Document:

THIRTY EGLINTON WEST INC.

                                   (Landlord)

                                     - and -

                                GRAVITY SPIN INC.

                                    (Tenant)

                               ------------------
                                      LEASE
                               ------------------

                             30 EGLINTON AVENUE WEST
                              MISSISSAUGA, ONTARIO

Dated:        November 15, 2001

Suite Number:       720

<PAGE>

                  30 Eglinton Avenue West, Mississauga, Ontario

                                  Office Lease

                                BASIC PROVISIONS
                                ----------------

Landlord:        Thirty Eglinton West Inc.

Address:         438 University Avenue
                 Suite 302, Box 18
                 Toronto, Ontario
                 M5G 2K8

Tenant:          Gravity Spin Inc.

Address:         30 Eglinton Avenue West
                 Toronto, Ontario

Suite No.:       720

Area:            Rentable Space    -    1,177

Term of Lease:   5 Years

From:            February 1, 2002

To:              January 31, 2007

Options) to Extend:      5 years

<PAGE>

                                      INDEX
                                      -----

ARTICLE 1.00 - GRANT AND WORK. . . . . . . . . . . . . . . . . . . .       1
     1.1  Grant. . . . . . . . . . . . . . . . . . . . . . . . . . .       1
     1.2  Quiet  Enjoyment . . . . . . . . . . . . . . . . . . . . .       1

ARTICLE 2.00 - TERM AND POSSESSION . . . . . . . . . . . . . . . . .       1
     2.1  Term . . . . . . . . . . . . . . . . . . . . . . . . . . .       1
     2.2  Delayed Possession . . . . . . . . . . . . . . . . . . . .       1
     2.3  Acceptance of Premises . . . . . . . . . . . . . . . . . .       2

ARTICLE 3.00 - RENT AND OPERATING COSTS. . . . . . . . . . . . . . .       2
     3.1  Minimum Rent . . . . . . . . . . . . . . . . . . . . . . .       2
     3.2  Operating Costs. . . . . . . . . . . . . . . . . . . . . .       2
     3.3  Payment of Rent - General . . . . . . . . . . . . . . . .        2
     3.4  Rent - Adjustment. . . . . . . . . . . . . . . . . . . . .       2
     3.5  Payment - Operating Costs. . . . . . . . . . . . . . . . .       3
     3.6  Deposit. . . . . . . . . . . . . . . . . . . . . . . . . .       3
     3.7  Net Lease. . . . . . . . . . . . . . . . . . . . . . . . .       3

ARTICLE 4.00 - TAXES AND UTILITIES . . . . . . . . . . . . . . . . .       3
     4.1  Taxes Payable by the Landlord. . . . . . . . . . . . . . .       3
     4.2  Taxes Payable by the Tenant. . . . . . . . . . . . . . . .       3
     4.3  Payment of Taxes . . . . . . . . . . . . . . . . . . . . .       4
     4.4  Business Taxes and Other Taxes of the Tenant . . . . . . .       4
     4.5  Separate School Taxes. . . . . . . . . . . . . . . . . . .       5
     4.6  Right to Contest . . . . . . . . . . . . . . . . . . . . .       5
     4.7  Utility Charges and Services . . . . . . . . . . . . . . .       5
     4.8  Goods and Services Taxes . . . . . . . . . . . . . . . . .       5

ARTICLE 5.00 - USE OF LEASED PREMISES. . . . . . . . . . . . . . . .       6
     5.1  Use. . . . . . . . . . . . . . . . . . . . . . . . . . . .       6
     5.2  Compliance with Laws . . . . . . . . . . . . . . . . . . .       6
     5.3  Abandonment. . . . . . . . . . . . . . . . . . . . . . . .       6
     5.4  Nuisance . . . . . . . . . . . . . . . . . . . . . . . . .       6

ARTICLE 6.00 - SERVICES, MAINTENANCE, REPAIR, ALTERATIONS ACCESS BY
THE LANDLORD AND CONTROL OF COMMON AREAS . . . . . . . . . . . . . .       6
     6.1  Operating of Building. . . . . . . . . . . . . . . . . . .       6
     6.2  Services to Premises . . . . . . . . . . . . . . . . . . .       7
     6.3  Building Services. . . . . . . . . . . . . . . . . . . . .       7
     6.4  Maintenance, Repair and Replacement. . . . . . . . . . . .       8
     6.6  Alterations by Landlord. . . . . . . . . . . . . . . . . .       8
     6.7  Access by Landlord . . . . . . . . . . . . . . . . . . . .       9
     6.8  Policies . . . . . . . . . . . . . . . . . . . . . . . . .       9
     6.9  Limitation . . . . . . . . . . . . . . . . . . . . . . . .       9

ARTICLE 7.00 - MAINTENANCE, REPAIR, ALTERATIONS, IMPROVEMENTS AND
SIGNS BY THE TENANT. . . . . . . . . . . . . . . . . . . . . . . . .       9
     7.1  Condition of Premises . . . . . . . . . . . . . . . . . .        9
     7.2  Failure to Maintain Premises . . . . . . . . . . . . . . .      10
     7.3  No Alterations Without Consent . . . . . . . . . . . . . .      10
     7.4  Construction of Improvements . . . . . . . . . . . . . . .      10
     7.5  Trade Fixtures . . . . . . . . . . . . . . . . . . . . . .      11
     7.6  Construction Liens . . . . . . . . . . . . . . . . . . . .      11
     7.7  Signs  . . . . . . . . . . . . . . . . . . . . . . . . . .      11

ARTICLE 8.00 - INSURANCE . . . . . . . . . . . . . . . . . . . . . .      12

<PAGE>

     8.1  Landlord's Insurance . . . . . . . . . . . . . . . . . . .      12
     8.2  Tenant not to Jeopardize Landlord's Insurance. . . . . . .      12
     8.3  Tenant's Insurance . . . . . . . . . . . . . . . . . . . .      13
     8.4  Landlord's Right to Place Tenant's Insurance . . . . . . .      14

ARTICLE 9.00 - INJURY TO PERSON OR PROPERTY. . . . . . . . . . . . .      15
     9.1  Loss or Damage . . . . . . . . . . . . . . . . . . . . . .      15
     9.2  Indemnity Tenant . . . . . . . . . . . . . . . . . . . . .      15

ARTICLE 10.00 - ASSIGNMENT AND SUBLETTING. . . . . . . . . . . . . .      15
     10.1 Assignment, Subletting and Transfers . . . . . . . . . . .      15
     10.2 Landlord's Right to Terminate. . . . . . . . . . . . . . .      16
     10.3 Conditions of Landlord's Consent . . . . . . . . . . . . .      16
     10.4 Conditions of Transfer . . . . . . . . . . . . . . . . . .      17
     10.5 Tenant Not Released. . . . . . . . . . . . . . . . . . . .      17
     10.6 No Partial Payments of Rent. . . . . . . . . . . . . . . .      17
     10.7 Documentation. . . . . . . . . . . . . . . . . . . . . . .      17
     10.8 Change of Control. . . . . . . . . . . . . . . . . . . . .      17
     10.9 No Advertising . . . . . . . . . . . . . . . . . . . . . .      18
     10.10 Assignment by Landlord. . . . . . . . . . . . . . . . . .      18

ARTICLE 11.00 - SURRENDER. . . . . . . . . . . . . . . . . . . . . .      18
     11.1 Possession . . . . . . . . . . . . . . . . . . . . . . . .      18
     11.2 Trade Fixtures and Improvements. . . . . . . . . . . . . .      18
     11.3 Payments after Termination . . . . . . . . . . . . . . . .      18

ARTICLE 12.00 - HOLDING OVER . . . . . . . . . . . . . . . . . . . .      19
     12.1 Month to Month Tenancy . . . . . . . . . . . . . . . . . .      19
     12.2 General. . . . . . . . . . . . . . . . . . . . . . . . . .      19

ARTICLE 13.00 - RULES AND REGULATIONS. . . . . . . . . . . . . . . .      19
         13.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . .      19
         13.2 Observance . . . . . . . . . . . . . . . . . . . . . .      19
         13.3 Modification . . . . . . . . . . . . . . . . . . . . .      19
         13.4 Non-Compliance . . . . . . . . . . . . . . . . . . . .      19

ARTICLE 14.00 - DAMAGE AND DESTRUCTION . . . . . . . . . . . . . . .      20
         14.1 No Abatement . . . . . . . . . . . . . . . . . . . . .      20
         14.2 Damage to Leased Premises. . . . . . . . . . . . . . .      20
         14.3 Right of Termination . . . . . . . . . . . . . . . . .      20
         14.4 Destruction of Building. . . . . . . . . . . . . . . .      21
         14.5 Architect's Certificate. . . . . . . . . . . . . . . .      21

ARTICLE 15.00 - ACKNOWLEDGEMENTS, ATTORNMENT, SUBORDINATION. . . . .      22
     15.1 Acknowledgment of Tenancy. . . . . . . . . . . . . . . . .      22
     15.2 Attornment . . . . . . . . . . . . . . . . . . . . . . . .      22
     15.3 Subordination. . . . . . . . . . . . . . . . . . . . . . .      22
     15.4 Power of Attorney. . . . . . . . . . . . . . . . . . . . .      22
     15.5 Financial Information. . . . . . . . . . . . . . . . . . .      22

ARTICLE 16.00 - NOTICES. . . . . . . . . . . . . . . . . . . . . . .      23
     16.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . .      23

ARTICLE 17.00 - DEFAULT. . . . . . . . . . . . . . . . . . . . . . .      23
     17.1 Interest and Costs . . . . . . . . . . . . . . . . . . . .      23
     17.2 Right to Re-enter. . . . . . . . . . . . . . . . . . . . .      23
     17.3 Right to Relet . . . . . . . . . . . . . . . . . . . . . .      24
     17.4 Legal Expenses . . . . . . . . . . . . . . . . . . . . . .      24
     17.5 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . .      24
     17.6 The Landlord May Perform Covenants . . . . . . . . . . . .      25
     17.7 Landlord May Follow Chattels . . . . . . . . . . . . . . .      25

<PAGE>

     17.8 Waiver of Exemptions . . . . . . . . . . . . . . . . . . .      25

ARTICLE 18.00 - INDEMNIFIER. . . . . . . . . . . . . . . . . . . . .      26
     18.1 Indemnifier's Covenants. . . . . . . . . . . . . . . . . .      26

ARTICLE 19.00 - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . .      26
     19.1 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . .      26
     19.2 Accord and Satisfaction. . . . . . . . . . . . . . . . . .      26
     19.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . .      26
     19.4 No Partnership . . . . . . . . . . . . . . . . . . . . . .      26
     19.5 Force Majeure. . . . . . . . . . . . . . . . . . . . . . .      26
     19.6 Name of Building . . . . . . . . . . . . . . . . . . . . .      27
     19.7 Consent not Unreasonably Withheld. . . . . . . . . . . . .      27
     19.8 Approval in Writing. . . . . . . . . . . . . . . . . . . .      27
     19.9 Registration . . . . . . . . . . . . . . . . . . . . . . .      27
     19.10 Governing Law . . . . . . . . . . . . . . . . . . . . . .      27
     19.11 Captions and Section Numbers. . . . . . . . . . . . . . .      27
     19.12 Partial Invalidity. . . . . . . . . . . . . . . . . . . .      27
     19.13 No Option . . . . . . . . . . . . . . . . . . . . . . . .      28
     19.14 Compliance with The Planning Act. . . . . . . . . . . . .      28
     19.15 Security Deposit. . . . . . . . . . . . . . . . . . . . .      28
     19.16 Time To Be of the Essence . . . . . . . . . . . . . . . .      28
     19.17 Successors and Assigns. . . . . . . . . . . . . . . . . .      28
     19.18 Relocation of Leased Premises . . . . . . . . . . . . . .      28
     19.19 Joint and Several Liability . . . . . . . . . . . . . . .      29
     19.20 Condition of the Premises . . . . . . . . . . . . . . . .      29
     19.21 Extension . . . . . . . . . . . . . . . . . . . . . . . .      29
     19.22 Parking . . . . . . . . . . . . . . . . . . . . . . . . .      30
     19.23 Restoration of Premises . . . . . . . . . . . . . . . . .      30

<PAGE>

                                                                    Office Lease

                THIS LEASE made this 15th day of November, 2001.

IN PURSUANCE OF THE SHORT FORMS OF LEASES ACT

B E T W E E N :

          THIRTY EGLINTON WEST INC.
          -------------------------

          (hereinafter called the "Landlord"),

                                                              OF THE FIRST PART;

                                    - and -

          GRAVITY SPIN INC.
          -----------------

          (hereinafter called the "Tenant"),

                                                             OF THE SECOND PART.

ARTICLE 1.00 - GRANT AND WORK
-----------------------------

1.1  Grant
     -----

     The Landlord  hereby  demises and leases the Leased  Premises to the Tenant
     and the Tenant  hereby  leases and  accepts  the Leased  Premises  from the
     Landlord, subject to the covenants and terms of this Lease.

1.2  Quiet Enjoyment
     ---------------

     The Landlord  covenants with the Tenant for quiet enjoyment  subject to the
     Tenant's full compliance with the terms of this Lease.

ARTICLE 2.00 - TERM AND POSSESSION

2.1  Term
     ----

     The  Landlord  leases the Leased  Premises to the Tenant for a Term of five
     (5) years to be computed from the 1st day of February, 2002 and to be fully
     completed and ended on the 31st day of January,  2007,  save as hereinafter
     provided for early termination.

     The Tenant  shall  have the right to access and occupy the Leased  Premises
     immediately,  provided  that  this  Lease  has  been  executed  by both the
     Landlord  and the  Tenant,  the  Landlord's  Work  has been  completed  and
     evidence of  insurance  has been  provided  by the Tenant to the  Landlord.
     Should the Tenant  occupy the  Leased  Premises  prior to the  Commencement
     Date,  the Tenant  shall abide by all terms and  conditions  of this Lease,
     save for the payment of Minimum Rent and Additional  Rent during the period
     from early occupancy to the Commencement Date of the Lease.

2.2  Delayed Possession
     ------------------

     If for any reason  other than delay  caused by the Tenant or failure of the

<PAGE>

                                      - 2 -

     Tenant to complete  its work,  the Leased  Premises are not  completed  and
     ready for occupancy on the  Commencement  Date,  Rent shall abate until the
     Leased  Premises are  completed and ready for occupancy as certified by the
     Architect's  Certificate  and  such  abatement  of  Rent  shall  be in full
     settlement of all claims which the Tenant may  otherwise  have by reason of
     the delay.

2.3  Acceptance of Premises
     ----------------------

     Taking  possession  of all or any  portion  of the Leased  Premises  by the
     Tenant shall be  conclusive  evidence as against the Tenant that the Leased
     Premises or such portion thereof are in satisfactory  condition on the date
     of taking possession.  Any warranties  available to the Landlord in respect
     of work done in the Leased  Premises  shall be pursued by the  Landlord for
     the benefit of the Tenant.

ARTICLE 3.00 - RENT AND OPERATING COSTS
---------------------------------------

3.1  Minimum Rent
     ------------

     Yielding and paying  therefor  unto the Landlord  yearly and every year and
     during the Term hereby granted for the period  commencing on the 1st day of
     February,  2002 until the 31st day of January, 2007, an annual Minimum Rent
     of $17,655.00 of lawful money of Canada, payable at par at Toronto in equal
     consecutive monthly instalments of $1,471.25,  each in advance on the first
     day of each month  during the Term.  It is  understood  and agreed that the
     foregoing Minimum Rent is calculated on the basis of $15.00 per square foot
     of the Rentable Space of the Leased  Premises per annum.  The parties agree
     that  Rentable  Space is correct and not subject to  remeasurement  and any
     provision contained in this lease to the contrary shall be inoperative.

3.2  Operating Costs
     ---------------

     The Tenant shall pay to the Landlord as  Additional  Rent, at the times and
     in the manner  provided  in Section  3.5,  its  Proportionate  Share of the
     Operating Costs.

3.3  Payment of Rent - General
     -------------------------

     All  amounts  payable  by the  Tenant to the  Landlord  under this Lease or
     payable  to a  government  authority  by reason of the  Tenant's  occupancy
     hereof other than Minimum Rent shall be  considered  "Additional  Rent" and
     shall be deemed to be Rent and shall be payable and  recoverable as Rent in
     the manner herein provided,  and the Landlord shall have all rights against
     the  Tenant for  default  in any such  payment as in the case of arrears of
     Minimum Rent.  Rent shall be paid to the Landlord,  without the requirement
     of notice and without  deduction or set-off,  in legal tender of Canada, at
     the address of the  Landlord  as set forth in this Lease,  or to such other
     Person  or at such  other  address  as the  Landlord  may from time to time
     designate in writing. The Tenant's obligation to pay Rent shall survive the
     expiration or earlier  termination of this Lease. If the time and manner of
     the payment of any Rent is not provided in this Lease,  the Landlord  shall
     be  permitted  to  determine  the  time and  manner  of such  payment.  All
     Additional  Rent shall  commence  to be payable  on the  Commencement  Date
     unless otherwise provided for herein.

3.4  Rent - Adjustment
     -----------------

     If the Term  commences or ends on a day other than the first or last day of
     a calendar  month,  the monthly  instalment of Minimum Rent and  Additional
     Rent under this Lease shall be calculated on a per diem basis and pro rated
     accordingly  using the Minimum Rent or Additional  Rent payable  during the
     calendar month in question.

<PAGE>

                                      - 3 -

3.5  Payment - Operating Costs
     -------------------------

     (a)  Prior to the Commencement  Date (or within a reasonable period of time
          thereafter)  and the  beginning  of each  Lease Year  thereafter,  the
          Landlord  shall compute and deliver to the Tenant a bona fide estimate
          of Operating Costs for the ensuing Lease Year.

     (b)  The Tenant  shall pay to the  Landlord  in equal  monthly  instalments
          one-twelfth  of the  Tenant's  Proportionate  Share of the  Landlord's
          estimate of Operating Costs for each Lease Year,  simultaneously  with
          the  Tenant's  monthly  instalment  of Minimum  Rent during such Lease
          Year.

     (c)  Unless delayed by causes beyond the Landlord's  control,  the Landlord
          shall  deliver to the Tenant  within one hundred and twenty (120) days
          after the end of each Lease Year a written  statement (the  "Operating
          Costs  Statement")  setting  out in  reasonable  detail  the amount of
          Operating  Costs for such Lease Year. If the aggregate of such monthly
          instalments  of  Operating  Costs  actually  paid by the Tenant to the
          Landlord  during such Lease Year  differs from the amount of Operating
          Costs payable for such Lease Year under Article 3.02, the Tenant shall
          pay or the Landlord  shall refund the  difference (as the case may be)
          without  interest  within  thirty (30) days after the  delivery of the
          Operating Costs Statement.

     (d)  The Tenant  shall not claim a  readjustment  in  respect of  Operating
          Costs for a Lease Year,  except by notice  delivered  to the  Landlord
          within six (6) months of the date of delivery of the  operating  Costs
          Statement.

     The  estimated  cost for realty  taxes,  Tenant hydro and  Operating  Costs
     (including  Landlord's  administration  fees) for 2001 is $11.81 per square
     foot per  annum.  This is an  estimate  only and shall be  subject to final
     calculations.

3.6  Deposit
     -------

     The  Landlord  hereby  acknowledges  receipt  by its  agent  of the  sum of
     $5,627.37  to be applied as a deposit  against  the first and last  months'
     Minimum Rent, Additional Rent and GST when due.

3.7  Net Lease
     ---------

     It is the intent of the parties  hereto that the Minimum Rent payable under
     this Lease  shall be  absolutely  net and  carefree  to the  Landlord.  Any
     obligation  which  is not  expressly  declared  herein  to be  that  of the
     Landlord  pertaining to the Leased  premises  shall be deemed to be that of
     the Tenant to be paid by the Tenant or to be performed by or at the expense
     of the Tenant.  Notwithstanding the generality of the foregoing, the Tenant
     shall have no responsibility for the income taxes of the Landlord,  and any
     principal,  interest  or other  carrying  charges  in any  mortgage  of the
     Building.

ARTICLE 4. 0 - TAXES AND UTILITIES
----------------------------------

4.1  Taxes payable by the Landlord
     -----------------------------

     The Landlord  shall pay all Taxes,  subject to Sections  4.2,  4.3, 4.4 and
     4.5, provided that it may defer such payments or compliance with any taxing
     statute,  law,  by-law,  regulation  or  ordinance  to the  fullest  extent
     permitted by law, so long as it diligently pursues any contest or appeal of
     any such Taxes.

4.2  Taxes Payable by the Tenant
     ---------------------------

<PAGE>

                                      - 4 -

     (a)  If  separate  real  property  tax bills  and  separate  real  property
          assessment  notices for the Leased  Premises  are  issued,  the Tenant
          shall;

          (i)       pay promptly  when due to the taxing  authorities  all Taxes
                    imposed,  assessed,  levied,  rated or charged  from time to
                    time  against the Leased  Premises  or any part  thereof and
                    forthwith provide the Landlord with evidence of payment upon
                    request; and

          (ii)      provide  the  Landlord  with a copy  of each  separate  real
                    property tax bill and separate  assessment notice within ten
                    (10) days after receipt thereof;

          provided  that if the Landlord so elects by notice to the Tenant,  the
          Tenant shall add any amounts  payable under this Section 4.2(a) to the
          monthly  instalments of Minimum Rent payable under Section 3.1 and the
          Landlord shall remit such amounts to the appropriate authorities.

     (b)  If  separate  real  property  tax bills  and  separate  real  property
          assessment  notices for the Leased Premises are not issued, the Tenant
          shall pay to the  Landlord at the times and in the manner  provided in
          Section  4.3, a share,  as  allocated  to the Leased  Premises  by the
          Landlord in its discretion, of all Taxes, imposed,  assessed,  levied,
          rated or charged against the Building and the Lands.

4.3  Payment of Taxes
     ----------------

     (a)  In the event that the  provisions of Section  4.2(b) shall apply,  the
          Tenant  shall  pay to  the  Landlord  in  equal  monthly  instalments,
          one-twelfth (1/12) of the Landlord's estimate of the amount payable by
          the Tenant  pursuant  to  Section  4.2(b)  above for each Lease  Year,
          simultaneously  with the Tenant's  monthly  instalment of Minimum Rent
          during such Lease Year.

     (b)  Unless delayed by causes beyond the Landlord's  control,  the Landlord
          shall  deliver to the Tenant  within one hundred and twenty (120) days
          after  the  end of each  Lease  Year a  written  statement  (the  "Tax
          Statement")  setting  out in  reasonable  detail  the  amount of Taxes
          imposed,  assessed,  levied, rated or charged against the Building and
          the Lands for such Lease Year and the amount of such Taxes  payable by
          the Tenant for such Lease Year under Section 4.2(b).  If the aggregate
          of such monthly  instalments  of Taxes  actually paid by the Tenant to
          the  Landlord  during such Lease Year differs from the amount of Taxes
          payable by the Tenant for such Lease Year under  Section  4,2(b),  the
          Tenant shall pay or the Landlord  shall refund the  difference (as the
          case may be)  without  interest  within  thirty  (30)  days  after the
          delivery of the Tax Statement.

     (c)  The Tenant shall not claim a  re-adjustment  in respect of Taxes for a
          Lease Year except by notice  delivered to the Landlord  within six (6)
          months after the date of delivery of the Tax Statement.

4.4  Business Taxes and Other Taxes of the Tenant
     --------------------------------------------

     In addition to the Taxes payable by the Tenant pursuant to Section 4.2, the
     Tenant  shall  pay to the  taxing  authorities,  or to the  Landlord  as it
     directs, before delinquency,  all "Business Taxes". "Business Taxes" means,
     (a) the  taxes,  rates,  duties,  assessments  and other  charges  that are
     imposed against or in respect of the improvements, equipment and facilities
     of the Tenant on or in the Leased  Premises or the Building or the Lands or
     any part of them or the Landlord on account of its ownership of or interest
     in  either  of them;  and (b) every  tax and  license  fee that is  imposed
     against or in respect  of any and every  business  carried on in the Leased

<PAGE>

                                      - 5 -

     Premises or in respect of the use or  occupancy  of the Leased  Premises or
     any part of the  Building or the Lands by the Tenant or its  subtenants  or
     licensees,  or against  the  Landlord  on account  of its  ownership  of or
     interest in either of them.  If there is not a separate  bill issued by the
     relevant  authority for Business  Taxes,  the Landlord shall be entitled to
     reasonably  allocate  Business Taxes and the Tenant shall pay the amount so
     allocated upon demand. The Landlord will remit amounts that it collects for
     Business Taxes to the relevant authority.

4.5  Separate School Taxes
     ---------------------

     If the Tenant  designates that Taxes go to support  separate  schools,  the
     Tenant shall pay to the Landlord forthwith upon demand, the difference,  if
     any,  between the rate for separate and public  schools,  together with any
     other payment required pursuant to this Article 4.00.

4.6  Right to Contest
     ----------------

     The  Landlord  and the Tenant  shall each have the right to contest in good
     faith the validity or amount of any tax,  assessment,  licence fee,  excise
     fee and other  charge  which it is  responsible  to pay under this  Article
     4.00,  provided that;  (a) the Tenant obtains the Landlord's  prior written
     consent to any such contest before  commencing  same; (b) no contest by the
     Tenant may involve the  possibility of  forfeiture,  sale or disturbance of
     the  Landlord's  interest  in the  Leased  Premises;  (c) that  the  Tenant
     indemnifies  and  agrees  to save the  Landlord  harmless  from any and all
     losses,  costs or damages  that the  Landlord  may suffer by reason of such
     contest by the Tenant;  and (d) that, prior to contesting such charge,  the
     Tenant  shall  immediately  pay and satisfy  the amount  claimed to be due,
     together  with any costs,  penalties  and interest and provide  evidence of
     such payment to the Landlord.

4.7  Utility Charges and Services
     ----------------------------

     All electricity or other utilities supplied to the Leased Premises shall be
     at the expense of the Tenant.  If the Leased  Premises  are not  separately
     metered,  the  Landlord  shall  pay the cost of such  electricity  or other
     utilities  and  apportion  such  costs  among  all those  tenants  supplied
     therefrom on a reasonable and equitable basis.  Upon receipt of a statement
     from the Landlord for such electricity or utility charges, the Tenant shall
     pay to the Landlord the amount shown on such statement. Notwithstanding the
     above,  the  Landlord  may elect by notice to the  Tenant to  estimate  the
     amounts for which the Tenant is liable  hereunder and require the Tenant to
     pay same in monthly  instalments  at the times and in the  manner  provided
     under this Lease for payment of Minimum Rent, in which case the  provisions
     of Section 3.5 shall apply.

4.8  Good and Services Taxes
     -----------------------

     Notwithstanding  any other  Section of this Lease,  the Tenant shall pay to
     the Landlord an amount equal to any and all goods and services taxes, sales
     taxes,  value added  taxes,  business  transfer  taxes,  or any other taxes
     imposed on the  Landlord or the Tenant with  respect to the Rent payable by
     the Tenant to the Landlord under this Lease, or in respect of the rental of
     space under this Lease, whether  characterized as a goods and services tax,
     sales tax,  value added tax,  business  transfer tax, or otherwise  (herein
     collectively  and  individually  called "Sales  Taxes"),  The amount of the
     Sales Taxes so payable by the Tenant shall be calculated by the Landlord in
     accordance with the applicable legislation and will be paid to the Landlord
     at the same time as the amounts to which such Sales Taxes apply are payable
     to the Landlord  under the terms of this Lease or upon demand at such other
     time or times as the Landlord from time to time determines. Notwithstanding
     any other Section of this Lease,  the amount payable by the Tenant pursuant
     to the  provisions  hereof shall be deemed not to be Rent, but the Landlord

<PAGE>

                                      - 6 -

     shall  have all of the same  remedies  for and  rights of  recovery  of the
     amount as it has for the recovery of Rent under this Lease.

ARTICLE 5.00 - USE OF LEASED PREMISES
-------------------------------------

5.1  Use
     ---

     The Leased  Premises  shall be used and occupied  only as general  business
     offices.

5.2  Compliance with Laws
     --------------------

     The Leased  Premises  shall be used and  occupied  in a safe,  careful  and
     proper manner so as not to contravene any present or future governmental or
     quasi-governmental  laws,  by-laws,  rules or  regulations  or  orders.  If
     improvements,  alterations, repairs or replacements are necessary to comply
     with any of the foregoing or with the  requirements of insurance  carriers,
     the Tenant shall pay the entire cost thereof.

5.3  Abandonment
     -----------

     The  Tenant  shall not vacate or abandon  the Leased  Premises  at any time
     during the Term without the written consent of the Landlord.

5.4  Nuisance
     --------

     The Tenant  shall not cause or maintain any nuisance in or about the Leased
     Premises,  and shall keep the  Leased  Premises  free of  debris,  rodents,
     vermin and  anything of a dangerous,  noxious or offensive  nature or which
     could create a fire hazard  (through  undue load on electrical  circuits or
     otherwise) or undue vibration, heat, noise or odours.

ARTICLE 6.00 - SERVICES, MAINTENANCE, REPAIR, ALTERATIONS ACCESS BY THE LANDLORD
--------------------------------------------------------------------------------
AND CONTROL OF COMMON AREAS
---------------------------

6.1  Operating of Building
     ---------------------

     During the Term, the Landlord  shall  operate and  maintain the Building in
     accordance with all applicable laws and regulations and with standards from
     time to time prevailing for a similar  multi-use  building of a similar age
     and size in the area in which the  Building is located and,  shall  provide
     the services  set out in Sections  6.2, 6.3 and 6.4 subject in all cases to
     reimbursement by the Tenant as part of Operating Costs.

     The  Building  and the  Lands  are at all times  subject  to the  exclusive
     control,  management  and operation of the Landlord.  Without  limiting the
     generality of the preceding  sentence,  the Landlord has the right,  in its
     control,  management and operation of the Building and the Lands and by the
     establishment of Rules and Regulations and general policies with respect to
     the  operation of the Building  and the Lands or any part  thereof,  at all
     times throughout the Term, to:

     (a)  construct  improvements  in or to the  Building  and make  alterations
          thereof,  additions thereto,  subtractions  therefrom,  rearrangements
          thereof (including all entrances and exits thereto),  build additional
          storeys on the Building and construct additional  facilities adjoining
          or proximate to the Building;

     (b)  relocate  or  rearrange  the  various   facilities  and   improvements
          comprising the Building or erected on the Lands from those existing at

<PAGE>

                                      - 7 -

          the Commencement Date;

     (c)  control,  supervise and regulate any parking  facilities  which may be
          used in  conjunction  with the Building in such manner as the Landlord
          determines from time to time, including, without limitation,  imposing
          charges  or  rates  as may  from  time to time  be  determined  by the
          Landlord for the use of any such parking facilities;

     (d)  do and perform such other acts in and to the Building and the Lands or
          any  part  thereof  as,  in the use of  good  business  judgment,  the
          Landlord  determines to be advisable for the more efficient and proper
          operation of the Building and the Lands.

6.2  Services to Premises
     --------------------

     Subject  to the  Additional  Services  which may be  provided  pursuant  to
     Section 6.5, the Landlord (except during periods of repair and maintenance)
     shall provide in the Leased Premises:

     (a)  heat, ventilation and cooling as required for the use and occupancy of
          the Leased Premises during Normal Business Hours.

     (b)  janitor services,  including window washing, as reasonably required to
          keep the Leased Premises in a clean and wholesome condition,  provided
          that the Tenant shall leave the Leased  Premises in a reasonably  tidy
          condition at the end of each business day,

     (c)  electric power for normal lighting and small business office equipment
          but not equipment using amounts of power disproportionate to that used
          by other tenants in the Building,

     (d)  replacement of Building standard  fluorescent  tubes,  light bulbs and
          ballasts  as required  from time to time as a result of normal  usage,
          and

     (e)  maintenance, repair and replacement as set out in Article 6.4.

6.3  Building Services
     -----------------

     The  Landlord  shall  (except  during  periods of repair  and  maintenance)
     provide in the Building:

     (a)  domestic running water and necessary supplies in washrooms  sufficient
          for the normal use thereof by occupants of the Building,

     (b)  access to and egress from the Leased  Premises  during Normal Business
          Hours of the  Building,  including  elevator or  escalator  service if
          included in the Building,

     (c)  heat, ventilation, cooling, lighting, electric power, domestic running
          water and janitor  service in those  portions of the Common Areas from
          time to time designated by the Landlord for use during Normal Business
          Hours by the Tenant in common with all  tenants  and other  Persons in
          the Building but under the exclusive control of the Landlord,

     (d)  a general  directory  board on which the Tenant  shall be  entitled to
          have its name shown,  provided that the Landlord  shall have exclusive
          control  thereof,  including the right to require a fee to be paid for
          the  privilege of  displaying  the name of the Tenant  thereon and any
          additions or deletions,  the Landlord being solely responsible for the
          allocation of space to tenants, and

<PAGE>

                                      - 8 -

     (e)  maintenance, repair and replacement as set out in Article 6.4.

6.4  Maintenance, Repair and Replacement
     -----------------------------------

     The  Landlord  shall  operate,  maintain,  repair and replace the  systems,
     facilities and equipment necessary for the proper operation of the Building
     and for provision of the  Landlord's  services  under  Articles 6.2 and 6.3
     (except as may be  installed by or be the property of the Tenant) and shall
     be  responsible  for  and  shall  expeditiously  maintain  and  repair  the
     foundations,  structure  and roof of the Building and repair  damage to the
     Building  which the Landlord is obligated to insure  against  under Article
     8.1 hereof, provided that:

     (a)  if  all  or  part  of  such  systems,  facilities  and  equipment  are
          destroyed,  damaged or impaired,  the Landlord shall have a reasonable
          time in which to complete the  necessary  repair or  replacement,  and
          during that time shall be required  only to maintain  such services as
          are reasonably possible in the circumstances,

     (b)  the Landlord may temporarily  discontinue such services or any of them
          at such times as may be necessary due to causes beyond the  reasonable
          control of the Landlord,

     (c)  if  all  or  part  of  such  systems,  facilities  and  equipment  are
          destroyed,  damaged or impaired by reason of the actions or  inactions
          of the Tenant,  then the cost of repair or replacement shall be at the
          expense of the Tenant.

6.5  Additional Services
     -------------------

     (a)  If from time to time  requested  in  writing  by the Tenant and to the
          extent that it is reasonably able to do so, the Landlord shall provide
          in the  Leased  Premises  services  in  addition  to those  set out in
          Articles 6.2 and 6.3,  provided  that the Tenant shall within ten (10)
          days of receipt of any invoice for any such additional service pay the
          Landlord  therefor at such  reasonable  rates as the Landlord may from
          time to time establish and as well comply with all reasonable security
          requirements of the Landlord.

     (b)  The Tenant shall not without the Landlord's written consent install in
          the Leased Premises equipment  (including  telephone  equipment) which
          generates   sufficient  heat  to  affect  the  temperature   otherwise
          maintained in the Leased  Premises by the air  conditioning  system as
          normally  operated.   The  Landlord  may  install   supplementary  air
          conditioning units,  facilities or services in the Leased Premises, or
          modify  its  air  conditioning  system,  as  may  be  required  in the
          reasonable  opinion of the  Landlord  to maintain  proper  temperature
          levels,  and the Tenant shall pay the Landlord within ten (10) days of
          receipt of any invoice for the cost thereof,  including  installation,
          operation and maintenance expense.

     (c)  If the Landlord shall from time to time reasonably determines that the
          use of  electricity  or any other  utility  or  service  in the Leased
          Premises is disproportionate to the use of other tenants, the Landlord
          may separately charge the Tenant for the excess costs  attributable to
          such disproportionate use. At the Landlord's request, the Tenant shall
          install and maintain,  at the Tenant's  expense,  metering devices for
          checking  the  use  of any  such  utility  or  service  in the  Leased
          Premises.

6.6  Alterations by Landlord
     -----------------------

     The  Landlord may from  time to time make repairs, replacements, changes or

<PAGE>

                                      - 9 -

     additions to the structure, systems, facilities and equipment in the Leased
     Premises where necessary to serve the Leased Premises or other parts of the
     Building.

6.7  Access by Landlord
     ------------------

     The Tenant shall permit the Landlord to enter the Leased  Premises  outside
     Normal  Business Hours and during Normal Business Hours where such will not
     unreasonably  disturb  or  interfere  with the  Tenant's  use of the Leased
     Premises and  operation of its business,  to examine,  inspect and show the
     Leased  Premises to Persons  wishing to lease same, to provide  services or
     make  repairs,  replacements,  changes  or  alterations  as set out in this
     Lease,  and to take such steps as the Landlord may deem  necessary  for the
     safety, improvement or preservation of the Leased Premises or the Building.
     The Landlord shall whenever possible consult with or give reasonable notice
     to the Tenant prior to such entry,  but no such entry shall  constitute  an
     eviction or entitle the Tenant to any  abatement  of Rent.  During the last
     six (6) months of the Term (or renewals), the Landlord shall be entitled to
     enter the Leased  Premises for the purposes of showing the Leased  premises
     to Persons wishing to lease same.

6.8  Policies
     --------

     The Landlord  shall be deemed to have  observed and performed the terms and
     conditions  to be  performed by the  Landlord  under this Lease,  including
     those  relating to the provision of utilities and services,  if in so doing
     it acts in accordance with a directive, policy or request of a governmental
     or  quasi-governmental  authority serving the public interest in the fields
     of energy, conservation or security.

6.9  Limitation
     ----------

     Notwithstanding  anything  contained in this Article or Lease, the Landlord
     shall not be liable under any  circumstances  for any loss or damage to any
     Person or property arising out of any obligation of the Landlord  contained
     in this Article or Lease.  No reduction or  discontinuance  of any services
     set out in Article  6.00 herein or elsewhere in this Lease nor any exercise
     by the  Landlord  of any of its  rights  set  out in this  Article  6.00 or
     elsewhere  in this Lease shall be construed as an eviction of the Tenant or
     a release of the Tenant from any of its  obligations  under this Lease or a
     breach of any  covenant  for quiet  enjoyment  contained  in this  Lease or
     implied by law.

ARTICLE 7.0 - MAINTENANCE,  REPAIR,  ALTERATIONS,  IMPROVEMENTS AND SIGNS BY THE
--------------------------------------------------------------------------------
TENANT
------

7.1  Condition of Premises
     ---------------------

     Except to the extent that the Landlord is specifically responsible therefor
     under this Lease,  the Tenant shall  maintain  the Leased  Premises and all
     improvements therein in good order and condition as reasonably requested by
     the Landlord  and at least to the  standard of the repair of the  Building,
     including:

     (a)  repainting and  redecorating  the Leased  Premises and cleaning drapes
          and carpets at reasonable intervals as needed,

     (b)  making  repairs,  replacements  and  alterations as needed,  including
          those necessary to comply with the requirements of any governmental or
          quasi-governmental authority having jurisdiction, and

     (c)  notifying the Landlord  promptly of any damage to the Leased  Premises
          or Building.

<PAGE>

                                     - 10 -

7.2  Failure to Maintain Premises
     ----------------------------

     If the Tenant fails to perform any  obligations  under Section 7.1, then on
     not less than ten (10) days'  notice to the Tenant the  Landlord  may enter
     the Leased Premises and perform such obligations  without  liability to the
     Tenant  for any loss or  damage to the  Tenant  thereby  incurred,  and the
     Tenant shall pay the Landlord for the cost  thereof,  plus fifteen  percent
     (15%) of such cost for  overhead and  supervision,  within ten (10) days of
     receipt of the Landlord's invoice therefor.

7.3  No Alterations Without Consent
     ------------------------------

     The Tenant shall not make any  alterations,  repairs,  changes,  additions,
     fixturing, installations or improvements (hereinafter collectively referred
     to as  "Improvements")  to the Leased  Premises  without the prior  written
     consent of the Landlord.  All  Improvements  (other than the Tenant's trade
     fixtures,  furniture,  drapery or equipment) made,  erected or installed in
     the Leased  Premises shall  immediately  upon their placement be and become
     the property of the Landlord  without  compensation  therefor to the Tenant
     and the  Tenant  shall not remove any such  Improvements  either  before or
     after the  termination  of this Lease without the prior written  consent of
     the Landlord. Prior to the Landlord giving consideration to any application
     for the Landlord's  consent  pursuant to this Section 7.3, the Tenant shall
     provide to the Landlord detailed plans, drawings and specifications of such
     Improvements.  Any  costs  incurred  by the  Landlord,  including,  without
     limiting  the  generality  of  the  foregoing,  fees  paid  to  architects,
     engineers or other consultants, shall be paid by the Tenant to the Landlord
     forthwith upon demand.

7.4  Construction of Improvements
     ----------------------------

     All Improvements,  when approved by the Landlord, shall be effected by such
     contractor, contractors or sub-contractors as the Tenant may select but, in
     each case, only under written contract  approved in writing by the Landlord
     and subject to all reasonable  conditions which the Landlord may impose. It
     is expressly understood and agreed that, without limiting the generality of
     the  foregoing,  it shall be  reasonable  for the  Landlord  to  impose  as
     conditions of the granting of its consent any one or more of the following:

     (a)  that  the  Tenant  shall   exhibit  to  the  Landlord   prior  to  the
          commencement  of the  making of  Improvements  all  building  permits,
          consents and other authorizations as may be required for the effecting
          of such Improvements;

     (b)  that the  Tenant  shall,  prior to the  commencement  of the making of
          Improvements, furnish to the Landlord such security, whether by way of
          performance  bond,  cash  deposit or  otherwise,  as the  Landlord may
          require,  to ensure the due and proper  carrying out and completion of
          the Improvements and payment therefor;

     (c)  that the Tenant shall  permit the  Landlord to supervise  the carrying
          out of the Improvements; and

     (d)  that the Tenant shall pay to the  Landlord  all costs  incurred by the
          Landlord in supervising  and inspecting  the  Improvements,  including
          fees paid to architects, engineers and other consultants, and salaries
          paid to  Persons  on the  Landlord's  staff or on staff of any  Person
          managing or administering  the Building,  as well as an administration
          fee  equal to five (5%)  percent  of the full  contract  price for all
          approvals,  supervision to ensure  compliance  with approved plans and
          building code requirements, attendance at site meetings, if necessary,
          security, hoisting, elevator service, temporary power.

<PAGE>

                                     - 11 -

     The Landlord may in its absolute  discretion  require that the whole or any
     part of such  Improvements be carried out by contractors or  subcontractors
     designated  by the  Landlord,  but at the expense of the Tenant.  Each such
     contractor  or  subcontractor,  whether or not  designated by the Landlord,
     shall be the Tenant's  contractor and  sub-contractor and the Tenant hereby
     undertakes  that any work performed by or for the Tenant shall be performed
     by competent  workmen whose labour union  affiliations are not incompatible
     with  those of any  workmen  who may be  employed  in the  Building  by the
     Landlord, its contractors or sub-contractors.

7.5  Trade Fixtures
     --------------

     The Tenant  may  install in the Leased  Premises  its trade  fixtures  in a
     proper manner,  provided that no such installation  shall interfere with or
     damage  the  mechanical  or  electrical  systems  or the  structure  of the
     Building.  If the Tenant is not then in default  hereunder,  trade fixtures
     installed in the Leased  Premises  may be removed from the Leased  Premises
     from time to time in the ordinary course of the Tenant's business or in the
     course of  reconstruction,  renovation or alteration of the Leased Premises
     by the Tenant and during a reasonable period prior to the expiration of the
     Term,  provided  that the Tenant  promptly  repairs at its own  expense any
     damage to the Leased Premises resulting from such installation and removal.
     The foregoing  reference to trade  fixtures  which may be removed shall not
     include any Improvements which as stated in Section 7.3 become the property
     of the Landlord upon installation.

7.6  Construction Liens
     ------------------

     The  Tenant  shall  pay all costs for work done or caused to be done by the
     Tenant in the Leased Premises which could result in any lien or encumbrance
     on the  Landlord's  interest  in the  Building  or the  Lands  or any  part
     thereof,  shall keep the title to the Building and the Lands and every part
     thereof free and clear of any lien or  encumbrance in respect of such work,
     and shall indemnify and hold harmless the Landlord against any claim, loss,
     cost, demand and legal or other expense,  whether in respect of any lien or
     otherwise,  arising out of the supply of  material,  services or labour for
     such work.  The Tenant  shall  immediately  notify the Landlord of any such
     lien,  claim of lien or other action of which it has or  reasonably  should
     have  knowledge and which affects the title to the Building or the Lands or
     any part  thereof,  and shall cause the same to be removed  within five (5)
     days, failing which the Landlord may take such action as the Landlord deems
     necessary  to remove same and the entire  cost  thereof  together  with all
     legal fees and expenses  expended by the Landlord shall be immediately  due
     and payable by the Tenant to the Landlord as Additional Rent.

7.7  Signs
     -----

     The Landlord shall, at its sole expense, add the Tenant's corporate name to
     all present and planned  internal  directory boards used for displaying the
     Building's  tenant roster and suite numbers.  The Tenant shall not inscribe
     or affix  any sign,  lettering  or design  in the  Leased  Premises  or the
     Building  which is visible  from the  exterior  of the  Building  or on the
     interior or exterior of the Leased Premises.  Any sign, lettering or design
     of the Tenant which is visible  from the  exterior of the Leased  Premises,
     eg. in the Common Areas,  must be approved by the Landlord,  which approval
     may be arbitrarily  withheld.  Any sign,  lettering or design of the Tenant
     which is approved of by the Landlord  shall be at the Tenant's  expense and
     shall  conform to the  uniform  pattern  (based on  Building  standard  and
     quality) of identification  signs for tenants in the Building as prescribed
     from time to time by the Landlord.

<PAGE>

                                     - 12 -

ARTICLE 8.00 - INSURANCE
------------------------

8.1  Landlord's Insurance
     --------------------

     (a)  During the Term, the Landlord shall maintain liability insurance, fire
          insurance  with  extended   coverage,   boiler  and  pressure   vessel
          insurance,  loss of rental income insurance or insurable gross profits
          and other  insurance  on the Building and all property and interest of
          the  Landlord in the  Building  with  coverage and in amounts not less
          than those which are from time to time  acceptable  to a prudent owner
          in the  area in which  the  Building  is  located.  The  costs of such
          insurance shall be reimbursed by the Tenant to the Landlord as part of
          Operating Costs.

     (b)  Notwithstanding  any  contribution  by the  Tenant  to the cost of the
          Landlord's  insurance  premiums,  the Tenant  acknowledges  and agrees
          that:

          (i)       the Tenant is not relieved of any liability  arising from or
                    contributed  to by  its  negligence  or  its  wilful  act or
                    omission;

          (ii)      no insurable interest is conferred upon the Tenant under any
                    insurance policies carried by the Landlord;

          (iii)     the  Tenant  has no right to  receive  any  proceeds  of any
                    insurance policies carried by the Landlord; and

          (iv)      the right of any insurer of the Landlord to be subrogated to
                    the  rights of the  Landlord  is not  limited  or in any way
                    restricted.

8.2  Tenant not to Jeopardize Landlord's Insurance
     ---------------------------------------------

     Tenant  shall  neither  do,  permit  or omit to be done,  nor keep or sell,
     anything in or about the Leased Premises or the Building or the Lands which
     might  result in any  increase in the  premiums  for  Landlord's  insurance
     coverage on the Building or which might result in the actual or  threatened
     reduction or cancellation of or material adverse change in such coverage.

     If the  premiums  for  Landlord's  insurance  are  increased as a result of
     Tenant's  use or  occupancy  of the Leased  Premises or any article kept by
     Tenant  on the  Leased  Premises  or any act or  omission  of Tenant in the
     Building or the Lands or any part  thereof,  Tenant shall pay such increase
     in premiums as  Additional  Rent  forthwith  upon  demand.  In  determining
     Tenant's responsibility as aforesaid for any increased premiums a statement
     issued by the organization or company establishing the insurance rate(s) on
     the Building shall be conclusive evidence of the various components of such
     rate(s).

     If any insurance  coverage on the Building or any part thereof is actually,
     or  threatened  to be, either  cancelled,  reduced or materially  adversely
     changed  by the  insurer  by reason of the use or  occupancy  of the Leased
     Premises or any part  thereof,  and if Tenant fails to remedy the condition
     or use or occupancy giving rise to such actual or threatened  cancellation,
     reduction or change within  twenty-four  (24) hours after notice thereof by
     Landlord then the Landlord may at its option either:

     (a)  re-enter  and take  possession  of the Leased  Premises  forthwith  by
          leaving upon the Leased  Premises a notice in writing of its intention
          to do so  and  thereupon  the  provisions  of  this  Lease  respecting
          Landlord's remedies shall apply; or

<PAGE>

                                     - 13 -

     (b)  enter  upon the Leased  Premises  and  remedy  the  condition,  use or
          occupancy  giving  rise to such  actual  or  threatened  cancellation,
          reduction  or change,  and Tenant  shall pay to  Landlord on demand as
          Additional  Rent the cost thereof to Landlord.  Tenant  agrees that no
          such entry by  Landlord  shall be deemed a re-entry or a breach of any
          covenant of quiet enjoyment contained in this Lease.

     Tenant agrees that  Landlord  shall not be liable for any loss or damage to
     any Person or  property  located on the Leased  Premises as a result of any
     entry or re-entry by Landlord pursuant to this Section 8.2.

8.3  Tenant's Insurance
     ------------------

     (a)  Tenant shall, at its sole cost and expense,  take out and keep in full
          force and effect and pay all  premiums  for,  throughout  the Term and
          during such other time as Tenant  occupies the Leased  Premises or any
          part thereof, the following insurance:

          (i)       comprehensive  general liability insurance including but not
                    limited  to  property  damage,   bodily  injury   liability,
                    contractual  liability,  non-owned  automobile liability and
                    owners' and contractors'  protective insurance coverage with
                    respect  to the  Leased  Premises  and  Tenant's  use of the
                    Building and the Lands,  coverage to include the  activities
                    conducted  by  Tenant  and any other  Person  on the  Leased
                    Premises,  and by  Tenant,  those for whom  Tenant is in law
                    responsible  and any other Person  performing work on behalf
                    of Tenant in any other  part of the  Building  or the Lands.
                    Such policies shall have  inclusive  limits of at least Five
                    Million   ($5,000,000.00)   Dollars   for  each   occurrence
                    involving bodily injury,  death or property damage,  or such
                    higher  limits as Landlord may from time to time  reasonably
                    require;

          (ii)      insurance upon property of every kind and description  owned
                    by  Tenant,  or for  which  Tenant  is  legally  liable,  or
                    installed by or on behalf of Tenant in the Building, without
                    limitation,   stock-in-trade,  if  appropriate,   furniture,
                    fixtures,  interior plate glass and leasehold  improvements,
                    in an  amount  of not less  than the full  replacement  cost
                    thereof,  which amount shall be  conclusively  determined by
                    Landlord in the event of any dispute with  respect  thereto.
                    Such  coverage  shall insure at least  against fire and such
                    other  perils  as are  from  time  to time  included  in the
                    standard "all-risks" coverage including, without limitation,
                    sprinkler leakages (where applicable), earthquake, flood and
                    collapse;

          (iii)     if  appropriate,   broad  form   comprehensive   boiler  and
                    machinery  insurance  on a blanket  repair  and  replacement
                    basis with  limits for each  accident  in an amount not less
                    than  the   full   replacement   costs   of  all   leasehold
                    improvements  and  of  all  boilers,  pressure-vessels,  air
                    conditioning   equipment   and   miscellaneous    electrical
                    apparatus  owned or operated  by Tenant or by others  (other
                    than  Landlord)  on behalf of  Tenant in or  relating  to or
                    serving the Leased Premises;

          (iv)      business interruption  insurance in such amounts as are from
                    time to time  necessary  to  reimburse  Tenant for direct or
                    indirect loss of earnings  attributable to any of the perils
                    required to be insured  against by Tenant pursuant hereto or
                    any other perils commonly insured against by prudent tenants
                    in similar  circumstances  or  attributable to prevention of
                    access to Leased  Premises  or the  Building  as a result of
                    such perils;

<PAGE>

                                      -14-

          (v)       tenant's legal liability insurance for the whole replacement
                    cost of the Leased Premises, including loss of use thereof;

          (vi)      standard  owners' form  automobile  policy  providing  third
                    party liability  insurance with inclusive limits of not less
                    than  Two  Million  ($2,000,000.00)  Dollars,  and  accident
                    benefit  insurance,  covering all licensed vehicles owned or
                    operated by or on behalf of Tenant; and

          (vii)     any other form of  insurance,  in such  amounts  and against
                    such  risks,  as Landlord  may from time to time  reasonably
                    require.

     (b)  Each of  Tenant's  insurance  policies  shall  name  Landlord  and any
          Persons  designated by Landlord as  additional  named insured as their
          respective interests may appear and shall contain, as appropriate,

          (i)       the  standard  mortgage  clause  as may be  required  by any
                    mortgagee of Landlord;

          (ii)      a waiver of any subrogation  rights which Tenant's  insurers
                    would have against  Landlord or any Person for whom Landlord
                    is in law responsible;

          (iii)     a  severability  of interests  clause and a  cross-liability
                    clause;

          (iv)      a provision stating that Tenant's  insurance policy shall be
                    primary  and  shall  not call  into  contribution  any other
                    insurance available to Landlord; and

          (v)       a waiver,  as respects the  interests of Landlord and of any
                    mortgagee,  of any  provision  in any of Tenant's  insurance
                    policies  with  respect  to any  breach  of any  warranties,
                    representations,  declarations,  or conditions  contained in
                    the said policies.

     (c)  All policies shall be taken out with such insurers and be in such form
          as are  satisfactory  from  time  to time to  Landlord.  Tenant  shall
          deliver to  Landlord  either  certificates  of  insurance  in the form
          designated  by Landlord  or  certified  copies of  Tenant's  insurance
          policies as soon as practicable after the placement of such insurance,
          and shall from time to time furnish to Landlord  certificates or other
          evidences  acceptable  to Landlord as to Tenant's  insurance in effect
          and its renewal or continuation in force,  together with such evidence
          as may be required by the  Landlord as to the method of  determination
          of the full  replacement cost of Tenant's  stock-in-trade,  furniture,
          fixtures, interior plate glass and leasehold improvements.

     (d)  All policies  shall  contain an  undertaking  by the insurers  that no
          material  change,  cancellation  or  termination of any policy will be
          made unless Landlord has received not less than thirty (30) days prior
          written notice thereof, delivered in accordance with the provisions of
          this Lease.

8.4  Landlord's Right to Place Tenant's Insurance
     --------------------------------------------

     If Tenant at any time fails to take out,  keep in force or pay the premiums
     on, any such insurance as required herein,  or if Tenant fails from time to
     time to deliver to Landlord  satisfactory proof of the good standing of any
     such insurance or the payment of premiums  thereon as required  herein then
     in any such event  Landlord  shall,  without  prejudice to any of its other
     rights and remedies under this Lease, have the right but not the obligation
     to effect such insurance on behalf of Tenant, and the cost thereof together
     with all reasonable  expenses  incurred by Landlord shall be paid by Tenant
     to Landlord upon demand.

<PAGE>

                                     - 15 -

ARTICLE 9.00 - INJURY TO PERSON OR PROPERTY
-------------------------------------------

9.1  Loss or Damage
     --------------

     The  Landlord  shall not be liable for any death or injury  arising from or
     out of any  occurrence  in,  upon,  at, or relating to, the Building or the
     Lands,  or damage to  property  of the  Tenant or of others  located on the
     Leased  Premises or elsewhere in the Building or upon the Lands,  nor shall
     the  Landlord be  responsible  for any loss of or damage to any property of
     the  Tenant or others  from any cause  whatsoever,  whether or not any such
     death,  injury, loss or damage results from the negligence of the Landlord,
     its agents, servants or employees or other Persons for whom it may, in law,
     be  responsible.  Without  limiting the  generality of the  foregoing,  the
     Landlord  shall not be liable  for any  injury  or  damage  to  Persons  or
     property resulting from fire, explosion,  falling plaster,  falling ceiling
     tile,  falling  ceiling  fixtures  and  diffuser  coverings,   steam,  gas,
     electricity,  water, rain, flood, snow or leaks from any part of the Leased
     Premises or from the pipes, sprinklers,  appliances,  plumbing works, roof,
     windows or  subsurface  of any floor or ceiling of the Building or from the
     adjoining  streets or any other  place or by dampness or by any other cause
     whatsoever.  The Landlord shall not be liable for any such damage caused by
     other  tenants or Persons  in the  Building  or by  occupants  of  adjacent
     property  thereto,  or the  public,  or  caused by  construction  or by any
     private,  public or  quasi-public  work. All property of the Tenant kept or
     stored on the Leased Premises shall be so kept or stored at the risk of the
     Tenant  only  and the  Tenant  shall  indemnify  the  Landlord  and save it
     harmless from any claims arising out of any damages to the same  including,
     without limitation, any subrogation claims by the Tenant's insurers.

9.2  Indemnity by Tenant
     -------------------

     The Tenant  will  indemnify  the  Landlord  and save it  harmless  from and
     against  any and all claims,  actions,  damages,  liability  and expense in
     connection with the loss of life, personal injury and/or damage to property
     arising from or out of any occurrence  in, upon or at the Leased  Premises,
     the  occupancy  or use by the  Tenant of the  Leased  Premises  or any part
     thereof  or  occasioned  wholly  or in part by any act or  omission  of the
     Tenant.  In case the Landlord  shall,  without fault on its part, be made a
     party to any litigation commenced by or against the Tenant, then the Tenant
     shall  protect  and hold the  Landlord  harmless  and shall pay all  costs,
     expenses and solicitors'  fees on a solicitor and his client basis incurred
     or paid by the Landlord in connection with such  litigation.  The foregoing
     obligation  of  the  Tenant  shall   survive  the   expiration  or  earlier
     termination of the Term.

ARTICLE 10.0 - ASSIGNMENT AND SUBLETTING
----------------------------------------

10.1 Assignment, Subletting and Transfers
     ------------------------------------

     The Tenant  shall not assign  this Lease or sublet the Leased  Premises  in
     whole or in part or otherwise transfer its rights to all or any part of the
     Leased Premises or the occupancy thereof, and will not mortgage,  charge or
     otherwise  encumber  this Lease or the Leased  Premises  (such  assignment,
     subletting,  transfer, mortgage, charge and encumbrance being herein called
     a "Transfer") to or in favour of any Person (herein called a  "Transferee")
     without the prior written  consent of the Landlord in each instance,  which
     consent  shall not be  unreasonably  withheld  but shall be  subject to the
     Landlord's  rights under  Section 10.2 and,  notwithstanding  any statutory
     provision to the contrary, it shall not be considered  unreasonable for the
     Landlord to take into account the following  factors in deciding whether to
     grant or withhold its consent:

<PAGE>

                                     - 16 -

     (a)  whether such Transfer is in violation or in breach of any covenants or
          restrictions  made or  granted  by the  Landlord  to other  tenants or
          occupants or prospective tenants or occupants of the Building;

     (b)  whether in the Landlord's opinion, the financial background,  business
          history and capability of the proposed Transferee is satisfactory; and

     (c)  if the  Transfer is to an  existing  tenant of the  Landlord;  and the
          consent  by  the  Landlord  to  any  Transfer  if  granted  shall  not
          constitute  a  waiver  of  the  necessity  for  such  consent  to  any
          subsequent Transfer. This prohibition against a Transfer shall include
          a prohibition against any Transfer by operation of law and no Transfer
          shall take  place by reason of the  failure  of the  Landlord  to give
          notice to the Tenant within 30 days as required by Section 10.2.

10.2 Landlord's Right to Terminate
     -----------------------------

     If the  Tenant  intends to effect a  Transfer  or if a  Transfer  occurs by
     operation  of law,  the Tenant  shall give at least  thirty (30) days prior
     written  notice to  Landlord of such intent or  occurrence  specifying  the
     identity of the Transferee, the type of Transfer intended or occurring, the
     portion of the Leased  Premises  affected  thereby,  and the  financial and
     other terms of the Transfer, and shall provide such financial,  business or
     other information relating to the proposed Transferee and its principals as
     the  Landlord  or its  mortgagee  requires,  together  with  copies  of any
     documents  which  record  the  particulars  of the  intended  or  occurring
     Transfer.  The Landlord  shall,  within 30 days after having  received such
     notice and all requested information, notify the Tenant either that it:

     (a)  consents or does not consent to the  Transfer in  accordance  with the
          provisions and qualifications of this Article 10.00; or

     (b)  elects to  terminate  this Lease as to the whole or part,  as the case
          may be, of the Leased  Premises  affected by the intended or occurring
          Transfer.

     If the Landlord elects to terminate this Lease in whole or in part it shall
     stipulate  in its notice the  termination  date of this  Lease,  which date
     shall be no less than 30 days nor more than 90 days following the giving of
     such notice termination.

10.3 Conditions of Landlord's Consent
     --------------------------------

     The Landlord's  consent to any subletting or parting with possession of all
     or any part of the Leased  Premises or to an assignment of this Lease shall
     be subject to the condition that:

     (a)  the  minimum  rent  and  additional  rent  payable  by the  sublessee,
          occupant or assignee, as the case may be, shall not be proportionately
          less than the Minimum Rent and Additional Rent payable hereunder as at
          the  effective  date  of the  sublease,  parting  with  possession  or
          assignment,  as the case may be (including any increases  provided for
          in this Lease);

     (b)  if  the  minimum  rent  and/or  additional  rent  to be  paid  by  the
          sublessee,  occupant or assignee, as the case may be,  proportionately
          exceeds the Minimum Rent and/or Additional Rent payable hereunder, the
          amount of such excess  shall be paid by the Tenant to the  Landlord as
          Additional Rent, if, as and when received the Tenant; and

     (c)  if the Tenant  receives from any sublessee,  occupant or assignee,  as
          the case may be,  either  directly or  indirectly,  any  consideration
          other  than  minimum  rent  or  additional  rent  for  such  sublease,

<PAGE>

                                     - 17 -

          occupancy  or  assignment,  as the case may be,  either in the form of
          cash,  goods  or  services,  the  Tenant  shall  forthwith  pay to the
          Landlord an amount equivalent to such consideration.

10.4 Conditions of Transfer
     ----------------------

     If there is a permitted  Transfer,  the  Landlord may collect rent from the
     Transferee and apply the net amount collected to the Rent payable hereunder
     but no acceptance by the Landlord of any payments by a Transferee  shall be
     deemed  a  waiver  of  the  Tenant's  covenants  or an  acceptance  of  the
     Transferee  as  tenant  or  a  release  of  the  Tenant  from  the  further
     performance by the Tenant of its obligations  under this Lease. Any consent
     by the Landlord shall be subject to the Tenant and the Transferee executing
     an agreement with the Landlord  agreeing that the Transferee  will be bound
     by all of the terms of this  Lease as if it had  originally  executed  this
     Lease as tenant;  and so as to incorporate  any  conditions  imposed by the
     Landlord in its consent or required by Section 10.3 and Section 10.4.

10.5 Tenant Not Released
     -------------------

     Notwithstanding any Transfer permitted or consented to by the Landlord, the
     Tenant shall remain  liable under this Lease and shall not be released from
     performing any of the terms of this Lease.

10.6 No Partial Payments of Rent
     ---------------------------

     Notwithstanding the effective date of any permitted Transfer as between the
     Tenant and the  Transferee,  all Minimum Rent and  Additional  Rent for the
     month in which such  effective  date occurs shall be paid in advance by the
     Tenant so that the Landlord will not be required to accept partial payments
     of Minimum Rent and  Additional  Rent for such month from either the Tenant
     or its Transferee.

10.7 Documentation
     -------------

     Any document evidencing any Transfer permitted by the Landlord,  or setting
     out any terms  applicable to such Transfer or the rights and obligations of
     the Tenant or Transferee  thereunder,  shall be prepared by the Landlord or
     its solicitors and all associated legal costs shall be paid by the Tenant.

10.8 Change of Control
     -----------------

     If the Tenant is at any time a company,  corporation  or  partnership,  any
     actual or  proposed  Change of  Control  in such  company,  corporation  or
     partnership  shall be deemed to be a  Transfer  and  subject  to all of the
     provisions of this Article  10.00.  The Tenant shall make  available to the
     Landlord  or  its  representatives  all  of its  corporate  or  partnership
     records,  as the case may be, for  inspection at all reasonable  times,  in
     order to  ascertain  whether  any Change of Control has  occurred.  For the
     purposes of this Section, Change of Control means the transfer, or issue of
     any shares, voting rights or interests by sale,  assignment,  subscription,
     transmission  on  death,  or by  operation  of law (and  shall be deemed to
     include a mortgage,  charge or security  interest  granted on such  shares,
     voting rights or interest),  where such transfer, issue, mortgage or charge
     would  result  in any  change in the  effective  control  of such  company,
     corporation or partnership unless such change occurs as a result of trading
     on a recognized stock exchange in Canada or the United States and then only
     so long as the Landlord receives assurances  reasonably  satisfactory to it
     that there will be continuity of management  and of the business  practices
     of such company or corporation notwithstanding such Change of Control.

<PAGE>

                                     - 18 -

10.9 No Advertising
     --------------

     The  Tenant  shall not  advertise  that the whole or any part of the Leased
     Premises are available for  assignment or sublease and shall not permit any
     broker  or  other  Person  to do so  unless  the text  and  format  of such
     advertisement is approved in writing by the Landlord. No such advertisement
     shall contain any reference to the Rent for the Leased Premises.

10.10 Assignment by Landlord
      ----------------------

     The Landlord shall have the unrestricted  right to sell,  lease,  convey or
     otherwise  dispose of all or any part of the Building and the Lands or this
     Lease or any  interest  of the  Landlord  therein.  To the extent  that the
     purchaser,  lessee or assignee from the Landlord assumes the obligations of
     the Landlord  under this Lease,  the Landlord  shall  thereupon and without
     further  agreement be released of liability  under this Lease to the extent
     of such assumption.

ARTICLE 11.00 - SURRENDER
-------------------------

11.1 Possession
     ----------

     Upon the  expiration  or other  termination  of the Term,  the Tenant shall
     immediately  quit and surrender  possession  of the Leased  Premises in the
     condition in which the Tenant is required to maintain the Leased  Premises.
     Upon such  surrender,  all right,  title and  interest of the Tenant in the
     Leased Premises shall cease.

11.2 Trade Fixtures and Improvements
     -------------------------------

     Subject to the Tenant's  rights under Section 7.5,  after the expiration or
     other  termination  of the  Term all of the  Tenant's  trade  fixtures  and
     Improvements  remaining in the Leased Premises shall be deemed conclusively
     to  have  been  abandoned  by the  Tenant  and may be  appropriated,  sold,
     destroyed  or  otherwise  disposed  of by the  Landlord  without  notice or
     obligation  to  compensate  the Tenant or to account  therefor,  and Tenant
     shall pay to the Landlord on written demand all  reasonable  costs incurred
     by the Landlord in connection therewith. Notwithstanding anything contained
     in this Section or in Section 7.3, 7.4 and 7.5 herein,  the Landlord  shall
     have the option of requiring the Tenant to remove any trade fixtures and/or
     Improvements  made to the Leased Premises by or on behalf or at the request
     of the Tenant (and  whether  installed by the Tenant or not) and to restore
     the Leased  Premises to the state that  existed  prior to the making of any
     such trade  fixtures  and/or  Improvements  therein  whether by Landlord or
     Tenant.  In such case the Tenant shall  promptly  repair at its own expense
     any damage to the Leased Premises resulting from such removal.

11.3 Payments after Termination
     --------------------------

     No payments of money by the Tenant to the Landlord  after the expiration or
     other termination of the Term or after the giving of any notice (other than
     a demand  for  payment  of  money) by the  Landlord  to the  Tenant,  shall
     reinstate, continue or extend the Term or make ineffective any notice given
     to the Tenant  prior to the  payment of such  money.  After the  service of
     notice of the commencement of a suit, or after final judgment  granting the
     Landlord  possession of the Leased  Premises,  the Landlord may receive and
     collect any sums of Rent due under the Lease, and the payment thereof shall
     not make  ineffective any notice,  or in any manner affect any pending suit
     or any judgment theretofore obtained.

<PAGE>

                                     - 19 -

ARTICLE 12.00 - HOLDING OVER
----------------------------

12.1 Month to Month Tenancy
     ----------------------

     If the Tenant remains in possession of the Leased  Premises with or without
     the Landlord's written consent after the expiration or other termination of
     the Term, the Tenant shall be deemed to be occupying the Leased Premises on
     a month to month tenancy only, at a monthly rental equal to one hundred and
     fifty percent  (150%) of the Minimum Rent and  Additional  Rent in the last
     month of the Term or such  other  rental  as is agreed  in  writing  by the
     Landlord and the Tenant,  and such month to month tenancy may be terminated
     by the  Landlord  or the  Tenant on the last day of any  calendar  month by
     delivery of at least thirty (30) days' advance notice of termination to the
     other.

12.2 General
     -------

     Any month to month tenancy  shall be subject to all other terms  conditions
     of this Lease  except any right of renewal  and nothing  contained  in this
     Article  12.00 shall be construed to limit or impair any of the  Landlord's
     rights of re-entry eviction or constitute a waiver thereof.

ARTICLE 13.00 - RULES AND REGULATIONS
-------------------------------------

13.1 Purpose
     -------

     The Rules and Regulations in Schedule "D" have been adopted by the Landlord
     for the safety, benefit and convenience of all tenants and other Persons in
     the Building.

13.2 Observance
     ----------

     The Tenant shall at all times comply with,  and shall cause its  employees,
     agents,  licensees and invitees to comply with,  the Rules and  Regulations
     from time to time in effect.

13.3 Modification
     ------------

     The  Landlord  may from time to time,  for the  purposes set out in Section
     13.1, amend, delete from or add to the Rules and Regulations, provided that
     any such modification;

     (a)  shall not be repugnant to any other provision of this Lease,

     (b)  shall be reasonable and have general application to all tenants in the
          Building, and

     (c)  shall be  effective  upon  delivery of a copy thereof to the Tenant at
          the Leased Premises.

13.4 Non-Compliance
     --------------

     The  Landlord  shall not be  responsible  to the Tenant for  failure of any
     Person to comply with such Rules and Regulations.

<PAGE>

                                     - 20 -

ARTICLE 14.00 - DAMAGE AND DESTRUCTION
--------------------------------------

14.1 No Abatement
     ------------

     If the Leased Premises or the Building are damaged or destroyed in whole or
     in part by fire or any other occurrence,  this Lease shall continue in full
     force and effect and there shall be no abatement of Rent except as provided
     in this Article 14.00.

14.2 Damage to Leased Premises
     -------------------------

     If the Leased  Premises are at any time destroyed or damaged as a result of
     fire or any other occurrence insured against by the Landlord and not caused
     or  contributed  to by the  Tenant  and such  damage is such  that,  in the
     opinion of the Landlord, the Leased Premises can be rebuilt or restored and
     made fit for the purpose of the Tenant  within one hundred and eighty (180)
     days of the  happening  of such damage or  destruction  then the  following
     provisions shall apply:

     (a)  if the Leased  Premises are rendered  untenantable  only in part,  the
          Landlord shall proceed to diligently repair the Leased Premises to the
          extent only of its obligations  under Section 6.4 and Rent shall abate
          proportionately  to  the  portion  of  the  Leased  Premises  rendered
          untenantable  from  the  date  of  destruction  or  damage  until  the
          Landlord's repairs have been substantially completed;

     (b)  if the Leased Premises are rendered wholly untenantable,  the Landlord
          shall proceed to diligently  repair the Leased  Premises to the extent
          only of its  obligations  pursuant to Section 6.4 and Rent shall abate
          entirely from the date of  destruction  or damage until the Landlord's
          repairs have been substantially completed;

     (c)  if the Leased  Premises are not rendered  untenantable  in whole or in
          part, the Landlord shall diligently perform such repairs to the Leased
          Premises to the extent only of its obligations  under Section 6.4, but
          in such circumstances Rent shall not abate;

     (d)  upon being notified by the Landlord that the  Landlord's  repairs have
          been substantially  completed, the Tenant shall diligently perform all
          repairs to the Leased  Premises which are the Tenant's  responsibility
          under  Section 7.1 and all other work  required  to fully  restore the
          Leased Premises for use in the Tenant's business, in every case at the
          Tenant's  cost  and  without  any  contribution  to  such  cost by the
          Landlord,  whether  or not  the  Landlord  has at any  time  made  any
          contribution  to the cost of supply,  installation  or construction of
          Improvements in the Leased Premises;

     (e)  nothing in this  Section  shall  require  the  Landlord to rebuild the
          Leased  Premises in the condition which existed before any such damage
          or destruction occurred so long as the Leased Premises as rebuilt will
          have  reasonably  similar  facilities to those in the Leased  Premises
          prior to such damage or destruction,  having regard,  however,  to the
          age of the Building at such time; and

     (f)  nothing in this Section  shall  require the Landlord to undertake  any
          repairs  having a cost in excess of the  insurance  proceeds  actually
          received by the Landlord with respect to such damage or destruction.

14.3 Right of Termination
     --------------------

     If the damage or destruction  which has occurred in the Leased  Premises is
     such that in the  reasonable  opinion of the Landlord  the Leased  Premises

<PAGE>

                                     - 21 -

     cannot be rebuilt  or made fit for the  purposes  of the Tenant  within one
     hundred  and  eighty  (180)  days  of  the   happening  of  the  damage  or
     destruction,  the  Landlord  may,  at its option,  terminate  this Lease on
     notice to the Tenant  given  within  thirty  (30) days after such damage or
     destruction.  If such notice is given,  Minimum  Rent and  Additional  Rent
     shall be apportioned and paid to the date of such damage or destruction and
     the  Tenant  shall  immediately  deliver  vacant  possession  of the Leased
     Premises in accordance with the terms of this Lease.

14.4 Destruction of Building
     -----------------------

     Notwithstanding any other provision of this Lease, if:

     (a)  35% or more of the Total  Rentable  Space in the Building is destroyed
          or damaged by any cause; or

     (b)  portions of the Building which affect services  essential  thereto are
          damaged or destroyed and, in the  reasonable  opinion of the Landlord,
          cannot be reasonably repaired within one hundred and eighty (180) days
          after the occurrence of the damage or destruction; then

     the Landlord  may, by notice to the Tenant given within thirty (30) days of
     such damage or  destruction,  terminate this Lease,  in which event neither
     the  Landlord  nor the Tenant shall be bound to repair and the Tenant shall
     surrender the Leased Premises to the Landlord within thirty (30) days after
     delivery of its notice of termination  and Minimum Rent and Additional Rent
     shall be  apportioned  and paid to the date on which  the  Tenant  delivers
     vacant possession of the Leased Premises, subject to any abatement to which
     the Tenant may be entitled  under  Section  14.2 and  provided  that if the
     Landlord  does not so elect to terminate  this Lease,  the  Landlord  shall
     proceed  to  diligently  repair  that  part  of  the  Building  damaged  or
     destroyed,  but only to the  extent  of the  Landlord's  obligations  under
     Section 6.4 and exclusive of any Tenant's  responsibilities with respect to
     such repair.  If the Landlord  elects to repair the Building,  the Landlord
     may do so in accordance with plans and specifications other than those used
     in the original construction of the Building.

14.5 Architect's Certificate
     -----------------------

     For the purposes of Sections 14.2 and 14.4 above,  the  certificate  of the
     Architect appointed by the Landlord shall bind the parties as to:

     (a)  the percentage of the Total Rentable Space in the Building  damaged or
          destroyed;

     (b)  whether or not the Leased Premises are rendered  untenantable  and the
          percentage of the Leased Premises rendered untenantable;

     (c)  the time required to rebuild, restore and make the Leased Premises fit
          for the purposes of the Tenant;

     (d)  the date upon which  either the  Landlord's  or the  Tenant's  work of
          reconstruction or repair is substantially completed; and

     (e)  the state of completion of any work of the Landlord or the Tenant.

<PAGE>

                                     - 22 -

ARTICLE 15.00 - ACKNOWLEDGEMENTS, ATTORNMENT, SUBORDINATION
-----------------------------------------------------------

15.1 Acknowledgment of Tenancy
     -------------------------

     Within ten (10) days after  request  therefor  by the  Landlord,  or in the
     event that upon any sale, assignment,  mortgage, charge or hypothecation of
     the Leased  Premises,  the Lands and/or the Building by the Landlord and an
     acknowledgment of tenancy is required from the Tenant, the Tenant agrees to
     deliver a certificate  to any proposed  mortgagee or  purchaser,  or to the
     Landlord, certifying (if such be the case) that this Lease is in full force
     and effect;  that Rent is paid  currently  without any  defences or offsets
     thereto; that the Tenant is in possession;  that there are no prepaid rents
     or security deposits other than those set out in this Lease; that there are
     no uncured defaults by the Landlord or stating those claimed by the Tenant,
     and such other  matters as the Landlord may  reasonably  require.  Any such
     statement may be relied upon by any prospective  transferee or encumbrancer
     of all  or any  portion  of the  Leased  Premises,  the  Lands  and/or  the
     Building, or any assignee of any such transferee or encumbrancer.

15.2 Attornment
     ----------

     The  Tenant  shall,  in the  event  any  proceedings  are  brought  for the
     foreclosure  of, or in the event of exercise of the power of sale under any
     mortgage made by the Landlord covering the Building and/or the Lands or any
     part  thereof,   attorn  to  the  mortgagee  or  purchaser  upon  any  such
     foreclosure or sale and recognize such purchaser as the Landlord under this
     Lease.

15.3 Subordination
     -------------

     Upon request of the Landlord,  the Tenant will  subordinate or postpone its
     rights hereunder to the lien of any mortgage or the lien resulting from any
     other method of financing or refinancing, now or hereafter in force against
     the Building  and/or the Lands or any part thereof and to all advances made
     or hereafter to be made upon the security  thereof or will  acknowledge the
     subordination  or  postponement  of any such mortgage or lien or its rights
     hereunder.

15.4 Power of Attorney
     -----------------

     The  Tenant,  upon  request  of any  party,  shall  execute  promptly  such
     instruments or  certificates to carry out the intent of Sections 15.1, 15.2
     and 15.3 above as shall be  requested.  If fifteen (15) days after the date
     of a written  request by the  Landlord  to execute  such  instruments,  the
     Tenant shall not have  executed  the same,  the Landlord may at its option,
     execute such instruments or certificates as the attorney for the Tenant and
     the Tenant hereby authorizes the Landlord to do so.

15.5 Financial Information
     ---------------------

     The Tenant shall, upon request,  provide the Landlord with such information
     as  to  the  Tenant's  and/or  the  Indemnifier's  financial  standing  and
     corporate organization as the Landlord or its mortgagee(s) may require from
     time to time.  Failure of the Tenant to comply with the Landlord's  request
     herein  shall  constitute  a default  under the terms of this Lease and the
     Landlord  shall be  entitled  to  exercise  all of its rights and  remedies
     provided for in this Lease.

<PAGE>

                                     - 23 -

ARTICLE 16.00 - NOTICES
-----------------------

16.1 Notice
     ------

     Any  demand,  approval,  consent  or  notice  from one  party to the  other
     hereunder  shall be in writing and shall be deemed duly served if delivered
     personally  to a  responsible  employee  of the party being  served,  or if
     mailed by registered  mail  addressed to the Tenant at the Leased  Premises
     (whether or not the Tenant has  departed  from,  vacated or  abandoned  the
     same) or to the Landlord at the place from time to time established for the
     payment of Rent.  Any notice shall be deemed to have been given at the time
     of personal delivery or, if mailed,  three (3) business days after the date
     of mailing  thereof.  Either  party  shall have the right to  designate  by
     notice, in the manner above set forth, a different address to which notices
     are to be mailed.

ARTICLE 17.00 - DEFAULT
-----------------------

17.1 Interest and Costs
     ------------------

     The Tenant  shall pay monthly to the  Landlord  interest at the  Stipulated
     Rate of Interest on all Rent  required  to be paid  hereunder  from the due
     date for payment  thereof until the same is fully paid and  satisfied.  The
     Tenant  shall  indemnify  the  Landlord   against  all  costs  and  charges
     (including  legal fees)  lawfully  and  reasonably  incurred  in  enforcing
     payment  thereof and in obtaining  possession of the Leased  Premises after
     default of the Tenant,  or upon  expiration or earlier  termination  of the
     Term of this Lease or in enforcing  any  covenant,  proviso or agreement of
     the Tenant herein contained.

17.2 Right to Re-enter
     -----------------

     When;

     (a)  the  Tenant  shall be in default  in the  payment of any Rent  whether
          lawfully  demanded or not and such default shall continue for a period
          of five  (5)  consecutive  days  following  written  notice  from  the
          Landlord of such default; or

     (b)  the Tenant shall be in default of any of its covenants, obligations or
          agreements  under this Lease or of any term or condition of this Lease
          (other than its covenant to pay Rent) and such default shall  continue
          for a period of fifteen (15)  consecutive days after written notice by
          the Landlord to the Tenant  specifying with  reasonable  particularity
          the nature of such default and requiring same to be remedied;

     then and in any of such cases the then current month's Rent,  together with
     the Rent for the three (3) months next ensuing shall immediately become due
     and  payable  and at the  option of the  Landlord,  the Term  shall  become
     forfeited  and void,  and the  Landlord  may without  notice or any form of
     legal process whatsoever forthwith re-enter upon the Leased Premises or any
     part thereof in the name of the whole and  repossess  and enjoy the same as
     of its  former  estate,  anything  contained  in any  statute or law to the
     contrary notwithstanding,  provided, however, that such forfeiture shall be
     wholly without prejudice to the right of the Landlord to recover arrears of
     Rent or damages for any antecedent  default by the Tenant of its covenants,
     obligations or agreements under this Lease or any term or condition of this
     Lease and provided  further that  notwithstanding  any such  forfeiture the
     Landlord may subsequently  recover from the Tenant damages for loss of Rent
     suffered by reason of this Lease having been prematurely determined.

<PAGE>

                                     - 24 -

17.3 Right to Relet
     --------------

     Should the Landlord elect to re-enter as herein provided, or should it take
     possession pursuant to legal proceedings or pursuant to any notice provided
     for by law, it may either  terminate this Lease or it may from time to time
     without terminating this Lease, make such alterations and repairs as may be
     necessary  in order to relet the  Leased  Premises,  and  relet the  Leased
     Premises or any part thereof as agent for the Tenant for such term or terms
     (which may be for a term  extending  beyond the Term of this  Lease) and at
     such  rental or rentals  and upon such other  terms and  conditions  as the
     Landlord in its sole discretion may deem advisable; upon each reletting all
     rentals  received by the  Landlord  from such  reletting  shall be applied;
     first,  to the payment of any  indebtedness  other than Rent due  hereunder
     from the Tenant to the Landlord;  second, to the repayment of any costs and
     expenses of such reletting,  including  brokerage fees and solicitors' fees
     and the costs of such  alterations  and repairs;  third,  to the payment of
     Rent due and unpaid  hereunder,  and the residue,  if any, shall be held by
     the  Landlord  and applied in payment of future Rent as the same may become
     due and payable hereunder. If such Rent received from such reletting during
     any month be less  than that to be paid  during  that  month by the  Tenant
     hereunder,  the Tenant shall pay any such deficiency to the Landlord.  Such
     deficiency shall be calculated and paid monthly.

     No such  re-entry  or  taking  possession  of the  Leased  Premises  by the
     Landlord  shall be construed  as an election on its part to terminate  this
     Lease unless a written  notice of such  intention be given to the Tenant or
     unless  the  termination  thereof  be  decreed  by  a  court  of  competent
     jurisdiction.  Notwithstanding any such reletting without termination,  the
     Landlord may at any time thereafter  elect to terminate this Lease for such
     previous  breach.  Should the Landlord at any time terminate this Lease for
     any breach,  in addition to any other  remedies it may have, it may recover
     from the  Tenant  all  damages  it may  incur  by  reason  of such  breach,
     including the cost of  recovering  the Leased  Premises,  and including the
     worth at the time of such termination of the excess,  if any, of the amount
     of Rent and  charges  equivalent  to Rent  reserved  in this  Lease for the
     remainder of the Term hereof, all of which amounts shall be immediately due
     and payable from the Tenant to the Landlord.  In determining the Rent which
     would be  payable by the  Tenant  hereunder,  subsequent  to  default,  the
     Minimum Rent for each year of the unexpired Term shall be equal to the then
     annual  Minimum  Rent  required  to be paid by the  Tenant  as the  time of
     default,  together with all  Additional  Rent which would have been payable
     during the calendar year in which this Lease was terminated, pro-rated over
     a full calendar year, if required.

17.4 Legal Expenses
     --------------

     In case suit shall be brought  for  recovery  of  possession  of the Leased
     Premises,  for the  recovery  of Rent or any  other  amount  due  under the
     provisions  of this Lease,  or because of the breach of any other  covenant
     herein  contained on the part of the Tenant to be kept or  performed  and a
     breach  shall be  established,  the Tenant  shall pay to the  Landlord  all
     expenses incurred therefor,  including  reasonable  solicitors' and counsel
     fees on a solicitor and his client basis.

17.5 Bankruptcy
     ----------

     The Tenant  covenants  and agrees  that if the Term or any of the goods and
     chattels of the Tenant on the Leased  Premises  shall be at any time during
     the Term seized or taken in execution or  attachment by any creditor of the
     Tenant or if the  Tenant  shall  make any  assignment  for the  benefit  of
     creditors or any bulk sale or, becoming  bankrupt or insolvent,  shall take
     the benefit of any Act now or  hereafter in force for bankrupt or insolvent
     debtors or if any order shall be made for the winding up of the Tenant,  or
     if a Receiver or Manager should be appointed for or should take  possession
     of the assets or undertaking of the Tenant, or if the Leased Premises shall

<PAGE>

                                     - 25 -

     without the written  consent of the Landlord become and remain vacant for a
     period of fifteen (15) days,  or be used by any other  Persons than such as
     are  entitled to use them under the terms of this  Lease,  or if the Tenant
     shall  without the written  consent of the  Landlord  abandon or attempt to
     abandon  the Leased  Premises or to sell or dispose of goods or chattels of
     the  Tenant or to remove  them or any of them from the Leased  Premises  so
     that there would not in the event of such abandonment,  sale or disposal be
     sufficient  goods on the Leased Premises subject to distress to satisfy the
     Rent  above  due or  accruing  due,  then and in every  such  case the then
     current  month's  Rent and the next  ensuing  three (3) months'  Rent shall
     immediately  become due and be paid and the  Landlord may re-enter and take
     possession  of the Leased  Premises as though the Tenant or the servants of
     the Tenant or any other  occupant of the Leased  Premises were holding over
     after the  expiration of the Term and the Term shall,  at the option of the
     Landlord,  forthwith become  forfeited and determined,  and in every one of
     the cases above such  accelerated Rent shall be recoverable by the Landlord
     in the same  manner  as the Rent  hereby  reserved  and as if Rent  were in
     arrears and the said option  shall be deemed to have been  exercised if the
     Landlord or its agents give notice to the Tenant as provided for herein.

17.6 The Landlord May Perform Covenants
     ----------------------------------

     If the Tenant  shall fail to perform any of its  covenants  or  obligations
     under or in respect of this Lease,  the  Landlord  may from time to time at
     its  discretion,  perform or cause to be performed any of such covenants or
     obligations,  or any part thereof,  and for such purpose may do such things
     upon or in  respect  of the  Leased  Premises  or any part  thereof  as the
     Landlord may consider requisite or necessary.

     All expenses incurred and expenditures made by or on behalf of the Landlord
     under this Section shall be forthwith  paid by the Tenant and if the Tenant
     fails  to pay the  same,  the  Landlord  may add the  same to the  Rent and
     recover the same by all remedies available to the Landlord for the recovery
     of Rent in arrears.

17.7 Landlord May Follow Chattels
     ----------------------------

     Provided  that in the  case of  removal  by the  Tenant  of the  goods  and
     chattels of the Tenant from the Leased  Premises,  the  Landlord may follow
     the same for thirty (30) days in the same manner as is provided  for in the
     Commercial Tenancies Act, c.L. 7 as amended.

17.8 Waiver of Exemptions
     --------------------

     The Tenant hereby  covenants and agrees with the Landlord in  consideration
     of the  premises  and of the  leasing  and  letting by the  Landlord to the
     Tenant of the Leased  Premises for the Term hereby  created (and it is upon
     that  express  understanding  that these  presents  are entered  into) that
     notwithstanding   anything  contained  in  Section  30  of  the  Commercial
     Tenancies  Act,  c.L.  7, as  amended,  or in any other  Statute  which may
     hereafter be passed to take the place of the said Act or to amend the same,
     none of the goods or  chattels  of the said  Tenant at any time  during the
     continuance  of the Term  hereby  created on the Leased  Premises  shall be
     exempt from levy by distress  for Rent in arrears by the Tenant as provided
     for by any  Section  or  Sections  of the said  Act,  or any  amendment  or
     amendments  thereto,  and that upon any claim being made for such exemption
     by the tenant or on distress  being made by the Landlord  this covenant and
     agreement  may be pleaded as an  estoppel  against the Tenant in any action
     brought to test the right to the  levying  upon any such goods as are named
     as exempted in said Section or Sections or amendment or amendments thereto,
     the Tenant  waiving as the Tenant  hereby does,  all and every benefit that
     could or might have  accrued to the Tenant  under and by virtue of the said
     Section or Sections of the said Act or any amendment or amendments  thereto
     but for this covenant.

<PAGE>

                                     - 26 -

ARTICLE 18.00 - INDEMNIFIER
---------------------------

18.1 Indemnifier's Covenants
     -----------------------

     Deleted Intentionally.

ARTICLE 19.00 - MISCELLANEOUS
-----------------------------

19.1 Waiver
     ------

     Failure by the  Landlord to require  performance  of any term,  covenant or
     condition herein contained shall not be deemed to be a waiver of such term,
     covenant or  condition  or of any  subsequent  breach of the same or of any
     other  term,  covenant  or  condition  herein  contained.   The  subsequent
     acceptance  of Rent  hereunder by the Landlord  shall not be deemed to be a
     waiver of any  preceding  breach by the  Tenant  of any term,  covenant  or
     condition  of this  Lease,  other than the failure of the Tenant to pay the
     particular Rent so accepted, regardless of the Landlord's knowledge of such
     preceding breach at the time of acceptance of such Rent. No covenant,  term
     or  condition  of this  Lease  shall be deemed  to have been  waived by the
     Landlord, unless such waiver be in writing by the Landlord.

19.2 Accord and Satisfaction
     -----------------------

     No payment by the Tenant or receipt by the Landlord of a lesser amount than
     the Rent herein  stipulated  shall be deemed to be other than on account of
     the earliest stipulated Rent, nor shall any endorsement or statement or any
     cheque or any letter  accompanying  any cheque or payment as Rent be deemed
     an accord and  satisfaction,  and the  Landlord  may accept  such cheque or
     payment without prejudice to the Landlord's right to recover the balance of
     such Rent or pursue any other remedy in this Lease provided.

19.3 Entire Agreement
     ----------------

     This  Lease and the  Schedules  and  Riders,  if any,  attached  hereto and
     forming a part hereof, set forth all the covenants,  promises,  agreements,
     conditions  and   understandings   between  the  Landlord  and  the  Tenant
     concerning  the  leased  Premises  and  there are no  covenants,  promises,
     warranties,  agreements,  conditions  or  representations,  either  oral or
     written,  between  them other  than are herein set forth.  Except as herein
     otherwise provided, no subsequent alteration, amendment, change or addition
     to this  Lease  shall be binding  upon the  Landlord  or the Tenant  unless
     reduced to writing and signed by them.

19.4 No Partnership
     --------------

     The Landlord  does not, in any way or for any purpose,  become a partner of
     the Tenant in the conduct of its business, or otherwise,  or joint venturer
     or a member a of a joint enterprise with the Tenant under the terms of this
     Lease.

19.5 Force Majeure
     -------------

     In the event that either  party  hereto  shall be delayed or hindered in or
     prevented from the  performance of any act required  hereunder by reason of
     strikes,  lock-outs,  labour  troubles,  inability  to  procure  materials,
     failure of power,  restrictive  governmental  laws or  regulations,  riots,
     insurrection,  war or other  reason of a like  nature  not the fault of the
     party delayed in performing  work or doing acts required under the terms of
     this Lease, then performance of such act shall be excused for the period of

<PAGE>

                                      -27 -

     the  delay  and the  period  for the  performance  of any such act shall be
     extended   for  a  period   equivalent   to  the  period  of  such   delay.
     Notwithstanding  anything herein contained,  the provisions of this Section
     19.5 shall not  operate to excuse  the  Tenant  from the prompt  payment of
     Rent,  nor  entitle  the  Tenant  to  compensation  for any  inconvenience,
     nuisance or discomfort thereby.

19.6 Name of Building
     ----------------

     The Landlord shall have the right to change the name, number or designation
     of the Building during the Term without liability to the Tenant.

19.7 Consent not Unreasonably Withheld
     ---------------------------------

     Except as otherwise specifically provided,  whenever consent or approval of
     the Landlord or the Tenant is required under the terms of this Lease,  such
     consent or approval  shall not be  unreasonably  withheld  or delayed.  The
     Tenant's  sole  remedy if the  Landlord  unreasonably  withholds  or delays
     consent or approval  shall be an action for  specific  performance  or with
     respect to Article  10.00 such other  remedies as are  available  under the
     Commercial Tenancies Act, c.L. 7, as amended, and the Landlord shall not be
     liable for damages. If either party withholds any consent or approval, such
     party  shall on  written  request  deliver  to the  other  party a  written
     statement giving the reasons therefor.

19.8 Approval in Writing
     -------------------

     Wherever  the  Landlord's  consent is  required  to be given  hereunder  or
     wherever the Landlord  must approve any act or  performance  by the Tenant,
     such consent or approval,  as the case may be, shall be given in writing by
     the Landlord before same shall be deemed to be effective.

19.9 Registration
     ------------

     The Tenant shall not register this Lease without the written consent of the
     Landlord.  However, upon the request of either party hereto the other party
     shall join in the execution of a memorandum or notice of this Lease for the
     purpose of  registration.  Said  memorandum  or notice of this Lease  shall
     describe  the  parties,  the  Leased  Premises  and the Term  and  shall be
     prepared and registered at the expense of the Tenant.

19.10 Governing Law
      -------------

     The Lease is to be governed by and  construed  according to the laws of the
     Province of Ontario.

19.11 Captions and Section Numbers
      ----------------------------

     The captions,  section numbers and article numbers  appearing in this Lease
     are inserted only as a matter of convenience  and in no way define,  limit,
     construe or describe the scope or intent of such sections or articles or of
     this Lease, nor in any way affect this Lease.

19.12 Partial Invalidity
      ------------------

     If any term, covenant or condition of this Lease or the application thereof
     to  any  Person  or  circumstance  shall,  to any  extent,  be  invalid  or
     unenforceable,  the remainder of this Lease and/or the  application of such
     term, covenant or condition to Persons or circumstances other than those as
     to which it is held invalid or unenforceable, shall not be affected thereby
     and each term,  covenant or  condition  of this Lease  shall be  separately
     valid and enforceable to the fullest extent permitted by law.

<PAGE>

                                     - 28 -

19.13 No Option
      ---------

     The  submission  of this  Lease  for  examination  does  not  constitute  a
     reservation  of or option for the Leased  Premises  and this Lease  becomes
     effective  as a Lease  only upon  execution  and  delivery  thereof  by the
     Landlord and the Tenant.

19.14 Compliance with The Planning Act
      --------------------------------

     It is an  expressed  condition of the within lease and the Landlord and the
     Tenant  so agree and  declare  that the  provisions  of  Section  50 of The
     Planning Act,  R.S.O.  1990, c.P. 13, and amendments  thereto,  be complied
     with if  applicable  in law.  Until any  necessary  consent to the Lease is
     obtained,  the Term  (including  any  extensions  thereof) and the Tenant's
     rights  and  entitlement  granted  by this Lease are deemed to extend for a
     period  not  exceeding  twenty-one  (21)  years  less  one (1) day from the
     Commencement  Date.  The Tenant shall apply  diligently  to prosecute  such
     application  for such consent  forthwith upon the execution of the Lease by
     both the Landlord and the Tenant and the Tenant  shall be  responsible  for
     all  costs,  expenses,  taxes and  levies  imposed,  charged or levied as a
     result of such application and in order to obtain such consent.  The Tenant
     shall keep the  Landlord  informed,  from time to time,  of its progress in
     obtaining such consent and the Landlord shall  cooperate with the Tenant in
     regard to such  application.  Notwithstanding  the foregoing  provisions of
     this Section  19.14,  the Landlord  reserves the right at any time to apply
     for such consent in lieu of the Tenant (on behalf and at the expense of the
     Tenant) and the Tenant's  application  is hereby  expressly made subject to
     any application which the Landlord intends to make.

19.15 Security Deposit
      ----------------

     Deleted Intentionally.

19.16 Time To Be of the Essence
      -------------------------

     Time shall be of the essence of this Indenture of Lease.

19.17 Successors and Assigns
      ----------------------

     Except  as  otherwise  specifically  provided,  the  covenants,  terms  and
     conditions  contained  in this  Lease  shall  apply to and bind the  heirs,
     successors, executors, administrators and/or assigns of the parties hereto.

19.18 Relocation of Leased Premises
      -----------------------------

     The Landlord  shall have the right at anytime  during the Term,  upon sixty
     (60) days' prior  written  notice to the Tenant,  to relocate the Tenant to
     other  premises  located  in  the  Office  Portion  of the  Building,  (the
     "Relocated  Premises") and in such event the following terms and conditions
     shall be applicable:

     (a)  The  Relocated  Premises  (which  term shall mean the Leased  Premises
          after relocation) shall contain  approximately the same Rentable Space
          as the Leased Premises prior to relocation;

     (b)  The Landlord shall provide at its expense  leasehold  improvements  in
          the Relocated Premises at least equal to the standard of the leasehold
          improvements in the Leased Premises which have been completed or which
          the Landlord is obligated hereunder to provide in the Leased Premises;

     (c)  The Landlord shall pay for the reasonable costs (if any) of moving the

<PAGE>

                                      -29 -

          Tenant's trade fixtures and  furnishings  from the Leased  Premises to
          the Relocated Premises;

     (d)  All other  terms  and  conditions  of this  Lease  shall  apply to the
          Relocated  Premises except insofar as they are  inconsistent  with the
          terms and conditions of this Section 19.18.

19.19 Joint and Several Liability
      ---------------------------

     If two or more  individuals,  corporations,  partnerships or other business
     associations  or any  combination  of two or more thereof,  shall sign this
     Lease  as  Tenant  the  liability  of each  such  individual,  corporation,
     partnership  or other  business  association to pay Rent and perform all of
     the  obligations  under this Lease shall be deemed to be joint and several.
     If a  Tenant  named  in this  Lease  is a  partnership  or  other  business
     association, the members of which by law are subject to personal liability,
     the liability of each such member shall be deemed to be joint and several.

19.20 Condition of the Premises
      -------------------------

     Other  than the  Landlord's  Work  outlined  in  Schedule  "F",  the Tenant
     acknowledges  that it shall  accept the Leased  Premises  on "as is" basis,
     with the understanding that any leasehold  improvements  currently in place
     shall  remain for the use of the Tenant for the duration of the Lease term,
     and with the Landlord's  acknowledgement that the HVAC system, lighting and
     electrical  systems in the Leased  Premises  shall be in good working order
     prior to the Tenant taking occupancy of the Leased Premises.

19.21 Extension
      ---------

     Provided it is mutually  agreed and understood that if the Tenant is not in
     default of any of the terms of the Lease at the time of the exercise of the
     option  herein,  then the Landlord  shall,  at the  expiration  of the Term
     hereof,  upon  written  request  of the  Tenant,  grant  to the  Tenant  an
     extension  of this  Lease  for a  further  period  of five (5)  years  (the
     "Extended  Term") upon the same terms and  conditions as contained  herein,
     save  as  to  leasehold  inducements  and  fixturing  period,  save  as  to
     Landlord's work, save as to the rental rate, free rent, parking and storage
     charges,  save  as to any  further  right  of  extension  and in an "as is"
     condition. Provided always that the Tenant shall have given to the Landlord
     at least  six (6)  months  and not more than 12  months  notice in  writing
     before the expiration of the Term of its desire to have such extension. The
     rental rate for the Extended  Term shall be at the then current fair market
     rate at the time of the exercise by the Tenant for premises in the Building
     and as mutually  agreed  between the Landlord and the Tenant.  In the event
     that the  Landlord  and the Tenant are unable to agree upon the rental rate
     for  the  Extended  Term by 90  days  prior  to the  Lease  expiry  date or
     extension  thereof,  as the case may be, the matter  shall be  submitted to
     arbitration by notice given by either party to the other.  Upon such notice
     being given, the dispute shall be determined by the award of 3 arbitrators,
     or by a majority of them,  one to be named by the  Landlord  and one by the
     Tenant  within  30 days of the  giving  of such  notice,  and the 3rd to be
     selected  by  these 2  arbitrators  within  7 days  after  both  have  been
     nominated.  If either the Landlord or the Tenant shall neglect or refuse to
     name  its  arbitrator  in  the  time  specified  or  to  proceed  with  the
     arbitration, the arbitrator named by the other party shall proceed with the
     arbitration,  and the award of such  arbitrator  shall be final and binding
     upon the Landlord and the Tenant.  The arbitrators shall have all the power
     given by the Arbitration Act of Ontario and may at any time proceed in such
     manner  as they  see fit on such  notice  as they  deem  reasonable  in the
     absence of either  party,  if such party fails to attend.  Each party shall
     pay its own costs and shall  share  equally the costs of  arbitration.  The
     award and  determination of the arbitrators shall be final and binding upon
     both  parties  hereto and each party agrees not to appeal any such award or
     determination.

<PAGE>

                                     - 30 -

     The rental shall not be less than the Minimum Rent payable  during the last
     year of the Term.

     If the award of the arbitrators is not given before the  commencement  date
     of the Extended  Term,  then the Tenant shall  continue to pay its existing
     Rent, which shall be adjusted  forthwith after the award of the arbitrators
     has become final and binding,  to be calculated from the commencement  date
     of the Extended Term.

     Interest  at the rate set out  herein  shall be  calculated  monthly on the
     difference  between  the  Minimum  Rent paid by the  Tenant  and the actual
     amount awarded by the  arbitrators  and shall be paid forthwith upon demand
     when the arbitrators' decision has been made.

     The  extension  of lease  form shall be  prepared  by the  Landlord  at the
     Tenant's cost.

19.22 Parking
      -------

     The Landlord  acknowledges that the Tenant shall be provided random parking
     stalls in the surface  parking area of the Building at a ratio of 3 parking
     stalls per 1,000 square feet leased.

19.23 Restoration of Premises
      -----------------------

     It is agreed that the Tenant  shall not have the  obligation  to remove the
     initial  leasehold  improvements at the termination of the Lease,  and that
     the Landlord agrees to accept the Leased Premises in the  configuration  in
     which it is  structured  at the  completion of the  Landlord's  Work.  Upon
     termination of the Lease, the Tenant agrees to leave the Leased Premises in
     a broom swept and tidy condition.

          IN WITNESS WHEREOF the Landlord and Tenant have signed and sealed this
Lease as of the day and year first above written.

                                THIRTY EGLINTON WEST INC.

                                Per:
                                    -----------------------------------------
                                    [Authorized Signing Officer]

                                Per:
                                    -----------------------------------------
                                    [Authorized Signing Officer]

                                GRAVITY SPIN INC.

                                Per:
                                    -----------------------------------------
                                    [Authorized Signing Officer]

                                Per:
                                    -----------------------------------------
                                    [Authorized Signing Officer]

<PAGE>

                                  SCHEDULE "A"
                                  ------------

                                   DEFINITIONS
                                   -----------

In this Lease:

     (a)  "Architect"  means such firm of  professional  architects,  surveyors,
          consultants or engineers as the Landlord may from time to time engage.

     (b)  "Architect's Certificate" means a certificate of the Architect.

     (c)  "Building"  means the  buildings  housing  the  integrated  retail and
          office  complex  and its  related  improvements  and  facilities,  all
          constructed and located on the Lands, as same may from time to time be
          altered, expanded or reduced. The municipal address of the Building is
          30 Eglinton Avenue West, Mississauga, Ontario.

     (d)  "Commencement Date" means the first day of the Term.

     (e)  "Common   Areas"  means  (a)  those  areas,   facilities,   utilities,
          improvements,  equipment and installations in the Building which, from
          time to time,  are not  designated or intended to be leased to tenants
          of  the  Building,  and  (b)  those  areas,   facilities,   utilities,
          improvements,  equipment and installations  which serve or are for the
          benefit of the Building,  whether or not located within,  adjacent to,
          or near the  Building  and which are  designated  from time to time as
          part of the Common Areas.  Common Areas includes,  without limitation,
          all  areas,  facilities,   utilities,   improvements,   equipment  and
          installations  which are  provided  or  designated  (and  which may be
          changed  from time to time)  for the use or  benefit  of the  tenants,
          their  employees,  customers and other  invitees in common with others
          entitled  to the use or  benefit  thereof  in the  manner  and for the
          purposes permitted by the Lease.

          Without  limiting  the  generality  of  the  foregoing,  Common  Areas
          includes the roof, exterior wall assemblies (including weather walls),
          exterior and  interior  structural  elements and bearing  walls in the
          buildings and improvements comprising the Building; parking areas, all
          vestibules  for and  entrances  and exits  thereto and all  structural
          elements  thereof;  driveways;  truckways;  related areas;  pedestrian
          sidewalks;  landscaped and planted  areas;  public seating and service
          areas;  corridors;  equipment,  furniture,  furnishings  and fixtures;
          stairways,  escalators,  ramps and elevators and other  transportation
          equipment and systems; tenant common and public washrooms; electrical,
          telephone,  meter,  valve,  mechanical,  mail,  storage,  service  and
          janitor rooms and  galleries;  music,  fire  prevention,  security and
          communication systems;  general signs, including,  without limitation,
          directory  signs  and  canopy  signs;  columns;   pipes;   electrical,
          plumbing, drainage, mechanical, and all other installations, equipment
          or  services  located  therein  or  related  thereto  as  well  as the
          structures  housing  the  same  (including,  without  limitation,  the
          heating, ventilating and air-conditioning system of the Building).

     (f)  "Landlord" means the Landlord, its successors,  assigns and authorized
          representatives.

     (g)  "Lands" means the lands  underneath,  adjacent and  appurtenant to the
          Building,  as more  particularly  described  in Schedule  "B" attached
          hereto as such  lands may from time to time be  altered,  expanded  or
          reduced.

     (h)  "Lease" means this lease

     (i)  "Lease Year" means a period of time,  the first Lease Year  commencing
          on the Commencement Date and ending on the 31st day of December in the
          calendar year of the Commencement Date.  Thereafter, Lease Years shall

<PAGE>

                                      - 2 -

          consist of  consecutive  periods of twelve  calendar  months ending in
          each case on December  31st,  save for the last Lease Year of the Term
          which shall  terminate upon the  expiration or earlier  termination of
          this Lease.

     (j)  "Leased  Premises"  means the premises  leased to the Tenant  together
          with all  improvements,  equipment  and fixtures  therein  (other than
          those  servicing  more than one (1) tenant)  containing  approximately
          1,177 square feet of Rentable Space, more or less, on the floor of the
          Building  which Leased  Premises are shown outlined in red on Schedule
          "C" attached hereto.

     (k)  "Minimum  Rent" means the amount payable by the Tenant to the Landlord
          in respect of each year of the Term under Section 3.1 herein.

     (l)  "Normal  Business  Hours" means 8:00 a.m. to 6:00 p.m.  Monday through
          Friday  excluding  days which are legal or  statutory  holidays in the
          jurisdiction in which the Building is located.

     (m)  "Occupiable  Space"  means 1) for any  premises  located in the Office
          Portion  of the  Building,  the  "useable  area" of such  premises  as
          defined in American National Standard  Z65.1-1996 as recognized by the
          Building Owners and Managers Association International, and 2) for any
          premises located in the Retail Portion of the Building,  the "rentable
          area" of such  premises  as  defined  in  American  National  Standard
          Z65.1-1996  as   recognized  by  the  Building   Owners  and  Managers
          Association International.  Occupiable Space may be adjusted from time
          to time to reflect any  expansion,  reduction  or  rearrangement.  The
          Architect's  Certificate  as to  Occupiable  Space  shall be final and
          binding on the parties hereto.

     (n)  "Office  Portion" means that portion of the Building located above the
          ground floor of the Building to be leased for office purposes.

     (o)  "Operating  Costs" means all costs and expenses incurred or accrued by
          the  Landlord  or  by  others  on  behalf  of  the  Landlord   without
          duplication  and  calculated in  accordance  with  generally  accepted
          accounting  principles  (as if the  Building  had been  100%  occupied
          during the whole of the particular  Lease Year) in connection with the
          supervision,  security,  maintenance,   operation,  cleaning,  repair,
          replacement  and  insurance  of  the  Building,   the  Lands  and  all
          appurtenances  thereto including any pedestrian tunnels or underground
          walkways to adjacent  buildings  and all common  driveways,  walkways,
          sidewalks, ramps and entrances on the street level of the Building and
          includes,  without limitation, any tax or levy imposed on the Building
          and/or the Lands or on the Landlord by reason of its  ownership of the
          Building  and/or  the Lands,  based on total  gross area or floor area
          whether  known as a Commercial  Concentration  Tax or  otherwise,  all
          Taxes not recovered from tenants of the Building, all Taxes, assessed,
          levied, rated or charged from time to time against the Common Areas to
          the  extent  only that such  Taxes on the  Common  Areas have not been
          included in the Taxes otherwise charged to the Tenant under the Lease,
          the cost of all repairs  required in the  maintenance of the Building,
          heating,   ventilating  and  air  conditioning  costs,   elevator  and
          escalator  maintenance and repair costs,  equipment rental,  providing
          hot and cold water, the costs of plumbing and sanitary  drainage,  the
          cost of electricity and of replacing  electrical  fixtures,  ballasts,
          tubes  and  bulbs  not  otherwise  chargeable  to  any  tenant  of the
          Building,  window cleaning,  snow removal,  landscaping,  uniforms and
          security,  all fire,  casualty,  liability and other insurance  costs,
          telephone  and  other  utility  costs,   amounts  paid  under  service
          contracts with independent contractors,  all salaries, wages and other
          remuneration  and  the  cost of  benefits  paid  to  employees  of the

<PAGE>

                                      - 3 -

          Landlord  engaged in operating,  managing and maintaining the Building
          and/or the Lands,  depreciation on an amortized  basis  established by
          the  Landlord's  auditors or accountants on fixtures or equipment paid
          for by the  Landlord  and used to  provide  services  to the  Building
          and/or the Lands,  legal,  appraisal,  accounting,  auditing and other
          professional  fees  incurred for the purposes of  attempting to reduce
          Taxes and various costs referred herein,  cost of accounting  services
          and  operational  auditing  and  accounting  fees,  the  cost  of  any
          modification  or  addition  to  the  Building  or  the  machinery  and
          equipment  therein where,  in the reasonable  opinion of the Landlord,
          such  expenditure  may reduce  Operating  Costs,  or the  cost-of  any
          additional  equipment  or  improvements  required  by law  or,  in the
          Landlord's  reasonable opinion,  made for the benefit or safety of the
          users  of  the  Building  and  including  repairs,   replacements  and
          maintenance  to the  structural  elements of the Building  (including,
          without limitation,  the bearing walls, foundations,  structural beams
          and roof,  including  the roof membrane and roofing) and including any
          capital  replacement  of  the  heating  or   air-conditioning   system
          servicing the Building,  and an  administration  and management fee of
          fifteen  (15%)  percent  of the total of all of the above  costs.  The
          Tenant  acknowledges  and  agrees  that  the  Operating  Costs  may be
          attributed  by the Landlord to the various  components of the Building
          (being the Office Portion and the Retail  Portion) in accordance  with
          reasonable and current practices on a basis consistent with the nature
          of the particular costs being attributed,  and the costs so attributed
          may be allocated to the tenants of such components separately.

     (p)  "Person",   if  the  context  allows,   includes  any  Person,   firm,
          partnership  or   corporation,   or  any  group  of  persons,   firms,
          partnerships or corporations or any combination thereof.

     (q)  "Proportionate Share" means a fraction,  the numerator of which is the
          Rentable Space in the Leased  Premises and the denominator of which is
          the Total Rentable Space in the Building.

     (r)  "Rent"  means any and all  amounts  payable by the  Tenant  under this
          Lease including Minimum Rent and Additional Rent.

     (s)  "Rentable  Space"  means 1) for any  premises  located  in the  Office
          Portion of the  Building  the  "rentable  area" as defined in American
          National Standard Z65.1-1996, as recognized by the Building Owners and
          Managers Association International, and 2) for any premises located in
          the Retail Portion of the Building, 110% of Occupiable Space. Rentable
          Space may be  adjusted  from time to time to  reflect  any  expansion,
          reduction or rearrangement. The Architect's Certificate as to Rentable
          Space shall be final and binding upon the parties hereto.

     (t)  "Retail Portion" means the portion of the ground floor of the Building
          to be leased for retail purposes.

     (u)  "Total  Rentable  Space of the  Building"  means the aggregate of each
          Rentable  Space of a floor in the Office Portion and Retail Portion of
          the  Building.  The Total  Rentable  Space of the  Building  shall (i)
          exclude the main telephone,  mechanical,  electrical and other utility
          rooms and enclosures,  the management office for the Building,  public
          lobbies  on the  ground  floor and other  public  space  common to the
          entire Building and all areas in the Building located below grade. The
          Total Rentable Space of the Building may be adjusted from time to time
          to reflect any expansion, reduction or rearrangement.  The Architect's
          Certificate  as to the Total  Rentable  Space of the Building shall be
          final and binding upon the parties hereto.

     (v)  "Stipulated Rate of Interest" means the prime rate of interest charged

<PAGE>

                                      - 4 -

          from  time to time by the  chartered  bank of the  Landlord  at  their
          respective  head offices  expressed as an annual rate by the Bank from
          time to time as a reference rate for commercial  loans  denominated in
          Canadian  dollars and made by the said Bank in Canada as announced and
          adjusted from time to time by the said Bank plus five percent (5%) per
          annum.

     (w)  "Taxes"  means  all  duties,  real  property  taxes,  business  taxes,
          assessments and payments,  extraordinary as well as ordinary,  whether
          foreseen or unforeseen, as shall fix during the Term hereby demised be
          laid, levied, assessed or imposed upon or become liens upon the Leased
          Premises  or the  Building  or the  Lands or any part  thereof  or any
          appurtenances thereto or the leasehold estate hereby created or as may
          be levied,  assessed  or imposed  upon the  Landlord  by reason of its
          ownership  of  the  Leased  Premises,  the  Building  and  the  Lands,
          including  capital taxes imposed or levied upon the Landlord,  and all
          governmental  charges  including an increase in income taxes wholly or
          partially  substituted for any real property  taxes,  all by virtue of
          any  present or future  law,  order or  ordinance  of Canada or of the
          provincial,  city,  county,  local or  regional  government  or of any
          department,  office  or bureau of any  governmental  authority.  Taxes
          shall also  include any and all  penalties,  late  payment or interest
          charges  imposed by any  municipality  or other taxing  authority as a
          result of the  Tenant's  late  payments  of any  Taxes or  instalments
          thereof but not as a result of the Landlord's delinquency.

     (x)  "Tenant"  means the Tenant herein and those for whom in law the Tenant
          is responsible.

     (y)  "Term" means the period of time set out in Article 2.1.

<PAGE>

                                  SCHEDULE "B"
                                  ------------

                                LEGAL DESCRIPTION
                                -----------------

FIRSTLY:
--------

Remainder of Parcel 16-1, Section 43, Toronto Twp., 2 N.D.S., being that Part of
Lot 16, Concession 2 North of Dundas Street, designated as Parts 6, 7, 8, 9, 14,
15  and  16  on  Reference  Plan  43R-14923,   City  of  Mississauga,   Regional
Municipality of Peel;

SUBJECT  TO A RIGHT  OF WAY  AND  EASEMENT  for the  purpose  of  vehicular  and
pedestrian  ingress and egress from and to Eglinton  Avenue  West,  in, over and
upon  the  lands  designated  as  Parts  6, 14 and 16 on Plan  43R-14923,  as in
LT850063;

TOGETHER  WITH A RIGHT OF WAY AND  EASEMENT  for the  purpose of  vehicular  and
pedestrian  ingress and egress from and to Eglinton  Avenue  West,  in, over and
upon the lands designated as Part 3 on Plan 43R-14923, as in LT850063;

SUBJECT  TO A RIGHT  OF WAY  AND  EASEMENT  for the  purpose  of  vehicular  and
pedestrian  ingress and egress, to and from Hurontario Street (commonly known as
Highway No. 10), in, over and upon the lands designated as Part 7 and Part 15 on
Plan 43R-14923,  save and except for such portion of the said Part 7 and Part 15
on Plan  43R-14923,  upon which  buildings,  structures,  landscaping  and other
physical improvements have been constructed, as in LT850063;

SUBJECT  TO AN  EASEMENT  in,  over,  along and upon Parts 14 and 15 and on Plan
43R-14923,  for the  purposes  of  providing  fire  services  and access to fire
hydrants situate thereon, as in LT850063;

TOGETHER  WITH AN EASEMENT in, over,  along and upon Parts 12, 13 and 17 on Plan
43R-14923,  for the  purposes  of  maintaining  storm and  sanitary  sewers  and
connections to the storm and sanitary sewer outlets, as in LT850063;

TOGETHER WITH AN EASEMENT over Parts 2, 3 and 11 on Plan  43R-14629,  as set out
in LT850058.

SECONDLY;

Parcel Block 1-1, Plan 43M-576, being Part of Block 1, Plan 43M-576,  designated
as  Parts  5,  6  and  22 on  Plan  43R-14629,  City  of  Mississauga,  Regional
Municipality of Peel;

SUBJECT TO A RIGHT to enter on,  upon,  over,  under  along Parts 4, 5 and 22 on
Plan  43R-14629,  subject to the  covenants  and for the  purposes as set out in
Transfer of Easement LT636347;

SUBJECT  TO A RIGHT  over  Parts  4, 5 and 22 on Plan  43R-14629,  as set out in
Transfer of Easement LT837918;

TOGETHER WITH AN EASEMENT over Parts 2, 3 and 11 on Plan 43R-14629, and Parts 1,
2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16 and 17 on Plan  43R-14923,  as set out
in LT850058;

SUBJECT TO A RIGHT OF WAY AND EASEMENT  in, over,  along and upon Parts 4, 5 and
22 on Plan 43R-14629, as set out in LT850063.

<PAGE>

                                  SCHEDULE "C"
                                  ------------

                                   FLOOR PLAN
                                   ----------

                               /\  /\  /\
                              /  \/  \/  \
                               \          |
                                \         |
                                 \ (3)    |
                                  \       |
                                  /       |
                                 /        |
                                 \        |
                                  \  (2)  |
                                   \      |
                                   |      |
                                   |      |
                                   |   (1)|
                                    ------

                            EXISTING LEASED PREMISES

                               /\  /\  /\
                              /  \/  \/  \
                               \          |
                                \         |
                                 \        |
                                  \       |
                                  /       |
                                 /        |
                                 \        |
                                  \       |
                                   \      |
                                   |      |
                                   |      |
                                   |      |
                                    ------

                            PROPOSED LEASED PREMISES

<PAGE>

                                  SCHEDULE "D"
                                  ------------

                              RULES AND REGULATIONS
                              ---------------------

     1.        The Landlord may prohibit any persons from  entering the Building
except during Normal Business Hours unless such person has a key to the premises
to which such person seeks entry and has complied with the security arrangements
of the Landlord as same may exist from time to time. The Landlord shall be under
no responsibility for failure to enforce this rule.

     2.        The  Common  Areas of the  Building  shall be used only for their
intended purposes.  The Tenant shall not use any entrance or exits,  passageway,
corridor,  lobby,  sidewalk,  ramp,  stairway,  escalator or elevator except for
ingress to and egress from the Leased  Premises.  The Tenant  shall not obstruct
such areas in any way and shall not  deposit  any  footwear,  waste,  garbage or
refuse  therein.  The  Landlord may remove at the expense of the Tenant any such
obstruction  at the expense of and without  notice or  obligation to the Tenant.
The Landlord reserves the right to restrict or prohibit  canvassing,  soliciting
or peddling in the Building.

     3.        All  plumbing  fixtures  shall be used  only for  their  intended
purposes and no sweeping,  rubbish,  rags,  ashes or other  substances  shall be
thrown  therein.  The  Tenant  shall  not  permit  any  toilet  or  drain  to be
obstructed. Taps shall he turned off when not in use.

     4.        The Leased Premises shall not be used for any residential purpose
including  sleeping  accommodation  and  cooking,  the  storage of any  personal
effects  or  articles  not  required  for  the  use of the  Leased  Premises  in
accordance  with the  lease or the  storage  of any  inflammable,  explosive  or
dangerous materials.

     5.        No musical  instruments or sound producing equipment or amplifier
which may be heard  outside the Leased  Premises  shall be played or operated on
the Leased Premises.

     6.        No drapes or window  coverings shall be installed on any exterior
windows  of the  Leased  Premises  without  the  prior  written  consent  of the
Landlord.  Any drapes or window  coverings so approved  shall not interfere with
the climate  control  central system of the Building and shall present a uniform
exterior appearance for the Building.

     7.        The Tenant shall not obstruct or interfere with access to janitor
and  electrical  closets or heating,  ventilating or air  conditioning  ducts or
equipment  in the  Leased  Premises.  In the  event of any such  obstruction  or
interference the Tenant shall be responsible for the cost of providing access to
same.

     8.        The Tenant shall leave the Leased  Premises in a reasonably  tidy
condition at the end of each business day.

     9.        The Tenant shall not mark,  drill into, bore or cut or in any way
damage or deface the walls, ceilings or floors of the Leased Premises. No wires,
pipes or conduits  shall be installed in the Leased  Premises  without the prior
written approval of the Landlord.  No broadloom or carpeting shall be affixed to
the Leased Premises by means of a non soluble adhesive or similar product,

     10.       (a)  No   safe,  heavy  equipment,  bulky   materials  or  office
furniture or equipment shall be brought into or removed from the Building except
during such hours and by such means as the Landlord  may  approve.  The Landlord
may prohibit the  installation  in the Leased  Premises of any safe or equipment
which exceeds the load-bearing capacity of the floor of the Leased Premises.

               (b)  Any hand trucks, carryalls or similar appliances used in the
Building  with the consent of the Landlord  shall be equipped with rubber tires,
side guards and such other safeguards as the Landlord requires or as agreed upon
by the parties acting reasonably.

<PAGE>

                                  SCHEDULE "E"
                                  ------------

                              INDEMNITY AGREEMENT
                              -------------------

Deleted Intentionally.

<PAGE>

                                  SCHEDULE "F"
                                  ------------

                        LANDLORD'S WORK AND TENANT'S WORK
                        ---------------------------------

1.     General
       -------

       Items enumerated under the heading  "Landlord's Work" will be provided by
and at  the  expense  of the  Landlord  and  all  other  items  including  those
enumerated  under the  heading  "Tenant's  Work" will be  provided by and at the
expense of the  Tenant.  The Tenant  shall  deliver  to the  Landlord,  within a
reasonable  time after the date of this  Lease,  but in any event not later than
ten (10) days after being  requested  so to do, three (3) copies and one (1) set
of sepias of each-of its plans and  specifications and such other information as
may be necessary for the Landlord's Work to proceed and for the Tenant's Work to
be reviewed  under the terms of this Lease.  If the Tenant  fails to deliver the
required  copies,  the Landlord  may obtain them from the Tenant's  architect or
designer at the Tenant's expense.  Such plans and  specifications  shall include
complete working plans and specifications for the following:

       (a)    floor layout, and complete interior finishing schedules;

       (b)    reflected ceiling plan;

       (c)    electrical  plans  and   specifications   for  wiring,   fixtures,
              ----------
security,  power,  fire alarm,  life  safety,  telephone  systems and any of the
special features or installations that affect the Leased Premises;

       (d)    mechanical  plans  and  specifications   for  plumbing,   heating,
              ----------
ventilating and air conditioning system, sprinklers, fire hose cabinets and fire
detection devices,  building automation system and any other special features or
installations that affect the Leased Premises.

       Plans and specifications  shall be professionally  designed and generally
to a scale of 1/4 inch to 1 foot. The Landlord recommends that the Tenant retain
Base   Building   mechanical/electrical   engineering   consultants   to  ensure
compatibility  of Base  Building and Tenant  systems.  If the Landlord  requires
revisions of the Tenant's Plans and specifications  prior to giving review, such
revisions shall be made  expeditiously by the Tenant and in any event within ten
(10) days of the request therefor.

2.     Landlord May Perform Tenant's Work
       ----------------------------------

       The Tenant  acknowledges  that if the performance of the Tenant's Work is
to be properly  integrated with the Landlord's Work, the performance of portions
of the Landlord's  Work cannot be proceeded  with or completed  until such plans
and specifications,  information and revisions have been delivered by the Tenant
to the Landlord and reviewed by the Landlord. Accordingly, unless they have been
delivered within the times aforesaid, the Landlord may, in such manner as in the
absolute  discretion  of the Landlord is  sufficient  for the Tenant's  purpose,
perform on the  Tenant's  behalf and at the Tenant's  expense all Tenant's  Work
required to permit the Landlord's Work to be proceeded with and completed.

3.     Landlord's Work
       ---------------

       The  Landlord  agrees to provide a leasehold  improvement  package to the
Leased  Premises,  which  shall  include  space  planning,  working  drawings if
necessary,  materials,  labour,  the cost of  securing  required  permits  and a
reasonable charge for supervision. More specifically,  the Landlord's Work shall
and consist of the following as per Schedule "C" attached hereto:

       (a)    demolition  and  removal  of the  walls and  doors  identified  as
"0000000";

       (b)    supply and install 2 duplex electrical  outlets as directed by the
Tenant;

<PAGE>

       (g)    the Tenant, its employees,  contractors and contractors' employees
shall not enter onto any roof of the Building or make any opening in the roof or
Building envelope;

       (h)    no load greater than the design load, uniformly distributed, shall
be imposed on any concrete  floor.  No unusual  loads maybe  suspended  from the
underside  of the  ceilings  and no holes shall be drilled  through the floor or
structural  elements  without  the  written  approval  of the  Landlord  and its
consultants  first  obtained.  The Landlord will  identify  areas for extra file
loading and the maximum loads permissible in the preliminary space plan;

       (i)    the Tenant  shall  maintain  the Leased  Premises in a  reasonably
clean and orderly state and shall be responsible  for removing from the Building
all excess material and garbage resulting from its work;

       (j)    objectionable  odours  from  the  Leased  Premises  shall,  at the
Tenant's expense,  be exhausted in such a manner so that they do not escape into
the Building or other  tenant's  promises and so that they do not short  circuit
into any fresh air vents.

       (k)    the  Tenant   acknowledges  that  certain  Tenant  Work  requiring
modification  and interfacing  with Base Building work and systems shall be done
only  by  Landlord   designated   contractors  at  Tenant  expense  to  maintain
compatibility and warranties.

       (l)    the  Tenant  shall  engage   contractors/subcontractors   who  are
acceptable to the Landlord and are compatible with the union  jurisdictions,  if
necessary  under  normal  union  contracts,  of Base  Building  contractors,  as
appropriate.

       (m)    the Tenant shall comply with all rules, guidelines and regulations
which maybe set forth in a Tenant Design/Construction Manual which the Landlord,
at its discretion,  may compile and issue to the Tenant prior to commencement of
the Tenant's Work.

       Any Tenant's Work that is not in accordance  with plans,  specifications,
information  and revisions  delivered to and approved by the Landlord or that it
not otherwise in accordance  with the Landlord's  requirements  and that has not
been removed or corrected  forthwith after demand may be removed or corrected by
the Landlord at the expense of the Tenant.  The Tenant shall pay to the Landlord
the Landlord's  cost of such work performed by the Landlord,  within thirty (30)
days of receipt of an invoice from the Landlord.

6.     Payments by Tenant
       ------------------

       The Tenant  shall pay to the  Landlord a fee of $1.50 per square  foot of
the Rentable Space of the Leased Premises to provide  temporary  services during
the period that the Tenant is completing the Tenant's Work  including  hoisting,
temporary power, lighting, heating and security. The Tenant shall further pay to
the Landlord, in respect of the conduct of Tenant's Work, the reasonable cost to
the  Landlord  of  special  supervision,  the cost of any  necessary  cutting or
patching of or repairing any injury to the Landlord's  Work, the cost of removal
of refuse or of  cleaning  as a result  of  Tenant's  Work,  or of  removing  or
correcting  faulty  Tenant's  Work,  any cost to the  Landlord of changes in the
Landlord's Work required by the Tenant for the use of the Leased  Premises,  the
cost of any  Tenant's  Work  performed  by the  Landlord  at the  request of the
Tenant,  and all other costs incurred for the accommodation of any Tenant's Work
(including delays in the Landlord's Work caused by the conduct of Tenant's Work)
and any other costs of the Landlord  that can  reasonably be allocated as direct
expense  relating to the conduct of Tenant's  Work as well as an  administrative
fee equal to five (5%)  percent of the full  contract  price for all  approvals,
supervision  to  ensure   compliance  with  approved  plans  and  building  code
requirements and attendance at site meetings, if necessary.  Any invoices may be
based upon the  Landlord's  reasonable  estimate of any such costs wherever such
costs  cannot be exactly  determined  from  information  then  available  to the
Landlord.  The Tenant shall pay to the Landlord the Landlord's Cost of such work
performed by the Landlord, within thirty (30) days of receipt of an invoice from
the Landlord.

       The Tenant  shall also be  responsible  for payment to the Landlord of an
engineering  review fee of $0.30 per square foot of Rentable Space of the Leased
Premises  in the event that the Tenant uses  consulting  design  mechanical  and
electrical  engineers  which are different  than the base  building  engineering
consultants.Rev. 10/27/94                                                      Exhibit 10.52
Rev. 11/15/94
Rev. 11/23/94

                                 LEASE AGREEMENT

                                     BETWEEN

              JOHN DONATO, JR., d/b/a MID ATLANTIC INDUSTRIAL CO.,

                         A Sole Proprietorship, Landlord

                                       AND

                             OSTEOTECH, INC., Tenant

                     DATED: OCTOBER 20, 1994

                     COMMENCEMENT DATE: JANUARY 1, 1995

                     FOR: 38,400 Square Foot Building
                          Lot 6.19, 6.20 & 6.21, Block 134
                          51 James Way, Eatontown, NJ 07724

<PAGE>

<TABLE>
<CAPTION>
                                     TABLE OF CONTENTS

                                                                                       Page
                                                                                       ----

          ARTICLE NO.    TITLE
          -----------    -----

<S>                      <C>                                                            <C>
                         PARTIES.........................................................1

          ONE            DEMISED PREMISES................................................1

          TWO            MINIMUM RENTAL..................................................2

          THREE          TERM OF LEASE...................................................3

          FOUR           IMPROVEMENTS....................................................5

          FIVE           RETURN OF PREMISES IN GOOD REPAIR...............................7

          SIX            REPAIRS, ORDINANCES AND VIOLATIONS..............................7

          SEVEN          INCREASED FIRE INSURANCE RATE...................................8

          EIGHT          ASSIGNMENT OR SUBLETTING........................................9

          NINE           BANKRUPTCY OR INSOLVENCY........................................9

          TEN            LITIGATION......................................................9

          ELEVEN         TAXES AND UTILITIES............................................11

          TWELVE         EXTERIOR MAINTENANCE INDUSTRIAL PARK OPERATING EXPENSE.........13

          THIRTEEN       BUILDING APPEARANCE OUTSIDE....................................14

          FOURTEEN       INTERIOR ALTERATIONS...........................................15

          FIFTEEN        FIRE...........................................................16

          SIXTEEN        INSURANCE......................................................17

          SEVENTEEN      WAIVER OF SUBROGATION RIGHTS...................................18

          EIGHTEEN       ABANDONMENT OF PREMISES........................................18

          NINETEEN       HOLDOVER.......................................................18

          TWENTY         INSPECTION.....................................................19

(Omitted) TWENTY-ONE     LANDLORD'S ACCESS FOR FUTURE CONSTRUCTION .....................19

          TWENTY-TWO     NON-LIABILITY OF LANDLORD......................................20
</TABLE>

<PAGE>

<TABLE>
<S>                      <C>                                                            <C>
          TWENTY-THREE   LIABILITY FOR DAMAGES AND PLATE GLASS..........................20

          TWENTY-FOUR    DEFAULT........................................................21

          TWENTY-FIVE    WAIVERS........................................................25

          TWENTY-SIX     SUBORDINATION BY TENANT........................................26

          TWENTY-SEVEN   ATTORNMENT.....................................................27

          TWENTY-EIGHT   ATTORNEY'S FEES................................................28

          TWENTY-NINE    STATEMENT OF ACCEPTANCE........................................28

          THIRTY         CHANGES IN OR ABOUT PREMISES...................................28

          THIRTY-ONE     LANDLORD'S RESERVED RIGHTS.....................................28

          THIRTY-TWO     RESPONSIBILITY FOR REPAIRS.....................................29

          THIRTY-THREE   EMINENT DOMAIN.................................................30

          THIRTY-FOUR    PAYMENT OF MORTGAGE, TAXES, ETC................................31

          THIRTY-FIVE    BROKERS........................................................32

          THIRTY-SIX     SECURITY.......................................................32

          THIRTY-SEVEN   INTERPRETATION.................................................33

          THIRTY-EIGHT   LEASE CONSTRUCTION.............................................33

          THIRTY-NINE    ARTICLE HEADING................................................33

          FORTY          ENTIRE AGREEMENT...............................................33

          FORTY-ONE      NOTICES........................................................34

          FORTY-TWO      DEFINITIONS....................................................34

          FORTY-THREE    QUIET ENJOYMENT................................................34

          FORTY-FOUR     HEIRS, ETC.....................................................35

          FORTY-FIVE     ENVIRONMENTAL LAWS INDUSTRIAL STANDARDS RECOVERY ACT (ISRA)....35

          FORTY-SIX      ASSIGNMENT OF LEASES...........................................41

                         SIGNATURES.....................................................42

                         EXHIBIT 1......................................................44

                         EXHIBIT 2......................................................45
</TABLE>

<PAGE>

                                      LEASE

     THIS LEASE, dated the 20th day of October 1994

BETWEEN:  JOHN DONATO, JR., d/b/a MID ATLANTIC INDUSTRIAL CO., a sole
          proprietorship, with offices located at Two Industrial Way West,
          Eatontown, New Jersey 07724

          (hereinafter referred to as "Landlord");

AND:      OSTEOTECH, INC., with offices located at 1151 Shrewsbury Avenue,
          Shrewsbury, New Jersey 07702

          (hereinafter referred to as "Tenant")

FOR:      Premises located at Lot 6.19, 6.20 & 6.21, Block 134, 51 James Way,
          Eatontown Industrial Park, Monmouth County, New Jersey, comprised of
          38,400 + - Square Feet of Office/Warehouse space as hereinafter more
          particularly described on Exhibit #1 as the "Demised Premises"
          consisting of the entire building.

                                   WITNESSETH:

ARTICLE ONE - DEMISED PREMISES

A) Landlord does hereby Lease and demise to Tenant and Tenant does hereby rent
and take from Landlord certain Premises, as more particularly described on
Exhibit #1 annexed hereto (the "Demised Premises"), which is comprised of a
38,400 + - Square foot building located at 51 James Way Eatontown, New Jersey
("the building"), at a rental hereinafter defined, for a term of Ten years
beginning on January 1, 1995 ("Commencement Date") and expiring on December 31,
2004 ("Expiration Date").

     For purposes of this Lease, the Demised Premises constitutes 100% of the
total rentable area of the Building, which shall be applicable to all of the
Tenant's costs to be paid as Additional Rent as hereinafter in this Lease
provided.

                                      -1-
<PAGE>

B) Osteotech will have the first Right of Refusal on expansion of the building
to encompass block 134, lot 6.22, for an aggregate of 20,000 SF. Additionally,
the tenant shall have first Right of Refusal for expansion on block 134, lot's
6.19, 6.20 and 6.21 for an aggregate of 30,000 SF, which will front on Corbett
Way. Tenant will have first Right of Refusal to purchase the demised Premises
plus additional vacant land for expansion.

ARTICLE TWO - MINIMUM RENTAL

     A. As rental for said Demised Premises, Tenant agrees to pay Landlord a net
rental (hereinafter referred to as the "Minimum Rental") of $6.87 per square
foot, triple net, of the Demised Premises payable in equal monthly installments
in advance of the sum of Twenty One Thousand Nine Hundred Eighty Four
($21,984.00) Dollars and promptly on the first day of each and every month
during the term of this Lease, without demand and without offset or deduction,
together with such additional rent or other Lease charges required to be paid by
the Tenant as hereinafter provided.

     B. The additional rent to be paid by Tenant hereunder shall be those
amounts and charges with respect thereto as hereinafter set forth in this Lease
("Additional Rent").

     C. It is the intention of the parties that the rent payable hereunder shall
be net to Landlord so that this Lease shall yield to Landlord the net annual
rent specified herein during the term of this Lease. With respect to mortgages
on the fee, they shall be and remain the sole obligation of Landlord.

     D. Any installment of rent accruing hereunder and any other sum payable
hereunder by Tenant to Landlord which is not paid prior to the tenth (10th) day
of any Lease month shall bear interest at ten (10%) percent per annum from the
time when the same shall respectively become due and payable until the same
shall be paid.

                                      -2-
<PAGE>

     E. If the term of this lease shall begin on a day other than the first day
of a calendar month, the rent for such partial month and other additional
payments required of Tenant hereunder shall be prorated and shall be paid by
Tenant to Landlord on the Commencement Date.

     F. Tenant convenants and agrees that in the event of any material dispute
with respect to the within Lease, its obligation to day the rent shall continue
without abatement notwithstanding any such dispute, and the Tenant agrees that
it shall seek such other remedies as the law may allow by way of plenary
proceedings with respect to such issues in dispute.

     G. Beginning on commencement date or date of occupancy, whichever is later,
Tenant will receive a credit for the first three months rental, however,
beginning from the commencement date, Tenant will be responsible for it's
proportionate share of usage of all building operating costs.

ARTICLE Three - TERM OF LEASE

     A. The Landlord leases unto the Tenant, and the Tenant hires the Demised
Premises for the term of One Hundred Twenty (120) months to commence on the
Commencement Date as hereinafter defined:

     Commencement Date shall be on January 1, 1995 or the first day of the
calendar month on or following the date when the Demised Premises are ready for
occupancy whichever is later. The Demised Premises shall be deemed ready for
occupancy when the Demised Premises are substantially completed in Landlord's
reasonable judgment in accordance with Exhibit #2 annexed hereto, and Landlord
has procured from the appropriate municipal agency and delivered to Tenant a
Certificate of Occupancy for the Demised Premises and appurtenances, which
Certificate of Occupancy shall permit legal occupancy and use the Demised
Premises.

                                      -3-
<PAGE>

     B. During any partial monthly occupancy prior to the commencment date,
Tenant shall be responsible to pay pro-rata rent, together with pro-rata charges
or Additional Rent as in this Lease provided. During said period of partial
monthly occupancy, the Tenant shall comply with all other terms and conditions
of the Lease upon the part of the Tenant to be performed.

     C. It is expressly understood and agreed that for the purpose of this
Lease, whereever and whenever the term "substantial completion" is used, the
term "substantial completion" shall not include items of maintenance, service or
guarantee which may be required pursuant to the terms and conditions of this
lease.

     D. Tenant agrees that it will furnish to Landlord, within thirty (30) days
after the Commencement Date or occupancy, whichever is later, a "Punch List" of
all items required to be corrected, replaced or completed by Landlord as soon as
practicable after receipt of the written Punch List.

     E. If Landlord shall be unable to give possession of the Demised Premises
on the Commencement Date by reason of the fact that the Demised Premises have
not been sufficiently completed to make them "ready for occupancy" for any
reason, Landlord shall not be subject to any liability for such failure. Under
such circumstances, the rent reserved and rent credit covenanted to be paid
herein shall not commence until the possession of the Demised Premises is given.
No such failure to give possession on the Commencement Date shall in any way
affect the validity of this Lease or the obligations of Tenant hereunder, nor
shall same be construed in any way to extend the term of this lease. If
permission is given to tenant to enter into possession of the Demised Premises
prior to the Commencement Date, Tenant convenants and agrees that such occupancy
shall be deemed to be under all the terms, covenants, conditions and provisions
of this Lease. Any prior occupancy by Tenant for any reason shall not cause
Landlord, as a

                                      -4-
<PAGE>

result thereof, to be subjected to any jurisdictional labor problems which may
prejudice Landlord's negotiations or relationship with Landlord's contractors or
subcontractors or as may disturb harmonious labor relations, and Landlord
reserves the right to summarily order any of Tenant's contractors or
subcontractors from the Demised Premises if their presence causes any
disturbance of harmonious labor relations.

     F. If Landlord shall be unable to give possession of the Demised Premises
for any reason by January 1, 1995 then either Landlord or Tenant shall have the
option to terminate this Lease by giving written notice of such election to the
other party not later than ten (10) days thereafter. In such event Tenant will
not be responsible for the pro-rata share of building operating costs in
accordance with Article 2G.

     G. The Tenant will have Two (2) Five (5) year options to renew at market
rates, exercisable six months prior to the expiration of each term provided the
Lease is not in default.

ARTICLE FOUR - IMPROVEMENTS

     A. By execution of this Lease, the Landlord and Tenant have agreed to
Exhibit #2 annexed hereto describing improvements to be provided and installed
by Landlord at Landlord's cost and expense, and Landlord agrees to perform the
work and make the installations in the Demised Premises which are set forth on
Exhibit #2 (the "Initial Improvements"). The Demised Premises will be considered
as "ready for occupancy" on the date on which Landlord, in its reasonable
business judgment, shall have substantially completed all work to be performed
by it in accordance with Exhibit #2, and the Punch List shall have been agreed
upon as provided in Article 3.D.

     B. Landlord shall prepare the Demised Premises for Tenant in accordance
with the provisions of this Article 4, and Landlord's general contractor shall
schedule the performance of said work in such a manner as it considers proper
for the rapid completion thereof. Tenant may,

                                      -5-
<PAGE>

at its own cost and expense, select and employ its own contractors for finishing
work, such as carpeting, cabinetwork, millwork, draperies, installation of
special equipment or decorations also including offices, laboratories and
special clean rooms (hereinafter called the "Tenant's Work"), provided (i)
Tenant advises Landlord in writing of its intention as to do prior to
commencement of Tenant's Work; and (ii) the contractors and subcontractors
employed by Tenant shall have been previously approved by Landlord, and it is
hereby understood and agreed that Tenant shall not employ any contractor in
doing Tenant's Work or in moving Tenant's property who in Landlord's opinion may
prejudice Landlord's negotiations or relationship with Landlord's contractors or
subcontractors or as may disturb harmonious labor relations. Prior to
commencement of Tenant's Work, Tenant shall obtain from subcontractor and
maintain at its cost and expense, Workmen's Compensation and Bodily Injury and
Property Damage Public Liability Insurance and so-called "Builder's Risk"
Insurance (all such insurance to conform to the requirements of this Lease), and
Tenant shall submit certificates of insurance as evidence thereof to Landlord.
Tenant, in any event, shall indemnify, defend and save harmless in the event of
any damage to property or injury to person occasioned by Tenant's Work.

     C. Tenant and its contractors shall be responsible for transportation,
safekeeping and storage of materials and equipment used in the performance of
Tenant's Work and for the removal of waste and debris resulting from the
performance of Tenant's Work, and Landlord shall not be responsible for the
coordination of the work of Landlord's contractors with the work of Tenants
contractors. Without specific charge being made therefore, Landlord shall allow
Tenant and its contractors to use utilities during normal working hours, to the
extent available, as may be reasonably required in the Demised Premises for the
performance of Tenant's Work.

                                      -6-
<PAGE>

Landlord reserves the right, however, to impose a charge for such utilities if
the use thereof would not have been necessary, except for and in connection with
Tenant's Work.

ARTICLE FIVE - RETURN OF PREMISES IN GOOD REPAIR

     At the expiration of the term, Tenant will peacefully yield up the Demised
Premises to Landlord, said Demised Premises being in good order and repair as
when delivered to Tenant, damage by fire, casualty, war or insurrection, riot or
public disorder or act upon the part of any governmental authority, and ordinary
wear and tear excepted, provided that such exceptions are not due to negligence
of Tenant, its agents, servants or employees.

ARTICLE SIX - REPAIRS, ORDINANCES AND VIOLATIONS

     Tenant convenants that no waste or damage shall be committed upon or to the
said Demised Premises, that the Demised Premises shall be used as
office/warehouse /laboratory and process facility and shall not be used or
permitted to be used for any other purpose, that the Demised Premises shall not
be used for any unlawful purpose, and no violations of law or ordinance or duly
constituted authority shall be committed thereon. Tenant further convenants
that, throughout said term Tenant will take good care of the interior of the
Demised Premises and the fixtures and appurtenances, which include, and are not
limited to, heating, ventilating and air-conditioning equipment, electrical
service, plumbing, plumbing system and sewer operations, and all alterations,
additions and improvements to same; make all repairs in and about the same
necessary to preserve them in good order and condition, which repair shall be in
quality and class equal to the original work; promptly pay the expense of such
repairs; suffer no waste or injury; give prompt notice to Landlord of any fire
that may occur; execute and comply with all laws, rules, ordinances and
regulations at any time issued or in force (except those requiring structural
repair or alterations, provided that the same are not due to Tenant's use and
occupancy), applicable to the Demised Premises or to Tenant's use and occupancy
thereof, of the city,

                                      -7-
<PAGE>

county, state and federal government, and of each and every department, bureau
and official thereof and the Board of Fire Underwriters having jurisdiction, and
Landlord convenants and agrees that the original construction work to be
performed by it shall be done in good and workmanlike manner, and that it shall
be responsible for such corrective work, if any relating to the Demised Premises
which shall be required during the first day of the Term.

ARTICLE SEVEN - INCREASED FIRE INSURANCE RATE

     In the event that Tenant or Tenant's use and occupancy of the Demised
Premises causes, for any reason whatsoever, any additional charge or increase in
the rate of insurance on the Building, or in the event the rate of insurance of
the Building can be decreased by any act of Tenant or by Tenant a compliance
with recommendations of any fire underwriter or fire department or any other
duly constituted and authorized body, then, and in either of such events, Tenant
shall, from time to time, immediately upon receipt of notice, do whatever is
deemed necessary and follow whatever recommendations may be made by any fire
underwriter or fire department or any other duly constituted and authorized
body, in order that such excess charge or increase in rate of insurance on the
building so caused by such Tenant's use or occupancy of the Demised Premises by
Tenant may be removed or the lower rate obtained, or in the event conditions are
such that nothing can be done by way of improvements or otherwise to remove such
extra and additional charge or increase of rate of insurance on the Building, or
the expense involved in excessive, then Tenant shall pay Landlord, as Additional
Rent, the total increased cost of such insurance on the Building. It is
understood and agreed that the tenant shall not be obligated to make any
structural repairs to the premises or to any of the services to the premises
which have been installed by the Landlord.

                                      -8-
<PAGE>

ARTICLE EIGHT - ASSIGNMENT OR SUBLETTING

     Except to a subsidiary or wholly owed entity of the Tenant, this lease
shall not be assigned or the Demised Premises underlet, in whole or in part,
without the written consent of Landlord, which will not be unreasonably
withheld, endorsed hereon and such consent having been given. Tenant shall,
notwithstanding any assignment or subletting, remain primarily liable to perform
all convenants and conditions of this lease. Landlord and Tenant both
acknowledge that Home Diagnostics and Seasonal Specialties are presently leasing
space in the demised premises (supra Article 46 herein).

ARTICLE NINE - BANKRUPTCY OR INSOLVENCY

     To more effectually secure Landlord against loss of Minimum Rental and
Additional Rent as herein provided to be made by Tenant, it is agreed as a
further condition of this Lease that the filing of any petition in bankruptcy or
insolvency by or against Tenant, or the adjudication in bankruptcy of Tenant, or
the appointment of a receiver for Tenant by any Court, shall be deemed to
constitute a breach of this Lease, provided, however, that if such filing is
dismissed or otherwise satisfied within sixty (60) days it will not be deemed a
breach, and thereupon, without entry or other action by Landlord, this Lease
shall, at the option of Landlord, not be terminated. If terminated Landlod shall
be entitled to recover the rent reserved in this Lease for the residue of the
term hereof less the fair rental value of the premises for the residue of said
term.

ARTICLE TEN - LITIGATION

     10.01 Tenant agrees that the use by itself, its agents contractors,
employees and servants of the Demised Premises and Office Complex is at its own
risk and hereby releases Landlord and its agents, servants, contractors,
subcontractors and employees from all claims and demands of

                                      -9-
<PAGE>

every kind resulting from any accident, damage or injury occurring thereon
unless due to the gross negligence of Landlord, its agents, servants or
contractors,

     10.02 Tenant shall defend, indemnify and save harmless Landlord and
Landlord's agents and employees from and against any and all liabilities,
obligations, damages, penalties, claims, costs charges and expenses included
third person (including, but not limited to, those for death, for personal
injuries, or for loss or damage to property) against Landlord or Landlord's
agents by reason or arising directly or indirectly during the term of this
Lease, or any time prior thereto, that Tenant may have had actual possession of
or been given access to all of or any portion of the Demised Premises, out of or
in connection with any of the following:

     (a) The tenant's use and operations in the Demised Premises which does not
result from Landlord's negligence.

     (b) Any negligent or otherwise wrongful act or omission on the part of
Tenant or any of its agents, contractors, subcontractors, servants, employees,
subtenants, assignees, licensees or invitees.

     (c) Any work or thing done in, on or about the Demised Premises or any part
thereof by Tenant, its agents, contractors, subcontractors, servants, employees,
subtenants, assignees, licensees or invitees.

     (d) Any accident, injury or damage to any person or property occurring in,
on or about the Demised Premises or any part thereof, not resulting from
Landlord's negligence.

     (e) Any failure on the part of Tenant to perform or comply with any of the
covenants, agreements, terms, provisions, conditions, or limitations, contained
this Lease on its part to be performed or complied with, which is not as a
result of Landlord's negligence or failure to perform, any obligations of this
Lease.

                                      -10-
<PAGE>

     (f) In case any action or proceeding is brought against Landlord by reason
of any such claim, Tenant, upon timely written notice from Landlord, shall, at
Tenant's sole cost and expense, resist defend such action or proceeding by
counsel approved by Landlord in writing which shall not be unreasonably
withheld.

     10.03 Landlord shall not be responsible or liable to Tenant for any loss or
damage that may be occasioned by or through the acts or omissions (i) of persons
occupying any part of the premises adjacent to or connected with the Demised
Premises, including but not limited to premises above or below the Demised
Premises or any part of the Building of which the Demised Premises are a part,
(ii) of any persons transacting any business in the Building or Office Complex
or present in the Building or Office Complex for any other purpose, (iii) for
any loss or damage resulting to Tenant or its property by operation in
construction of any private, public or quasi-public work by any person or entity
other than Landlord. Landlord shall not be liable for any loss or damage that
may be occasioned by any latent defect in the Building or Office Complex or for
any failure of or defect in any electric line, circuit or facility but Landlord
shall be responsible for repairing or correcting same in a prompt and efficient
manner subject to provisions contained elsewhere in this Lease Agreement. All
property kept, stored or maintained in the Demised Premises or elsewhere in the
Building or any other part of the Office Complex shall be so kept, stored or
maintained at the sole risk of Tenant. Notwithstanding anything herein contained
to the contrary, Landlord shall be responsible for the gross negligence of
itself, its agents, servants and employees.

ARTICLE ELEVEN - TAXES AND UTILITIES

     A. (1) Tenant shall, from the Commencement Date and thereafter, during the
term of this Lease, as Additional Rent, be liable for and pay and discharge
punctually, as and when the same shall become due and payable, all taxes,
special and general assessments, water rents, rates

                                      -11-
<PAGE>

and charges, sewer rents and other governmental impositions and charges of every
kind and nature whatsoever, extraordinary as well as ordinary (hereinafter
referred to as "Taxes"), and each and every installment thereof which shall or
may, from the Commencement Date and thereafter, during the term of this Lease be
charged, levied, laid, assessed, imposed, become due and payable, or liens upon
or for or with respect to the Demised Premises or any part thereof, or any
appurtenances or equipment owned by Tenant thereon or therein or any part
thereof , together with all interest and penalties thereon, under or by virtue
of all present or future laws, ordinances, requirements, orders, directives,
rules or regulations of the Federal, State, County and Township Governments and
of all other governmental authorities whatsoever (all of which shall also be
included in term "Taxes" as heretofore defined). Landlord hereby warrants to
Tenant that, to the best of his knowledge, there are no special assessments, any
additional easements or special improvement costs for utilities, or any unpaid
taxes. All sewer rents and charges, if any, for water, steam, heat, gas, hot
water, electricity, light and power, and other service or services, furnished to
the Demised Premises through meters or connections in the Building serving the
Building from the Commencement Date and thereafter, during the term of this
Lease (hereinafter referred to as "Utility Expenses").

          (2) Any amount due to the Landlord under the provisions of this
     paragraph shall be paid within 30 days after the Landlord shall have
     submitted a statement to the Tenant showing in detail the computation of
     the amount due to the Landlord. Landlord may at any time deliver to Tenant
     a written statement, herein referred to as the Landlord's Statement,
     containing a computation of the Tenant's Percentage of Taxes and Utility
     Expenses. The failure of Landlord to deliver a Landlords' Statement as
     provided above, shall not prejudice nor waive the right of Landlord to
     deliver

                                      -12-
<PAGE>

     such statement for any subsequent tax year, nor from including in such
     statement as Additional Rent Tenant's Percentage of Taxes and Utility
     Expenses for any year in which no Landlord's Statement was delivered to the
     Tenant, but for which the Tenant was otherwise obligated to pay such
     Additional Rent.

          (3) Nothing herein or in this Lease otherwise contained shall require
     or be construed to require Tenant to pay any inheritance, estate,
     succession, transfer, gift, franchise, income or profit taxes, that are or
     may be imposed upon Landlord, his heirs, executors, administrators or
     assigns.

     B. Landlord covenants and agrees that it there shall be any refunds or
rebates on account of the Taxes or Utility Expenses paid by Tenant under the
provisions of this Lease, Tenant's Percentage of such refund or rebate shall
belong to Tenant. Any refunds received by Landlord shall be deemed trust funds
and, as such, are to be received by Landlord in trust and Tenant's Percentage
thereof paid to Tenant forthwith. Landlord will, upon the request of Tenant,
sign any such refund or rebate, and will promptly pay over to Tenant the
Tenant's Percentage of such refund or rebate as requested by Landlord plus
interest from date of receipt by Landlord until date paid to tenant.

     C. Any utility services for water, gas, electricity, heat, sewer or other
similar services which are connected to or metered for the Demised Premises
exclusivly shall be paid solely by Tenant as its expense, and Tenant shall be
solely responsible to pay all costs, change deposits incidental to such
exclusive utility services.

ARTICLE TWELVE - EXTERIOR MAINTENANCE INDUSTRIAL PARK OPERATING EXPENSE

     Tenant shall pay to Landlord in the manner provided below the Tenant's
Percentage not to exceed Twenty Five ($.25(cent)) Cents psf of the Actual Costs
of Maintaining and Operating the Industrial Park common areas during the leased
term. The phrase "Actual Costs of Maintaining

                                      -13-
<PAGE>

and Operating the Building Exterior" means the following: All amounts paid by
Landlord as actual net costs for maintaining and repairing the exterior roadways
and the exterior grounds, driveways, walkways and landscaping areas (but only to
the extent that the cost in question is not properly chargeable to "capital
account "under generally accepted accounting principles. including, without
limitation, cleaning; snow and ice removal; costs and expenses of planting,
replanting and replacing flowers and landscaping; patching and repaving;
lighting; material, equipment, supplies, and services purchased for maintenance
of the Industrial Park exterior; and such other expenses actually incurred in
maintaining and repairing the Park areas exterior during tenants occupancy.

     The annual charge to Tenant shall be paid in monthly installments on the
first day of each calendar month in advance in an amount estimated by Landlord.
Within Ninety (90) days after the end of each calendar year, the Landlord shall
furnish the Tenant a statement in reasonable detail of the actual costs and
expenses paid or incurred by Landlord or its designees during such period
prepared in accordance with sound accounting practices by Landlord's or the
designee's accountant, and thereupon there shall be an adjustment between
Landlord and Tenant, with payment to or repayment by Landlord, as the case may
require to the end that Landlord shall receive the entire amount of the Tenant's
Percentage of such costs and expenses for such period.

ARTICLE THIRTEEN - BUILDING APPEARANCE OUTSIDE

     Tenant shall maintain its windows in a neat and clean condition, shall keep
any sidewalks adjoining the Demised Premises clean and free from rubbish, and
shall store all trash in garbage receptacles within the Demised arrange for the
regular pickup of trash and garbage. Tenant shall not burn any trash of any kind
in or about the building, nor shall Tenant permit rubbish, refuse or garbage to
accumulate or fire hazards to exist about the Demised Premises. Tenant shall
also

                                      -14-
<PAGE>

acquire and maintain metal gargage receptacles at such location adjacent to the
rear entrance as shall be designated by Landlord, at the expense of Tenant.

ARTICLE FOURTEEN - INTERIOR ALTERATIONS

     Tenant may, at its expense and only upon Landlord's prior written approval,
which approval shall not be unreasonably withheld, make such alterations and
improvements to the Demised Premises and install interior partitions as it may
require, provided that such improvements and alterations are done in a
workmanlike manner in keeping with all building codes and regulations and in no
way harm the structure of the Demised Premises, and further provided that at the
expiration of this Lease or any extensions hereof, Tenant, at its expense,
removes all such improvements except for the Initial Improvements, if requested
to do so by Landlord, and restores the Demised Premises to their original
condition and repairs any damage to the premises resulting from the installation
or removal of such partitions, fixtures or equipment as may have been installed
by Tenant, if requested to do so by Landlord, as long as removal of improvements
does not have a structural effect on building and will not hinder usage of
building for new tenancy. In the event that a Mechanic's Lien or Stop Notice
shall be filed against the Demised Premises as a result of improvements
authorized by Tenant, then, in the event, Tenant shall be obligated to have the
same removed within thirty (30) days of the filing thereof, and in the event
that same is not removed within said thirty (30) day period and if Tenant
desires to contest the validity of the asserted lien, then, in that event,
Tenant shall be required to post a surety bond with Landlord in such sum as
shall be sufficient to satisfy said lien.

     All of such changes, additions or alterations shall be made solely at the
expense of Tenant, and Tenant agrees to protect, indemnify and save harmless
Landlord on account of any injury to third persons or property by reason of any
such changes, additions or alterations, and to

                                      -15-
<PAGE>

protect, indemnify and save harmless Landlord from the payment of any claim of
any kind or character on account of bills for labor or material in connection
therewith.

ARTICLE FIFTEEN - FIRE

     If the Demised Premises, or the building of which they form a part, are
partially damaged by fire or other casualty not occurring through the fault of
Tenant, its agents, servants or employees, and such damage can be repaired
within one hundred twenty (120) days of the date of such occurrence, this Lease
shall remain in full force and effect and Landlord shall promptly repair such
damage, at its expense, and in the event there shall be a proportionate
abatement of rent for so much of the demised premises as may be untenantable
during the Period of the damages or repair or restoration.

     If, in the opinion of a registered architect or engineer appointed by
Landlord, the Demised Premises are damaged by fire or other casualty, as
aforesaid, to such an extent as to make them wholly untenantable for a period of
sixty (60) days or more from the date of such occurrence and such damage cannot
be repaired or the premises restored within said one hundred twenty (120) day
period, this Lease shall terminate at the option of Landlord, upon the written
notice given within thirty (30) days after such occurrence, notwithstanding the
foregoing, Tenant shall pay rent within said term only to the date of such
damage or destruction, or surrender of the demised premises, whichever occurs
later. If twenty-five (25%) percent or more of the building of which the Demised
Premises form a part is damaged by fire or other casualty, as aforesaid, to such
an extent that the same cannot be repaired or restored within sixty (60) days of
the damge of such occurrence, this Lease may be cancelled, at the option of
Landlord, upon thirty (30) days written notice from the date of such occurrence,
even though the premises occupied by Tenant have not become untenantable, and
there shall be an adjustment of rent to said date of termination.

                                      -16-
<PAGE>

ARTICLE SIXTEEN - INSURANCE

     A. Contemporaneously with the Commencement Date of this Lease, Landlord
shall carry and maintain fire and extended coverage insurance covering the
Building and the Demised Premises against loss or damage by fire and against
loss or damage by other causes now or hereafter embraced by so called "extended
coverage" in amounts sufficient to prevent Landlord, Tenant or any mortgagee
from becoming a co-insurer under the terms of the applicable policies, and said
coverage shall provide for actual replacement value of the Building and Demised
Premises for fire and extended coverage. All policies of insurance shall provide
by endorsement or otherwise that any loss shall be payable to mortgagee(s),
Landlord and Tenant, as their interests may appear.

     B. Tenant shall Day to Landlord all premiums, costs and charges incurred by
Landlord for all insurance coverage obtained by Landlord which covers or applies
to the Building and Demised Premises. Billings and payments of Tenant's
insurance costs shall be handled in the same manner as prescribed in Article
Twelve, supra for Industrial Park Exterior costs.

     C. Tenant convenants and agrees that it will carry General Liability
insurance for bodily injury and property damage, combined single general
aggregate limit of Three Million ($3,000,000.00) Dollars for each location.
Tenant further covenants and agrees that such policy shall name Landlord at the
time such insurance is first required to be carried by Tenant, and thereafter at
least thirty (30) days prior to the expiration of such policy, a certificate of
insurance shall be provided to the Landlord. It being the intention of the
parties hereto that the insurance required under the terms hereof shall be
continuous during the entire term of this lease and any renewal and any other
period of time during which, pursuant to the terms hereof, said insurance is
required.

                                      -17-
<PAGE>

ARTICLE SEVENTEEN - WAIVER OF SUBROGATION RIGHTS

     The Landlord and Tenant mutually waive all rights of recovery against each
other, their agents, servants or employees, for any loss, damage or injury or
any nature whatsoever to property or person for which either party is insured.
Each party shall obtain from its insurance carriers, provided insurance company
is in agreement, waivers of insurance rights under their respective policies
which shall be included within the terms of the policies and will furnish
evidence of such waiver upon request.

ARTICLE EIGHTEEN - ABANDONMENT OF PREMISES

     If Tenant shall abandon or vacate the Demised Premises before the end of
the term or otherwise default under any other provision of this Lease, Landlord
may take possession of said premises and relet the same without such action
being deemed an acceptance of a surrender of this Lease or in any way
terminating Tenant's Liability hereunder, and Tenant shall remain liable for
payment of the rent herein reserved, less the net realized by Landlord from
reletting after deduction of any expenses incident to such repossession and
reletting.

ARTICLE NINETEEN - HOLDOVER

     If Tenant shall occupy the Demised Premises with the consent of Landlord
after the expiration of this Lease and rent is accepted from said Tenant, such
occupancy and payment shall be construed as an extension of this Lease for the
term of one (1) month only from the date of such expiration and occupation, and
payment thereafter shall operate to extend the term of this Lease for but one
(1) month at a time unless other terms of such extensions are endorsed hereon in
writing and signed by the parties hereto. In such event, if either Landlord or
tenant desires to terminate said occupancy at the end of any month after the
termination of this Lease, the party so desiring to terminate the same shall
give the other party at least thirty (30) days written notice to that effect.
Failure on the part of Tenant to give such notice shall obligate it to pay rent
for an

                                      -18-
<PAGE>

additional calendar month following the month in which Tenant has vacated the
Demised Premises. If such occupancy continued without the consent of Landlord,
Tenant shall pay to Landlord as liquidated damages double the amount of rent at
the highest rate specified in this Lease for the time Tenant retains possession
of the premises or any part thereof after termination of the term by lapse of
time or otherwise.

ARTICLE TWENTY - INSPECTION

     Landlord expressly reserves the following rights, subject to prior
reasonable notice:

     A. To enter the Demised Premised at any time to examine or to make such
repairs, additions or alterations as it may deem necessary for the safety,
improvement or preservation thereof, or of said building and, in all instances
where practical, said work is to be performed so as not to interfere with
Tenant's business but Landlord assumes no obligation to make repairs to the
Demised Premises or said building; and

     B. During or after the time Tenant abandons or vacates the Demised Premises
or otherwise defaults hereunder, to repair, alter or otherwise prepare the
Demised Premises for reoccupancy.

     The exercise of any reserved right by Landlord shall never be deemed an
eviction or disturbance of Tenant's use and possession of the Demised Premises
and shall never render Landlord liable in any manner to Tenant or to any other
person.

ARTICLE TWENTY-ONE - LANDLORD'S ACCESS FOR FUTURE CONSTRUCTION

[Text omitted in original.]

                                      -19-
<PAGE>

ARTICLE TWENTY-TWO - NON-LIABILITY OF LANDLORD

     It is agreed that Landlord shall not be liable to Tenant or any other
person on the Demised Premises or in the building for any damage, either to
person or property, except where such damage is caused by the negligence of the
Landlord, his agents, servants or employees. Landlord shall not be under any
responsibility or liability in anyway whatsoever for the quality, quantity,
impairment, interruption, stoppage or other interference with service involving
water (exclusive of flooding or inundation by water), heat, gas, electric
current for light and power, telephone or any other service by any public
utility except for any damage caused to the tenant by such interference due to
the negligence of the Landlord, his agents, servants or employees.

ARTICLE TWENTY-THREE - LIABILITY FOR DAMAGES AND PLATE GLASS

     Except where such damage is caused by negligence of the landlord, his
agents, servants or employees, Tenant agrees to be responsible for any damage to
the property of Landlord which may result from any use of the Demised Premises,
or any act done thereon by Tenant or any person coming or being thereon by the
license of Tenant, expressed or implied, and also to save Landlord harmless from
any liability to any person for damage to person or property resulting from any
such causes, and to protect such liability with general liability insurance and,
at the request of Landlord, to furnish Landlord with a certificate issued by the
insurance carrier showing such insurance in force and with Landlord covered
thereby for bodily injury and property damage combined single limit of Three
Million ($3,000,000.00) Dollars. Tenant agrees to replace all glass broken,
damaged or destroyed in any manner whatsoever, Tenant assuming all
responsibility for the glass in the Demised Premises, and to cause such
liability to be protected by plate glass insurance, at Tenant's expense and
further to deposit such plate glass insurance policy or certificate showing such
insurance in force with Landlord during the term of this Lease. Tenant agrees,
at Tenant's expense, to keep all non-structural plumbing and heating

                                      -20-
<PAGE>

lines from the point of entrance to the Demised Premises to the point of actual
use tight and free from leakage and stoppage at all times and to use reasonable
diligence in the conservation of these services.

ARTICLE TWENTY-FOUR - DEFAULT

     A. Upon Tenant's failure to pay any installment of the Minimum Rental or
Additional Rent when due, it shall be lawful thereupon, after ten (10) days
written notice and failure to cure default after additional fifteen (15) days,
as indicated elsewhere in the lease, and without any legal process; provided
additional rent remains unpaid and is not being disputed in good faith, for
Landlord to re-enter and reposses the Demised Premises, to remove all persons
therefrom and to take exclusive possession of and remove all property herefrom,
and any and all rights of Tenant as a tenant shall, at Landlord's option,
immediately cease and terminate. The failure on the part of Landlord to re-enter
and repossess the Demised Premises, or to exercise any of its rights hereunder
upon any default, shall not be deemed a waiver of any of the terms and
conditions of this Lease, and shall not preclude said Landlord from the exercise
of any of such rights upon any subsequent occurring default or defaults.

     B. If this Lease shall be terminated, as provided in this Article
Twenty-four:

          (1.) Landlord may immediately, or at any time therafter, re-enter and
     resume possession of the Demised Premises and remove all persons and
     property therefrom, either by summary dispossess proceedings or by a
     suitable action or proceeding at law or in equity, or by force or
     otherwise, without being liable for any damages therefor. No re-entry by
     Landlord shall be deemed an acceptance of a surrender of this Lease.

          (2.) Landlord may relet the whole or any part of the Demised Premises
     for a period equal to, or greater or lesser than, the remainder of the then
     term of this Lease, at such rental and upon such terms and conditions as
     Landlord shall deem reasonable, to any Person

                                      -21-
<PAGE>

     which it may deem suitable and satisfactory and for any use and purpose
     which it may be deemed appropriate. In no event shall Landlord be liable in
     any respect for the failure to relet the Demised Premises or, in the event
     of such reletting, for failure to collect the rent thereunder. Any sums or
     other consideration received by Landlord on a reletting in excess of the
     rent reserved in this lease shall belong to Landlord.

     C. If this Lease shall be terminated as provided in this Provision, or by
summary proceedings or otherwise, and whether or not the Demised Premises shall
be relet, Landlord shall be entitled to recover from Tenant, and Tenant shall
Pay to Landlord the following:

          (1.) An amount equal to all expenses, including (i) reasonable counsel
     feels incurred by Landlord in recovering possession of the Demised
     Premises, (ii) all reasonable cost and charges for the care of the Demised
     Premises while vacant, and (iii) all expenses incurred by Landlord in
     connection with the reletting of the Demised Premises or any part thereof,
     including broker's commission, advertising expenses and costs of repairing,
     renovating or remodeling the Demised Premises, which amounts set forth in
     ths provision shall be due and payable by Tenant to Landlord at such times
     as the expenses, costs and charges shall have been incurred.

          (2.) An amount equal to all Minimum Rental, Additional Rent and other
     charges required to be paid by Tenant under this Lease, less the net rent,
     if any, collected by Landlord on reletting the Demised Premises, which
     amount shall be due and payable by Tenant to Landlord on the several days
     on which such Minimum Rental and other charges would have become due and
     payable had this Lease not been terminated, and Tenant shall pay to
     Landlord the amount of any deficiency then existing. The net rent collected
     by Landlord on reletting shall be computed by deducting from the gross
     rents collected the expenses, costs and charges referred

                                      -22-
<PAGE>

     to in provision C (1.) supra, provided said expenses and charges have not
     already been recovered from the Tenant.

     Without any previous notice or demand, separate actions may be instituted
by Landlord against Tenant from time to time to recover any damages which at the
commencement of any such action shall then or theretofore have become due and
payable to Landlord under any provision hereof without waiting until the end of
the original term of this Lease, and neither the institution of suit or suits,
proceeding or proceedings, nor the entering of judgment therein shall bar
Landlord from bringing a subsequent suit or proceedings for damages of any kind
theretofore or thereafter suffered, it is expressly agreed that the forebearance
on the part of Landlord in the institution of any suit or entry of judgment for
any part of the rent herein reserved to Landlord, including, but not limited to,
the unliquidated percentage rent then due, shall in no way serve as a defense
against nor prejudice a subsequent action for such rent. Tenant hereby expressly
waives Tenant's right to claim a merger of such subsequent action in any
previous suit or in the judgment entered therein. Furthermore, it is expressly
agreed that claims for liquidated or minimum annual rent may be regarded by
Landlord, if it so elects, as separate claims capable of being assigned.

     D. In the event of a breach or threatened breach of Tenant of any of the
covenants or provisions, after written notice and the expiration of the period
to cure as provided in Section 24 (a), Landlord shall have the right or
injunction and the right to invoke any remedy allowed, at law or in equity, as
it re-entry, summary proceedings and other remedies where not herein provided
for. Mention in this Lease of any particular remedy shall not preclude Landlord
from any other remedy, in law or in equity. Tenant hereby expressly waives any
and all rights of redemption granted by or under any present or future laws in
the event of Tenant being evicted

                                      -23-
<PAGE>

or disposed for any cause, or in any event of Landlord obtaining possession of
the Demised Premises by reason of the violation by Tenant of any of the
covenants and conditions of this Lease or otherwise.

     E. Notwithstanding any other provision of this Lease, if Tenant shall
default in the payment of any rent and/or any other payments required of Tenant,
or any part thereof, and if such default shall continue for twenty-five (25)
days after written notice thereof then, without any previous notice or demand
and without terminating this Lease, Landlord may institute any action, suit or
proceeding provided for by law (notwithstanding the fact that such is not
otherwise provided for herein) against Tenant from time to time to recover any
of the aforesaid sums which, at the commencement of any such action, writ or
proceeding shall then or theretofore have become due and payable to the Landlord
under any provisions hereof, without waiting until the end of the original term
of this Lease, and neither the institution of such action, suit or proceeding
nor the settlement thereof of entering of judgment there in shall terminate this
Lease, nor shall it bar Landlord from bringing subsequent actions, suits or
proceedings from time to time for any sum or sums of any kind which shall
thereafter become due and owing from Tenant to Landlord under any of the terms
hereof or otherwise. Tenant hereby expressly waives any right or defense which
it may have to claim a merger of such subsequent actions, suits or proceedings
in any previous action, suit or proceeding or in the settlement thereof or
judgment entered therein.

     F. All sums other than Minimum Rent Payable hereunder by Tenant are hereby
deemed and declared to be "Additional Rent" under the terms of this Lease and
Landlord shall have any and all rights afforded it hereunder to collect the
same.

                                      -24-
<PAGE>

     G. If after default in payment of rent or violation of any other provision
of this Lease, or upon the expiration of this Lease, Tenant moves out or its
dispossessed and fails to remove any trade fixtures, signs or other property
prior to such default, removal, expiration of Lease, or prior to the issuance of
final order to execution of warrant, then in that event the said fixtures, signs
and property shall be deemed abandoned by Tenant and shall become the property
of Landlord, or Landlord may notify Tenant to remove the same at Tenant's own
cost and expense, and upon the failure to Tenant so to do Landlord may, in
addition to any other remedies available to it, remove said trade fixtures,
signs or other property as the duly authorized agent of Tenant and store the
same in the name and at the usual or proper form of warehouse receipt, whether
or not authorizing the sale of same for nonpayment of storage charges without
any way being liable for trespass, conversation or negligence by reason of the
acts of Landlord or anyone claiming under it or by reason of the negligence of
any person in caring for the same while in storage, and Tenant will pay to
Landlord upon demand any and all expenses and charges incurred upon such removal
and storage, irrespective of the length of time of storage.

ARTICLE 24(a) - REMEDY

     In the event of any default under the provisions of Article 24 the Tenant
shall have fifteen (15) days after written notice to cure default. Tenant shall
thereupon pay to Landlord the Minimum Rent, Additional Rent, any other charges
payable hereunder by Tenant to Landlord up to the time of such termination of
this Lease.

ARTICLE TWENTY-FIVE - WAIVERS

     The failures of Landlord to insist, in any one or more instances, upon a
strict performance of any of the covenants of this Lease, or to exercise any
option herein contained, shall not be construed as a waiver or a relinquishment
for the future of such covenant or option, but the same shall continue and
remain in full force and effect. The receipt by Landlord of rent with

                                      -25-
<PAGE>

knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provisions hereof shall be deemed
to have been made unless expressed in writing and signed by Landlord. Even
though Landlord shall consent to an assignment and/or subletting hereof, no
further assignment and/or sublettng shall be made without express consent in
writing by Landlord.

ARTICLE TWENTY-SIX - SUBORDINATION BY TENANT

     A. This Lease shall be subject and subordinate at all times to the lien of
the mortgages now on the Demised Premises and to all advances made or hereafter
to be made upon the security thereof, and subject and subordinate to the lien of
any mortgage or mortgages which at any time may be made a lien upon the Demised
Premises, and subject and subordinate to any lease or other arrangement or right
to possession under which Landlord is in control of the Demised Premises and to
the rights of the owner or Owners of the Demised Premises and of the Building or
Land upon which it is situated. Tenant will execute and deliver such further
instrument or instruments subordinating this Lease to the lien of any such
instrument or instruments for Tenant as may be required hereunder. A refusal by
the Tenant to execute such instruments shall entitle the Landlord to the option
of canceling this Lease, and the term hereof is hereby expressly limited
accordingly.

     B. Tenant hereby agrees not to look to the mortgagee, as mortgagee,
mortgagee in possession, or successor in title to the Subject Premises, for
accountability for any security deposit required by the Landlord hereinunder,
unless said sums have actually been received by said mortgages as security for
the Tenant's performance of this Lease, lien of any such instrument or
instruments for Tenant as may be required hereunder. A refusal by the Tenant to
execute such instruments shall entitle the Landlord to the option of canceling
this Lease and the term hereof is hereby expressly limited accordingly.

                                      -26-
<PAGE>

     Landlord will obtain a non-disturbance agreement within 45 days of Lease
commencement from mortgagee providing that Tenant's possession of the Demised
Premises is not to be disturbed if Tenant shall not be in default under this
Lease.

ARTICLE TWENTY-SEVEN - ATTORNMENT

     If at any time during the term of this Lease the Landlord of the Demised
Premises shall be the holder of a leasehold estate covering permises which
include the Demised Premises, and if such leasehold estate shall terminate or be
terminated for any reason, Tenant agrees, at the election and upon demand of any
owner of the premises which include the Demised Premises, or of any mortgagee in
possession thereof, or of any holder of a leasehold thereafter affecting
premises which include the Demised Premises, to attorn, from time to time, to
any such owner, mortgagees, or holder upon the terms and conditions set forth
herein for the remainder of the term demised in this Lease.

     The foregoing provisions shall inure to the benefit of any such owner,
mortgagees or holder, shall apply notwithstanding that this Lease may terminate
upon the termination of any such leasehold estate, and shall be self-operative
upon such demand without requiring any further instrument to give effect to such
provisions. Tenant, however, upon demand of any such owner, mortgagee or holder,
agrees to execute, from time to time, an instrument in confirmation of the
foregoing provisions satisfactory to any such owner, mortgagee or holder in
which Tenant shall acknowledge such attornment and shall set forth the terms and
conditions of its tenancy, which shall be the same as those set forth herein,
and shall apply for the remainder of the term original demised in this lease.
Nothing contained in this Article shall be construed to impair any right
otherwise exercisable by any such owner, mortgagee or holder.

                                      -27-
<PAGE>

ARTICLE TWENTY-EIGHT - ATTORNEY'S FEES

     If Tenant shall at any time be in default hereunder, and if Landlord shall
institute an action or summary proceeding against Tenant based upon such
default, or if Landlord shall cure such default or defaults for the act of
Tenant, then Tenant will reimburse Landlord for the expense of attorney's fees
and disbursements, thereby incurred by Landlord so far as the same are,
reasonable in amount.

ARTICLE TWENTY-NINE - STATEMENT OF ACCEPTANCE

     Upon the Tenant's accepting the Demised Premises and entering possession
pursuant to the terms and conditions hereof, the Tenant covenants and agrees
that it will furnish to the Landlord a statement that it accepts the Demised
Premises and agrees to pay the rent from the date of acceptance, subject to the
terms and conditions of the Lease as herein contained. Tenant further agrees
that subsequent to the Commencement Date it will execute, as a condition of the
within Lease, an estoppel letter as may be required from Landlord's mortgagee
from time to time, certifying among other things that the Commencement Date of
the Lease, status of current rent payments by Tenant, and any other pertinent
information as may be reasonable required by such mortgagee as it affects the
status of the within Lease.

ARTICLE THIRTY - CHANGES IN OR ABOUT PREMISES

     This Lease shall not be affected or impaired by any change in any sidewalk,
alleys or streets adjacent to or around the Building, or in parking regulations
of the Borough of Eatontown or any County or State Agency or Office.

ARTICLE THIRTY-ONE - LANDLORD'S RESERVED RIGHTS

     A. To show the Demised Premises to Prospective tenants or brokers during
the last year of the term of this Lease, or at any time, as the same may be
extended, and visits are supervised by Tenant whose approval shall not be
unreasonably withhold, and to prospective

                                      -28-
<PAGE>

purchasers at all reasonable times, provided prior notice to Tenant in each case
is given, and Tenant's use and occupancy of the premises shall not be materially
inconvenienced by any such action of Landlord. Landlord may enter upon the
Demised Premises and may exercise any or all of the foregoing rights hereby
reserved without being deemed guilty of an eviction or disturbance of Tenant's
use or Possession and without being liable in any manner to Tenant.
Notwithstanding the foregoing, Landlord agrees that it shall arrange said
visitation only by appointment with Tenant.

     B. No action by Landlord shall be permitted which would eliminate or
substantially reduce access to the Demised Premises.

ARTICLE THIRTY-TWO - RESPONSIBILITY FOR REPAIRS

     A. Landlord shall keep the foundation, the exterior walls (except plate
glass windows, doors, door closure devices and other exterior openings, window
and door frames, molding, locks and hardware; roof membrane, lighting, heating,
air-conditioning, plumbing and other electrical, mechanical and electromotive
installation, equipment and fixtures, signs, placards, decorations or
advertising media of any type; and interior painting or other treatment of
exterior walls) and roof deck of the Demised Premises in good repair. Landlord,
however, shall not be required to make any repairs occasioned by the act or
negligence of Tenant, its agents, employees, subtenants and licensees. In the
event, that the Demised Premises should become in need of repairs required to be
made by Landlord hereunder, Tenant shall give written notice thereof to
Landlord, and Landlord shall not be responsible in any way for failure to make
any such repairs until a reasonable time shall have elapsed after receipt by
Landlord of such written notice or verbal confirmation within 24 hours. Should
Landlord not make needed repairs within 30 days, Tenant may elect to perform
work and deduct cost from rental.

                                      -29-
<PAGE>

     If structural damage is such that building cannot be occupied by Tenant and
cannot be repaired so that tenant can occupy building, then lease shall become
null and void and Landlord will reimburse Tenant for moving expenses to new
facility.

     B. Tenant shall keep the Demised Premises in good, clean, and habitable
condition and shall at its sole cost and expense keep the premises free of
insects, rodents, vermin and other pests and make all needed repairs and
replacements including replacement of cracked or broken glass, except for
repairs and replacement required to be made by Landlord under the provisions of
Paragraph A of this Article Thirty-Two. Without limiting the coverage of the
previous sentence, it is understood that Tenant's responsibilities therein
include the repair and replacement of all lighting, heating, air-conditioning,
plumbing, paved areas and other electrical, mechanical and electromotive
installation, equipment and fixtures and also include all utility repairs in
ducts, conduits, pipes and wiring, and any sewer stoppage located in under and
above the Demised Premises. If any repairs required to be made by Tenant
hereunder are not made within ten days after written notice delivered to Tenant
by Landlord, Landlord may at its option make such repairs without liability to
Tenant for any loss or damage which may result to its stock or business by
reason of such repairs; and Tenant shall pay to Landlord the invoiced amount for
the cost of repairs if not paid within thirty (30) days an interest rate of ten
(10%) percent will be charged thereafter.

ARTICLE THIRTY-THREE - EMINENT DOMAIN

     As to eminent domain or taking in lieu thereof only, if the whole or part
of the Demised Premises shall be acquired or condemned by right of eminent
domain for any public or quasi-public use or purpose, then Landlord or Tenant,
at their election, may terminate the term of this Lease by giving notice to
Landlord or Tenant of its election, and in such event all rent shall be

                                      -30-
<PAGE>

apportioned and adjusted as of the date of termination. There shall be no
reduction or adjustment in the rental as a result of taking over a portion of
the parking provided by Landlord.

     Landlord reserves to itself, and Tenant assigns to Landlord, all rights to
damages accruing on account of any such taking or condemnation or by reason of
any act of any public or quasi-public authority for which damages are payable.
Tenant agrees to execute such instruments of assignment as may be required by
Landlord, to join with Landlord in any petition for the recovery of damages, if
requested by Landlord, and to turn over to Landlord any such damages that may be
recovered in any such proceeding. If Tenant shall fail to execute such
instruments as may be required by Landlord or to undertake such other steps as
may be requested as herein stated, then and in any such event Landlord shall be
deemed the duly authorized irrevocable agent and attorney-in-fact of Tenant to
execute such instruments and undertake such steps as herein stated in and on
behalf of Tenant. It is agreed and understood, however, that Landlord does not
reserve to itself, and Tenant does not assign to Landlord, any damages payable
for trade fixtures installed by Tenant at its own cost and expense which are not
part of the realty or Tenant's damage for interference or deprivation of use.

ARTICLE THIRTY-FOUR - PAYMENT OF MORTGAGE, TAXES, ETC.

     Landlord hereby convenants and agrees with Tenant that all rent received
hereunder shall be first applied and paid over to make and satisfy all payments
required under the existing mort-gage(s) on the Demised Premises and all real
estate taxes and any other charge or assessment which if remaining unpaid would
constitute a lien upon the Demised Premises, as the same become due. In the
event that Landlord shall fail to make any such payment in accordance with the
provisions of this Article, then Tenant shall have the right (but not the
obligation) to make such payment(s) directly to the mortgagee, taxing authority
or other levying agency and to deduct such payment(s) from the next ensuing rent
payment(s) hereunder.

                                      -31-
<PAGE>

ARTICLE THIRTY-FIVE - BROKERS

     Landlord and Tenant represent to one another that this Lease has been
effected with the aid and assistance of Jacobson, Goldfarb & Tanzman Associates
and that a commission is due. If Owner, with particular reference to a certain
Commission Agreement signed July 21, 1994 between Landlord and Owner and
Jacobson, Goldfarb & Tanzman Associates, as Broker (a copy of which is annexed
hereto) fails to make any commission payment to Broker, Broker shall provide
written notice to Tenant (with a copy to Landlord) of the Landlord's failure to
make such payment, setting forth the total amount of commission due and payable
to Broker. Tenant, upon receipt of said notice, is hereby authorized and
directed by Landlord to make all monthly payments of rent directly to Broker (at
the address set forth in the Commission Agreement) until such time as the
commission obligation to Broker has been paid in full. Landlord and Tenant agree
that the payments of brokerage commission by Tenant to Broker shall be in lieu
of rental payments required under the Lease and Tenant shall not be in default
under the lease by virtue of its payment of such funds to Broker on behalf of
Landlord.

     Landlord and Tenant agree that, in the event of a transfer of the Premises
to a third party, whether by sale, foreclosure or deed in lieu of foreclosure,
or otherwise, such third party will assume all of the obligations of Landlord
hereunder.

ARTICLE THIRTY-SIX - SECURITY

     Upon execution of this Lease, the Tenant shall deposit with the Landlord
the sum of Twenty One Thousand Nine-Hundred Eighty Four ($21,984.00) Dollars as
security for the full and faithful performance of this Lease upon the part of
the Tenant to be performed. Upon termination of this Lease, the Landlord shall
return the said sum of Twenty One Thousand Nine Hundred Eighty Four ($21,984.00)
Dollars to the Tenant. Anything herein contained to the contrary
notwithstanding, it is expressly understood and agreed that the said security
deposit

                                      -32-
<PAGE>

shall not bear interest. Tenant covenants and agrees that it will not assign,
pledge, hypothecate, mortgage or otherwise encumber the aforementioned security
during the term of this Lease. It is expressly understood and agreed that the
Landlord shall have the right to co-mingle the security funds with its general
funds and said security shall not be required to be segregated.

ARTICLE THIRTY-SEVEN - INTERPRETATION

      It is agreed that if any provision of this Lease shall be determined to be
void by any court of competent jurisdication, then such determination shall not
affect any other provision of this Lease and all of said other provisions shall
remain in full force and effect. It is the intention of the parties hereto that
if any provision of this Lease is capable of two constructions, one of which
would render the provision void and the other of which would render the
provision valid. Said lease shall be construed pursuant to the laws of the State
of New Jersey pursuant to Article 38 hereof.

ARTICLE THIRTY-EIGHT - LEASE CONSTRUCTION

     The Lease shall be construed pursuant to the laws of the State of New
Jersey.

ARTICLE THIRTY-NINE - ARTICLE HEADING

     The paragraph headings herein are inserted only as a matter of convenience
and for reference, and in no way to define, limit or describe the scope of this
Lease nor the intent of any provision hereof.

ARTICLE FORTY - ENTIRE AGREEMENT

     It is agreed that neither Landlord nor anyone acting in its behalf has made
any statement, promise or agreement, or taken upon itself or themselves any
engagement whatever, verbally or in writing, in conflict with the terms of this
Lease, or that in any way modified, varies, alters, enlarges or invalidates any
of its provisions, and that no obligations of Landlord shall be implied in
addition to the obligations herein expressed, also including subtenants.
Notwithstanding

                                      -33-
<PAGE>

anything contained herein, this lease upon commencement date shall supercede
lease dated 26 September 1994.

ARTICLE FORTY-ONE - NOTICES

     All notices to be given hereunder by either party shall be in writing and
given to Landlord or Tenant, or shall be sent by registered or certified mail,
postage prepaid, addressed to the party intended to be notified at the post
office address of such party last known to the party giving notice, and notice
given as aforesaid shall be a sufficient service thereof and shall be deemed
given as of the date when deposited in any post office or in any post office box
regularly maintained by the federal government.

ARTICLE FORTY-TWO - DEFINITIONS

     It is understood that the terms "Landlord" and "Tenant" used herein shall
be construed to mean landlords and tenants where there is more than one, and the
necessary grammatical changes required to make the provisions hereof apply
either to corporations or individuals, masculine or feminine, shall in all cases
be assumed as though fully expressed.

     The word "Landlord" as used in this Lease means only the owner for the time
being of Landlord's interest in this Lease in the event of any assignment of
Landlord's interest in this Lease, the assignor shall no longer be liable for
the performance or observance of any agreements or conditions on the part of
Landlord to be performed or observed, except as to the security deposit.

ARTICLE FORTY-THREE - QUIET ENJOYMENT

     Landlord covenants that Tenant in paying the rent and performing the
covenants aforesaid, shall and peacefully and quietly have, hold and enjoy the
Demised Premises for the term aforesaid.

                                      -34-
<PAGE>

ARTICLE FORTY-FOUR - HEIRS, ETC.

     The covenants and agreements contained in the foregoing Lease are binding
upon the parties hereto and their respective heirs, executors, administrators,
successores, legal representatives and assigns.

ARTICLE FORTY-FIVE - ENVIRONMENTAL LAWS INDUSTRIAL STANDARDS RECOVERY ACT (ISRA)

     A. Hazardous Substances. (1) Tenant shall not (a) except as used in
laboratory quantities and as provided in subparagraph (2) below, bring or
otherwise cause to be brought to permit any of its agents, employees,
contractors or invitees to bring in, on or about any part of the Building, any
hazardous substances or hazardous waste as such terms are or may be defined in
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601 et seq., as the same may, from time to time, be amended and the
regulations promulgated thereto (CERCLA) or the Environmental Cleanup
Responsibility Act, N.J.S.A. 13:K-6 et seq., as the same may, from time to time,
be amended and the regulations promulgated pursuant thereto (ISRA), (b) perform
or omit to perform any act or permit Tenant's standard industrial classification
number ("SIC Number") to fall within any SIC Number to which ISRA may be
applicable, or (c) cause or permit to exist in, upon or about any part of the
Building, any condition arising by reason of Tenant's activities or the
activities of any of Tenant's agents, employees, contractors or invitees which
may subject Landlord or Tenant or any person or entity in privity with Landlord
or Tenant to any liability or other obligation arising out of any injury or
threatened injury to the environment or human health pursuant to any federal,
state or local act, law, ordinance, rule or regulations, whether now or existing
or hereafter in effect.

          (2) Tenant may bring de minimus quantities of substances referred to
     in subparagraph (1) above to the Demised Premises, but only to the extent
     that such substances are

                                      -35-
<PAGE>

     exempt from the requirements of ISRA and provided that the quantity and
     nature of such substances do not prevent the Tenant or the Landlord from,
     at any time, obtaining from the New Jersey Department of Environmental
     Protection ("NJDEP") a "De Minimus Quantity Exemption" Pursuant to N.J.A.C.
     7:26B-10.1. Tenant shall store and handle such substances in accordance
     with the standard set forth in N.J.A.C. 7:26B-10.1.

     B. Environmental Cleanup Responsibility Act. (1) If any of the provisions
of subparagraph A shall be waived, or if Tenant shall default in the performance
of any of its obligations under subparagraph A, in such instance, Landord shall
have all rights and remedies to which Landlord is entitled, by reason of a
breach of this Lease, the Tenant shall nevertheless comply with ISRA prior to
the occurrence of closing, termination, transfer of operations or any event
requiring compliance with ISRA ("ISRA Event") as may, from time to time, be
described in ISRA, or as currently described in that portion of ISRA cited as
N.J.A.C. 7:26B-1.5 et seq., in accordance with the provisions of this Lease.

          (2) Tenant shall, not less than five (5) days prior to the occurrence
     of any ISRA Event, and also within twenty-one (21) days prior to
     "Termination" (which for purposes of this Article Forty-Five shall mean the
     expiration, of the Term of this Lease, or earlier termination thereof),
     obtain from the Industrial Site Evaluation Element of New Jersey Department
     of Environmental Protection ("NJDEP"), and deliver a true copy thereof to
     Landlord either (a) a written non-applicability determination stating that
     ISRA is not applicable in such instance; (b) a written approval of Tenant's
     negative declaration stating that there has been no discharge of hazardous
     substances or waste on or from the Building by reason of any activity of
     Tenant, its agents, employees, contractors or invitees; or (c) a letter or
     other written statement from NJDEP stating that a NJDEP approved cleanup
     plan has been fully implemented and completed. Except

                                      -36-
<PAGE>

     as provided in subparagraph (3) below, the Tenant shall be deemed to have
     obtained "ISRA Approval", for purposes of this Lease, upon the Landlord's
     receipt of the documentation described (a), (b) or (c) above.

          (3) If Tenant shall seek to acquire ISRA Approval by obtaining a
     non-applicability determination based upon operations of Tenant in the
     Demised Premises falling within a standard industrial classification number
     ("SIC Number"), which is outside the scope of ISRA, Tenant shall submit to
     Landlord not earlier than thirty (30) days prior to Termination, and not
     later than ten (10) days after Termination, an affidavit in the form
     annexed here to as Exhibit #2, signed by Tenant, or on behalf of Tenant by
     a duly authorized officer or partner of Tenant, having overall
     responsibility for the activities of Tenant at the Demised Premises. Tenant
     shall be deemed to have obtained ISRA Approval, for purposes of this Lease,
     upon receipt by Landlord of a nonapplicability determination from ISRA and
     the aforesaid affidavit.

          (4) If Tenant has not obtained ECRA Approval within twenty-one (21)
     days prior to Termination, Landlord may direct Tenant to promptly apply for
     and obtain an Administrative Consent Order ("ACO") NJDEP. In such event,
     Tenant shall post any financial assurances required by NJDEP. Under no
     circumstances shall the Tenant's acquisition of an ACO be deemed to
     constitute ISRA Approval under this Lease, nor shall it relieve Tenant of
     any duty or obligation provided by this Lease.

          (5) Landlord shall receive for its review and comment a copy of any
     letter, application, affidavit, report, plan, map or other document
     (hereinafter referred to as "Correspondence") intended to be submitted by
     or on behalf of Tenant to NJDEP at least seven (7) business days prior to
     submission. Landlord may timely communicate to Tenant any

                                      -37-
<PAGE>

     modification or alteration requested to be made to the Correspondence,
     which modification or alteration will be incorporated therein, provided,
     there is no inaccuracy in such modification or alteration.

          (6) Upon receipt, Tenant shall immediately submit to Landlord true and
     complete copies of any Correspondence received by Tenant from NJDEP or any
     other regulatory agency concerning matters rising out or relating to ISRA.
     In addition, Tenant shall keep Landlord fully informed of all progress in
     complying with any of its obligations under this Article Forty-Five of this
     Lease.

          (7) Landlord shall have the opportunity to participate with Tenant in
     negotiations with the NJDEP leading to the obtaining by Tenant of a
     certification from NJDEP that Tenant has complied with all of its
     obligations pursuant to ISRA.

          (8) Any representation made by Tenant, its officers, directors,
     employees, or any other party acting by or on behalf of Tenant, to NJDEP or
     any other regulatory agency concerning matters arising out of or relating
     or ISRA, may be relied upon by Landlord and shall be considered a
     representation made directly to the Landlord which shall survive
     Termination, and inure to the benefit of Landlord.

          (9) Tenant shall timely inform Landlord of any proposed sampling of
     soil sediment, air, groundwater, surface water or other samples in or near
     any part of the Building intended to be taken by Tenant, its consultants or
     agents or by any other party acting by or on behalf of Tenant, and upon
     Landlord's request, deliver portions of such samples to Landlord. Tenant
     shall, on a continuing basis, contemporaneously provide Landlord with
     copies of all sampling results, if written, and reports of sampling
     results, if oral, whether or not provided to

                                      -38-
<PAGE>

     NJDEP, as well as any other reports obtained by Tenant relating in any way
     to the environmental condition of the Building or property nearby.

     C. Cleanup Plan. (1) Should NJDEP require that a cleanup plan be prepared
and that cleanup be undertaken (the "Cleanup Plan") , because of any spills or
discharges of hazardous substances or wastes in, upon, or about the Building, or
the threat thereof , by reason of the conduct of Tenant, its agents employees,
contractors or invitees, then Tenant shall prepare and submit the required plan
and financial assurances required by ISRA and, subject to the provisions of
subparagraph (4) below, comply with and perform the work required by the Cleanup
Plan.

          (2) Tenant shall, upon request of Landlord, deposit with Landlord
     twenty-five percent (25%) of the cost of compliance with the Cleanup Plan,
     as reasonably estimated by Landlord. Portions of the amount deposited with
     Landlord may, from time to time, be released by Landlord to be applied to
     the costs of performance of the Cleanup Plan, provided that at least
     twenty-five percent (25%) of the estimated cost of the balance of the costs
     of compliance with the Cleanup Plan (as reasonably estimated by Landlord)
     remain in the fund held by Landlord until issuance of a Certification by
     NJDEP of compliance with and completion of the Cleanup Plan.

          (3) Tenant shall utilize its own identification number or code as
     provided or to be provided by the United States Environmental Protection
     Agency and/or the NJDEP in connection with the shipment of any materials or
     substances removed from the Building, in order to comply with Tenant's ISRA
     obligations, and shall identify itself on any manifests and other documents
     prepared in connection with any such shipments as the generator and owner
     of the material and substances to be shipped.

                                      -39-
<PAGE>

          (4) Tenant shall be responsible for the cost of repair or replacement
     of any part of the Building, the equipment, personally and installations
     thereon and therein necessitated by reason of the performance by Tenant of
     its obligations under this Article Forty-Five.

          (5) Tenant shall implement and institute any reasonable safety
     measures in connection with any work in, about or near the Building by
     reason of its obligations under this Article Forty-Five, as Landlord may
     reasonably request, and, in addition thereto, Tenant shall perform such
     work at such hours as shall be designated by Landlord in order to avoid
     interference with the operations of the Building and the conduct of
     business therein by the tenants.

          (6) Landlord may, in its reasonable discretion, determine that the
     execution of the Cleanup Plan and the work required thereunder affect
     portions of the Building or property other than the Demised Premises, the
     operation hereof or other tenants therein, and in such instance, Landlord
     may, complete or cause the work required to be completed pursuant to the
     Cleanup Plan at Tenant's cost, and any funds deposited by Tenant with
     Landlord may be applied to the cost of such work by Landlord.

     D. Failure to Obtain ISRA Approval Prior to Termination. Tenant
acknowledges that the failure by Tenant to receive ISRA Approval may adversely
affect Landlord's ability to operate the Building, lease space therein, or
otherwise mortgage, finance or sell the Building and that the damages which may
be sustained by Landlord as a result thereof may be substantial and are not
easily susceptible to definitive computation. Accordingly, Tenant shall be
responsible for and pay to Landlord an amount equal to one three hundred
sixty-fifth (1/365th) of the aggregate of the highest amount of Minimum Rental
and Additonal Rent payable by Tenant in any Lease

                                      -40-
<PAGE>

year during the five (5) year period immediately preceding the expiration or
termination multiplied by two (2) for each day after termination that Tenant has
failed to obtain ISRA approval, diminished by any rental or other revenues
received by Landlord by reason of the occupancy of the Demised Premises during
such period provided that Tenant has timely applied for ISRA approval and holdup
was caused by the State and not of its own doing; this penalty shall not be
applied.

ARTICLE FORTY-SIX - ASSIGNMENT OF LEASES

     Landlord will assign two (2) leases now in full force and effect at the
Demised Premises; to Osteotech. Home Diagnostics and Seasonal Specialties Leases
will be assigned, provided the Tenant, Osteotech, will have the right to request
the Landlord to provide alternate facilities for both subtenants upon thirty
(30) days written notice.

     Home Diagnostics will lease 3,500 + - square feet of office space at $8.50
per square foot, triple net, per annum. Seasonal Specialties will continue to
lease 5,628 square feet warehouse space under the same terms and conditions
except that they will relocate in the building and have the access to a
tailboard dock.

                                      -41-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals, or caused these presents to be signed by their proper corporate officers
and their proper corporate seal to be hereto affixed, the day and year first
above written.

WITNESS:

/s/ Hugh J. Magee                              /s/ John Donato, Jr.
--------------------------------               ---------------------------------
                                               JOHN DONATO, JR.
                                               d/b/a MID ATLANTIC INDUSTRIAL CO.
                                                                      (Landlord)

/s/ Joseph Fisher                              /s/ Michael Jeffries
--------------------------------               ---------------------------------
                                               MICHAEL JEFFRIES,
                                               Executive Vice-President
                                               OSTEOTECH, INC.          (Tenant)

                                      -42-
<PAGE>

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

WITNESS:

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

--------------------------------
SEAL

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

WITNESS:

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

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

                                ACKNOWLEDGEMENTS

                                      -43-
<PAGE>

                                    EXHIBIT 1

           Diagram/Map of the Plot Plan of 38,400 Square Foot Building
                        Lots 6.19, 6.20 & 6.21, Block 134
                       51 James Way, Eatontown, NJ 07724.

                                      -44-

<PAGE>

                       EXHIBIT 2 - LANDLORD'S WORK LETTER

     Space will be leased in an "as is" condition. Tenant will provide Landlord,
for his review and approval which will not be unreasonably withheld,
construction documents for renovations to office and laboratory area. Landlord
will have five (5) days to review Tenant's proposed work plans. Should Landlord
object to any construction details, then Tenant and Landlord's architect
respectively will work out a mutually acceptable change to the construction
documents.

     For Lease purposes, construction documents will be reviewed separately and
initialed as approved by both paties.

     Outside of building to be powerwashed within ten (10) days of execution of
Lease.

     Parking - three (3) spaces for each 1,000 square feet of space. Provided
Tenant expands building, this parking ratio will pertain to additional area.

                                      -45-

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