery Deductions and other Tax Benefits
     anticipated by Lessor hereunder; (E) each Item of Equipment is reasonably
     estimated to have an economic useful life of at least 125% of the initial
     term of the Lease and have an economic value of at least 20% of Lessor's
     original cost of the Item of Equipment at the expiration of the lease term;
     (F) each Item of Equipment does not and will not require any improvements.
     modifications, alterations or additions in order to render it complete for
     its intended use by Lessee; (G) Lessor will not realize any taxable income
     as a result of any improvements, modifications, alterations or additions to
     the Equipment or any Item of Equipment made by anyone other than Lessor,
     (H) all amounts includable in the gross income of Lessor

<PAGE>

     with respect to each Item of Equipment and all deductions allowable to
     Lessor with respect to each Item of Equipment will be treated as derived
     from, or allocable to sources within the United States; and (I) Lessee will
     maintain sufficient records to verify such use which records will be
     furnished to Lessor within 30 days after receipt of a demand therefor.

          C. Tax Indemnity. If for any reason whatsoever, including, without
     limitation, the falsehood or inaccuracy of any Tax Representation
     (excluding only a failure of Lessor to claim properly or timely the
     Recovery Deductions or Interest Deductions for the appropriate year, or the
     failure of Lessor to have sufficient taxable income to benefit from the
     Recovery Deductions or Interest Deductions): (A) Lessor shall lose, shall
     not have or shall lose the right to claim or there shall be disallowed,
     eliminated, reduced, or recaptured with respect to Lessor, for federal,
     state or local income tax purposes, all or any portion of the Tax Benefits
     with respect to an Item of Equipment; or (B) the Lessor's anticipated net
     after-tax economic and accounting yields and periodic net after-tax cash
     flows over the term of the applicable Schedule (based upon the same
     assumptions used by Lessor in originally evaluating the Lease and
     applicable Schedule at the commencement of the term of the applicable
     Schedule) (the Lessor's "Anticipated Economics") is adversely affected due
     to (i) any income or deductions with respect to any Item of Equipment being
     treated as derived from, or allocable to, sources without the United
     States, or (ii) enactments of new income tax legislation or amendments and
     other changes to the Code or any other state or local income tax law,
     including the promulgation of regulations and judicial or administrative
     rulings with respect thereto; or (C) the Lessor shall be required to
     include any amount in its taxable income as a result of any improvements.
     modifications, alterations or additions to any Item of Equipment made by
     anyone other than Lessor (an occurrence of an event under (A), (B) and/or
     (C) being referred to individually or collectively as a "Loss"); then, at
     the option of the Lessor, (x) the rent over the remainder of the term of
     the applicable Schedule shall, on and after the next succeeding rent
     payment date, after written notice to Lessee by Lessor that a Loss has
     occurred, be increased by such amount which, in the sole opinion of Lessor,
     after deduction of all taxes owed by Lessor to any governmental or taxing
     authority as a result of such increase in rent, will cause Lessor's actual
     net after-tax economic and accounting yields and periodic net after-tax
     cash flows over the term of the applicable Schedule (the Lessor's "Actual
     Economics") to equal the Lessor's Anticipated Economics that would have
     been available if such Loss had not occurred. and Lessee shall forthwith
     pay to Lessor, on demand, an amount which, after deduction of all taxes
     owed by Lessor to any governmental or taxing authority as a result of the
     receipt of such amount, shall be equal to the amount of any penalties,
     interest or additions to tax which may be assessed by any governmental or
     taxing authority against Lessor attributable to the Loss, or (y) after
     written notice to Lessee by Lessor that a Loss has occurred, Lessee shall
     pay to Lessor, upon demand, in a lump sum, an amount which, after deduction
     of all taxes owed to any governmental or taxing authority by Lessor as a
     result of the receipt of such lump sum payment, will cause Lessor's Actual
     Economics to be equal to the Lessor's Anticipated Economics that would have
     been available if such Loss had not occurred plus an amount which, after
     deduction of all taxes owed by Lessor to any governmental or taxing
     authority as a result of the receipt of such amount, shall be

<PAGE>

     equal to the amount of any penalties, interest, or additions to which may
     be assessed by any governmental or taxing authority against Lessor
     attributable to the Loss.

          D. Calculation. All calculations of Lessor's Actual Economics with
     respect to a Loss shall be determined on the basis of that assumption that
     Lessor will be subject to federal, state and local corporate income tax
     rates at the maximum statutory rate. Any written notice that any Loss has
     occurred pursuant to this paragraph 10 shall be accompanied by a written
     statement from Lessor describing in reasonable detail such Loss and the
     computations of the amounts payable, either in a lump sum or revised rent
     payments as set forth above, which computation shall be binding and
     conclusive upon Lessee, absent manifest error.

          E. Interest. Upon failure to pay any indemnification amount when due,
     by demand or otherwise, such unpaid obligation shall bear interest at a per
     annum, rate equal to the prime rate of interest as announced, from time to
     time, by the Bank.

          F. Consolidated Return. As used in this paragraph 10, the term
     "Lessor" shall include any successor or assign of Lessor and an, member of
     an affiliated group of which Lessor is, or may become, a member if
     consolidated, joint or combined returns are filed for such affiliated group
     for federal, state or local income tax purposes.

          G. Survival. The indemnities and assumptions of liabilities and
     obligations provided for in this paragraph 10 shall continue in full force
     and effect notwithstanding the expiration or other termination of this
     Lease.

     11 EARLY BUYOUT OPTION. After ninety (90) days prior written notice to
Lessor, provided that no Event of Default exists under the Lease, and further
provided that Lessor has received Lessee's seventy-second (72nd) monthly rental
payment, Lessee may, on the last day of the seventy-second (72nd) month of the
base term, purchase all (but not less than all) of the Equipment for a purchase
price equal to 35% of the Equipment Cost as set forth in the applicable
Schedule, payable in immediately available funds. Thereupon, the Lessor shall
convey the Equipment to the Lessee on an as-is, where-is basis, without
representation or warranty whatsoever, except that the Equipment shall be
conveyed free and clear of any liens or encumbrances created due to or through
the acts or omissions of Lessor. This early buyout option shall be available to
Lessee only in the time period set forth in this paragraph 11.

     12 END OF TERM OPTIONS.

          A. Provided that no Event of Default will have occurred and be
     continuing, on the expiration of the base lease term under any applicable
     Schedule, at its option, Lessee may purchase all of the Lessor's right,
     title and interest in and to all, but not less than all of the Equipment
     described in such Schedule. On the last day of the base lease term under
     any applicable Schedule, the Lessee shall pay to the Lessor an amount equal
     to the greater of (i) the fair market value of the Equipment described in
     the applicable Schedule determined in accordance with the provisions of
     subparagraph (b), or (ii) the percent of the Equipment Cost stated in such
     Schedule. In order to exercise its option,

<PAGE>

     Lessee shall notify Lessor in writing of its intention to exercise such
     option at least 180 days prior to the expiration of the base lease term
     under any applicable Schedule. Lessee will deliver to the Lessor, on or
     before the expiration of the base lease term, an appraisal of the Equipment
     as described in subparagraph (b), together with the payment of the purchase
     price in immediately available funds. Thereupon, the Lessor shall convey
     the Equipment to the Lessee on an as-is, where-is basis without
     representation or warranty whatsoever, except that the Equipment shall be
     conveyed free and clear of any liens or encumbrances created due to or
     through the acts or omissions of the Lessor.

          B. As used in subparagraph (a), "fair market value" of the Equipment
     described in the applicable Schedule shall be the value of the Equipment as
     of the last day of the base term of the Lease, as determined by an
     appraiser selected by the Lessor and retained at Lessee's expense. For
     purposes of determining the fair market value, the appraiser shall be
     instructed to assume that the Equipment is in the condition required by the
     terms of the Lease. The report of the appraiser shall be in writing and
     delivered to the Lessor on or before the expiration of the base lease term.

          C. In the event that the Lessee does not purchase the Equipment in
     accordance with subparagraph (a), then (i) Lessee shall continue to pay
     rent for the remainder of the base lease term in the amount set forth in
     the applicable Schedule, and (ii) this Schedule shall automatically be
     extended for an additional term (the "Renewal Term") as stated in the
     applicable Schedule, without further action on the part of the Lessor or
     the Lessee. At the expiration of the Renewal Term and conditioned that no
     Event of Default shall have occurred and be continuing, the Lessee may
     either (i) purchase the Equipment at the fair market value as of the last
     day of the Renewal Term as determined in accordance with this paragraph 12,
     or (ii) return the Equipment to the Lessor in accordance with paragraph 13.
     Lessee shall notify Lessor of its election to either purchase or return the
     Equipment not less than sixty (60) days prior to the expiration of the
     Renewal Term. If Lessee fails to so notify Lessor of its election, this
     Lease will be deemed extended on a month-to-month basis on the same terms
     and conditions until Lessee provides Lessor with written notice of its
     election to terminate the Lease not less than sixty (60) days from the date
     of such notice.

     13 RETURN OF EQUIPMENT. Upon the expiration or earlier termination of this
Lease, Lessee shall return the Equipment described in the applicable Schedule,
freight and insurance prepaid, to Lessor (or Lessor's nominee) at a location
designated by Lessor. If requested by Lessor, Lessee will provide 180 days free
storage at the Equipment's location at the expiration of the term. During the
storage period, Lessee shall maintain the Equipment in operating condition for
the purpose of on-site inspections by prospective buyers and shall keep the
Equipment insured in accordance with paragraph 18 of the Lease. The Equipment
and all parts thereto shall be free and clear of all liens (other than Lessor
liens), and shall be free of all advertising or insignia and residual materials,
cleaned, painted, complete with no missing components or attachments, and fully
operational and able to perform its described task effectively, without repair
or overhaul, within the original tolerances and specifications set by the
manufacturer. Any and all costs of dismantling, packing, and removing of the
Equipment shall also be paid by Lessee. If the Equipment is returned in a
condition other than that described,

<PAGE>

Lessor may commission an independent appraiser, licensed professional engineer,
or manufacturer technical representative, obtained by Lessor at Lessee's cost
and expense, to determine the extent of costs to return the Equipment to the
condition required herein. Lessee shall promptly advance payment for all
necessary repairs. Lessee's obligations to pay for repairs shall be reduced by
any proceeds of insurance which Lessor has received due to the damage to the
Equipment. If Lessee fails to provide timely notice of return or fails to return
the Equipment to the designated location at the end of the base lease term or
any renewal thereof under the applicable Schedule, and does not exercise the
renewal or purchase options provided for herein (if any), then, at Lessor's
option, the Lease as it relates to the applicable Schedule will be deemed
extended on a month-to-month basis for a minimum renewal term of three (3)
months, with rent due on the day of each month applicable and at the rate
applicable to the base lease or renewal term just ended.

     14   FAIR MARKET VALUE AND ESTIMATED USEFUL LIFE. In all circumstances,
except where Lessee has elected to purchase the Equipment pursuant to paragraph
12(a), fair market value, fair market rental value and estimated useful life of
the Equipment shall be determined by an appraiser selected by the Lessor and
approved by Lessee in its reasonably judgment. The appraiser shall determine the
fair market value of the Equipment on its in place value without reduction or
consideration of the cost of dismantling, preparation for shipping or
transportation of the Equipment. For purposes of determining the fair market
value, the appraiser shall be instructed to assume that the Equipment is in the
condition required by the terms of the Lease. The appraiser's decision shall be
binding on the parties. If Lessee has given Lessor notice of Lessee's intention
to exercise its purchase or renewal option, and the Lessor has obtained an
appraisal of the Equipment as provided for herein, Lessee shall be bound by the
appraisal and shall purchase the Equipment, or renew the Lease, as the case may
be, at the value determined by the appraisal. The cost of the appraisal shall be
borne by the Lessee.

     15   MARKETING OF EQUIPMENT. At Lessor's request, Lessee shall mark the
Equipment in a reasonably distinct and conspicuous manner with the name of the
Lessor followed by the words "Owner and Lessor" or other appropriate words
designated by Lessor. Lessee shall not alter, deface or remove any of Lessor's
ownership identification plates or markings on the Equipment and, upon Lessor's
request, Lessee shall affix or re-affix such identification.

     16 INSURANCE. In addition to the requirements contained in paragraph 18 of
the Lease, the following insurance requirements shall apply:

     Liability Coverage:
          A. General liability including/comprehensive form:
     premises/operations; products/completed operations, contractual liability;
     independent contractors; broad form property damage; personal injury; and
     collapse hazard.

          B. Bodily Injury and Property Damage Combined Single Limit Per
     Occurrence: $3,000,000.

          C. Fire-legal liability-custody, care or control, each occurrence: $
     1,000,000.

<PAGE>

     Property Coverage:
     (a) All risk of physical loss; Equipment must be insured for at least the
     total original cost

     17   COVENANTS. By executing and delivering to Lessor the Lessee Acceptance
Certificate included within each applicable Schedule Lessee warrants, covenants
and agrees that (a) Lessee has received all of the Equipment described in such
Schedule at the location, described in such Schedule; (b) Lessee has duly
inspected and accepts such Equipment without reservation; (c) Lessee L,
unconditionally bound to pay to Lessor the total rent and other payments due
under the Lease, whether or not the related Equipment may now or hereafter
become unsatisfactory in any respect; and (d) notwithstanding anything contained
herein, Lessor and Lessee shall continue to have all rights which either of them
might otherwise have with respect to the related Equipment against any
manufacturer or seller of such Equipment or any part thereof.

     18   ADDITIONAL PROVISIONS. (a) Each applicable Schedule is incorporated
herein by reference; and (b) Lessee grants Lessor the right to insert the
Equipment description and payment dates and terms in each applicable Schedule at
the time of commencement of the base lease term.

WITNESS the due execution hereof with the intent to be legally bound.

Lessor: PNC LEASING, LLC            Lessee: SUPREME SPECIALTIES NORTHWEST, INC.
By: /s/ Michael J. Woodring         By: /s/Mark Cocchiola
    --------------------------          ---------------------------------------

Title: Vice President               Title: President
       -----------------------             ------------------------------------<PAGE>   1
                                                                     EXHIBIT 4.9

                                WAVE OPTICS, INC.
                             1997 SHARE OPTION PLAN
                     (as amended and restated July 1, 1997)

1.      PURPOSE

        This 1997 Share Option Plan (the "Plan") is intended to reward past
service by, increase incentive for and encourage ordinary share ownership on the
part of selected key employees of, and consultants retained by, Wave Optics,
Inc. (the "Corporation") or other corporations which are or become subsidiaries
of the Corporation. It is also the purpose of the Plan to provide such employees
and consultants with a proprietary interest, or increase their proprietary
interest, in the Corporation and its subsidiaries, and to encourage them to
continue in the employ of or to be retained by the Corporation or the
subsidiaries. It is intended that certain options granted pursuant to the Plan
shall constitute incentive share options ("incentive share options") within the
meaning of Section 422 of the Internal Revenue Code of 1986 (the "Code"), and
that certain options granted pursuant to the Plan shall not constitute incentive
share options ("non-qualified share options"). The word "subsidiaries" as used
in the Plan shall mean corporations in which the Corporation owns, directly or
indirectly, more than 50% of the voting shares, in accordance with Section
424(f) of the Code.

2.      SHARES

        The shares subject to the Plan shall be the shares of the Corporation's
authorized but unissued ordinary shares of S$0.01 each in the capital of the
Corporation ("Shares"). The aggregate number of shares which may be issued under
the Plan shall not exceed 75,000, subject to such adjustments as may be required
pursuant to Section 6 hereof. In the event that any outstanding option under the
Plan shall expire or be terminated for any reason, the Shares allocated to the
unexercised portion of such option shall again become available to be made
subject to an option under the Plan.

3.      ADMINISTRATION

        The Plan shall be administered by a committee (the "Committee") of the
Board of Directors of the Corporation (the "Board"). The Board shall be
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it may deem appropriate for the proper administration of the
Plan, and to make such determinations under, and such interpretations of, and to
take such steps in connection with, the Plan or the options granted thereunder
as it may deem necessary or advisable. The interpretation and construction by
the Board of any provisions of the Plan or any option granted pursuant thereto
shall be final, binding and conclusive. No member of the Board shall be liable
for any action, failure to act, determination or interpretation made in good
faith with respect to the Plan or any transaction thereunder.

        Notwithstanding the foregoing, the Board shall have the authority to
delegate its duty to administer the Plan to a committee of the Board appointed
by the Board. In addition, as of the date of the first registration of an equity
security of the Corporation under Section 12 of the Securities Exchange Act of
1934 (the "Exchange Act"), the Plan shall be administered in such manner as the
Board shall determine in order to assure that the Plan complies with Rule 16b-3
of

<PAGE>   2

the Securities and Exchange Commission ("Rule 16b-3") if the Board shall deem
such compliance necessary or advisable. Any committee charged with
administration of the Plan shall have all the powers and protections authorized
to the Board under the Plan, except those powers set forth in Section 14 hereof,
until the Board shall decide otherwise.

4.      ELIGIBILITY AND AWARD OF OPTIONS

        The Board shall have full and final authority in its discretion, at any
time and from time to time, to grant or authorize the granting of options to
such officers and other key employees of and consultants retained by the
Corporation or its subsidiaries, including members of the Board, as it may
select, and for such numbers of shares as it shall designate; provided, however,
that, notwithstanding any other provision hereof, no member of the Board shall
take any action with respect to his or her participation in the Plan, in
accordance with Section 310(a)(2) of the California General Corporation Law (the
"Law"). In no event, however, may any consultant participate in the Plan if such
participation is (a) prohibited, or (b) restricted (either absolutely or subject
to various securities requirements whether legal or administrative, being
complied with), in the jurisdiction in which such consultant is resident under
the relevant securities laws of that jurisdiction. Provided always that in the
case of (b) above, the relevant consultant's participation in the Plan may be
effected at the absolute discretion of the Committee if compliance with the
relevant securities requirements of the jurisdiction in which such consultant is
resident is not impractical (having regard to the nature of those requirements)
and would not involve undue expense. The Board shall have full and final
authority in its discretion to determine, in the case of officers and other key
employees, whether such options shall be incentive share options or
non-qualified share options and whether incentive share options and
non-qualified share options shall be awarded pursuant to separate grants or in
conjunction. However, the aggregate fair market value (determined as of the date
on which the option is granted) of the Shares with respect to which incentive
share options granted to an officer or other key employee may be exercisable for
the first time by such individual during any calendar year (under all incentive
share option plans of his or her employer corporation and its parent and
subsidiary corporations) shall not exceed $100,000. Persons selected by the
Board who are prospective employees of or consultants retained by the
Corporation or its subsidiaries shall be eligible to receive non-qualified share
options; provided, however, that, in the case of prospective employees, such
options shall be subject to such persons' becoming employees, of the Corporation
or its subsidiaries. All options granted under the Plan shall be subject to the
Corporation's receipt of adequate consideration in accordance with Section 409
of the Law.

        The date on which an option shall be granted shall be the date of the
Board's authorization of such grant or such later date as may be determined by
the Board at the time such grant is authorized. Any individual may hold more
than one option.

5.      TERMS AND CONDITIONS OF OPTIONS

        Share options granted pursuant to the Plan shall be evidenced by
agreements in such form as the Board shall determine, which agreements shall
comply with the following terms and conditions:

<PAGE>   3

        (A)    Optionee's Retention or Employment

               Each option agreement shall state that it shall not be construed
as granting an optionee who is a consultant any right to continued retention by
or employment with, or an optionee who is or becomes an employee any right to
continued employment with, the Corporation or any subsidiary and that, subject
to any written retention or employment agreement between the optionee and the
Corporation or any subsidiary, such retention and employment shall be terminable
at will by the Corporation or such subsidiary.

        (B)    Number of Shares

               Each option agreement shall state the number of the Shares to
which the option pertains.

        (C)    Option Price

               Each option agreement shall state the option price per share,
which shall be not less than 85%, in the case of a non-qualified share option,
and 100%, in the case of an incentive share option, of the fair market value of
a Share on the date the option is granted. Notwithstanding the foregoing, the
option price per share of any option, whether incentive or non-qualified,
granted to a person who, on the date of such grant and in accordance with
Section 424(d) of the Code, owns shares possessing more than 10% of the total
combined voting power of all classes of shares of the Corporation (or of its
parent or subsidiary corporation) shall be not less than 110% of the fair market
value of a Share on the date the option is granted. In no event may the exercise
price be less than the par value of a Share. Fair market value shall mean (i)
the average of the closing bid and asked prices of the Shares quoted in the
Over-The-Counter Market Summary or the closing price quoted on any exchange on
which the Shares is listed, whichever is applicable, as published in the Western
Edition of The Wall Street Journal for the date an option is granted or, if no
report is available for such date, for the next preceding date for which such a
report is available; or (ii) if the Shares is not traded Over-The-Counter or on
an exchange, the amount determined in good faith by the Board for the date an
option is granted by applying the rules and principles of valuation set forth in
Treasury Regulation Section 20.2031-2, relating to the valuation of shares for
purposes of Section 2031 of the Code.

        (D)    Medium and Time of Payment

               The option price shall be payable upon the exercise of an option
in legal tender of the United States (in cash or by certified check). Upon
receipt of payment, the Corporation shall promptly deliver to the optionee (or
the person entitled to exercise the option) a certificate or certificates for
the Shares to which the option pertains.

        (E)    Term and Exercise of Option

               Each option shall state the time or times when it becomes
exercisable and, subject to the other provisions of the Plan, the time or times
when it expires, both of which provisions shall be determined by the Board;
provided, however, that each option shall become exercisable at the rate of at
least twenty (20) percent per year over five (5) years from the date the option
is

<PAGE>   4

granted. To the extent that an option has become exercisable, it may be
exercised in whole or in such lesser amount as authorized by the option
agreement. If exercised in part, the unexercised portion of an option shall
continue to be held by the optionee and may thereafter be exercised as provided
in the option agreement and herein. Notwithstanding any other provision of the
Plan, (i) no option granted to an employee under the Plan shall be exercisable
after the expiration of ten (10) years from the date of its grant, and no option
granted to a consultant under the Plan shall be exercisable after the expiration
of five (5) years from the date of its grant and (ii) no incentive share option
granted under the Plan to a person who, on the date of such grant and in
accordance with Section 424(d) of the Code, owns shares possessing more than 10%
of the total combined voting power of all classes of shares of the Corporation
(or of its parent or subsidiary corporation) shall be exercisable after the
expiration of five (5) years from the date of its grant.

        (F) Termination of Employment or Retention

            (i) If an optionee who is an employee shall cease to be employed, or
an optionee who is a consultant shall cease to be retained (other than to become
an employee), by the Corporation and any of its subsidiaries for any reason
other than death or disability, his or her option may be exercised within a
period, determined by the Board and set forth in the relevant option agreement,
not shorter than thirty (30) days or longer than ninety (90) days after the date
of such cessation of employment or retention, as the case may be, but only to
the extent such option was exercisable under the terms of such option agreement
on such date.

            (ii) If an optionee who is an employee shall cease to be employed,
or an optionee who is a consultant shall cease to be retained, by the
Corporation and any of its subsidiaries by reason of disability, his or her
option may be exercised within a period, determined by the Board and set forth
in the relevant option agreement, not shorter than six (6) months or longer than
one (1) year after the date of such cessation of employment or retention, as the
case may be, but only to the extent such option was exercisable under the terms
of such option agreement on such date.

            (iii) If an optionee should die while in the employ of, or while
retained by, the Corporation or any subsidiary or within the period not shorter
than thirty (30) days or longer than ninety (90) days or not shorter than six
(6) months or longer than one (1) year referred to above, whichever is
applicable, his or her option may be exercised, to the extent it was exercisable
under the terms of the relevant option agreement immediately prior to the
optionee's death, at any time within a period, determined by the Board and set
forth in such option agreement, not shorter than six (6) months or longer than
one (1) year after the optionee's death by the optionee's executors or
administrators or the person or persons to whom the option is transferred by
will or by the applicable laws of descent and distribution. No transfer of an
option by the optionee by will or by the applicable laws of descent and
distribution shall be effective unless the Corporation shall have been furnished
with written notice thereof, and such other evidence as the Board may deem
necessary to establish the validity of the transfer and the acceptance of the
transferee or transferees of the terms and conditions of the option, and to
establish compliance with any laws or regulations pertaining thereto.

        Disability shall mean an optionee's inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected

<PAGE>   5

to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months, in accordance with
Section 22(e)(3) of the Code.

        (G) Other Provisions

            The option agreements authorized under the Plan shall contain such
other provisions, including, without limitation, restrictions upon the exercise
of the option, restrictions on the transferability and/or right to retain the
Shares received upon the exercise of options, and restrictions required by any
applicable securities laws, as the Board shall deem advisable. Each optionee
shall receive copies of the Corporation's financial statements on an annual
basis.

6.      CHANGES IN CAPITALIZATION, REORGANIZATIONS AND OTHER EVENTS

        Subject to any action by the shareholders of the Corporation required by
law, the number of the Shares covered by the Plan and each outstanding option,
and the price per share thereof, shall be proportionately adjusted for any
increase or decrease in the number of issued and outstanding Shares resulting
from a subdivision or consolidation of shares or the payment of a share dividend
(but only on the Shares) or any other increase or decrease in the number of such
shares effected without the receipt of consideration by the Corporation;
provided, however, that no such adjustment shall result in the issuance of any
fractional shares. The issuance of the Shares upon the conversion of convertible
securities shall be treated as an issuance for which the Corporation receives
consideration for this purpose. Adjustments pursuant to this paragraph shall be
made by the Board, whose determinations shall be final, binding and conclusive.

        A dissolution or liquidation of the Corporation shall cause each
outstanding option to terminate. A merger or consolidation in which the
Corporation is not the surviving corporation shall affect each outstanding
option in the manner set forth in the applicable option agreement.

        The grant of an option pursuant to the Plan shall not affect in any way
the right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets.

7.      NONASSIGNABILITY

        No option granted under the Plan shall be assignable or transferable by
an optionee except by will or the laws of descent and distribution. An option
granted under the Plan shall be exercisable, during the optionee's lifetime,
only by the optionee.

8.      NO OBLIGATION TO EXERCISE OPTION

        The granting of an option shall impose no obligation upon the optionee
or a transferee of the optionee to exercise such option.

9.      RIGHTS AS A SHAREHOLDER

<PAGE>   6

        An optionee or a transferee of an optionee shall have no rights as a
shareholder with respect to any shares covered by his or her option until the
date of the allotment and issuance of such shares to the optionee/transferee and
upon his or her registration as the registered holder of such shares in the
Branch Register of Members. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such share certificate is issued, except as provided in Section 6.

10.     MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS

        Subject to the terms and conditions and within the limitations of the
Plan, the Board may modify, extend or renew the exercisability of outstanding
options granted under the Plan. Furthermore, the Board may, subject to any
applicable provisions of the Plan, upon the cancellation of previously granted
higher priced options, regrant options at a lower price. Notwithstanding the
foregoing, however, no modification or cancellation and regrant of an option
shall, without the written consent of the optionee, alter or impair any rights
or obligations under any option theretofore granted under the Plan.

11.     USE OF PROCEEDS

        The proceeds received from the sale of the Shares pursuant to the
exercise of options granted under the Plan shall be used for general corporate
purposes.

12.     APPROVAL OF SHAREHOLDERS

        Options granted under the Plan shall be subject to approval of the Plan
by the shareholders in accordance with Section 422 of the Code. No option
granted hereunder may become exercisable unless and until such approval is
obtained. In the event an equity security of the Corporation is registered under
Section 12 of the Exchange Act, the Plan shall again be submitted for approval
by the shareholders, for purposes of Rule 16b-3 and in accordance with the
provisions of such Rule, if the Board shall deem compliance with such Rule
necessary or advisable.

13.     TERM OF PLAN

        The Plan is effective June 1, 1997 and, unless terminated sooner
pursuant to Section 14, shall remain in effect until the earlier of the close of
business on May 31, 2007 or when all the Shares subject to or which may become
subject to the Plan have been issued upon the exercise of options granted under
the Plan.

14.     TERMINATION OR AMENDMENT OF THE PLAN

        The Board may from time to time suspend, discontinue or terminate the
Plan or revise or amend it in any respect whatsoever; provided, however, that no
such action of the Board shall:

<PAGE>   7

        (A)    without the consent of the optionee, alter or impair any rights
               or obligations under any option theretofore granted under the
               Plan;

        (B)    without the approval of the shareholders of the Corporation in
               accordance with Section 422(b)(1) of the Code, increase the
               aggregate number of the Shares which may be issued under options
               granted under the Plan (except as may be effected pursuant to the
               provisions of Section 6);

        (C)    without the approval of the shareholders of the Corporation in
               accordance with Section 422(b)(1) of the Code, change the
               designation of the employees or class of employees eligible to
               receive incentive share options under the Plan;

        (D)    as of the date of the first registration of an equity security of
               the Corporation under Section 12 of the Exchange Act and if the
               Board shall deem compliance with Rule 16b-3 necessary or
               advisable, without the approval of the shareholders of the
               Corporation for purposes of Rule 16b-3 and in accordance with the
               provisions of such Rule, materially increase the benefits
               accruing to participants under the Plan, materially increase the
               number of securities which may be issued under the Plan or
               materially modify the requirements as to eligibility for
               participation in the Plan; or

        (E)    without such approval by the shareholders of the Corporation as
               shall be necessary in the opinion of counsel, otherwise amend or
               modify the Plan.

<PAGE>   8

               THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS
AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE
STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR
RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY
SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS
OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

                                WAVE OPTICS, INC.
                        INCENTIVE SHARE OPTION AGREEMENT

        THIS AGREEMENT, by and between Wave Optics, Inc., a California
corporation (hereinafter called the "Corporation"), and _______________
(hereinafter called the "Optionee"), is made as of the _______________.

                                   WITNESSETH:
        WHEREAS, the Corporation has a 1997 Share Option Plan (hereinafter
called the "Plan"), providing for the granting of share options to employees of
the Corporation and its subsidiaries (as defined in the Plan), some of which
options are intended to be incentive share options (hereinafter referred to as
"incentive share options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), to purchase ordinary shares of
S$0.01 each in the capital of the Corporation (the "Shares"); and

        WHEREAS, the Board of Directors of the Corporation (the "Board") has
authorized the granting of an incentive share option to the Optionee on the date
of this Agreement, thereby allowing the Optionee to acquire a proprietary
interest in the Corporation in order that said Optionee will have a further
incentive for continuing to be retained by and increasing his or her efforts on
behalf of the Corporation and its subsidiaries.

        NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
hereinafter set forth and the sum of $1.00 paid by the option holder to the
Corporation (the receipt, adequacy and sufficiency of which the Corporation
herby acknowledges), the parties hereto hereby agree as follows:

1. The Corporation hereby grants to the Optionee, as a separate incentive and
not in lieu of any fees or other compensation for his or her services, an
incentive share option to purchase, on the terms and conditions hereinafter set
forth, all or any part of an aggregate of _______________ shares of authorized
but unissued Shares, at the exercise price set forth in paragraph 2 of this
Agreement.

<PAGE>   9

2. The exercise price per share (the "Option Price") shall be $_______________,
which is not less than the fair market value per Share on the date of this
Agreement. The Option Price shall be payable in legal tender of the United
States (in cash or by certified check).

3. The number and class of shares specified in paragraph 1 above, and/or the
Option Price, are subject to appropriate adjustment in the event of certain
changes in the shares of the Corporation as set forth in the Plan. A dissolution
or liquidation of the Corporation, a merger or consolidation in which the
Corporation is not the surviving corporation, or a change in control of the
Corporation will cause the option granted hereunder to terminate, unless and
except to the extent that the agreement effecting the merger, consolidation or
change in control shall provide that the option shall continue in effect;
provided that the Optionee shall be given thirty (30) days' (or, if less, the
maximum practicable) prior written notice of an such event and, prior to such
event shall have the right to exercise the option granted hereunder, in whole or
in part, to the extent permitted under paragraph 4 below. For purposes of this
Agreement, a change in control of the Corporation shall be deemed to have
occurred whenever any of the following occurs with respect to the Corporation:
(i) the direct or indirect sale or exchange in a single transaction or series of
related transactions by the shareholders of the Corporation of more than fifty
percent (50%) of the voting shares of the Corporation; (ii) a merger or
consolidation in which the Corporation is a party; or (iii) the sale, exchange,
or transfer of all or substantially all of the assets of the Corporation;
provided that in the case of (ii) or (iii), a change in control shall be deemed
to have occurred only if the shareholders of the Corporation immediately before
the transaction do not retain immediately after the transaction, in
substantially the same proportions as their ownership of shares of the
Corporation's voting shares immediately before the transaction, ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting shares of the Corporation or the surviving corporation or the
corporation or corporations to which the assets of the Corporation were
transferred.

4. The right to exercise the option shall accrue as to one fourth (1/4) of the
number of shares subject to the option on _______________ and as to an
additional two and eight hundred thirty-three ten-thousandths percent (2.0833%)
of the number of shares subject to the option as of the end of each of the
thirty-six (36) consecutive calendar months following such date, provided that
the Optionee's employment with the Corporation shall continue as of each such
date. Shares entitled to be, but not, purchased as of any such date may be
purchased at any subsequent time, subject to paragraphs 5 and 6 below. The
number of shares which may be purchased as of any such date shall be rounded up
to the nearest whole number. No partial exercise of the option may be for less
than ten percent (10%) of the number of shares subject to the option.

5. Notwithstanding any other provision of this Agreement, the option may not be
exercised after, and shall expire on, the close of business on (i) in respect of
options granted to employees of the Corporation, the tenth anniversary of the
date hereof, or, (ii) in respect of options granted to consultants, the fifth
anniversary of the date hereof, unless terminated sooner pursuant to paragraph 6
below.

6. In the event of termination of the Optionee's employment with the
Corporation and its subsidiaries for any reason except death or disability, the
Optionee may, on or before the close of business on the earlier of the date
thirty (30) days after the date of such termination or the date determined under
paragraph 5 above, exercise the option to the extent the Optionee could have
exercised the option on the date of such termination pursuant to paragraph 4
above. In the event

<PAGE>   10

of termination of the Optionee's employment with the Corporation and its
subsidiaries by reason of his or her disability, the Optionee may, on or before
the close of business on the earlier of the date six (6) months after the date
of such termination or the date determined under paragraph 5 above, exercise the
option to the extent the Optionee could have exercised the option on the date of
such termination pursuant to paragraph 4 above. If the Optionee shall die during
such thirty (30) day period or such six (6) month period, whichever is
applicable, or while in the employ of the Corporation or any subsidiary, the
Optionee's transferee as determined under paragraph 8 below may exercise the
option, as hereinafter provided, only to the same extent as the Optionee could
have exercised the option immediately prior to his or her death pursuant to
paragraph 4 above on or before the close of business on the earlier of the date
one (1) year after the date of the Optionee's death or the date determined under
paragraph 5 above. If the option is not exercised prior to the end of the
applicable period described in this paragraph 6, it shall terminate at the end
of such period.

7. The option shall be exercisable during the Optionee's lifetime only by the
Optionee. The option shall be non-transferable by the Optionee otherwise than by
will or the laws of descent and distribution.

8. To the extent exercisable after the Optionee's death, the option shall be
exercised only by the Optionee's transferee, who shall be the Optionee's
executor(s) or administrator(s) or the person or persons to whom the option is
transferred under the Optionee's will or, if the Optionee shall fail to make
testamentary disposition of the option, under the applicable laws of descent and
distribution. Any transferee exercising the option must furnish the Corporation
with (a) written notice of his or her status as transferee, (b) evidence
satisfactory to the Corporation to establish the validity of the transfer of the
option and compliance with any laws or regulations pertaining to said transfer,
and (c) written acceptance of the terms and conditions of the option as
prescribed in this Agreement.

9. Subject to paragraphs 10 and 11 below, the option may be exercised by the
person then entitled to do so by delivering to the Corporation (a) written
notice of exercise in the form attached hereto as Exhibit A (which includes
certain restrictions on the transfer of such shares), specifying the number of
full shares to be purchased, and (b) full payment of the Option Price thereof
(and the amount of any tax the Corporation is required by law to withhold by
reason of such exercise). The Corporation shall issue a certificate representing
the shares so purchased within a reasonable time after its receipt of such
notice of exercise and such payment.

10. Because of the exemption from the qualification requirements of the
California Corporate Securities Law of 1968 (the "Law") relied upon by the
Corporation in granting the option to the Optionee, the Optionee represents and
warrants to the Corporation that the Optionee, by reason of his or her business
or financial experience or the business or financial experience of his or her
professional advisors who are unaffiliated with and who are not compensated by
the Corporation or any affiliate or selling agent of the Corporation, directly
or indirectly, has the capacity to protect his or her own interests in
connection with the issuance and exercise of the option and is accepting the
option, and will purchase the Shares upon exercising the option, for his or her
own account and not with a view to or for sale in connection with any
distribution thereof. The Optionee hereby acknowledges that the option is not
transferable otherwise than in accordance with paragraph 7 above.

<PAGE>   11

11. The issuance of Shares upon exercise of the option will be subject to
compliance by the Corporation and the person exercising the option with all
applicable requirements of federal and state securities and other laws relating
thereto and with all applicable regulations of any shares exchange on which the
Shares may be listed at the time of such issuance. No person may exercise the
option at any time when, in the opinion of counsel to the Corporation, such
exercise is not permitted under applicable federal or state securities laws.
Nothing herein shall be construed to require the Corporation to register or
qualify under applicable federal or state securities laws, or take any action to
secure an exemption from such registration and qualification for, the issuance
of the Shares upon exercise of the option.

12. The Optionee shall receive financial statements of the Corporation once
during each fiscal year of the Corporation while his or her option is
outstanding. The Optionee hereby acknowledges that such financial information is
confidential to the Corporation and the Optionee further agrees to keep such
information confidential.

13. Neither the Optionee nor any person claiming under or through the Optionee
shall be or have any of the rights or privileges of a shareholder of the
Corporation in respect of any of the shares issuable upon the exercise of the
option, unless and his or her name is duly registered in the Branch Register of
Members of the Corporation maintained by Equiserve L.P., the share registrar and
transfer agent of the Corporation.

14. Nothing in this Agreement shall be construed as granting the Optionee any
right to continued employment. Except as the Corporation, or the subsidiary
employing the Optionee, and the Optionee shall have otherwise agreed in writing,
the Optionee's employment shall be terminable by the Corporation, or by such
subsidiary, at will. The Board in its sole discretion shall determine whether
any leave of absence or interruption in service (including an interruption
during military service) shall be deemed a termination of employment for the
purposes of this Agreement.

15. Any notice to be given to the Corporation under the terms of this Agreement
shall be addressed to the Corporation. Any notice to be given to the Optionee
shall be in writing and delivered or mailed by registered or certified mail,
return receipt requested, postage prepaid, addressed to the Optionee at the
address set forth beneath the Optionee's signature hereto, or at such other
address as the Optionee may hereafter designate in writing. Any such notice
shall be deemed to have been duly given when deposited in a United States post
office.

16. Nothing herein contained shall affect the Optionee's right to participate in
and receive benefits under and in accordance with the then current provisions of
any pension, insurance or other employee benefit plan or program of the
Corporation or any subsidiary.

17. Except as otherwise herein provided, the option herein granted and the
rights and privileges conferred hereby shall not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to sale under execution, attachment or similar process.
Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of said option, or of any right or privilege conferred hereby, contrary to the
provisions hereof, or upon any attempted sale under any execution, attachment or
similar process

<PAGE>   12

upon the rights and privileges conferred hereby, said option and the rights and
privileges conferred hereby shall immediately become null and void.

18. Subject to the limitation on the transferability of the option contained
herein, this Agreement shall be binding upon and inure to the benefit of the
heirs, legal representatives, successors and assigns of the parties hereto.

19. This Agreement shall be governed by and construed in accordance with the
laws of the State of California.

20. In the event that the Plan is administered by a committee of the Board (the
"Committee") at any time subsequent to the date of this Agreement, all
references herein to the Board shall be construed to mean the Committee for the
period(s) during which the Committee administers the Plan.

21. This Agreement is subject to the terms and conditions of the Plan, including
the Board's discretion to modify the provisions hereof. The Plan is incorporated
herein by this reference and the Optionee acknowledges receipt of a copy
thereof.

22. The Optionee hereby acknowledges that: (i) this Agreement was prepared with
his or her knowledge; (ii) he or she was advised by the Corporation to seek
independent counsel to review this Agreement on his or her behalf; (iii) he or
she had adequate time to seek the advice of such independent counsel and to
review this Agreement; and (iv) he or she either obtained the advice of such
independent counsel or knowingly and intentionally chose not to seek such
advice.

        IN WITNESS WHEREOF, the parties have executed this Agreement, in
duplicate, the day and year first above written.

                                     WAVE OPTICS, INC.

                                     By:
                                         -------------------------------------
                                             [name and title]
---------------------------------
[name], Optionee

Address:
         -------------------------

         -------------------------

<PAGE>   13

                                    EXHIBIT A

Wave Optics, Inc.
1300 Spacepark Way
Mountain View, California 94043
Attention: Corporate Secretary

                       Re: Notice of Exercise of Incentive Share Option

Dear  _______________:

        I hereby exercise, as of ______________, ______, my incentive share
option (granted _______________) to subscribe for ____________ ordinary shares
of S$0.01 each in the capital of Wave Optics, Inc. (the "Corporation") (the
"Option Shares"). Payment of the exercise price of $________ is enclosed
herewith.

        As a condition to this notice of exercise, I hereby make the following
representations and agreements:

1. I am aware of the Corporation's business affairs and financial condition and
have had access to such information about the Corporation as I have deemed
necessary or desirable to reach an informed and knowledgeable decision to
acquire the Option Shares. I am purchasing the Option Shares for investment for
my own account only and not with a view to, or for resale in connection with,
any distribution thereof.

2. I understand that the Option Shares have not been registered under the
Securities Act of 1933 (the "Act") by reason of specific exemptions therefrom,
which exemptions depend upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission (the "Commission"), the
statutory basis for one such exemption may not exist if presently intend to hold
the Option Shares for a minimum capital gains period under the tax laws, for a
deferred sale, for a market rise, for a sale if the market does not rise, or for
a year or any other fixed period in the future.

3. I acknowledge and agree that the Option Shares are restricted securities
which must be held indefinitely unless they are subsequently registered under
the Act and their offer and sale are qualified under the California Corporate
Securities Law of 1968 (the "Law") or exemptions from such registration and
qualification are available. I further acknowledge and understand that the
Corporation is under no obligation to effect such registration or qualification
or to assure the availability of any such exemption.

4. I am aware of the adoption of Rule 144 by the Commission, promulgated under
the Act, which permits limited public resale of securities acquired in a
non-public offering, subject to the satisfaction of certain conditions,
including, among other things, the availability of certain current public
information about the issuer, the passage of not less than one year after the
holder has purchased and paid for the securities to be sold, effectuation of the
sale on the public market

                                       6
<PAGE>   14

through a broker in an unsolicited "brokers' transaction" or to a "market
maker," and compliance with specified limitations on the amount of securities to
be sold (generally, one percent of the total amount of Shares outstanding)
during any three-month period.

5. I understand that the Corporation currently does not, and at the time I wish
to sell the Option Shares may not, satisfy the current public information
requirement of Rule 144 and, consequently, I may be precluded from selling the
Option Shares under Rule 144 even if the one-year minimum holding period has
been satisfied, unless I am not an "affiliate" of the Corporation and have
purchased and completed payment for the Option Shares to be sold at least two
years before the date of such sale. I further understand that Rule 144 does not
affect my obligations under the Law and, notwithstanding the availability of
Rule 144, I may not offer or sell the Option Shares unless such offer or sale is
qualified under the Law or an exemption from such qualification is available.

6. I further understand that if all of the requirements of Rule 144 are not met,
compliance with Regulation A or some other exemption from registration will be
required; and that, although Rule 144 is not exclusive, the Staff of the
Commission has expressed its opinion that persons proposing to sell restricted
securities other than in a registered offering and other than pursuant to Rule
144 will have a substantial burden of proof in establishing that an exemption
from registration is available for such offers or sales and that such persons
and the brokers who participate in such transactions do so at their own risk.

7. I further understand that the certificate(s) representing the Option Shares,
whether upon initial issuance or any transfer thereof, shall bear on their face
such legends, prominently stamped or printed thereon in capital letters of not
less than 10-point size, as counsel to the Corporation shall determine,
including the following:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR THE PURCHASER'S OWN ACCOUNT AND NOT WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF. NO SALE OR OTHER DISPOSITION OF SUCH
SECURITIES MAY BE EFFECTED WITHOUT THE (1) REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND (2) QUALIFICATION OF THE OFFER AND
SALE OR DISPOSITION OF SUCH SECURITIES UNDER THE CALIFORNIA CORPORATE SECURITIES
LAW OF 1968, AS AMENDED, OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT
REQUIRED."

            "THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE WITH, AND ARE SUBJECT TO TRANSFER UPON CERTAIN EVENTS DESCRIBED IN,
AN INCENTIVE SHARE OPTION AGREEMENT, COPIES OF WHICH ARE ON FILE AT THE
PRINCIPAL OFFICE OF THE ISSUER."

                                       7
<PAGE>   15

        The Option Shares should be issued to ____________________, and
delivered to the following address:

                                            Signed:
                                                   -----------------------------

                                            Dated:
                                                  ------------------------------

                                       8

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