Document:

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                                                                   EXHIBIT 10.22

                                 LEASE AGREEMENT

                                       FOR

                               158 WEST YARD ROAD
                               BETHLEHEM, NEW YORK

                                     BETWEEN

                             SELKIRK VENTURES, LLC.

                                       AND

                             DAISYTEK, INCORPORATED
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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PARAGRAPH                                                                   PAGE
---------                                                                   ----
<S>                                                                         <C>
1. Term                                                                        1
2. Renewal Term                                                                1
3. Rental                                                                      2
4. Condition of Premises                                                       4
5. Expansion                                                                   4
6. Utilities                                                                   6
7. Additional Rent; Taxes and Insurance                                        7
8. Operating Expenses                                                          8
9. Lessee Compliance with Laws and Maintenance                                11
10. Use                                                                       12
11. Repairs and Maintenance                                                   12
12. Alterations and Liens                                                     12
13. Entry and Inspection                                                      14
14. Subletting and Assignment                                                 14
15. Liability and Insurance                                                   15
16. Default                                                                   16
17. Holding Over                                                              17
18. Excusable Delay                                                           17
19. Destruction                                                               18
20. Condemnation                                                              18
21. Sale of Premises                                                          19
22. Estoppel                                                                  19
23. Subordination                                                             19
24. Signs                                                                     20
25. Entire Agreement; Waiver                                                  20
26. Notice                                                                    21
27. Financials                                                                21
28. Brokerage                                                                 21
29. Contingency                                                               21
30. Miscellaneous                                                             21
31. Guaranty of Lease                                                         22

Exhibit A - Demised Premises                                                  24
Exhibit B - Supplemental Agreement                                            25
Exhibit C - Lessee Improvements                                               26
Exhibit D - Supplemental Agreement                                            31
Exhibit E - PILOT Terms                                                       33
Exhibit F - Subordination, Non-Disturbance and Attornment Agreement           34
Exhibit G - Guaranty                                                          39
</TABLE>
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                                 LEASE AGREEMENT

      THIS LEASE AGREEMENT (the "Lease") made as of the 15th day of March, 2002,
between SELKIRK VENTURES, LLC, a New York corporation, having an office at 695
Rotterdam Industrial Park, Schenectady, New York 12306, hereinafter referred to
as the "Lessor" and DAISYTEK, INCORPORATED., a Delaware corporation authorized
to do business in New York State which has a business office at 1025 Central
Expressway South, Allen, Texas 75013, hereinafter referred to as the "Lessee".

      WITNESSETH that the Lessor hereby leases to the Lessee and the Lessee
hereby hires and takes from the Lessor those premises described as 158 West Yard
Road, Town of Bethlehem, County of Albany, New York consisting of approximately
thirty four (34) acres of land on which is constructed an approximately three
hundred fifty thousand (350,000) square foot warehouse building (the "Building")
and a one hundred (100) car surface parking area surrounding such Building, as
shown on the map attached hereto and made a part hereof, as Exhibit A and made a
part hereof (hereinafter referred to as the "Demised Premises" or sometimes the
"Real Property") upon the terms and conditions hereinafter set forth, and the
Lessee does hereby covenant with the Lessor as follows:

1.    TERM. Lessee shall lease the Demised Premises for an initial term of
approximately ten (10) years ("Initial Term") commencing on the Commencement
Date (hereinafter defined), subject to extension of the Initial Term pursuant to
Paragraph 5 of this Lease, extensions provided in Paragraph 2 of this Lease and
earlier termination as hereinafter provided. The Initial Term shall expire on
the last day of the calendar month in which the tenth (10th ) anniversary of the
Commencement Date occurs. Promptly after the Commencement Date occurs, the
parties shall enter into a Supplemental Agreement, in the form marked Exhibit D,
setting forth the commencement and expiration dates of the Initial Term. The
word "Term" and the words "Term of the Lease" shall mean the Initial Term and
any Extension Term (as hereinafter defined) which may become effective.

2.    RENEWAL TERM. Lessee is hereby granted three (3) successive options (each
an "Extension Term" and collectively, the "Extension Terms") to extend the term
of this Lease upon the following terms and conditions:

      (A)   At the time of the exercise of option to extend and at all times
      after said exercise and prior to the time of said extension, the Lessee
      shall not be in default of any provision of this Lease beyond applicable
      cure periods.

      (B)   Daisytek, Incorporated. or a Permitted Assignee (hereinafter
      defined) is itself in occupancy of and conducting its business in the
      whole of the Demised Premises in accordance with the terms of the Lease.

      (C)   Notice of the exercise of the first option shall be received by the
      Lessor in writing at least three hundred sixty five (365) calendar days
      before the expiration of the Initial Term and, in the case of the second
      option or third option, at least three hundred sixty five (365) days prior
      to the expiration of the first option or second option period,
      respectively.

      (D)   Each Extension Term shall be for the term of five (5) years
      commencing at the expiration of the Initial Term, and all of the terms and
      conditions of this Lease, other than the base rent, shall apply during any
      such Extension Term (except that there shall be no additional Extension
      Terms).

      (E)   The Base Rent (as hereinafter defined) payable by Lessee to Lessor
      for each Extension Term shall be one hundred and ten (110%) percent of the
      Base Rent applicable during the Initial Term, in the case of the first
      Extension Term, or the Base Rent applicable during the then immediately
      preceding Extension Term in the case of the second and third Extension
      Terms.

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3.    RENTAL: As rental for the Demised Premises (sometimes hereinafter referred
to as "Base Rent" or "Rent"), the Lessee hereby agrees to pay the Lessor,
without deduction, setoff, prior notice or demand, the sums as outlined in
Exhibit B - Rental and Term Schedule, attached hereto and made a part hereof, in
advance on the Commencement Date and thereafter on the first day of each and
every month, said Rent to be paid to the Lessor by good check mailed to Lessor
at P.O. Box 98, Guilderland Center, New York 12085 or delivered to Lessor's
offices at 695 Rotterdam Industrial Park, Schenectady, New York, or at such
other place or places as the Lessor may from time to time direct. The Lessee
shall pay the first and last month's installment of Base Rent on the signing of
this Lease by Lessee. The Lessee shall pay a "late charge" of one and one-half
(1.5%) percent per month from the due date if any installment of Rent or
Additional Rent (as hereinafter defined) shall be received by Lessor more than
five (5) business days after its due date. Nothing herein contained shall be
deemed to limit any right or remedy which the Lessor may have under this Lease,
at law or in equity.

4.    CONDITION OF PREMISES; CONSTRUCTION; LESSEE WORK: (A) . The Lessor shall,
at its own cost and expense, make those repairs and additions to the Demised
Premises, as more particularly described on Exhibit "C" attached hereto and made
a part hereof ("Lessee Improvements"). Lessor shall make all commercially
reasonable efforts to reach Substantial Completion of Lessee Improvements by
July 1, 2002 (the "Target Completion Date"), but this date may be extended for
delays in construction resulting from causes beyond the reasonable control of
the Lessor and Lessee Delays (hereinafter defined), and, in such event, the
Lessor shall not be liable in damages to Lessee for failure to substantially
complete the construction of the Lessee Improvements by the Targeted Completion
Date. In such event, then the date for payment of rent covenanted and reserved
to be paid herein shall be put off by one day for each extra day Lessor requires
to substantially complete the Premises. Notwithstanding anything to the contrary
contained herein, in the event the Lessee Improvements shall not be
Substantially Completed (as hereinafter defined) by August 1, 2002, then Lessee
shall be entitled to an abatement of rent equal to two days for each day after
August 1, 2002 that the Lessor shall not have Substantially Completed the Lessee
Improvements until Lessor shall have Substantially Completed the Lessee
Improvements, provided, the Lessee shall not then be in default under the terms
of the Lease and provided further that Lessor's failure to cause the Lessee
Improvements to be Substantially Completed by August 1, 2002 (the "Outside
Completion Date") shall not have been caused as a result of Lessee Delays. In
the event the Lessor shall not have Substantially Completed the Lessee
Improvements by the Outside Completion Date as a result of any Lessee Delay,
then the Lessee's right to an abatement of rent as provided in the preceding
sentence shall be put off by one day for each day Substantial Completion shall
not have been achieved by the Outside Completion Date due in any part to a
Lessee Delay.

      (B)   Promptly after the later to occur of (i) acquisition of title to the
      Real Property by Lessor or (ii) completion of the plans and specifications
      approved by the Lessor and the Lessee, Lessor shall commence and proceed
      with due diligence, to construct the Premises in accordance with the said
      approved plans and specifications. The Demised Premises shall be
      constructed with materials of the standard type, brand and quality
      generally used by Lessor for leasehold warehouse construction. Lessor
      shall also obtain all licenses (except all licenses and approvals required
      by the Lessee to operate its business from the Demised Premises),
      temporary and permanent certificates of occupancy and other governmental
      approvals required to permit the use and occupancy of the Premises in
      accordance with this Lease.

      (C)   During the course of construction of the Lessee Improvements, the
      Lessee, its agents, employees and contractors, may enter upon the Demised
      Premises at all reasonable times for the purposes of inspection and, upon
      notice by Lessor to Lessee (which is currently targeted for approximately
      twenty (20) days after Lessor shall have commenced the construction of the
      Lessee Improvements), for the purpose of installing improvements, fixtures
      (including without limitation racking systems) and other equipment without
      being deemed thereby to have taken possession. It is understood by the
      parties hereto that Lessee's fixturing shall take place during the course
      of construction of the Lessee Improvements on a staggered basis as and
      when Lessor shall complete each portion of Lessee Improvement. In the
      event (i) the Lessee or its agents or contractors shall enter the Demised
      Premises for the purpose of inspecting, preparing for, or installing
      Lessee's fixtures, improvements or equipment at any time other than when
      the Lessors'

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      contractors are constructing the Lessee's Improvements or (ii) any act on
      the part of the Lessee or its agents or contractors shall cause directly
      or indirectly any increase of the Lessor's insurance expense as reasonably
      documented by Lessor or (iii) any act on the part of the Lessee or its
      agents or contractors shall cause directly or indirectly excessive charges
      of electric power, heating, air-conditioning, water or sewer as reasonably
      documented by Lessor. Lessee shall be responsible for any such extra
      utility consumption, clean up costs, and increased insurance, inventory
      coverage and indemnity coverage, computed using a method mutually
      agreeable to Lessor and Lessee. All contractors entering the Demised
      Premises at the request of Lessee shall name the Lessor as an additional
      insured on their insurance and furnish Lessor with a copy of same prior to
      commencing any work therein. Lessee shall have no obligation to inspect
      any portion of Lessee Improvements under construction but shall promptly
      bring to Lessor's attention any deficiencies in construction which come to
      Lessee's attention. In the event Lessee shall reject any portion of Lessee
      Improvements as not conforming to the requirements of this Lease, Lessor
      shall promptly correct same at Lessor's expense. Lessee agrees that during
      said period of fixturing (a) Lessor shall have no liability to Lessee for
      damage to any property of Lessee stored on the Premises except for damages
      caused by acts or omissions of Lessor's or its employees, contractors or
      agents, (b) Lessee shall not unreasonably interfere with Lessor's
      construction work on the Demised Premises, and (c) Lessee shall indemnify
      Lessor and hold Lessor harmless from and against any claims, losses,
      damages and expenses arising out of the acts or omissions of Lessee's or
      its employees or agents in the Premises. Any such prior entrance to the
      Demised Premises shall be at the Lessee's sole risk.

      (D)   Lessee will give full cooperation in having available at the job
      those persons who are necessary to settle problems arising out of job
      conditions. Prior to commencing construction, Lessee shall designate one
      or more representatives who shall have authority to bind Lessee as to all
      construction-related matters including, without limitation, construction
      schedule, ordering changes in the work, provided that any Change Order
      shall be countersigned by a representative of Lessee. The term "Change
      Order" as used in this section shall mean the total costs incurred by the
      Lessor in connection with any such change to the approved plans and
      specifications, including without limitation, construction costs and
      architectural and engineering fees associated with reviewing and revising
      the approved plans and specifications plus overhead of ten (10%) percent
      and profit of five (5%) percent.

      (E)   The Lessee shall take possession of the Real Property and the Lessee
      shall commence the payment of Rent and Additional Rent and commence the
      performance of all of its obligations under this Lease on the date of
      Substantial Completion (hereinafter defined) of Lessee Improvements,
      except that if the date of Substantial Completion shall be delayed due to
      any Lessee Delay, the Commencement Date shall be accelerated for one day
      for each day the date of Substantial Completion shall be delayed due to
      any Lessee Delay. The earlier to occur of the date of Substantial
      Completion or the date of Substantial Completion but for any Lessee Delay
      shall herein be referred to as the "Commencement Date") For purposes of
      this Lease, the term "Substantial Completion" or "Substantially Complete"
      shall be deemed to have been achieved when all of the following have
      occurred with respect to the Premises:

                  (1)   A certificate of occupancy has been issued with respect
            to the Demised Premises; and

                  (2)   A "punch list" shall have been established by the Lessor
            and approved by the Lessee's on-site representative, detailing all
            items of construction of the Lessee Improvements which are not yet
            complete and the Lessee shall have received a construction schedule
            for the completion of such uncompleted work.

      (F)   For each day that the date of Substantial Completion of the Demised
      Premises shall be delayed due to any Lessee Delay, Lessee shall not be
      entitled to one day of an abatement of rent as provided in this Paragraph.
      The term "Lessee Delay" shall include, without limitation, any of the
      following which delays the completion of Lessee's Improvements:

                  (1)   Failure of Lessee to furnish Lessor with the racking
            plan, racking time frames

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            and other plans or specifications required for the preparation for,
            or execution of, Lessee Improvements by no later than April 1, 2002
            or delay in giving any other approvals required for the preparation
            for, or execution of, Lessee Improvements;

                  (2)   Delays due to -

                        (a)   Changes made by or on behalf of Lessee in Lessee's
                  plans or in Lessee's Improvements;

                        (b)   Postponement of any of Lessee's Improvements at
                  Lessee's request or because of any Lessee's work required to
                  be performed in advance of items of Lessee's Improvements so
                  postponed;

                        (c)   Delays resulting from interference with Lessee's
                  Improvements in the Demised Premises or relating to the
                  Building by Lessee's, its agents, servants, employees or
                  contractors (for example, delays resulting from the
                  interference of Lessee's Improvements by Lessee or its agents,
                  servants, employees or contractors in connection with the
                  installation of Lessee's racking systems); or

                        (d)   Commercial unavailability of any materials
                  necessary to complete a Change Order, such delay commencing
                  after Lessor uses commercially reasonable efforts to obtain
                  said materials and if said materials remain unavailable,
                  Lessor advises Lessee of such unavailability and Lessee fails
                  to reselect materials which are available

      (G)   After the Commencement Date, but in no event more than thirty (30)
      days thereafter, Lessee shall deliver to Lessor a supplemental punch list
      detailing defective or other work not in substantial compliance with the
      approved plans and specifications for Lessee's Improvements, and Lessor
      shall promptly commence, and with due diligence shall proceed to do the
      work set forth on said supplemental punch list. Lessor warrants that all
      Building systems shall be free from material defects in materials and
      workmanship for the twelve (12) months from the Commencement Date. Lessor
      shall assign any warranties offered by manufacturers to Lessee. Upon
      Lessor's completion of Lessee's Improvements, except for any punch list
      and supplemental punchlist items not yet completed, Lessee shall be deemed
      to have accepted the Demised Premises "as is" in good order and repair.

5.    EXPANSION. The Lessor hereby grants to Lessee two (2) separate options to
expand the square footage of the Demised Premises, which options are as follows:

      (A)   Fixed Expansion Option. Provided Lessee is not in default beyond any
      applicable notice or cure period, both at the time of the exercise of the
      right hereby granted and at any time thereafter prior to the date of the
      completion of the Fixed Addition (as hereinafter defined), Lessee shall
      have the right to expand the Demised Premises (the "Fixed Expansion
      Right") by having Lessor construct a one hundred thousand (100,000) square
      foot addition to the Demised Premises (the "Fixed Addition"), subject to,
      and in accordance with, the following:

            (1)   Lessee may only exercise the Fixed Expansion Right during the
      period commencing on the Commencement Date and ending on the date
      immediately preceding the fourth (4th) anniversary of the Commencement
      Date, by giving Lessor not less than three hundred sixty five (365) days
      prior written notice (the "Fixed Addition Notice") of Lessee's desire to
      have the Fixed Addition constructed. In the event Lessee exercises such
      right, the Fixed Addition shall be constructed by Lessor and leased to
      Lessee, as described below.

            (2)   Upon receipt of the Fixed Addition Notice, Lessor agrees to
      promptly commence all requisite actions to obtain a building permit and
      any other requisite municipal approvals necessary to allow the
      construction of the Fixed Addition (collectively, the

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<PAGE>
      "Approvals"). Lessor's obligation to construct the Fixed Addition is
      contingent upon Lessor's ability to obtain the Approvals in a commercially
      reasonable period of time, without undue expense. Subject to the
      foregoing, Lessor shall take all commercially reasonable, good faith steps
      to substantially complete construction of the Fixed Addition within two
      hundred seventy (270) days after receipt of the last of the Approvals and,
      provided Lessee shall not be in default beyond any applicable cure period,
      if Lessor fails to complete said Fixed Addition within three hundred and
      sixty five (365) days of receipt of such Approvals (the "Completion
      Deadline"), Lessee shall be entitled to an abatement of Base Rent equal to
      two (2) days for each day after the Completion Deadline until Lessor shall
      have substantially completed the Fixed Addition. After the exercise of the
      Fixed Expansion Right, Lessee may request and the Lessor shall use
      commercially reasonable efforts to provide temporary warehouse space in
      Rotterdam Industrial Park in Rotterdam, New York, Northeastern Industrial
      Park, Guilderland Center, New York, and/or Scotia-Glenville Industrial
      Park, Scotia, New York at rates and terms mutually acceptable to the
      Lessor and the Lessee.

            (3)   Within thirty (30) days after the exercise of the Fixed
      Expansion Right by Lessee, Lessor and Lessee shall enter into an amendment
      to this Lease, (the "Fixed Expansion Amendment") providing that, from and
      after the completion of the Fixed Addition:

                  (a)   The definition of "Demised Premises" shall be changed to
            refer to both the original Demised Premises (the "Original Demised
            Premises") and the Fixed Addition (the "Original Demised Premises
            and the Fixed Addition being hereinafter sometimes referred to,
            collectively, as the "Fixed Expanded Demised Premises").

                  (b)   The Base Rent for the Original Demised Premises
            ("Original Base Rent") shall continue to be paid at the same rent
            per square foot as previously paid and shall continue to increase as
            of the first day of the fifth Lease Year (as hereinafter defined) as
            described on Exhibit B.

                  (c)   The base rent payable with respect to the Fixed Addition
            (the "Fixed Addition Base Rent") shall be an amount per square foot
            equal to the Original Base Rent then payable with respect to the
            Original Demised Premises adjusted upward (but not downward) by any
            percentage increase in the ten-year United States Treasury Rate
            above the Treasury Rate in effect on January 28, 2002.

                  (d)   The Fixed Addition Base Rent shall increase at the same
            time and in the same manner (i.e., by 110%) as increases in the
            Original Base Rent occur.

                  (e)   The amounts payable by Lessee for Additional Rent shall
            be changed to reflect the expansion of the Demised Premises by
            virtue of the construction of the Fixed Addition.

                  (f)   Except as modified by the Fixed Expansion Amendment, the
            Lessee shall occupy the Fixed Expanded Demised Premises on the same
            terms and conditions as are then and thereafter applicable to the
            Original Demised Premises (except that there shall be no further
            Fixed Expansion Right or Alternate Expansion Right (as hereinafter
            defined)).

      (B)   Alternate Expansion Option. In the event that Lessee does not, or
      cannot, exercise the Fixed Expansion Option, Lessee may elect to request
      that Lessor agree to expand the Demised Premises as follows:

            (1)   Provided that Lessee is not in default beyond any applicable
      grace or cure period under this Lease, both at the time of the notice
      hereinafter set forth or at any time thereafter prior to completion of the
      Alternate Addition (as hereinafter defined), Lessee shall have the right
      (the "Alternate Expansion Right") to request that the Lessor expand the
      Demised

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      Premises by constructing an addition (the "Alternate Addition") thereto.
      Lessee may exercise the Alternate Expansion Right by sending Lessor a
      written notice (the "Alternate Expansion Notice") of Lessee's desire to
      exercise the Alternate Expansion Right at any time during the Initial
      Term. Promptly after receipt of the Alternate Expansion Notice,
      representatives of the Lessor and the Lessee shall meet to negotiate in
      good faith an appropriate amendment to this Lease (the "Alternate
      Expansion Amendment"), which must be acceptable to both Lessor and Lessee,
      in the exercise of their reasonable discretion, and to Lessor's mortgage
      lender, pursuant to which the Lessor will construct the Alternate Addition
      within a timeframe specified in the Alternate Expansion Amendment, and
      include same within the definition of the Demised Premises. Without in any
      way limiting the issues to be discussed in the Alternate Expansion
      Amendment, Lessor and Lessee agree that the following issues are
      appropriate and reasonable to consider and negotiate as part of the
      Alternate Expansion Amendment:

                  (a)   the exact size and configuration of, and construction
                  component to be included in, the Addition, as well as the
                  estimated cost thereof;

                  (b)   an appropriate timetable with respect to the
                  construction of the Alternate Addition, taking into account
                  then applicable zoning, building code and other applicable
                  governmental rules and regulations;

                  (c)   the rent, additional rent, and other sums per square
                  foot to be charged for the Alternate Addition, which sums
                  shall be paid at the same time and in the same manner as they
                  are paid with respect to the Original Demised Premises and the
                  timing of any increases in any such sums to be paid; and

                  (d)   an appropriate extension, if required, of the Term of
                  the Lease, so as to allow Lessor to finance the cost of the
                  Alternate Addition, including, without limitation, any sums
                  required to be paid to Lessor's mortgage lender in order to
                  secure such lender's agreement to allow the construction of
                  the Alternate Addition and to permit the financing thereof.

            (2)   Notwithstanding anything to the contrary contained herein, in
            the event that the Alternate Expansion Amendment has not been fully
            executed and delivered within ninety (90) days after the delivery of
            the Alternate Expansion Notice, either Lessor or Lessee may
            thereafter cancel Lessee's exercise of the Alternate Expansion
            Right, in which event Lessor shall have no obligation to construct
            the Alternate Addition and the Alternate Expansion Right shall not
            thereafter be exercisable again by Lessee.

6.    UTILITIES: The Lessor or public utility shall provide and maintain the
necessary mains, ducts and conduits in order to bring water and electricity
service to the Demised Premises and to carry sewage therefrom. All means of
distribution of such services within the Demised Premises shall be supplied and
maintained by the Lessee at the Lessee's expense.

      (A)   ELECTRICAL: The Lessee has made known to the Lessor its electricity
      requirements prior to the execution of this Lease and in the absence of
      any change in such requirements, the Lessor may assume that the Lessee's
      requirements will not exceed the electrical capacity available to the
      Demised Premises on the Commencement Date. The Lessor hereby represents
      and warrants to Lessee that the electrical capacity presently available at
      the Demised Premises is at least 2000 amps. In the event the Lessee
      requires additional capacity, any additional risers, feeders, meters,
      wiring or other equipment required thereby shall be installed by the
      Lessor or a qualified contractor upon the Lessee's request and at the
      Lessee's cost and expense, provided, however, that in the Lessor's sole
      judgment, the same are reasonably necessary and will not cause permanent
      damage or injury to the Demised Premises or cause or create a dangerous or
      hazardous condition or entail excessive alterations, repairs or expense or
      unreasonably or materially interfere with or disturb other lessees.
      Electrical service shall be directly with the utility provider for the
      Demised

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      Premises. Lessee shall request service in its own name at Lease prior to
      the Commencement Date and shall pay for such service directly to the
      utility provider.

      (B)   WATER: Lessee shall contract directly for and pay for all water used
      at the Demised Premises. Availability of water is dependent upon the
      municipality and is beyond the Lessor's control, and therefore, the Lessor
      shall not be liable for any loss or damage occasioned by the availability
      or sufficiency of water, except solely to the extent of any direct loss to
      Lessee (excluding consequential damages) resulting solely from Lessor's
      negligence or willful misconduct.

      (C)   FUEL OIL AND/OR NATURAL GAS AND/OR LP GAS: Lessee shall contract for
      and pay all costs of liquid or gas fuels directly to supplier.

      (D)   SPRINKLERS: Sprinklers and sprinkler systems now existing in said
      Demised Premises, and as shall be improved pursuant to the terms and
      conditions set forth on Exhibit "C", shall be maintained and serviced by
      the Lessor and all costs incurred relative thereto shall be included as
      part of the Operating Expenses (as hereinafter defined), provided,
      however, that if any such system or any of its appliances shall be damaged
      or injured or rendered otherwise than in proper working order by reason of
      any act or omission of the Lessee, the Lessee's agents, servants,
      employees, licensees or visitors, the Lessee shall forthwith restore such
      equipment to good working condition and order at its own expense. If by
      reason of the acts or operations of the Lessee, the New York Board of Fire
      Underwriters or the New York Fire Insurance Exchange or any bureau,
      department or official of the state or municipal government requires or
      recommends any change in such sprinklers or sprinkler system or if any
      change is necessary to prevent the imposition of a penalty or charge
      against the full allowance for a sprinkler system in the fire insurance
      rate as fixed by such exchange or by any fire insurance company, the
      Lessee shall at its own expense promptly make such change. Any changes
      whatsoever in the sprinkler system desired by the Lessee must be submitted
      to the Lessor for the review and approval of the Lessor's insurer.

      SEPTIC SYSTEM. On-site septic system now servicing the Demised Premises,
      and as may be repaired or improved pursuant to the terms and conditions
      set forth on Exhibit "C", shall be maintained and serviced by the Lessor
      and all costs relative thereto shall be included as part of the Operating
      Expenses provided, however, that if any such system or any of its
      appliances shall be damaged or injured or rendered otherwise than in
      proper working order by reason of any act or omission of the Lessee, the
      Lessee's agents, servants, employees, licensees or visitors, the Lessee
      shall forthwith restore such equipment to good working condition and order
      at its own expense, in default of which Lessor shall make such repairs and
      charge the full cost thereof, plus any applicable interest thereon to
      Lessee, which shall be payable thirty (30) days after written notice, as
      Additional Rent hereunder.

      In the event the Lessee shall fail to pay any tax, rent, levy or charge
      for any utility service, which by reason of such non-payment may become a
      lien upon any part of the Demised Premises, the Lessor may, upon five (5)
      business days' written notice thereof to the Lessee, make payment of such
      tax, rent, levy or charge together with any interest, penalties or other
      accruals due thereon, and upon such payment the amount thereof shall
      immediately become due and payable by the Lessee to the Lessor as
      Additional Rent hereunder.

      The Lessor may interrupt or suspend the supply of any such service to the
      Demised Premises in order to make any necessary repair or alteration to
      the Demised Premises and there shall be no abatement in Rent and/or
      Additional Rent because of any such interruption or suspension provided
      that the Lessor shall make such repair or alteration with commercially
      reasonable diligence and provided further that such repair or alteration
      shall not unreasonably interfere with the Lessee's business.

7.    ADDITIONAL RENT; TAXES AND INSURANCE. Additional Rent ("Additional Rent")
shall mean Lessee's proportionate share (one hundred (100%) percent) of real
estate taxes and assessments, insurance, Operating Expenses related to the
Demised Premises, and all other sums

                                       7
<PAGE>
(exclusive of Rent) Lessee assumes or agrees to pay pursuant to this Lease. The
parties hereto intend that this Lease shall be construed to be a "triple net
lease" and Lessee shall be required to pay, amongst other expenses, as
hereinafter described, all real estate taxes (and payments in lieu of real
estate taxes), insurance and Operating Expenses related to the Demised Premises.
In addition, rubbish and refuse removal and disposal both on the interior and
the exterior of the Demised Premises, janitorial services, replacement and
repairs of lighting, light bulbs and fixtures and the cost and payment of all
utilities, which include water, electric, natural gas, light and telephone shall
be the sole responsibility of Lessee. The cost of all such services and
utilities shall be paid by Lessee directly to the appropriate supplier.

Lessee shall initially pay to Lessor as Additional Rent, $0.54 per square foot
annual cost, paid monthly at the same time it pays Rent, for any real property
taxes and assessments levied or assessed against the Demised Premises. Taxes and
assessments will be initially based upon the current assessed value and tax rate
until such time as taxes shall be determined based upon a Payment in Lieu of Tax
Agreement ("PILOT") to be offered by the Bethlehem Industrial Development
Agency. Consequently, Additional Rent for these items is subject to change. It
is currently anticipated that the PILOT to be offered by the Bethlehem
Industrial Development Agency shall be for a term of at least ten (10) years and
whereby the tax exemption applicable from and after the date of the PILOT shall
become effective shall be no less favorable than the exemption schedule
described on Exhibit E annexed hereto and made a part hereof. In the event the
Bethlehem Industrial Development Agency agrees to a PILOT less favorable than
the schedule above provided, the Lessee shall be entitled to a monthly abatement
of Base Rent equal to the percentage difference between the PILOT in effect and
the proposed PILOT as described in the preceding sentence amortized over the
Initial Term, provided the Lessee shall not be in default beyond any applicable
grace or cure period under the terms of this Lease as and when the Lessee shall
take advantage of any such abatement. Lessor shall have no obligation to contest
or challenge the assessed value of the Demised Premises, however, the Lessee
shall have such right to contest or challenge the assessed value, at its sole
cost and expense.

The Lessee shall also initially pay to the Lessor as Additional Rent, $0.07 per
square foot annual cost, paid monthly at the same time it pays Rent, similarly
computed, for premium rate charges incurred by the Lessor with respect to
insurance on the Demised Premises for general liability, fire and extended
coverage. The $0.07 is an estimated amount expected due for the first year, or
part thereof, and is subject to adjustment based upon actual costs.

8.    OPERATING EXPENSES . The Lessee shall initially pay to the Lessor as
Additional Rent $0.40 per square foot annual cost, paid monthly, for Operating
Expenses. The $ 0.40 is an estimated amount expected due for the first year, or
part thereof, which is subject to adjustments based upon actual costs.

      (A)   Subject to the terms of this Paragraph A, the words "Operating
      Expenses" shall mean normal, reasonable and customary operating expenses,
      charges, fees and costs consistent with those incurred by Lessor during
      the Term of this Lease for similar buildings in Albany County, New York,
      which are incurred by Lessor relative to the operation, repair, cleaning,
      and maintenance of the Demised Premises, including all costs and expenses
      incurred as a result of Lessor's compliance of any of its obligations
      hereunder and without limitation, all costs and expenses specified below
      in subparagraph (i). Lessor shall use commercially reasonable efforts to
      minimize such costs. Any cost allocable to the items specified below in
      subparagraph (i) incurred after the expiration or earlier termination of
      the term of this Lease (by mutual consent of the parties) shall be
      excluded from Operating Expenses.

            (i)   Items Included in Operating Expenses:

                  (a)   gross salaries, wages and all other expenses and
            benefits incurred by the Lessor for personnel pro rated to the
            extent such personnel shall provide services in connection with the
            management, maintenance and operation of the Demised Premises and
            other premises, including without limitation, pro rata share of
            payroll taxes, social security taxes, worker's compensation, and
            unemployment insurance,

                                       8
<PAGE>
            but excluding Lessor's members salaries, wages and benefits;

                  (b)   the cost of materials, supplies, replacement parts (to
            the extent used in connection with cleaning or maintenance), tools,
            materials and equipment;

                  (c)   all charges for snow, ice removal and any taxes on any
            of the same;

                  (d)   amounts paid by Lessor to Lessor's employees and/or
            independent contractors for services (including full or part-time
            labor) and materials for the maintenance, repair, replacement (but
            not capital items except as specifically set forth below) and/or
            operation of the Demised Premises, including, without limitation,
            water and septic lines and other pipes and utilities servicing the
            Demised Premises, plumbing, heating, ventilation and air
            conditioning systems, fire sprinkler systems, security systems,
            landscaping and gardening services;

                  (e)   the cost of repainting any part of the exterior of the
            Demised Premises;

                  (f)   management fee equal to two (2%) percent of gross rents
            derived from the Demised Premises;

                  (g)   all costs and expenses of maintaining, repairing,
            replacing and repaving (including, without, limitation, amounts paid
            for service contracts, labor and material) the parking areas, curbs,
            driveways, walkways, and landscaping; provided, however, that costs
            incurred to completely repave the driveways and parking areas more
            than once in any five (5) year period shall not be included as part
            of the Operating Expenses; and

                  (h)   cost of repairs, alterations, improvements and
            replacements made to the Demised Premises, to the extent performed
            by or on behalf of Lessor.

            (ii)  Items Excluded from Operating Expenses:

                  (a)   the cost of correcting defects in construction, repair
            and replacement within the first (1st) year after completion of the
            construction of the Demised Premises, resulting from inferior or
            deficient workmanship, materials or equipment in the building
            systems in the Demised Premises or for which Lessor is reimbursed by
            insurance;

                  (b)   salaries, benefits and payroll taxes of Lessor's members
            and its headquarters staff not attending in some fashion to the
            maintenance, operation and management of the Demised Premises;

                  (c)   the cost of any items for which Lessor is reimbursed by
            insurance proceeds, condemnation awards, or otherwise;

                  (d)   the cost of any repair made in accordance with Paragraph
            15 of this Lease entitled Liability and Insurance and covered by
            insurance maintained by Lessor;

                  (e)   interest and principal payments on any debt, and rental
            under any ground lease or other underlying lease;

                  (f)   any real estate brokerage commissions or other cost
            incurred in procuring tenants, or any fee in lieu of commission;

                  (g)   any advertising expenses;

                  (h)   any expenses for repairs or maintenance which are
            covered by warranties,

                                       9
<PAGE>
            guaranties or service contracts (excluding any mandatory
            deductibles);

                  (i)   costs necessitated by or resulting solely from
            negligence or willful misconduct of Lessor, its agents, employees or
            independent contractors;

                  (j)   costs which are not directly attributable to the
            operation and maintenance repair or replacement of the Demised
            Premises;

                  (k)   amortization;

                  (l)   costs with respect to a sale, financing or refinancing;

                  (m)   costs associated with the operating of the business
            entity of Lessor including, business entity accounting and business
            entity legal matters or costs associated with maintaining Lessor's
            existence as a legal entity, including legal, consulting, and
            accounting fees (other than those incurred in connection with
            Demised Premises operations);

                  (n)   any amounts paid to any person, firm or corporation
            related to or otherwise affiliated with Lessor or any officer,
            director or member of Lessor or any of the foregoing, to the extent
            the same exceed arm's length competitive prices paid in Albany
            County, New York, for similar services or goods;

                  (o)   costs incurred for alterations, capital improvements and
            replacements to reduce Operating Expenses above the amount actually
            saved as a result of such capital improvements; and

                  (p) costs incurred for capital improvements and replacements
            required to be made solely as a result of any change in laws,
            provided such improvement or replacement is not required as a result
            of Lessee's specific use of the Demised Premises.

            In the calculation of any expenses hereunder, it is understood that
            no expense shall be charged more than once. Lessor shall use
            commercially reasonable good faith efforts to effect an equitable
            proration of bills for services rendered to the Demised Premises and
            to any other property owned by Lessor or an affiliate of Lessor. In
            the event there exists a conflict as to an expense which is
            specified to be included in Operating Expenses and is also specified
            to be excluded from Operating Expenses within the above list, the
            exclusions listed above shall prevail and the expenses shall be
            deemed excluded.

      (B)   Computation and Billing. (i) The words "Lessor's Statement" shall
      mean a statement, certified by a representative of Lessor or Lessor's
      management company, setting forth in detail the amount of (a) each item
      included in the Operating Expenses for the period in question and (b) any
      other Additional Rent determined by Lessor to be due and owing for the
      period in question. All amounts due Lessor shall be paid in a lump sum
      within thirty (30) days after Lessee receives Lessor's Statement which
      will be submitted, within sixty (60) days after each calendar or fiscal
      year, as the case may be. Any Lessor Statement rendered to Lessee shall
      consist of data prepared for Lessor by its internal accountant(s) and
      shall constitute a final determination between Lessor and Lessee as to
      Operating Expenses for the period represented thereby.

            (ii)  Lessor agrees to retain the books and records substantiating
            the Operating Expenses incurred in each calendar year for a period
            of at least three (3) years from the date Lessor submits a statement
            to Lessee. Lessee or its designee shall have the right, during
            normal business hours and upon reasonable prior notice to Lessor,
            from time to time, to inspect Lessor's books and records relating to
            Operating Expenses, and/or to have such books and records audited at
            Lessee's expense by a certified

                                       10
<PAGE>
            public accountant designated by Lessee and approved by Lessor, which
            approval shall not be unreasonably withheld, conditioned or delayed.
            Any audit that discloses a discrepancy of more than five (5%)
            percent in the annual Operating Expenses shall be at Lessor's
            expense and Lessor shall reimburse Lessee for such cost (including
            reasonable attorneys' fees) within thirty (30) days of the result of
            the audit. Any discrepancy shall be promptly corrected by a payment
            of any shortfall to Lessor by Lessee within thirty (30) days after
            the applicable audit, or by a credit against the next payment(s) of
            Rent hereunder or (at Lessee's election) a refund from Lessor of the
            overpaid amount within thirty (30) days, as may be applicable. In
            the event Lessee does not contest a statement of Operating Expenses
            within six (6) months after it is rendered, such statement shall
            become binding and conclusive on both Lessor and Lessee, except that
            any such statement which may contain material misrepresentations
            shall not be binding and conclusive on Lessee until one (1) year
            after it is rendered

            (iii) Any delay or failure of Lessor in rendering any Lessor's
            Statement, Lessor's computation or bill as herein above provided
            shall not prejudice Lessor's right to thereafter render such Lessor
            Statement, Lessor's computation or bill, or any others, nor
            constitute a waiver of, or in any way impair, the continuing
            obligation of Lessee to pay Additional Rent required by this
            Article.

9.    LESSEE COMPLIANCE WITH LAWS AND MAINTENANCE: Other than repairs required
to be made to the structural portions of the Demised Premises, Lessee shall
comply with all statutes, rules, ordinances, orders, codes and regulations, and
legal requirements and standards, including without limitation, those related to
the use, storage and disposal of Hazardous Substances (as hereinafter defined)
and hazardous wastes generated, stored or disposed by or on behalf of Lessee
(collectively referred to in this Lease as the "Laws") which are applicable to
Lessee's specific manner of use or use of the Demised Premises including any of
the requirements of the Occupational Safety and Health Act of 1970 applicable to
Lessee's specific use of the Demised Premises and all other applicable laws
relating to occupational safety and health and rules and regulations promulgated
thereunder, and the Lessee shall further comply with all laws, rules and
regulations of the State of New York (the "State") and any department, agency,
board, or political sub-division of the State pertaining to building
construction or safety applicable to either the Lessee or the Lessor and shall
hold the Lessor harmless therefrom. Nothing herein shall be construed as
preventing the Lessor from taking such action as it shall deem necessary for the
protection of its interests in respect to any order, decree, judgment or other
act of any Federal or State department, agency or board. Upon expiration or
early termination of this Lease, Lessee shall deliver possession of the Demised
Premises to Lessor in the condition required by the provisions of this Lease.

The Lessee shall, at its own expense, maintain all portions of the Demised
Premises and immediately adjoining areas in a clean and orderly condition,
reasonable wear and tear excepted, free of dirt and rubbish, and the Lessee
shall remove or cause to be removed all rubbish from the Demised Premises and
immediately adjoining areas at the Lessee's expense. Under no conditions will
Lessor permit Lessee to use outside areas for parking of unregistered and/or
disabled or non-functioning or damaged vehicles, or for the accumulation of
pallets and/or other packing materials. Lessee must install a dumpster or
similar trash receptacle of ample size at inception of occupancy. In the event
the Lessee permits accumulations of rubbish, the Lessor may remove such rubbish
and charge the cost thereof to the Lessee and the Lessee shall thereupon become
liable to the Lessor for such cost as Additional Rent. Lessee shall keep all
fire doors clear and shall not obstruct dock areas except in the normal process
of loading and unloading operations from inside storage to transport vehicles.
As stated above, Lessee shall be solely and separately responsible for chemical
waste collection and disposal in accordance with all applicable federal, state,
and local environmental and safety laws.

Lessor hereby represents and warrants that, based solely upon an environmental
assessment audit, dated February 8, 2002prepared by A.& A.S. and having
undertaken no independent inquiry or investigation, to the Lessor's actual
knowledge without independent investigation, (i) the Demised Premises do not
contain any Hazardous Substances, (ii) there have been no releases or threatened
releases at, upon or under the Demised Premises, of any Hazardous Substance and
(iii) Lessor has received no notice from any governmental authority or from any
tenant or other occupant or from

                                       11
<PAGE>
any other person with respect to any release of any Hazardous Substance at,
upon, under or within the Demised Premises. Lessee shall not cause or permit any
Hazardous Substances to be used, stored, generated or disposed of in, on or
about the Demised Premises or the land upon which the Demised Premises are
situated (the "Land") by Lessee, its agents, employees, contractors or invitees,
except for such Hazardous Substances as are used and stored in strict conformity
with all Environmental Laws (hereinafter defined). Lessee shall indemnify and
hold harmless the Lessor, its mortgagees, industrial development agencies,
agents, employees, officers, shareholders and directors, from any and all
claims, damages, fines, judgements, penalties, costs, expenses or liabilities
(including, without limitation, any and all sums paid for settlement of claims,
attorney's fees, consultant and expert fees) arising during or after the Term of
the Lease from or in connection with the use, storage, generation or disposal of
Hazardous Substances in, on or about the Land or Demised Premises by Lessee,
Lessee's agents, employees, contractors, customers, invitees or licensees.

As used herein, "Hazardous Substances" means any substance which is toxic,
ignitable, reactive, or corrosive or which is regulated by "Environmental Laws".
The term "Environmental Laws" means Federal, State and local laws and
regulations, judgements, orders and permits governing safety and health and the
protection of the environment, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.,
as amended (CERCLA), the Resource Conservation and Recovery Act, as amended 42
U.S.C. 6901 et seq., the Clean Water Act, 33 U.S.C. 1251 et seq., the Clean Air
Act, 42 U.S.C. 7401 et seq., the Toxic Substance Control Act, 15 U.S.C. 2601 et
seq., and the Safe Drinking Water Act, 42 U.S.C. 300f through 300j. "Hazardous
Substances" includes any and all materials or substances which are defined as
"hazardous waste", "extremely hazardous waste" or a "hazardous substance"
pursuant to state, federal or local government law. "Hazardous Substances" also
includes asbestos, polychlorinated biphenyls ("PCBSs") and petroleum products.
Lessee shall supply Lessor with the necessary MSDS sheets for products used and
stored in the Demised Premises.

10.   USE: The Demised Premises are hereby leased to the Lessee upon the express
condition that the Lessee shall use the said Demised Premises for warehousing
and distribution of computer and office supplies, including but not limited to,
toner and ink-jet cartridges, fax supplies and diskettes; related office uses
("Lessee's Intended Use"), and any other lawful purpose related to Lessee's
business activities, provided same is in accordance with the zoning ordinance of
the Town of Bethlehem and other applicable federal, state and local laws. Lessor
represents that Lessee's Intended Use of the Demised Premises (including any
expansion of the Demised Premises as provided under Paragraph 5 of this Lease)
is permitted under Chapter 128of the Town of Bethlehem Ordinance, entitled
"Zoning" as of the date of the execution and delivery of this Lease. All uses to
which the Demised Premises shall be put by the Lessee shall conform to the
requirements of any and all local laws, ordinances, rules or regulations adopted
or enacted by the municipality having jurisdiction over the Demised Premises and
shall also conform to any special use permit or certificate of occupancy or
other permit of any kind issued or required to be issued by any governmental
authority having such jurisdiction over the Demised Premises and shall not be
put to any such use by the Lessee until all governmental rules and regulations
relative to or affecting such use have been complied with and all governmental
permits required as a condition precedent to such use shall have been obtained.
The Lessee shall not use or permit the use of such Demised Premises or part
thereof for any immoral or any other purpose prohibited by law or which will
increase the rate of insurance upon the Demised Premises or cause a cancellation
of any insurance policy covering the Demised Premises or any part thereof. The
Lessee shall not do or suffer anything to be done upon said Demised Premises
which will cause structural injury to said Demised Premises of which the same
form a part, nor shall it cause said Demised Premises to be overloaded, nor
shall it permit any machinery, apparatus or other appliance to be used or
operated upon said Demised Premises which will in any way vibrate, shake or
otherwise injure said Demised Premises, nor shall the Lessee permit any
noisemaking device to be operated or allowed upon said Demised Premises for the
purpose of attracting trade or otherwise. The Lessee shall not permit any use to
be made of the Demised Premises which will in any way impair the efficient
operation of the sprinkler within the Demised Premises. In addition to the
Lessee's liability for Additional Rent in respect of insurance premium rate
increases as provided in Paragraph 7 hereof, if any act on the part of the
Lessee or use of the Demised Premises by the Lessee shall cause directly or
indirectly any increase of the Lessor's insurance expense, such additional
expense shall be paid by the Lessee to the Lessor upon demand as Additional
Rent. No such payment

                                       12
<PAGE>
by the Lessee shall limit the Lessor in the exercise of any other rights or
remedies or constitute a waiver of the Lessor's right to require the Lessee to
discontinue such act or use.

11.   REPAIRS AND MAINTENANCE: Throughout the Term of the Lease, the Lessee
shall maintain the Demised Premises and fixtures and equipment therein in good
condition and repair, reasonable wear and tear excepted, and shall not permit or
suffer any waste or injury thereto. All such repairs and replacements shall be
in quality and class equal to the original work and materials. Lessor is
responsible for the maintenance of the structural elements of the Building,
including without limitation, the roof, roofing system, footings, foundations,
load-bearing walls, sprinklers and the on-site septic system (subject to the
same being part of the Operating Expenses in accordance with Paragraph 8 of this
Lease), and Lessee for the maintenance and repairs of all other non-structural
elements and systems, including without limitation HVAC, plumbing, interior and
exterior electricity facilities, doors and windows. When used in this Paragraph
the term "repairs" shall include all necessary replacements, renewals,
alterations, additions and betterments of a non-structural character. All
repairs made by the Lessee shall be at least equal in quality and class to the
original work. Upon the expiration of the Term of the Lease or sooner
termination, the Lessee shall surrender the Demised Premises to the Lessor in
the same condition as received (including without limitation, removing the
Lessee's racking systems and repairing all walls and floors affected by such
racking systems to the reasonable satisfaction of the Lessor), ordinary wear and
tear and damage by fire, earthquake, act of God or the elements alone excepted.
If Lessee desires services by Lessor's maintenance personnel, such will be
performed on a work order basis only.

Lessor shall promptly after receipt of written notice from Lessee perform all
maintenance and make all repairs to the Demises Premises, which by the
provisions hereof are the responsibility of the Lessor and diligently prosecute
same until completed. Lessor shall not be considered in default so long as
Lessor, within ten (10) days after receipt of notice from Lessee, commences to
cure the breach in a diligent and prudent manner and diligently proceeds to
completion of same and is allowed such additional time as reasonably necessary
to cure the breach. In the event that Lessor shall fail to do or complete any
such maintenance or repairs in the time periods permitted above, the Lessee may
make such repairs in a commercially reasonable manner and at market rates and
upon completion of same Lessee shall furnish Lessor with written invoices
relative to such repairs in form and detail reasonably satisfactory to the
Lessor, and furnish Lessor with copies of receipted bills, copies of checks and
such other documentation as may be reasonably requested by Lessor. Lessor shall
reimburse Lessee for such amounts within thirty (30) days after receipt of said
documentation.

If, in the reasonable opinion of the Lessee, repairs, restoration or
replacements are of an emergency nature, that is, necessary for the preservation
of Lessee's property in the Demised Premises and/or the vital Building systems
of the Demised Premises or the safety or health of occupants of the Demised
Premises (hereinafter referred to an "Emergency Situation") and by the
provisions hereof are the responsibility of the Lessor, the Lessee shall make
reasonable efforts to notify the Lessor and thereafter, may make such repairs in
a commercially reasonable manner and at market rates and upon completion of
same, Lessee shall furnish Lessor with copies of receipted bills, copies of
checks and such other documentation as may be reasonably requested by Lessor.
Lessor shall reimburse Lessee for such amount within thirty (30) days after
receipt of such documentation.

12.   ALTERATIONS AND LIENS: (A) The Lessee shall make no alterations or
additions to the Demised Premises without prior written consent of the Lessor in
each instance, which consent Lessor agrees not to unreasonably withhold,
condition or delay. Upon the giving of such written consent, all alterations,
additions and improvements, including fixtures made in, to or on the Demised
Premises, except unattached moveable business fixtures and racking, shall become
the property of the Lessor and shall remain upon and be surrendered with the
Demised Premises, except that the Lessor shall advise the Lessee at the time of
the granting by Lessor of Lessee's request to make any such alteration or
addition to the Demised Premises whether the Lessor desires to have the Demised
Premises or any part or parts thereof restored to their condition as of the time
of the delivery thereof to the Lessee, reasonable wear and tear excepted, and,
if the Lessor so desires, the Lessee shall restore said Demised Premises or such
part or parts thereof to such original condition reasonable wear and tear
excepted before the end of the Term of the Lease entirely at the Lessee's own
cost and expense. The Lessee shall indemnify and save and hold harmless the
Lessor from all

                                       13
<PAGE>
liens, claims or demands arising out of any work performed, materials furnished
or obligations incurred by or for the Lessee upon said Demised Premises during
said term and agrees not to suffer any such lien or encumbrance to be imposed on
any of the Lessor's premises. The Lessee shall have the obligation to discharge
any such lien or encumbrance by the payment of money or the posting of a surety
bond if Lessee in good faith contests the validity of such lien or encumbrance.
Notwithstanding anything to the contrary contained in the preceding sentence,
the Lessor shall have the right, after the giving of not less than twenty (20)
days' notice to the Lessee to remove such lien or encumbrance, to bring such
action or proceeding as may be necessary to effect the removal thereof and the
costs and expenses thereof, including reasonable attorney's fees, shall become
immediately due and payable by the Lessee to the Lessor as Additional Rent.

      (B)   Prior to the commencement of any such alterations, additions or
      improvements, Lessee shall provide to Lessor with the following: (i)
      copies of the plans and specifications relative thereto; (ii) copies of
      all necessary building permits and all other requisite permits and
      approvals; (iii) copies of construction contracts with contractors
      reasonably acceptable to the Lessor; and (iv) copies of builders' risk
      insurance coverage covering the full replacement value of the alterations
      and improvements, copies of architects' architectural errors and omissions
      insurance coverage, naming Lessor as additional insured and the other
      insurance coverage required under Paragraph 15 of this Lease. All such
      insurance other than the worker's compensation insurance shall name Lessor
      as an additional insured. The Lessee hereby agrees that all such
      alterations, additions and improvements shall (a) incorporate only new
      materials; (b) be at least equal in quality and workmanship to the
      original work or installation; (c) be in accordance with reasonable
      requirements as Lessor may impose; and (d) be constructed in accordance
      with all applicable laws, rules, regulations and directives of all
      governmental authorities having jurisdiction over the Demised Premises.

13.   ENTRY AND INSPECTION: The Lessor and its agents may enter upon the Demised
Premises at all reasonable times upon at least twenty four (24) hours prior
notice (except that no prior notice shall be required in an Emergency Situation)
to inspect the same, to submit them to a prospective purchaser or to make any
repairs which the Lessor shall consider necessary for the protection,
improvement or preservation of the Demised Premises or to make any changes in
the plumbing, wiring, meters or other equipment, fixtures or appurtenances of
the Demised Premises, provided that the same may be performed without material
interference with the business operations of the Lessee, and there shall be no
liability against the Lessor in favor of the Lessee for damages sustained by the
Lessee by reason of such repairs or changes, except due to Lessor's negligence
or willful misconduct, nor shall the Lessee be entitled to any abatement of Rent
and/or Additional Rent by reason thereof. At any time after three hundred and
sixty five (365) days prior to the termination of the Lease the Lessor may place
on said Demised Premises any usual or ordinary "To Let" or "To Lease" signs. For
the purposes of this Paragraph, the Lessor may hold at all times a duplicate set
of keys to the Demised Premises. The Lessee shall make no changes in locks or
other facilities controlling access to the Demised Premises without notifying
Lessor prior to any such change;.

14.   SUBLETTING AND ASSIGNMENT: Except for an assignment of this Lease or a
sublet of all or any portion of the Demised Premises to a Permitted Assignee (as
hereinafter defined), the Lessee shall not, without the Lessor's prior written
consent, which consent shall be not be unreasonably withheld, assign or sublet
this Lease or permit any person or entity other than the Lessee to use or
occupy, or store goods, materials or other property (such goods, materials and
property being hereinafter referred to as "Property") at the Demised Premises or
any part thereof. In connection with any proposed assignment of this Lease,
Lessee acknowledges that Lessor shall be deemed to be reasonable in withholding
its consent if the proposed sublessee or assignee is not of a financial
condition or capability which is commensurate with Lessee's or not otherwise
reasonably satisfactory to Lessor for the leasing of the space such as the
Demised Premises. Lessee shall give Lessor not less than thirty (30) days prior
written notice (sent in accordance with the requirements of Paragraph 26) of the
effective date of any proposed assignment, sublease or use by any Licensee (as
hereinafter defined). In the event that Lessor shall not either (i) inform
Lessee that Lessor's consent is being denied or (ii) request further information
with respect to any such proposed transaction within fifteen (15) business days
after Lessor's receipt of any such notice, Lessor shall be deemed to have
consented to the requested transaction.

                                       14
<PAGE>
Notwithstanding the foregoing, or anything to be contrary elsewhere contained in
this Lease, Lessee, without Lessor's consent, but upon not less than thirty (30)
days' prior written notice, may assign this Lease or sublet the Demised
Premises, or any portion thereof, to its parent, any of its subsidiaries or to
any other entity affiliated with Lessee or its parent, or to a corporation or
other entity resulting from any reorganization or merger to which Lessee, its
parent or any of its subsidiaries or affiliates is a party, provided Lessee
shall remain obligated under this Lease (the foregoing being hereinafter
referred to as a "Permitted Assignment") Such assignee shall be herein referred
to as a "Permitted Assignee".

If Lessee shall assign this Lease, sublet any or all of the Demised Premises or
permit any person or entity (a "Licensee") other than the Lessee (or a party
permitted pursuant to a Permitted Assignment) to use, or occupy any portion of,
or store any Property at the Demised Premises, without the consent of the Lessor
in each instance to the extent required hereunder, such assignment, subletting
or permission shall be void and shall constitute a breach of this Lease. .

Any proposed assignment (excluding a Permitted Assignment) shall contain a
written assumption by the assignee of all of the Lessee's obligations under this
Lease. Any sublease shall (a) provide that the sublessee shall procure and
maintain a policy of insurance as required of the Lessee under this Lease; (b)
provide for a copy to the Lessor of any notice of default by either party; and
(c) otherwise be subject to the terms and provisions of this Lease.

No Permitted Assignment or consent by the Lessor to any subletting, assignment
or use, occupancy or storage of Property by any Licensee shall be deemed to be a
consent to any further subletting (or sub-subletting), assignment or any other
use, occupancy or storage by any Licensee (including any expanded use by the
Licensee for whom permission is being given).

In the event that the Lessee assigns or subleases any portion of the Demised
Premises or permits the use, occupancy or storage of Property at any portion of
the Demised Premises by a Licensee, the Lessee shall pay to the Lessor monthly,
as Additional Rent hereunder, fifty (50%) percent of the amount calculated by
subtracting from the rent and other charges and considerations payable from time
to time by the assignee, sublessee or Licensee to the Lessee for aforesaid
space, the amount of rent and other charges payable by the Lessee to the Lessor
under this Lease, allocated to the assigned, subleased or otherwise utilized
portion of the Demised Premises.

Without limiting Lessor's other rights hereunder, Lessee, in no event, shall
have any right to sublet or assign this Lease or grant any Licensee the right to
use or occupy all or any portion of the Demised Premises except on the following
terms and conditions:

      (A)   Such subletting, assignment, or grant of any right of use or
      occupancy, shall not relieve the Lessee from its duty to perform fully all
      of the agreements, covenants and conditions set forth in this Lease

      (B)   Other than in connection with a Permitted Assignment, the Lessee
      shall provide the name of the proposed sublessee, assignee or Licensee,
      the terms and conditions of the proposed subletting, assignment or
      agreement for use or occupancy, the nature and character of the business
      of the proposed sublessee, assignee or Licensee, and banking, financial or
      other credit information relating to the proposed assignee, sublessee or
      Licensee reasonably sufficient to enable Lessor to determine the financial
      responsibility of said proposed sublessee, assignee or Licensee.

      (C)   The sublease, assignment or agreement with respect to use and
      occupancy will expressly prohibit further assignment of this Lease, or any
      sublease or agreement for use or occupancy or any further subletting, or
      granting of rights of use and occupancy by the sublessee, assignee or
      Licensee without, in each instance, receiving Lessor's prior written
      consent as described above.

                                       15
<PAGE>
      (D)   If this Lease shall be assigned, or if the Demised Premises or any
      part thereof, be sublet or occupied by any person or persons other than
      Lessee, Lessor may, after default by Lessee, collect rent from the
      assignee, subtenant or occupant, and apply the net amount collected to the
      Rent and/or Additional Rent herein reserved, but no such assignment,
      subletting, occupancy or collection of Rent and/or Additional Rent shall
      be deemed a waiver of the covenants contained in this Lease, nor shall it
      be deemed acceptance of the assignee, subtenant or occupant as a tenant or
      a release of Lessee from the full performance by Lessee of all of the
      terms, conditions and covenants of this Lease.

      (E)   The Lessee shall reimburse the Lessor for all reasonable legal costs
      involved in reviewing a proposed assignment, subletting (including a
      Permitted Assignment) or agreement with any Licensee for the use,
      occupancy or storage of any Property not to exceed one thousand
      ($1,000.00) dollars.

15.   LIABILITY AND INSURANCE: The Lessee, to the fullest extent permitted by
law, shall indemnify, defend and hold the Lessor and the Lessor's directors,
officers, , members, mortgagees, industrial development agencies, agents,
representatives and employees harmless and free from and against any and all
claims, losses, costs, liabilities, penalties, damages, expenses, causes of
action and/or judgments, including, without limitation, penalties, fines and
reasonable attorney's fees (collectively, "Damages"), in connection with or
arising from or by reason of (a) the use or occupancy or manner of use or
occupancy of the Demised Premises by lessee or any person occupying the Demised
Premises, (b) any injury or damage to any person or persons or property
including, without limitation, the Lessee, its servants, agents and employees,
from any cause or causes whatsoever, or (c) any occurrence on the Premises from
any cause whatsoever, including leakage and environmental contamination, while
in, upon or in any way connected with the Demised Premises or its appurtenances.
The foregoing indemnity does not include Damages to the extent such Damages are
caused by the negligence or willful misconduct of Lessor. This indemnification
shall survive the termination or expiration of this Lease for any reason
whatsoever.

Except as described in this Lease or as a result of Lessor's failure to fulfill
its maintenance and repairs obligations under Paragraph 11 of this Lease, the
Lessor shall not be liable for any loss or damage occasioned by failure to keep
said Demised Premises in repair and free from refuse, obnoxious odors, vermin or
other foreign matter; the bursting, leaking, running or clogging of the pipes or
fixtures; any malfunction, bursting, leaking, running or clogging of any heating
or air conditioning equipment, cistern, tank, sprinkler system, boiler, wash
stand, closet or wastepipe; accidental discharge of the sprinkler; water, snow,
ice or other foreign matter being upon or coming through the roof, trapdoors,
doors, windows or otherwise; acts of negligence of guests, invitees and
employees of the Lessee or other occupants of the Demised Premises; acts of
negligence of any owners or occupants of adjacent or contiguous property or
their employees; acts of God; acts of negligence of any persons not in the
employ of the Lessor.

The Lessee shall take out and keep in force during the Term of the Lease hereof,
at the Lessee's expense, public liability and other insurance in companies
acceptable to the Lessor to protect against any liability to the public, whether
to persons or property, incident to the use of said Demised Premises or
resulting from accident occurring in or about said Demised Premises or the areas
immediately adjacent thereto, which insurance shall be in an amount not less
than $2,000,000 combined single limit per occurrence. The Lessee shall also take
out and keep in force during the Term of the Lease, at the Lessee's expense,
insurance protecting Lessee against damage to any of its property at the Demised
Premises, an employer liability and automobile liability policy in an amount not
less than $1,000,000 combined limit and a New York State statutory worker's
compensation insurance policy. The Lessee shall cause every insurer to agree by
endorsement upon the policy or policies issued by it, or by independent
instrument furnished to the Lessor, that such insurer will give the Lessor,
Lessor's mortgage and the Town of Bethlehem Industrial Development Agency ten
(10) days' written notice at the addresses given to Lessee before the policies
in question shall be altered or canceled. Certified copies of said policies or
certificates of insurance naming the Lessor, Lessor's mortgagee and the Town of
Bethlehem Industrial Development Agency as additional insured shall be furnished
at the time of Lease inception, except that there shall be no additional
insureds on the

                                       16
<PAGE>
Workers' Compensation and Employer liability policies. Said policies shall be
renewed at the end of each policy period.

The Lessor and Lessee hereby release one another and their respective officers,
members, agents, employees and servants from any and all claims or demands for
damages, loss, expense or injury to the Demised Premises or to the furnishings
and fixtures and equipment or inventory or other property of either the Lessor
or the Lessee in, about or upon the Demised Premises, as the case may be, which
may be caused by or result from perils, events or happenings which are the
subject of insurance carried by the respective parties and in force at the time
of any such loss, provided, however, that such release and waiver shall be
effective only to the extent of the insurance coverage for such loss. This
Paragraph does not preclude the respective parties from any and all other
remedies at law which are available and in no way are their respective rights
prejudiced.

16.   DEFAULT: In the event the Lessee (a) fails to pay the Rent and/or
Additional Rent herein provided or any part thereof or any other sum required by
the Lessee to be paid to the Lessor in the manner herein provided and within
five (5) business days after receipt of notice of non-payment (which notice need
not be given more then twice in any twelve (12) month period, after which time a
default shall be deemed to have occurred if any amount required to be paid
hereunder is not paid by its due date); or (b) violates any of the provisions of
this Lease respecting assignments or subletting; or (c) defaults in any of the
other covenants or conditions on the Lessee's part to be performed hereunder and
such default is not cured within twenty (20) days after notice by the Lessor to
the Lessee of such default (each an "Event of Default"), then such default or
breach or act shall give the Lessor the right to re-enter the Demised Premises
and remove all persons and all or any property therefrom either by summary
dispossess proceedings or by any suitable action or proceeding at law, or by
force or otherwise, without being liable to indictment, prosecution or damages
therefor, and repossess and enjoy said Demised Premises together with all
additions, alterations and improvements, and in such case the Lessor may either
relet the Demised Premises or any parts thereof as agent of the Lessee and
receive the Rent and Additional Rent applying the same first to the payment of
such expenses as the Lessor may have incurred and then to the fulfillment of the
covenants of the Lessee. The Lessor may rent said Demised Premises for a term
extending beyond the term hereby granted without releasing the Lessee from any
liability. Upon the expiration of this Lease prior to the expiration of its term
by operation of any provision hereof or by summary proceedings or otherwise,
then, whether or not the Demised Premises be relet, the Lessee shall remain
liable for and shall pay the Lessor, until the time when this Lease would have
expired but for such termination or expiration, the equivalent of the amount of
all of the Rent and Additional Rent reserved herein, less the avails of
reletting, if any, and the same shall be due and payable by the Lessee to the
Lessor on the several rent days above specified. In all events, Lessee is liable
for all damages, costs and expenses, of whatever kind or nature, direct or
indirect, suffered by Lessor as a result of the occurrence of an Event of
Default. If Lessee fails to promptly pay Lessor for the damages suffered, Lessor
may pursue a monetary recovery from Lessee. Included among those damages are all
expenses incurred by Lessor in repossessing the Demised Premises (including
increased insurance premiums resulting from Lessee's vacancy), all expenses
incurred by Lessor in reletting the Demised Premises (including those incurred
for advertisements and brokerage fees and needed repairs, remodeling to the
condition existing as of the Commencement Date, reasonable wear and tear
excepted and replacements), all reasonable concessions granted to a new lessee
on a reletting, all losses incurred by Lessor as a result of Lessee's default, a
reasonable allowance for Lessor's administrative costs attributable to Lessee's
default, and all reasonable attorney's fees incurred by Lessor in enforcing any
of Lessor's rights or remedies against Lessee. The Lessee hereby expressly
waives any and all rights of redemption in the event of eviction or
dispossession by judgment or warrant of any court or judge, and the Lessee
waives and will waive all right to trial by jury in any summary proceeding
hereafter instituted by the Lessor against the Lessee in respect of the Demised
Premises. All remedies herein provided shall be deemed cumulative and shall in
no way limit or restrict the Lessor from pursuing such other and further
remedies as may be allowed at law or in equity.

17.   HOLDING OVER: Lessor and Lessee recognize that the damage to Lessor
resulting from any failure by Lessee to timely surrender possession of the
Demised Premises will be substantial, will exceed the amount of the monthly
installments of the Rent and Additional Rent payable hereunder,

                                       17
<PAGE>
and will be impossible to measure accurately. Lessee therefore agrees that if
possession of the Demised Premises is not surrendered to Lessor upon the
expiration date or sooner termination of this Lease, in addition to any other
rights or remedies Lessor may have hereunder or at law, Lessee shall pay to
Lessor, as liquidated damages, for each month and for each portion of any month
during which Lessee holds over in the Demised Premises after the expiration date
or sooner termination of this Lease, a sum equal to one hundred and fifty (150%)
percent of the aggregate of Base Rent and Additional Rent that was payable under
this Lease during the last month of the Term of the Lease. Nothing herein
contained shall be deemed to permit Lessee to retain possession of the Demised
Premises after the expiration date or sooner termination of this Lease. The
provisions of this Paragraph shall survive the expiration date or sooner
termination of this Lease. Lessee's occupancy subsequent to the expiration date
or sooner termination of this Lease, whether or not with the consent or
acquiescence of Lessor, shall be deemed to be that of a tenancy-at will and in
no event from month-to-month or year-to-year and it shall be subject to all
terms, covenants and conditions of this Lease applicable thereto, including,
without limitation, those set forth in this Paragraph. In the event the Lessee
defaults or remains in possession of the Demised Premises or any part thereof
after the expiration of the tenancy-at-will created hereby then the Lessee's
occupancy shall be deemed a tenancy-at-sufferance and not a tenancy-at-will.

18.   EXCUSABLE DELAY: Whenever Lessor or Lessee is required by the provisions
of this Lease to perform an obligation (other than for the payment of money) or
any work and Lessor or Lessee, as the case may be, is prevented from doing so by
reason of an Excusable Delay (as hereinafter defined), Lessor or Lessee, as the
case may be, shall be temporarily relieved of its obligation to so perform,
provided it promptly notifies the other party of the specific delay and
exercises due diligence to remove or overcome it. The words "Excusable Delay"
shall mean any delay due to strikes, lockouts or other labor or industrial
disturbance; civil disturbance; future order of any government, court or
regulatory body claiming jurisdiction; act of the public enemy; war, riot,
sabotage, blockage or embargo; unforeseen physical (including environmental)
conditions; failure or inability to secure (i) materials (or their reasonable
substitutes), (ii) supplies (or their reasonable substitutes); or (iii) labor
through ordinary sources; regulation or order of any government or regulatory
body; lightning, earthquake, fire, storm, hurricane, tornado, flood, washout or
explosion, (iii) the existence of a sewer moratorium or other development
moratorium or similar event or objection by any person or entity to the
development or construction of the Demised Premises, which would prohibit, or
materially and adversely interfere with or impair the Lessor's timely ability to
(a) obtain all final, unappealable permits, licenses or approvals required by
all governmental authorities having jurisdiction over the Building, the Addition
and the Demised Premises or (b) construct the Addition or the Demised Premises
in accordance with the plans and specifications approved by the Lessor and the
Lessee (items (a) and (b) above being hereinafter collectively referred to as a
"Permit Delay") (iv) or act or omission of the other party which prevents the
party responsible for performing from complying, or which materially and
adversely interferes with the ability of the party required to perform to comply
with, an obligation under this Lease on Lessor's or the Lessee's part to be
performed, as the case may be. Any time limits required to be met by Lessor
hereunder, whether specifically made subject to Excusable Delay or not, except
those related to the provision of insurance shall, unless specifically stated to
the contrary elsewhere in this Lease, be automatically extended by the number of
days by which any performance called for is delayed due to Excusable Delay.
Lessee shall, in no event, have any right to terminate this Lease, abate Base
Rent or Additional Rent or assert a claim of partial or total actual or
constructive eviction because of any failure by Lessor to perform any obligation
or work required to be performed under this Lease, if such failure occurs by
reason of Excusable Delay. In no event, however, shall an Excusable Delay be
applicable to any obligation of Lessee to pay Rent or Additional Rent hereunder,
to pay any other sum of money required to be paid hereunder or to provide any
insurance required to be provided hereunder.

19.   DESTRUCTION: In the event the Demised Premises are damaged by fire,
earthquake, enemy, act of God or the elements or other casualty, the Lessor,
unless it shall otherwise elect as hereinafter provided, shall repair the same
with reasonable dispatch after written notice of the damage. Nothing contained
in this Lease shall require Lessor to restore, replace or repair leasehold
improvements, inventory, chattel, signs, contents, fixtures, trade fixtures or
personalty of Lessee. If such damage is so extensive as to render the Demised
Premises untenantable, but nevertheless the Demised Premises are repaired by the
Lessor, then the Rent (but not Additional Rent) shall be abated

                                       18
<PAGE>
to an extent corresponding with the time during which and the extent to which
said Demised Premises may have been untenantable. If such repairs, however, are
delayed because of the Lessee's failure to adjust the Lessee's own insurance
claim, no rental reduction shall be allowed beyond a reasonable time allowed for
such adjustment. The Lessor shall have the right to determine, within thirty
(30) days after destruction, whether to demolish and not rebuild or reconstruct
the Demised Premises and, in the event of such decision by the Lessor to so
demolish, then, upon notice given by the Lessor to the Lessee, this Lease shall
terminate on a date to be specified in such notice as if that date had been
originally fixed as the expiration date of the Term of the Lease herein demised
and the Rent and/or Additional Rent shall be adjusted as of the time of the
occurrence of such damage or destruction. If during said 30-day time period,
Lessor elects to demolish, rebuild or restore the Demised Premises, the Demised
Premises shall be repaired, rebuilt or restored within two hundred and seventy
(270) days after destruction. During the period of restoration or
reconstruction, the Lessor shall use commercially reasonable efforts to provide
substitute space for the Lessee in either Rotterdam Industrial Park or
Scotia-Glenville Industrial Park, provided such relocation shall be at the sole
cost and expense of the Lessee. Any cancellation or termination of Lease does
not release Lessee from any liability in connection with any fire or casualty.
Lessor is not responsible for delays due to settling insurance claims, obtaining
estimates, labor and supply problems or any other cause not fully under Lessor's
control. Lessee hereby waives the provisions of Section 227 of the Real Property
Law or any other law or statute hereafter enacted of similar import and agrees
that the foregoing provisions of this Paragraph shall govern and control in lieu
thereof. The Lessee shall give immediate notice to the Lessor in case of such
damage or destruction.

20.   CONDEMNATION: If the whole or a portion of the Demised Premises shall be
taken for any public or quasi-public use by right of eminent domain, with or
without litigation, or transferred by agreement or purchase in connection with
such public or quasi-public use, the Lease at the option of the Lessor shall
terminate as of the date title shall vest in the condemnor. If any part of the
Demised Premises shall be so taken as to render the remainder thereof unusable
for the purposes for which the Demised Premises were leased, in Lessee's
reasonable opinion, then the Lessee shall have the right to terminate this Lease
as hereinafter provided. Upon any such taking, with or without a termination of
this Lease, all compensation awarded shall belong and be paid to the Lessor and
the Lessee shall have no claim thereto, except that the Lessee shall have the
right to apply for reimbursement from the condemning authority for moving
expenses, the expense of removal of Lessee's trade fixtures and loss of Lessee's
business good will, provided same does not impair, affect or reduce Lessor's
award. The Lessee hereby irrevocably assigns, transfers, releases and sets over
to the Lessor any right to compensation for damages to which the Lessee may
become entitled during the Term of the Lease hereof by reason of such
condemnation or taking (except as otherwise expressly provided in the preceding
sentence). In the event that upon such taking there shall be no termination of
this Lease by either party, this Lease shall continue for the balance of its
Term of the Lease as to the part of the Demised Premises remaining. In such
event the Rent payable by the Lessee to the Lessor shall be reduced pro rata in
the proportion in which the area of the Demised Premises so taken bears to the
area of the Demised Premises before such taking, and all other liabilities of
the Lessee hereunder shall remain unaffected. If upon such taking this Lease
shall not terminate and shall continue as herein provided, the Lessor shall at
its own cost and expense restore the remaining portion of the Demised Premises
to the extent necessary to render it useable for the purposes for which it was
leased and shall make all repairs to the Demised Premises to the extent
necessary to constitute the building a complete architectural unit, provided
that such work shall not exceed the scope of construction existing immediately
prior to such taking and the cost of such restoration shall not exceed the
proceeds of the condemnation award less the Lessor's expenses in securing such
award. Termination of this Lease by either party under the provisions of this
Paragraph shall be effected by the delivery of a thirty (30) day notice by such
party to the other.

21.   SALE OF PREMISES: In the event of a sale or conveyance by the Lessor of
all or any part of the Lessor's estate containing the Demised Premises, upon
written assumption by such transferee the same shall operate to release the
Lessor from any future liability upon any of the covenants or conditions,
express or implied, herein contained in favor of the Lessee, and in such event
the Lessee agrees to look solely to the responsibility of the successor in
interest of the Lessor.

22.   ESTOPPEL: At either party's request, the other party agrees, within ten
(10) days after

                                       19
<PAGE>
receipt, to execute a lease estoppel certificate stating, if such be accurate,
that:

      a.    The Lease is unmodified (or if modified, setting forth the dates of
            such modifications) and in full force and effect;
      b.    The term of the Lease has begun and Rent payable under the Lease is
            accruing;
      c.    No notice of default or termination of the Lease has been served on
            Lessee under the terms of the Lease;
      d.    To the best of Lessee's knowledge, neither it nor the Lessor are in
            default in any way under the Lease.
      e.    Certifying with respect to such other information with respect to
            this Lease and Lessee's occupancy of the Demised Premises as Lessor
            shall reasonably request.

23.   SUBORDINATION: This Lease shall be subordinate and subject to all ground
and underlying leases and to any first mortgages thereon and to any mortgages
covering the fee of the Demised Premises, and to all renewals, consolidations,
amendments, modifications or replacements thereof, provided, however, that with
respect to any mortgage, no later than the Commencement Date and, with respect
to any future mortgage, on or before the effective date thereof, Lessor shall
obtain from its mortgagee a written agreement with Lessee in substantially the
form attached hereto and marked Exhibit F. If the mortgagee or any successor in
interest shall succeed to the rights of the Lessor under this Lease, whether
through possession, surrender, assignment, subletting, judicial or foreclosure
action, or delivery of a deed or otherwise, Lessee shall attorn to and recognize
each successor-lessor as Lessee's lessor and the successor-lessor will accept
such attornment and recognize Lessee's rights of possession and use of the
Demised Premises in accordance with the provisions of this Lease. This clause
shall be self-operative and no further instrument of attornment or recognition
shall be required. Provided the applicable mortgagee delivers to the Lessee a
non-disturbance agreement in the form described above, upon a foreclosure or
deed in lieu thereof (or termination of any such ground lease), this Lease shall
be subject and subordinate to the provisions, operations and effect of said
lien.

24.   SIGNS: The Lessee may inscribe, paint or affix any signs, placards or
advertisements on the exterior or roof of the Demised Premises or upon entrance
doors, windows or upon any adjoining or appurtenant lands, provided same
complies with all applicable ordinances, local laws, orders, rules or
regulations of the municipality having jurisdiction thereof, and provided
further that, prior to erecting any such signs, placards or advertisements,
Lessee shall furnish Lessor with written notice, together with plans and
specifications detailing any such signs, placards or advertisements. Any such
sign, placard or advertisement so placed upon the Demised Premises shall be
removed by the Lessee at the termination of this Lease and the Lessee shall
repair any damage or injury to the Demised Premises caused thereby, and upon the
failure of the Lessee to comply herewith, the Lessor may have the same removed
and the Lessee shall be liable to the Lessor for the expense thereof.

25.   ENTIRE AGREEMENT, WAIVER: This instrument contains all the agreements and
conditions made between the parties hereto and may not be modified, changed or
terminated in whole or in part orally or in any manner other than by agreement
in writing signed by the parties hereto or their respective successors in
interest. The receipt of Rent and/or Additional Rent by the Lessor, with
knowledge of any breach of this Lease by the Lessee or of any default on the
part of the Lessee in the observance or performance of any of the conditions or
covenants of this Lease, shall not be deemed to be a waiver of any provision of
this Lease. If the Lessee makes any payment of any amount less than that due
hereunder, the Lessor without notice may accept the same as a payment on
account; the Lessor shall not be bound by any notation on any check involving
such payment nor any statement in any accompanying letter. No failure on the
part of the Lessor to enforce any covenant or provision herein contained, nor
any waiver of any right thereunder by the Lessor, unless in writing, shall
discharge or invalidate such covenant or provision or affect the right of the
Lessor to enforce the same in the event of any subsequent breach or default. The
receipt by the Lessor of any rent or any other sum of money or any other
consideration hereunder paid by the Lessee after the termination, in any manner,
of the term herein demised, or after the giving by the Lessor of any notice
hereunder to effect such termination, shall not reinstate, continue or extend
the term herein demised, or destroy, or in any manner impair the efficacy of any
such notice of termination as may have been given hereunder by the Lessor to the
Lessee prior to the receipt of any such sum of money or other

                                       20
<PAGE>
consideration, unless so agreed to in writing and signed by the Lessor. Neither
acceptance of the keys nor any other act or thing done by the Lessor or any
agent or employee of the Lessor during the term herein demised shall be deemed
to be an acceptance of a surrender of said Demised Premises, excepting only an
agreement in writing signed by the Lessor accepting or agreeing to accept such a
surrender. Any right herein granted to the Lessor to terminate this Lease shall
apply to any extension or renewal of the term herein demised, and the exercise
of any such right during the term herein demised shall terminate any extension
or renewal of the term herein demised, and any right on the part of the Lessee
thereto. No act or conduct of any nature or character on the part of the Lessor
or its agents, servants or employees other than by an agreement in writing
signed by the Lessor shall be construed as a waiver of the provisions of this
Paragraph irrespective of any circumstances existing at the time of such act or
conduct.

26.   NOTICE: Any notice, request or demand under this Lease shall be in writing
and shall be considered properly delivered upon receipt when addressed as
hereinafter provided, and (a) served personally, (b) sent by registered or
certified mail (return receipt requested) and deposited in a United States
general or branch post office, (c) sent by a private express mail carrier with a
bill of lading and evidence of receipt or (d) sent by telecopy transmission with
a confirmation generated from such telecopy equipment followed by a copy sent by
one of the other methods described in (a) through (c) above. Any notice, request
or demand by Lessee to Lessor shall be addressed to Lessor at:

                  SELKIRK VENTURES, LLC
                  695 Rotterdam Industrial Park
                  Schenectady, New York 12306
                  Attn. David M. Buicko

                  With copies to:

                  Steven K. Porter, General Counsel
                  695 Rotterdam Industrial Park
                  Schenectady, New York 12306

      until otherwise directed in writing by Lessor and, if requested in writing
      by Lessor, simultaneously served on or sent to Lessor's first mortgagee at
      the address specified in such request. Any notice, request or demand by
      Lessor to Lessee shall be addressed to Lessee at:

                  Daisytek, Incorporated
                  c/o Daiseytek International Corporation
                  1025 Central Expressway South
                  Suite 200
                  Allen, Texas  75013
                  Attn: Michael Bishoff

                  With a copy to:

                  Munsch Hardt Kopf & Harr, P.C.
                  4000 Fountain Place
                  1445 Ross Avenue
                  Dallas, Texas  75202
                  Attn: A. Michael Hainsfurther, Esq.

      until otherwise directed in writing by Lessee. Rejection or other refusal
      to accept a notice, request or demand or the inability to deliver the same
      because of a changed address of which no notice was given shall be deemed
      to be receipt of the notice, request or demand sent.

                                       21
<PAGE>
27.   FINANCIALS: In the event that the shares of stock of Lessee no longer
trade on any public stock exchange, Lessor may from time to time during the
remainder of the Term of the Lease, but not more often than annually, have the
right to request, and the Lessee shall thereafter promptly provide, current
financials from the Lessee.

28.   BROKERAGE: Lessee warrants and represents that it has not dealt with any
real estate broker or agent in connection with this Lease or its negotiations
except Cushman & Wakefield, Inc. Lessee shall indemnify and hold Lessor harmless
from any cost, expense or liability (including cost of suit and reasonable
attorneys' fees) for any compensation, commission or fees claimed by any other
real estate broker or agent in connection with this Lease or its negotiation by
reason of any act of Lessee. Lessor agrees to pay a real estate commission
pursuant to the Real Estate Brokerage Commission Agreement dated January 30,
2002, by and between Lessor and Cushman & Wakefield, Inc.

29.   CONTINGENCY: IT IS UNDERSTOOD BY THE PARTIES HERETO THAT THE LESSOR'S
INTEREST IN THE REAL PROPERTY IS THAT OF A CONTRACT VENDEE AND THAT THE PARTIES'
OBLIGATIONS HEREUNDER ARE CONTINGENT UPON THE LESSOR ACQUIRING TITLE TO THE REAL
PROPERTY. IF LESSOR SHALL FAIL TO ACQUIRE THE REAL PROPERTY BY MAY 1, 2002, THEN
LESSEE SHALL HAVE THE RIGHT TO TERMINATE THIS LEASE UPON WRITTEN NOTICE RECEIVED
BY THE LESSOR WITHIN FIVE (5) BUSINESS DAYS THEREAFTER .

30.   MISCELLANEOUS:

      (A)   References. All personal pronouns used in this Lease, whether used
      in the masculine, feminine or neuter gender, shall include all other
      genders; the singular shall include the plural, and vice versa. The use
      herein of the word "including" or "include" when following any general
      statement, term or matter shall not be construed to limit such statement,
      term or matters to the specific items or matters set forth immediately
      following such word or to similar items or matters, whether or not
      non-limiting language (such as "without limitation", or "but not limited
      to," or words of similar import) is used with reference thereto. All
      references, if any, to "mortgage" and "mortgagee" shall include deeds of
      trust and beneficiaries under deeds of trust, respectively. All Exhibits
      and Riders (if any) referenced and attached to this Lease are incorporated
      in this Lease by this reference. The captions preceding Sections of this
      Lease have been inserted solely as a matter of convenience, and such
      captions in no way define or limit the scope or intent of any provision of
      this Lease.

      (B)   Successors and Assigns. The terms, covenants and conditions
      contained in this Lease shall bind and inure to the benefit of Lessor and
      Lessee and, except as otherwise provided herein, their respective personal
      representatives and successors and assigns.

      (C)   Severability. If any provision of this Lease or the application
      thereof to any person or circumstances shall, to any extent, be invalid or
      unenforceable, the remainder of this Lease, or the application of such
      provision to persons or circumstances other than those as to which it is
      invalid or unenforceable, shall not be affected thereby, and each
      provision of this Lease shall remain in effect and shall be enforceable to
      the full extent permitted by law.

      (D)   Construction. This Lease shall be governed by and construed in
      accordance with the laws of the State of New York, without regard for such
      State's choice of law requirements.

      (E)   Delivery for Examination. Delivery of this Lease to Lessee shall not
      bind Lessor in any manner, and no lease or obligations of Lessor shall
      arise until this Lease is signed by both Lessor and Lessee and delivery is
      made to each.

      (F)   Lessee Authority. Lessee warrants, covenants and represents that it
      is duly organized and qualified to do business in the State of New York,
      and it has the power and authority to enter into this Lease and the person
      executing this Lease on behalf of Lessee hereby covenants, warrants, and
      represents that he or she is authorized to enter into this Lease on behalf
      of Lessee.

                                       22
<PAGE>
      (G)   No Construction Against the Preparer of this Lease. This Lease has
      been prepared by the Lessor and its professional advisors and reviewed by
      the Lessee and it professional advisors. Lessor, Lessee, and their
      separate advisors believe that this Lease is the product of all of their
      efforts, that it expresses their agreement, and that it should not be
      interpreted in favor of either Lessor or Lessee or against Lessor or
      Lessee merely because of their efforts in preparing it.

      (H)   Personal Jurisdiction. The Lessee hereby submits to personal
      jurisdiction in the State Courts of the State of New York or any Federal
      Court sitting therein and consents to the nonexclusive jurisdiction of
      such court and service of process in any suit being made upon the Lessee
      by mail at the address set forth herein. The Lessee hereby knowingly,
      voluntarily and international waives the right to service of process by
      the CPLR or any other applicable statute.

31.   GUARANTY OF LEASE. The Lessee shall cause Daiseytek International
Corporation, the Lessee's parent corporation (the "Guarantor"), to execute that
certain guaranty of lease attached hereto as Exhibit "G" (the "Guaranty of
Lease") contemporaneously with the execution and delivery of this Lease by the
Lessee, which Guaranty of Lease evidences the Guarantor's obligations to
guarantee the prompt payment and performance of the Lessee's obligations under
this Lease. The execution of the Guaranty of Lease by the Guarantor is a
material inducement of the Lessor entering into this Lease with the Lessee and
the performing of its obligations hereunder.

-signature page follows-

                                       23
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
the day and year first above written.

WITNESS:                                     SELKIRK VENTURES, LLC

________________________                     By: _______________________________
                                             Name:   David M. Buicko
                                             Title:  Authorized Representative

WITNESS:                                     DAISYTEK, INC.

________________________                     By: _______________________________
                                             Name:
                                             Title:

STATE OF NEW YORK                   )
                                    SS:
COUNTY OF SCHENECTADY               )

      On the ___ day of March , 2002 before me, the undersigned, a notary public
in and for said state, personally appeared David M. Buicko personally known to
me to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity and that by his
signature on the instrument, the individual or the person upon behalf of which
the individual acted, executed the instrument.

                                                        ________________________
                                                        Notary Public

STATE OF __________________         )
                                    SS:
COUNTY OF ________________          )

      On the ___ day of March, 2002 before me, the undersigned, a notary public
in and for said state, personally appeared _________________ personally known to
me to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity and that by his
signature on the instrument, the individual or the person upon behalf of which
the individual acted, executed the instrument.

                                                        ________________________
                                                        Notary Public

                                       24
<PAGE>
                                GUARANTY OF LEASE

      FOR VALUE RECEIVED, and in consideration of, and as an inducement for the
execution and delivery of the foregoing and attached lease agreement demising
the Demised Premises (as defined in the Lease hereinafter defined) in the Town
of Bethlehem, Albany County, New York (hereinafter called the "Lease") by
SELKIRK VENTURES, LLC, the Lessor therein named (hereinafter called the
"Lessor") to DAISYTEK, INCORPORATED., the Lessee therein named (hereinafter
called the "Lessee"), the undersigned DAISYTEK INTERNATIONAL CORPORATION,
(hereinafter called the "Guarantor") hereby guarantees to the Lessor, its
successors and assigns, the full and prompt payment of rent, including, but not
limited to, Base Rent (as defined in the Lease), Additional Rent (as defined in
the Lease) and any and all other sums and charges payable by the Lessee, its
successors and assigns, under said Lease, and further hereby guarantees the full
and timely performance and observance of all the covenants, terms, conditions
and agreements therein provided to be performed and observed by the Lessee, its
successors and assigns; and the Guarantor hereby covenants and agrees to and
with the Lessor, its successors and assigns, that if default shall at any time
by made by the Lessee, its successors and assigns, in the payment of any such
Base Rent, Additional Rent, and any and all other sums and charges payable by
the Lessee, its successors and assigns, under said Lease, or if Lessee should
default in the performance and observance of any of the covenants, terms,
conditions or agreements contained in said Lease, the Guarantor will forthwith
pay such rent and such other sums and charges to the Lessor, its successors and
assigns, and any arrears thereof, and will forthwith faithfully perform and
fulfill all of such terms, covenants, conditions, and agreements, and will
forthwith pay to the Lessor all damages that may arise in consequence of any
default by the Lessee, its successors and assigns, under said Lease, including
without limitation, all reasonable attorney's fees, disbursements incurred by
the Lessor or caused by any such default and/or by the enforcement of this
Guaranty.

      This Guaranty is an absolute and unconditional guarantee of payment and of
performance. This Guaranty is not a collection guaranty. It shall be enforceable
against the Guarantor without the necessity of any suit or proceedings on the
Lessor's part of any kind or nature whatsoever against the Lessee, its
successors and assigns, and without the necessity of any notice of nonpayment,
nonperformance or nonobservance or of any notice of acceptance of this Guaranty
or of any other notice or demand to which the Guarantor might otherwise be
entitled, all of which the Guarantor hereby expressly waives; and the Guarantor
hereby expressly agrees that the validity of this Guaranty and the obligations
of the Guarantor hereunder shall be nowise be terminated, affected, diminished

                                       41
<PAGE>
or impaired by reason of the assertion or the failure to assert by the Lessor
against the Lessee, or against the Lessee's successors and assigns, of any of
the rights or remedies reserved to the Lessor pursuant to the provisions of the
said Lease or by relief of Lessee from any of Lessee's obligations under this
Lease or otherwise (including, but not by way of limitation, the rejection of
said Lease in connection with proceedings under the bankruptcy laws now or
hereafter in effect).

      This Guaranty shall be a continuing guarantee and the liability of the
Guarantor hereunder shall in no way be affected, modified or diminished by
reason of any assignment, renewal, modification or extension of the Lease or
said Lease, or by reason of any extension of time that may be granted by the
Lessor to the Lessee, its successors or assigns or a changed or different use of
the Demised Premises consented to in writing by Lessor, or by reason of any
dealings or transactions or matters or things occurring between the Lessor and
the Lessee, its successors or assigns, whether or not notice thereof is given to
the Guarantor.

      The Lessor's consent to any assignment or assignments, and successive
assignments by the Lessee and Lessee's assigns of the Lease made either with or
without notice to the Guarantor shall in no manner whatsoever release the
Guarantor from any liability as Guarantor.

      The assignment by Lessor of the Lease and/or the avails and proceeds
thereof made either with or without notice to the Guarantor shall in no manner
whatsoever release the Guarantor from any liability as Guarantor.

      All of the Lessor's rights and remedies under the said Lease or under this
Guaranty are intended to be distinct, separate and cumulative and no such right
and remedy therein or herein mentioned is intended to be in exclusion of or a
waiver of any of the others. The obligations of the Guarantor hereunder shall
not be released by Lessee's receipt, application or release of security given
for the performance and observance and observance of covenants and conditions
required to be performed and observed by Lessee under said Lease, nor shall the
Guarantor be released by the maintenance of or execution upon any lien which
lien which Lessor may have or assert against Lessee and/or Lessee's assets.

      Until all the covenants and conditions in said Lease on the Lessee's part
to be performed and observed are fully performed and observed, the Guarantor (a)
shall have no right of subrogation against the Lessee by reason of any payments
or acts of performance by the Guarantor, in compliance with the obligations of
the Guarantor hereunder; (b) waives any right to enforce any remedy which the
Guarantor now or hereafter shall have against the Lessee by reason of any one or
more payment or acts of performance in compliance with the obligations of the
Guarantor hereunder; and (c) subordinates any liability or indebtedness of the
Lessee now or hereafter held by the Guarantor to the obligations of the Lessee
to the Lessor under said Lease.

                                       42
<PAGE>
      Guarantor hereby submits itself to the jurisdiction of the courts of the
state in which the Lease Premises are located, and hereby irrevocably appoints
the Lessee, or if Lessee is more than one person than any one of them, the
manager, assistant manager and any acting manager of the facility being operated
at any time during the term of the Lease at the Demised Premises and (if Lessee
is a corporation, trustee or partnership) all persons of the Lessee upon whom
service of process may be served for service upon Lessee as its agents for the
service of process in any action against Guarantor arising out of this Guaranty.
Pursuant to such service, suit may be brought against Guarantor in the county
and state in which the Demised Premises are located. This provision does not
affect any right to serve process upon Guarantor or in any other manner
permitted by law. This Guaranty shall be governed by and construed in accordance
with the laws of the State of New York, without regard for such State's choice
of law provision.

      The Guarantor represents to the Lessor that it shall derive substantial
financial benefits the Lessee entering into the Lease with the Lessor.

      IN WITNESS WHEREOF, the Guarantor has duly executed this Guaranty as of
the ____ day of March, 2002.

                                          DAISEYTEK INTERNATIONAL CORPORATION

                                          By:___________________________________
                                              Name:
                                              Title:

STATE OF __________________      )
                                 SS:
COUNTY OF _________________      )

      On the ___ day of March, 2002 before me, the undersigned, a notary public
in and for said state, personally appeared _________________ personally known to
me to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity and that by his
signature on the instrument, the individual or the person upon behalf of which
the individual acted, executed the instrument.

                                                        ________________________
                                                        Notary Public

                                       43<PAGE>

                                                                   EXHIBIT 10.23

                           INDUSTRIAL LEASE AGREEMENT

                                     BETWEEN

                         NEW YORK LIFE INSURANCE COMPANY

                                   AS LANDLORD

                                       AND

                                 DAISYTEK, INC.

                                    AS TENANT
<PAGE>
LEASE INDEX

<TABLE>
<CAPTION>
                  Section                 Subject
                  -------                 -------
<S>                                       <C>
                  1                       Basic Lease Provisions

                  2                       Demised Premises

                  3                       Term

                  4                       Base Rent

                  5                       Intentionally Omitted

                  6                       Operating Expenses and Additional Rent

                  7                       Use of Demised Premises

                  8                       Insurance

                  9                       Utilities

                  10                      Maintenance and Repairs

                  11                      Tenant's Personal Property; Indemnity

                  12                      Tenant's Fixtures

                  13                      Signs

                  14                      Intentionally Omitted

                  15                      Governmental Regulations

                  16                      Environmental Matters

                  17                      Construction of Demised Premises

                  18                      Tenant Alterations and Additions

                  19                      Services by Landlord

                  20                      Fire and Other Casualty

                  21                      Condemnation

                  22                      Tenant's Default

                  23                      Landlord's Right of Entry

                  24                      Lender's Rights
</TABLE>
<PAGE>
<TABLE>
<S>                                       <C>
                  25                      Estoppel Certificate

                  26                      Landlord's Liability

                  27                      Notices

                  28                      Brokers

                  29                      Assignment and Subleasing

                  30                      Termination or Expiration

                  31                      Intentionally Omitted

                  32                      Late Payments

                  33                      Rules and Regulations

                  34                      Quiet Enjoyment

                  35                      Miscellaneous

                  36                      Special Stipulations

                  37                      Lease Date

                  38                      Authority

                  39                      No Offer Until Executed

Exhibit "A" Demised Premises
Exhibit "B" Intentionally Omitted
Exhibit "C" Special Stipulations
Exhibit "D" Rules and Regulations
Exhibit "E" Certificate of Authority
Exhibit "F" Sign Exhibit
Exhibit "G" Connector Plans and Specifications
</TABLE>
<PAGE>
                           INDUSTRIAL LEASE AGREEMENT

         THIS LEASE AGREEMENT (the "Lease") is made as of the "Lease Date" (as
defined in Section 37 herein) by and between NEW YORK LIFE INSURANCE COMPANY, a
New York mutual insurance company ("Landlord"), and DAISYTEK, INC., a Delaware
corporation ("Tenant") (the words "Landlord" and "Tenant" to include their
respective legal representatives, successors and permitted assigns where the
context requires or permits).

                                               W I T N E S S E T H:

         1.       Basic Lease Provisions. The following constitute the basic
                  provisions of this Lease:

                  (a)      Demised Premises Address:  4550 Quality Drive,
                                                      Suite 103
                                                      Memphis, Tennessee 38118

                  (b)      Demised Premises Square Footage: approximately
                           120,000 sq. ft.

                  (c)      Building Square Footage: approximately 220,100 sq.
                           ft.

                  (d)      Annual Base Rent:

                                    Lease Year 1               $374,338.08

                                    Lease Year 2               $374,338.08

                                    Lease Year 3               $374,338.08

                                    Lease Year 4               $374,338.08

                                    Lease Year 5               $374,338.08

                  (e)      Monthly Base Rent Installments:

                                    Lease Year 1               $31,194.84

                                    Lease Year 2               $31,194.84

                                    Lease Year 3               $31,194.84

                                    Lease Year 4               $31,194.84

                                    Lease Year 5               $31,194.84

                  (f)      Lease Commencement Date: April l, 1999

                  (g)      Base Rent Commencement Date: April 1, 1999

                  (h)      Expiration Date: March 31, 2004

                  (i)      Term: 5 years

                  (j)      Tenant's Operating Expense Percentage: 54.52%
<PAGE>
                  (k)      Security Deposit: Not Applicable

                  (l)      Permitted Use: Office and partially automated storage
                           and distribution of non-toxic products

                  (m)      Address for notice:

                           Landlord:           New York Life Insurance Company
                                               51 Madison Avenue, Room 907
                                               New York, New York 10010
                                               Attn: Dan McConnell

                           With a copy to:     IDI Services Group, Inc.
                                               3424 Peachtree Road, Suite 1500
                                               Atlanta, Georgia 30326

                           Tenant:             Daisytek, Inc.
                                               500 North Central Expressway
                                               Plano, Texas 75074
                                               Attn: Mark C. Layton, CEO

                  (n)      Address for rental payments:

                                               New York Life Insurance Company
                                               c/o IDI Services Group, Inc.
                                               3424 Peachtree Road, N.E.
                                               Suite 1500
                                               Atlanta, Georgia 30326

                  (o)      Broker(s):          Commercial Tennessee
                                               3175 Lennox Park Blvd., Suite 100
                                               Memphis, Tennessee 38115
                                               Attn: Wyatt A. Aiken

         2. Demised Premises. For and in consideration of the rent hereinafter
reserved and the mutual covenants hereinafter contained, Landlord does hereby
lease and demise unto Tenant, and Tenant does hereby hire, lease and accept,
from Landlord all upon the terms and conditions hereinafter set forth the
following premises, referred to as the "Demised Premises", as outlined on
Exhibit A attached hereto and incorporated herein: approximately 120,000 square
feet of space, approximately 6,000 square feet of which is office space, having
an address as set forth in Section 1(a), located within Building I (the
"Building"), which contains a total of approximately 220,100 square feet and is
located within Southpark (the "Project"), located in Shelby County, Tennessee.

         3. Term. To have and to hold the Demised Premises for a preliminary
term (the "Preliminary Term") commencing on the Lease Date and ending on the
Lease Commencement Date as set forth in Section 1(f), and a primary term (the
"Primary Term") commencing on the Lease Commencement Date and terminating on the
Expiration Date as set forth in Section 1(h), as the Lease Commencement Date and
the Expiration Date may be revised pursuant to Section 17 (the Preliminary Term,
the Primary Term, and any and all extensions thereof, herein referred to as the
"Term"). The term "Lease Year" shall mean each one (1) year period of the Term
(or portion thereof if the last Lease Year of the Term is less than one (1) full
year)

                                      -2-
<PAGE>
beginning on the Lease Commencement Date, and each anniversary thereof, and
ending on the day immediately prior to the next succeeding anniversary of the
Lease Commencement Date.

         4. Base Rent. Tenant shall pay to Landlord at the address set forth in
Section 1(n), as base rent for the Demised Premises, commencing on the Base Rent
Commencement Date and continuing throughout the Term in lawful money of the
United States, the annual amount set forth in Section 1(d) payable in equal
monthly installments as set forth in Section 1(e) (the "Base Rent"), payable in
advance, without demand and without abatement, reduction, set-off or deduction,
on the first day of each calendar month during the Term. If the Base Rent
Commencement Date shall fall on a day other than the first day of a calendar
month, the Base Rent shall be apportioned pro rata on a per diem basis (i) for
the period between the Base Rent Commencement Date and the first day of the
following calendar month (which pro rata payment shall be due and payable on the
Base Rent Commencement Date), and (ii) for the last partial month of the Term,
if applicable. No payment by Tenant or receipt by Landlord of rent hereunder
shall be deemed to be other than on account of the amount due, and no
endorsement or statement on any check or any letter accompanying any check or
payment of rent shall be deemed an accord and satisfaction, and Landlord may
accept such check as payment without prejudice to Landlord's right to recover
the balance of such installment or payment of rent or pursue any other remedies
available to Landlord.

         5. Intentionally Omitted.

         6. Operating Expenses and Additional Rent.

                  (a) Tenant agrees to pay as Additional Rent (as defined in
Section 6(b) below) its proportionate share of Operating Expenses (as
hereinafter defined). "Operating Expenses" shall be defined as all reasonable
expenses for operation, repair, replacement and maintenance as necessary to keep
the Building and the common areas, driveways, and parking areas associated
therewith (collectively, the "Building Common Area") in good order, condition
and repair, including but not limited to, utilities for the Building Common
Area, expenses associated with the driveways and parking areas (including
sealing and restriping, and snow, trash and ice removal), security systems, fire
detection and prevention systems, lighting facilities, landscaped areas,
walkways, painting and caulking, directional signage, curbs, drainage strips,
sewer lines, all charges assessed against or attributed to the Building pursuant
to any applicable easements, covenants, restrictions, agreements, declaration of
protective covenants or development standards, property management fees, all
real property taxes and special assessments imposed upon the Building, the
Building Common Area and the land on which the Building and the Building Common
Area are constructed, all costs of insurance paid by Landlord with respect to
the Building and the Building Common Area and cost of improvements to the
Building and the Building Common Area required by any law, ordinance or
regulation applicable to the Building and the Building Common Area generally
(but specifically excluding any such improvements made necessary solely as a
result of the particular use of the Building or the Building Common Area by
another tenant of the Building other than Tenant). Operating Expenses shall not
include expenses for the costs of any maintenance and repair required to be
performed by Landlord at its own expense under Section (10)(b) or advertising,
marketing or commission expenses. Further, Operating Expenses shall not include
the costs for capital improvements unless such costs are incurred for the
purpose of causing a material decrease in the Operating Expenses of the Building
or the Building Common Area or are made with respect to improvements made to
comply with laws, ordinances or regulations as described above. Operating
Expenses shall be accounted for in accordance with generally accepted accounting
principles. The proportionate share of Operating Expenses to be paid by Tenant
shall be a percentage of the Operating Expenses based upon the proportion that
the square footage of the Demised Premises bears to the total square footage of
the Building (such figure referred to as "Tenant's Operating Expense Percentage"
and set forth in Section 1(j)). Prior to or promptly after the beginning of each
calendar year during the Term, Landlord shall estimate the total amount of
Operating Expenses to be paid by Tenant during each such calendar year and
Tenant shall pay to Landlord one-twelfth (1/12) of such sum on the first day of
each

                                      -3-
<PAGE>
calendar month during each such calendar year, or part thereof, during the Term.
Within a reasonable time after the end of each calendar year, Landlord shall
submit to Tenant a statement of the actual amount of Operating Expenses for such
calendar year, and the actual amount owed by Tenant, and within thirty (30) days
after receipt of such statement, Tenant shall pay any deficiency between the
actual amount owed and the estimates paid during such calendar year, or in the
event of overpayment, Landlord shall credit the amount of such overpayment
toward the next installment of Operating Expenses owed by Tenant or remit such
overpayment to Tenant if the Term has expired or has been terminated and no
Event of Default exists hereunder. The obligations in the immediately preceding
sentence shall survive the expiration or any earlier termination of this Lease.
If the Lease Commencement Date shall fall on other than the first day of the
calendar year, and/or if the Expiration Date shall fall on other than the last
day of the calendar year, Tenant's proportionate share of the Operating Expenses
for such calendar year shall be apportioned prorata.

                  (b) Any amounts required to be paid by Tenant hereunder (in
addition to Base Rent) and any charges or expenses incurred by Landlord on
behalf of Tenant under the terms of this Lease shall be considered "Additional
Rent" payable in the same manner and upon the same terms and conditions as the
Base Rent reserved hereunder except as set forth herein to the contrary. Any
failure on the part of Tenant to pay such Additional Rent when and as the same
shall become due shall entitle Landlord to the remedies available to it for
non-payment of Base Rent. Tenant's obligations for payment of Additional Rent
shall begin to accrue on the Base Rent Commencement Date.

                  (c) If applicable in the jurisdiction where the Demised
Premises are located, Tenant shall pay and be liable for all rental, sales, use
and inventory taxes or other similar taxes, if any, on the amounts payable by
Tenant hereunder levied or imposed by any city, state, county or other
governmental body having authority, such payments to be in addition to all other
payments required to be paid Landlord by Tenant under the terms of this Lease.
Such payment shall be made by Tenant directly to such governmental body if
billed to Tenant, or if billed to Landlord, such payment shall be paid
concurrently with the payment of the Base Rent, Additional Rent, or such other
charge upon which the tax is based, all as set forth herein.

         7. Use of Demised Premises.

                  (a) The Demised Premises shall be used for the Permitted Use
set forth in Section 1(l) and for no other purpose without Landlord's consent,
which consent shall not be unreasonably withheld.

                  (b) Tenant will permit no liens to attach or exist against the
Demised Premises.

                  (c) The Demised Premises shall not be used for any illegal
purposes, and Tenant shall not allow, suffer, or permit any vibration, noise,
odor, light or other effect to occur within or around the Demised Premises that
could constitute a nuisance or trespass for Landlord or any occupant of the
Building or an adjoining premises. Upon notice by Landlord to Tenant that any of
the aforesaid prohibited uses are occurring, Tenant agrees to promptly remove or
control the same.

                  (d) Tenant shall not in any way violate any law, ordinance or
restrictive covenant affecting the Demised Premises, and shall not in any manner
use the Demised Premises so as to cause cancellation of, prevent the use of the
fire and extended coverage insurance policy required hereunder. Landlord makes
no (and does hereby expressly disclaim any) covenant, representation or warranty
as to the Permitted Use being allowed by or being in compliance with any
applicable laws, rules, ordinances or restrictive covenants now or hereafter
affecting the Demised Premises, and any zoning letters, copies of zoning
ordinances or other information from any governmental agency or other third
party provided to Tenant by Landlord or any of Landlord's agents or employees
shall be for informational purposes only, Tenant hereby expressly acknowledging
and agreeing that Tenant shall conduct and rely solely on its own due diligence
and investigation with respect to the compliance of the Permitted Use with all
such applicable

                                      -4-
<PAGE>
laws, rules, ordinances and restrictive covenants and not on any such
information provided by Landlord or any of its agents or employees.

                  (e) In the event insurance premiums pertaining to the Demised
Premises, the Building, or the Building Common Area, whether paid by Landlord or
Tenant, are increased over the least hazardous rate available due to the nature
of the use of the Demised Premises by Tenant, Tenant shall pay such additional
amount as Additional Rent, provided Tenant is given reasonable prior notice of
such impending increase and an opportunity to cease or modify such use.

         8. Insurance.

                  (a) Tenant covenants and agrees that from and after the Lease
Commencement Date or any earlier date upon which Tenant enters or occupies the
Demised Premises or any portion thereof, Tenant will carry and maintain, at its
sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided for:

                           (i) Liability insurance in the Commercial General
Liability form (or reasonable equivalent thereto) covering the Demised Premises
and Tenant's use thereof against claims for bodily injury or death, property
damage and product liability occurring upon, in or about the Demised Premises,
such insurance to be written on an occurrence basis (not a claims made basis),
to be in combined single limits amounts not less than $1,000,000.00 and to have
general aggregate limits of not less than $2,000,000.00 with "umbrella" coverage
with limits of not less than $5,000,000.00 for each policy year. The insurance
coverage required under this Section 8(a)(i) shall, in addition, extend to any
liability of Tenant arising out of the indemnities provided for in Section 11
and, if necessary, the policy shall contain a contractual endorsement to that
effect.

                           (ii) Insurance covering (A) all of the items included
in the leasehold improvements constructed in the Demised Premises by or at the
expense of Landlord (collectively, the "Improvements"), including but not
limited to demising walls and the heating, ventilating and air conditioning
system and (B) Tenant's trade fixtures, merchandise and personal property from
time to time in, on or upon the Demised Premises, in an amount not less than one
hundred percent (100%) of their full replacement value (or such percentage below
100% which assures full payment by the insurer of any claim) from time to time
during the Term, providing protection against perils included within the
standard form of "all-risks" fire and casualty insurance policy, together with
insurance against sprinkler damage, vandalism and malicious mischief. Any policy
proceeds from such insurance relating to the Improvements shall be used solely
for the repair, construction and restoration or replacement of the Improvements
damaged or destroyed unless this Lease shall cease and terminate under the
provisions of Section 20.

                  (b) All policies of the insurance provided for in Section 8(a)
shall be issued in form reasonably acceptable to Landlord by insurance companies
with a rating of not less than "A," and financial size of not less than Class X,
in the most current available "Best's Insurance Reports", and licensed to do
business in the state in which the Building is located. Each and every such
policy:

                           (i) shall name Landlord and Lender (as defined in
Section 24) as an additional insured. In addition, the coverage described in
Section 8(a)(ii)(A) relating to the Improvements shall also name Landlord as
"loss payee";

                           (ii) shall be delivered to Landlord, in the form of
an insurance certificate acceptable to Landlord as evidence of such policy,
prior to the Lease Commencement Date and thereafter within thirty (30) days
prior to the expiration of each such policy, and, as often as any such policy
shall

                                      -5-
<PAGE>
expire or terminate. Renewal or additional policies shall be procured and
maintained by Tenant in like manner and to like extent;

                           (iii) shall contain a provision that the insurer will
give to Landlord and such other parties in interest at least fifteen (15) days
notice in writing in advance of any cancellation, termination or lapse, or the
effective date of any reduction in the amounts of insurance; and

                           (iv) shall be written as a primary policy which does
not contribute to and is not in excess of coverage which Landlord may carry.

                  (c) In the event that Tenant shall fail to carry and maintain
the insurance coverages set forth in this Section 8, Landlord may upon thirty
(30) days notice to Tenant (unless such coverages will lapse in which event no
such notice shall be necessary) procure such policies of insurance and Tenant
shall promptly reimburse Landlord therefor.

                  (d) Landlord and Tenant hereby waive any rights each may have
against the other on account of any loss or damage occasioned to Landlord or
Tenant, as the case may be, their respective property, the Demised Premises, its
contents or to the other portions of the Building, arising from any risk covered
by all risks fire and extended coverage insurance of the type and amount
required to be carried hereunder, provided that such waiver does not invalidate
such policies or prohibit recovery thereunder. The parties hereto shall use
reasonable efforts to cause their respective insurance companies insuring the
property of either Landlord or Tenant against any such loss, to waive any right
of subrogation that such insurers may have against Landlord or Tenant, as the
case may be.

         9. Utilities. During the Term, Tenant shall promptly pay as billed to
Tenant all rents and charges for water and sewer services and all costs and
charges for gas, steam, electricity, fuel, light, power, telephone, heat and any
other utility or service used or consumed in or servicing the Demised Premises.
To the extent reasonably possible, such utilities shall be separately metered
and billed to Tenant. Any utilities which are not separately metered shall be
billed to Tenant by Landlord at Landlord's actual cost. In the event Tenant's
use of any utility not metered is in excess of the average use by other tenants,
Landlord shall have the right to install a meter for such utility, at Tenant's
expense, and bill Tenant for Tenant's actual use. If Tenant fails to pay any
utility bills or charges, Landlord may, at its option and upon reasonable notice
to Tenant, pay the same and in such event, the amount of such payment, together
with interest thereon at the Interest Rate as defined in Section 32 from the
date of such payment by Landlord, will be added to Tenant's next due payment as
Additional Rent.

         10. Maintenance and Repairs.

                  (a) Tenant shall, at its own cost and expense, maintain in
good condition and repair the interior of the Demised Premises, including but
not limited to the heating, air conditioning and ventilation systems, glass,
windows and doors, sprinkler, all plumbing and sewage systems, fixtures,
interior walls, floors (including floor slabs), ceilings, storefronts, plate
glass, skylights, all electrical facilities and equipment including, without
limitation, lighting fixtures, lamps, fans and any exhaust equipment and
systems, electrical motors, and all other appliances and equipment (including,
without limitation, dock levelers, dock shelters, dock seals and dock lighting)
of every kind and nature located in, upon or about the Demised Premises, except
as to such maintenance and repair as is the obligation of Landlord pursuant to
Section 10(b). During the Term, Tenant shall maintain in full force and effect a
service contract for the maintenance of the heating, ventilation and air
conditioning systems with an entity reasonably acceptable to Landlord. Tenant
shall deliver to Landlord (i) a copy of said service contract prior to the Lease
Commencement Date, and (ii) thereafter, a copy of a renewal or substitute
service contract within thirty (30) days prior to the expiration of the existing
service contract. Tenant's obligation shall exclude any

                                      -6-
<PAGE>
maintenance and repair required because of the act or negligence of Landlord,
its employees, contractors or agents, which shall be the responsibility of
Landlord.

                  (b) Landlord shall, at its own cost and expense, maintain in
good condition and repair the roof, foundation (beneath the floor slab) and
structural frame of the Building. Landlord's obligation shall exclude the cost
of any maintenance or repair required because of the act or negligence of Tenant
or Tenant's agents, contractors, employees and invitees (collectively, "Tenant's
Affiliates"), the cost of which shall be the responsibility of Tenant.

                  (c) Except to the extent the same is caused by the negligent
action or inaction of Landlord, its employees or agents, and is not covered by
the insurance required to be carried by Tenant pursuant to the terms of this
Lease, Landlord shall not be liable to Tenant or to any other person for any
damage occasioned by failure in any utility system or by the bursting or leaking
of any vessel or pipe in or about the Demised Premises, or for any damage
occasioned by water coming into the Demised Premises unless caused by the
negligent action or inaction of Landlord, costs of which shall be the
responsibility of Landlord.

         11. Tenant's Personal Property; Indemnity. Except as otherwise set
forth in this paragraph, all of Tenant's personal property in the Demised
Premises shall be and remain at Tenant's sole risk. Landlord, its agents,
employees and contractors, shall not be liable for, and Tenant hereby releases
Landlord from, any and all liability for theft thereof or any damage thereto
occasioned by any act of God or by any acts, omissions or negligence of any
persons. Landlord, its agents, employees and contractors, shall not be liable
for any injury to the person or property of Tenant or other persons in or about
the Demised Premises, Tenant expressly agreeing to indemnify and save Landlord,
its agents, employees and contractors, harmless, in all such cases, except to
the extent caused by the negligence of Landlord, its agents, employees and
contractors. Tenant further agrees to indemnify and reimburse Landlord for any
costs or expenses, including, without limitation, attorneys' fees, that Landlord
reasonably may incur in investigating, handling or litigating any such claim
against Landlord by a third person, unless such claim arose from the negligence
of Landlord, its agents, employees or contractors. The provisions of this
Section 11 shall survive the expiration or earlier termination of this Lease
with respect to any damage, injury or death occurring before such expiration or
termination. The foregoing shall not release Landlord from liability relating to
the act or negligence of Landlord, costs of which shall be Landlord's
responsibility.

         12. Tenant's Fixtures. Tenant shall have the right to install in the
Demised Premises trade fixtures required by Tenant or used by it in its
business, and if installed by Tenant, to remove any or all such trade fixtures
from time to time during and upon termination or expiration of this Lease,
provided no Event of Default, as defined Section 22, then exists; provided,
however, that Tenant shall repair and restore any damage or injury to the
Demised Premises (to the condition in which the Demised Premises existed prior
to such installation) caused by the installation and/or removal of any such
trade fixtures.

         13. Signs. No sign, advertisement or notice shall be inscribed,
painted, affixed, or displayed on the windows or exterior walls of the Demised
Premises or on any public area of the Building, except in such places, numbers,
sizes, colors and styles as are approved in advance in writing by Landlord, and
which conform to all applicable laws, ordinances, or covenants affecting the
Demised Premises. Notwithstanding the foregoing, Tenant shall have the right to
affix one (1) identification sign to the exterior of the Demised Premises or to
a free-standing "monument sign" in a location reasonably approved by Landlord,
provided Tenant and such sign otherwise comply with the terms and conditions of
this Section 13. Any and all signs installed or constructed by or on behalf of
Tenant pursuant hereto shall be installed, maintained and removed by Tenant at
Tenant's sole cost and expense. [PARTIES AGREE TO ATTACH AND REFERENCE A
MUTUALLY AGREEABLE SIGN EXHIBIT IF PROVIDED BY TENANT TO LANDLORD PRIOR TO LEASE
EXECUTION.]

                                      -7-
<PAGE>
         14. Intentionally Omitted.

         15. Governmental Regulations. Tenant shall promptly comply throughout
the Term, at Tenant's sole cost and expense, with all present and future laws,
ordinances, orders, rules, regulations or requirements of all federal, state and
municipal governments and appropriate departments, commissions, boards and
officers thereof (collectively, "Governmental Requirements") relating to (a) all
or any part of the Demised Premises, and (b) to the use or manner of use of the
Demised Premises and the Building Common Area. Tenant shall also observe and
comply with the requirements of all policies of public liability, fire and other
policies of insurance at any time in force with respect to the Demised Premises.
Without limiting the foregoing, if as a result of one or more Governmental
Requirements it is necessary, from time to time during the Term, to perform an
alteration or modification of the Demised Premises (a "Code Modification") which
is made necessary as a result of the specific use being made by Tenant of the
Demised Premises, then such Code Modification shall be the sole and exclusive
responsibility of Tenant in all respects; any such Code Modification shall be
promptly performed by Tenant at its expense in accordance with the applicable
Governmental Requirement and with Section 18 hereof. If as a result of one or
more Governmental Requirements it is necessary from time to time during the Term
to perform a Code Modification which (i) would be characterized as a capital
expenditure under generally accepted accounting principles and (ii) is not made
necessary as a result of the specific use being made by Tenant of the Demised
Premises, then (a) Landlord shall have the obligation to perform the Code
Modification at its expense, (b) the cost of such Code Modification shall be
amortized on a straight-line basis over the useful life of the item in question,
as reasonably determined by Landlord, and (c) Tenant shall be obligated to pay
(as Additional Rent, payable in the same manner and upon the same terms and
conditions as the Base Rent reserved hereunder) for the portion of such
amortized costs attributable to the remainder of the Term, including any
extensions thereof. Tenant shall promptly send to Landlord a copy of any written
notice received by Tenant requiring a Code Modification.

         16. Environmental Matters.

                  (a) For purposes of this Lease:

                           (i) "Contamination" as used herein means the presence
of or release of Hazardous Substances (as hereinafter defined) into any
environmental media from, upon, within, below, into or on any portion of the
Demised Premises, the Building, the Building Common Area or the Project so as to
require remediation, cleanup or investigation under any applicable Environmental
Law (as hereinafter defined).

                           (ii) "Environmental Laws" as used herein means all
federal, state, and local laws, regulations, orders, permits, ordinances or
other requirements, which exist now or as may exist hereafter, concerning
protection of human health, safety and the environment, all as may be amended
from time to time.

                           (iii) "Hazardous Substances" as used herein means any
hazardous or toxic substance, material, chemical, pollutant, contaminant or
waste as those terms are defined by any applicable Environmental Laws
(including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq. ("CERCLA") and the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. ["RCRA"]) and any
solid wastes, polychlorinated biphenyls, urea formaldehyde, asbestos,
radioactive materials, radon, explosives, petroleum products and oil.

                  (b) Landlord represents that, except as revealed to Tenant in
writing by Landlord, to Landlord's actual knowledge, Landlord has not treated,
stored or disposed of any Hazardous Substances upon

                                      -8-
<PAGE>
or within the Demised Premises, nor, to Landlord's actual knowledge, has any
predecessor owner of the Demised Premises.

                  (c) Tenant covenants that all its activities, and the
activities of Tenant's Affiliates (as defined in Section 10(b)), on the Demised
Premises, the Building, or the Project during the Term will be conducted in
compliance with Environmental Laws. Tenant warrants that it is currently in
compliance with all applicable Environmental Laws and that there are no pending
or threatened notices of deficiency, notices of violation, orders, or judicial
or administrative actions involving alleged violations by Tenant of any
Environmental Laws arising out of its activities on or within the Demised
Premises. Tenant, at Tenant's sole cost and expense, shall be responsible for
obtaining all permits or licenses or approvals under Environmental Laws
necessary for Tenant's operation of its business on the Demised Premises and
shall make all notifications and registrations required by any applicable
Environmental Laws. Tenant, at Tenant's sole cost and expense, shall at all
times comply with the terms and conditions of all such permits, licenses,
approvals, notifications and registrations and with any other applicable
Environmental Laws. Tenant warrants that it has obtained all such permits,
licenses or approvals and made all such notifications and registrations required
by any applicable Environmental Laws necessary for Tenant's operation of its
business on the Demised Premises.

                  (d) Tenant shall not cause or permit any Hazardous Substances
to be brought upon, kept or used in or about the Demised Premises, the Building,
or the Project in violation of any Environmental Laws without the prior written
consent of Landlord, which consent shall not be unreasonably withheld; provided,
however, that the consent of Landlord shall not be required for the use at the
Demised Premises of cleaning supplies, toner for photocopying machines and other
similar materials, in containers and quantities reasonably necessary for and
consistent with normal and ordinary use by Tenant in the routine operation or
maintenance of Tenant's office equipment or in the routine janitorial service,
cleaning and maintenance for the Demised Premises. For purposes of this Section
16, Landlord shall be deemed to have reasonably withheld consent if Landlord
determines that the presence of such Hazardous Substance within the Demised
Premises could result in a risk of harm to person or property or otherwise
negatively affect the value or marketability of the Building or the Project.

                  (e) Tenant shall not cause or permit the release of any
Hazardous Substances by Tenant or Tenant's Affiliates into any environmental
media such as air, water or land, or into or on the Demised Premises, the
Building or the Project in any manner that violates any Environmental Laws. If
such release shall occur, Tenant shall (i) take all steps reasonably necessary
to contain and control such release and any associated Contamination, (ii) clean
up or otherwise remedy such release and any associated Contamination to the
extent required by, and take any and all other actions required under,
applicable Environmental Laws and (iii) notify and keep Landlord reasonably
informed of such release and response.

                  (f) Regardless of any consents granted by Landlord pursuant to
Section 16(d) allowing Hazardous Substances upon the Demised Premises, Tenant
shall under no circumstances whatsoever cause or permit (i) any activity on the
Demised Premises which would cause the Demised Premises to become subject to
regulation as a hazardous waste treatment, storage or disposal facility under
RCRA or the regulations promulgated thereunder, (ii) the discharge of Hazardous
Substances into the storm sewer system serving the Project or (iii) the
installation of any underground storage tank or underground piping on or under
the Demised Premises.

                  (g) Tenant shall and hereby does indemnify Landlord and hold
Landlord harmless from and against any and all reasonable and actual expense,
loss, and liability suffered by Landlord (except to the extent that such
expenses, losses, and liabilities arise out of Landlord's own negligence or
willful act), by reason of the storage, generation, release, handling,
treatment, transportation, disposal, or arrangement for transportation or
disposal, of any Hazardous Substances (whether accidental, intentional, or
negligent) by

                                      -9-
<PAGE>
Tenant or Tenant's Affiliates or by reason of Tenant's breach of any of the
provisions of this Section 16. Such expenses, losses and liabilities shall
include, without limitation, (i) any and all expenses that Landlord may incur to
comply with any Environmental Laws; (ii) any and all costs that Landlord may
incur in studying or remedying any Contamination at or arising from the Demised
Premises, the Building, or the Project; (iii) any and all costs that Landlord
may incur in studying, removing, disposing or otherwise addressing any Hazardous
Substances; (iv) any and all fines, penalties or other sanctions assessed upon
Landlord; and (v) any and all legal and professional fees and costs incurred by
Landlord in connection with the foregoing. The indemnity contained herein shall
survive the expiration or earlier termination of this Lease for a period of two
(2) years after said termination or expiration of this Lease.

         17. Construction of Demised Premises. Tenant hereby expressly
acknowledges and agrees that it shall accept, and shall be deemed to have
accepted, the Demised Premises AS IS, WHERE IS, and as suitable for the purposes
for which the same are leased hereby and, upon request by Landlord, shall
execute and deliver to Landlord a letter of acceptance in which Tenant (i)
accepts the Demised Premises AS IS, WHERE IS and (ii) confirms that the Lease
Commencement Date, the Base Rent Commencement Date and the Expiration Date
remain as set forth in Section 1, or if revised pursuant to the terms hereof,
setting forth such dates as so revised.

         18. Tenant Alterations and Additions.

                  (a) Tenant shall not make or permit to be made any
alterations, improvements, or additions to the Demised Premises (a "Tenant's
Change"), without first obtaining on each occasion Landlord's prior written
consent (which consent Landlord agrees not to unreasonably withhold) and
Lender's prior written consent (if such consent is required). As part of its
approval process, Landlord may require that Tenant submit plans and
specifications to Landlord, for Landlord's approval or disapproval, which
approval shall not be unreasonably withheld. All Tenant's Changes shall be
performed in accordance with all legal requirements applicable thereto and in a
good and workmanlike manner with first-class materials. Tenant shall maintain
insurance reasonably satisfactory to Landlord during the construction of all
Tenant's Changes. If Landlord at the time of giving its approval to any Tenant's
Change notifies Tenant in writing that approval is conditioned upon restoration,
then Tenant shall, at its sole cost and expense and upon the termination or
expiration of this Lease, remove the same and restore the Demised Premises to
its condition prior to such Tenant's Change. No Tenant's Change shall be
structural in nature or impair the structural strength of the Building. Tenant
shall pay the full cost of any Tenant's Change. Except as otherwise provided
herein and in Section 12 hereof, and except as agreed upon by the parties at the
time a Tenant's Change is approved, all Tenant's Changes shall immediately upon
completion or installation thereof be and become part of the Demised Premises
and the property of Landlord without payment therefor by Landlord and shall be
surrendered to Landlord upon the expiration or earlier termination of this
Lease.

                  (b) To the extent permitted by law, all of Tenant's contracts
and subcontracts for such Tenant's Changes shall provide that no lien shall
attach to or be claimed against the Demised Premises or any interest therein
other than Tenant's leasehold interest in the Demised Premises, and that all
subcontracts let thereunder shall contain the same provision. Whether or not
Tenant furnishes the foregoing, Tenant agrees to hold Landlord harmless against
all liens, claims and liabilities of every kind, nature and description which
may arise out of or in any way be connected with such work. Tenant shall not
permit the Demised Premises to become subject to any mechanics', laborers' or
materialmen's lien on account of labor, material or services furnished to Tenant
or claimed to have been furnished to Tenant in connection with work of any
character performed or claimed to have been performed for the Demised Premises
by, or at the direction or sufferance of Tenant and if any such liens are filed
against the Demised Premises, Tenant shall promptly discharge the same;
provided, however, that Tenant shall have the right to contest, in good faith
and with reasonable diligence, the validity of any such lien or claimed lien if
Tenant shall give to Landlord, within fifteen days after demand, such security
as may be reasonably satisfactory to Landlord to assure payment thereof and to

                                      -10-
<PAGE>
prevent any sale, foreclosure, or forfeiture of Landlord's interest in the
Demised Premises by reason of non-payment thereof; provided further that on
final determination of the lien or claim for lien, Tenant shall immediately pay
any judgment rendered, with all proper costs and charges, and shall have the
lien released and any judgment satisfied. If Tenant fails to post such security
or does not diligently contest such lien, Landlord may, without investigation of
the validity of the lien claim, discharge such lien and Tenant shall reimburse
Landlord upon demand for all costs and expenses incurred in connection
therewith, which expenses shall include any attorneys' fees, paralegals' fees
and any and all costs associated therewith, including litigation through all
trial and appellate levels and any costs in posting bond to effect a discharge
or release of the lien. Nothing contained in this Lease shall be construed as a
consent on the part of Landlord to subject the Demised Premises to liability
under any lien law now or hereafter existing of the state in which the Demised
Premises are located.

         19. Services by Landlord. Landlord shall be responsible for providing
for maintenance of the Building Common Area, and, except as required by Section
10(b), hereof Landlord shall be responsible for no other services whatsoever.
Tenant, by payment of Tenant's share of the Operating Expenses, shall pay
Tenant's pro rata share of the expenses incurred by Landlord hereunder.

         20. Fire and Other Casualty. In the event the Demised Premises are
damaged by fire or other casualty, Landlord agrees to promptly restore and
repair the Demised Premises at Landlord's expense, including the Improvements to
be insured by Tenant but only to the extent Landlord receives insurance proceeds
therefor, including the proceeds from the insurance required to be carried by
Tenant on the Improvements (provided that Landlord shall be responsible for any
deductible under Landlord's insurance policies). Notwithstanding the foregoing,
in the event that the Demised Premises are (i) in the reasonable opinion of
Landlord, so destroyed that they cannot be repaired or rebuilt within ninety
(90) days after the date of such damage; or (ii) destroyed by a casualty which
is covered by Landlord's insurance but Lender or other party entitled to
insurance proceeds fails to make such proceeds available to Landlord in an
amount sufficient for restoration of the Demised Premises reasonably acceptable
to Tenant, then Landlord shall give written notice to Tenant of such
determination (the "Determination Notice") within sixty (60) days of such
casualty. Either Landlord or Tenant may terminate and cancel this Lease
effective as of the date of such casualty by giving written notice to the other
party within thirty (30) days after Tenant's receipt of the Determination
Notice. Upon the giving of such termination notice, all obligations hereunder
with respect to periods from and after the effective date of termination shall
thereupon cease and terminate. If no such termination notice is given, Landlord
shall, to the extent of the available insurance proceeds, make such repair or
restoration of the Demised Premises to the approximate condition existing prior
to such casualty, promptly and in such manner as not to unreasonably interfere
with Tenant's use and occupancy of the Demised Premises (if Tenant is still
occupying the Demised Premises). Base Rent and Additional Rent shall
proportionately abate during the time that the Demised Premises or any part
thereof are unusable by reason of any such damage thereto.

         21. Condemnation.

                  (a) If all of the Demised Premises is taken or condemned for a
public or quasi-public use, or if a portion of the Demised Premises is taken or
condemned for a public or quasi-public use and the remaining portion thereof is
not usable by Tenant in the reasonable opinion of Landlord, this Lease shall
terminate as of the earlier of the date title to the condemned real estate vests
in the condemnor or the date on which the Demised Premises are not usable by
Tenant. In such event, the Base Rent herein reserved and all Additional Rent and
other sums payable hereunder shall be apportioned and paid in full by Tenant to
Landlord to that date, all Base Rent, Additional Rent and other sums payable
hereunder prepaid for periods beyond that date shall be repaid by Landlord to
Tenant on the date such apportioned payment is made, and neither party shall
thereafter have any liability hereunder, except that any obligation or liability
of either party under this Lease which has accrued on or prior to such
termination date shall survive.

                                      -11-
<PAGE>
                  (b) If only part of the Demised Premises is taken or condemned
for a public or quasipublic use and this Lease does not terminate pursuant to
Section 21(a), Landlord shall, to the extent of the award it receives, restore
the Demised Premises to a condition and to a size as nearly comparable as
reasonably possible to the condition and size thereof immediately prior to the
taking, and there shall be an equitable adjustment to the Base Rent and
Additional Rent according to the value of the Demised Premises before and after
the taking.

                  (c) Landlord shall be entitled to receive the entire award in
any proceeding with respect to any taking provided for in this Section 21, and
Tenant shall receive no part of such award. Nothing herein contained shall be
deemed to prohibit Tenant from making a separate claim, against the condemnor,
to the extent permitted by law, for the value of Tenant's leasehold estate,
moveable trade fixtures, machinery and moving expenses, provided that the making
of such claim shall not and does not adversely affect or diminish Landlord's
award.

         22. Tenant's Default.

                  (a) The occurrence of any one or more of the following events
shall constitute an "Event of Default" of Tenant under this Lease:

                           (i) if Tenant fails to pay Base Rent or any
Additional Rent hereunder as and when such rent becomes due and such failure
shall continue for more than ten (10) days after Landlord gives written notice
to Tenant of such failure;

                           (ii) intentionally omitted;

                           (iii) if the Demised Premises become deserted or
abandoned for more than thirty (30) consecutive days;

                           (iv) if Tenant permits to be done anything which
creates a lien upon the Demised Premises and fails to discharge or bond such
lien, or post security with Landlord acceptable to Landlord within thirty (30)
days after receipt by Tenant of written notice thereof;

                           (v) if Tenant fails to maintain in force all policies
of insurance required by this Lease and such failure shall continue for more
than ten (10) days after Landlord gives Tenant written notice of such failure;

                           (vi) if any petition is filed by or against Tenant
under any present or future section or chapter of the Bankruptcy Code, or under
any similar law or statute of the United States or any state thereof (which, in
the case of an involuntary proceeding, is not permanently discharged, dismissed,
stayed, or vacated, as the case may be, within ninety (90) days of
commencement), or if any order for relief shall be entered against Tenant in any
such proceedings;

                           (vii) intentionally omitted;

                           (viii) if a receiver, custodian, or trustee is
appointed for the Demised Premises or for all or substantially all of the assets
of Tenant, which appointment is not vacated within sixty (60) days following the
date of such appointment; or

                           (ix) if Tenant fails to perform or observe any other
term of this Lease and such failure shall continue for more than thirty (30)
days after Landlord gives Tenant written notice of such failure, or, if such
failure cannot be corrected within such thirty (30) day period, if Tenant does
not

                                      -12-
<PAGE>
commence to correct such default within said thirty (30) day period and
thereafter diligently prosecute the correction of same to completion within a
reasonable time.

                  (b) Upon the occurrence of any one or more Events of Default,
Landlord may, at Landlord's option, without any demand or notice whatsoever
(except as expressly required in this Section 22):

                           (i) Terminate this Lease by giving Tenant notice of
termination, in which event this Lease shall expire and terminate on the date
specified in such notice of termination and all rights of Tenant under this
Lease and in and to the Demised Premises shall terminate. Tenant shall remain
liable for all obligations under this Lease arising up to the date of such
termination, and Tenant shall surrender the Demised Premises to Landlord on the
date specified in such notice; or

                           (ii) Terminate this Lease as provided in Section
22(b)(i) hereof and recover from Tenant all damages Landlord may incur by reason
of Tenant's default, including, without limitation, an amount which, at the date
of such termination, is calculated as follows: (1) the value of the excess, if
any, of (A) the Base Rent, Additional Rent and all other sums which would have
been payable hereunder by Tenant for the period commencing with the day
following the date of such termination and ending with the Expiration Date had
this Lease not been terminated (the "Remaining Term"), over (B) the aggregate
fair market rental value of the Demised Premises for the Remaining Term (which
excess, if any shall be discounted to present value at the "Treasury Yield" as
defined below for the Remaining Term); plus (2) the costs of recovering
possession of the Demised Premises and all other expenses incurred by Landlord
due to Tenant's default, including, without limitation, reasonable attorney's
fees; plus (3) the unpaid Base Rent and Additional Rent earned as of the date of
termination plus any interest and late fees due hereunder, plus other sums of
money and damages owing on the date of termination by Tenant to Landlord under
this Lease or in connection with the Demised Premises. The amount as calculated
above shall be deemed immediately due and payable. The payment of the amount
calculated in subparagraph (ii)(l) shall not be deemed a penalty but shall
merely constitute payment of liquidated damages, it being understood and
acknowledged by Landlord and Tenant that actual damages to Landlord are
extremely difficult, if not impossible, to ascertain. "Treasury Yield" shall
mean the rate of return in percent per annum of Treasury Constant Maturities for
the length of time specified as published in document H.15(519) (presently
published by the Board of Governors of the U.S. Federal Reserve System titled
"Federal Reserve Statistical Release") for the calendar week immediately
preceding the calendar week in which the termination occurs. If the rate of
return of Treasury Constant Maturities for the calendar week in question is not
published on or before the business day preceding the date of the Treasury Yield
in question is to become effective, then the Treasury Yield shall be based upon
the rate of return of Treasury Constant Maturities for the length of time
specified for the most recent calendar week for which such publication has
occurred. If no rate of return for Treasury Constant Maturities is published for
the specific length of time specified, the Treasury Yield for such length of
time shall be the weighted average of the rates of return of Treasury Constant
Maturities most nearly corresponding to the length of the applicable period
specified. If the publishing of the rate of return of Treasury Constant
Maturities is ever discontinued, then the Treasury Yield shall be based upon the
index which is published by the Board of Governors of the U.S. Federal Reserve
System in replacement thereof or, if no such replacement index is published, the
index which, in Landlord's reasonable determination, most nearly corresponds to
the rate of return of Treasury Constant Maturities. In determining the aggregate
fair market rental value pursuant to subparagraph (ii)(l)(B) above, the parties
hereby agree that, at the time Landlord seeks to enforce this remedy, all
relevant factors should be considered, including, but not limited to, (a) the
length of time remaining in the Term, (b) the then current market conditions in
the general area in which the Building is located, (c) the likelihood of
reletting the Demised Premises for a period of time equal to the remainder of
the Term, (d) the net effective rental rates then being obtained by landlords
for similar type space of similar size in similar type buildings in the general
area in which the Building is located, (e) the vacancy levels in the general
area in which the Building is located, (f) current levels of new construction
that will be completed

                                      -13-
<PAGE>
during the remainder of the Term and how this construction will likely affect
vacancy rates and rental rates and (g) inflation; or

                           (iii) Intentionally Omitted

                           (iv) Without terminating this Lease, in its own name
but as agent for Tenant, enter into and upon and take possession of the Demised
Premises or any part thereof. Any property remaining in the Demised Premises may
be removed and stored in a warehouse or elsewhere at the cost of, and for the
account of, Tenant without Landlord being deemed guilty of trespass or becoming
liable for any loss or damage which may be occasioned thereby unless caused by
Landlord's negligence. Thereafter, Landlord may, but shall not be obligated to,
lease to a third party the Demised Premises or any portion thereof as the agent
of Tenant upon such terms and conditions as Landlord may deem necessary or
desirable in order to relet the Demised Premises. The remainder of any rentals
received by Landlord from such reletting, after the payment of any indebtedness
due hereunder from Tenant to Landlord, and the payment of any costs and expenses
of such reletting, shall be held by Landlord to the extent of and for
application in payment of future rent owed by Tenant, if any, as the same may
become due and payable hereunder. If such rentals received from such reletting
shall at any time or from time to time be less than sufficient to pay to
Landlord the entire sums then due from Tenant hereunder, Tenant shall pay any
such deficiency to Landlord. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for any such previous default provided same has not been cured; or

                           (v) Without terminating this Lease, and with or
without notice to Tenant, enter into and upon the Demised Premises and, without
being liable for prosecution or any claim for damages therefor, maintain the
Demised Premises and repair or replace any damage thereto or do anything or make
any payment for which Tenant is responsible hereunder. Tenant shall reimburse
Landlord immediately upon demand for any expenses which Landlord incurs in thus
effecting Tenant's compliance under this Lease and Landlord shall not be liable
to Tenant for any damages with respect thereto; or

                           (vi) Without liability to Tenant or any other party
and without constituting a constructive or actual eviction, suspend or
discontinue furnishing or rendering to Tenant any property, material, labor,
utilities or other service, wherever Landlord is obligated to furnish or render
the same so long as an Event of Default exists under this Lease; or

                           (vii) With or without terminating this Lease, allow
the Demised Premises to remain unoccupied and collect rent from Tenant as it
comes due; or

                           (viii) Pursue such other remedies as are available at
law or equity.

                  (c) If this Lease shall terminate as a result of or while
there exists an Event of Default hereunder, any funds of Tenant held by Landlord
may be applied by Landlord to any damages payable by Tenant (whether provided
for herein or by law) as a result of such termination or default.

                  (d) Neither the commencement of any action or proceeding, nor
the settlement thereof, nor entry of judgment thereon shall bar Landlord from
bringing subsequent actions or proceedings from time to time, nor shall the
failure to include in any action or proceeding any sum or sums then due be a bar
to the maintenance of any subsequent actions or proceedings for the recovery of
such sum or sums so omitted.

                  (e) No agreement to accept a surrender of the Demised Premises
and no act or omission by Landlord or Landlord's agents during the Term shall
constitute an acceptance or surrender of the Demised Premises unless made in
writing and signed by Landlord. No re-entry or taking possession of the Demised
Premises by Landlord shall constitute an election by Landlord to terminate this
Lease unless a written notice

                                      -14-
<PAGE>
of such intention is given to Tenant. No provision of this Lease shall be deemed
to have been waived by either party unless such waiver is in writing and signed
by the party making such waiver. Landlord's acceptance of Base Rent or
Additional Rent in full or in part following an Event of Default hereunder shall
not be construed as a waiver of such Event of Default. No custom or practice
which may grow up between the parties in connection with the terms of this Lease
shall be construed to waive or lessen either party's right to insist upon strict
performance of the terms of this Lease, without a written notice thereof to the
other party.

                  (f) If an Event of Default shall occur, Tenant shall pay to
Landlord, on demand, all expenses incurred by Landlord as a result thereof,
including reasonable attorneys' fees, court costs and expenses actually
incurred.

         23. Landlord's Right of Entry. Tenant agrees to permit Landlord and the
authorized representatives of Landlord and of Lender to enter upon the Demised
Premises at all reasonable times for the purposes of inspecting the Demised
Premises and Tenant's compliance with this Lease, and making any necessary
repairs thereto; provided that, except in the case of an emergency, Landlord
shall give Tenant reasonable prior notice of Landlord's intended entry upon the
Demised Premises. Nothing herein shall imply any duty upon the part of Landlord
to do any work required of Tenant hereunder, and the performance thereof by
Landlord shall not constitute a waiver of Tenant's default in failing to perform
it. Landlord shall not be liable for inconvenience, annoyance, disturbance or
other damage to Tenant by reason of making such repairs or the performance of
such work in the Demised Premises or on account of bringing materials, supplies
and equipment into or through the Demised Premises during the course thereof,
and the obligations of Tenant under this Lease shall not thereby be affected;
provided, however, that Landlord shall use reasonable efforts not to disturb or
otherwise interfere with Tenant's operations in the Demised Premises in making
such repairs or performing such work. Landlord also shall have the right upon
reasonable notice to enter the Demised Premises at all reasonable times to
exhibit the Demised Premises to any prospective purchaser or mortgagee thereof,
or, during the last six (6) months of the Term, to any prospective tenant
thereof.

         24. Lender's Rights.

                  (a) For purposes of this Lease:

                           (i) "Lender" as used herein means the current holder
of a Mortgage;

                           (ii) "Mortgage" as used herein means any or all
mortgages, deeds to secure debt, deeds of trust or other instruments in the
nature thereof which may now or hereafter affect or encumber Landlord's title to
the Demised Premises, and any amendments, modifications, extensions or renewals
thereof.

                  (b) Except as hereinafter provided, this Lease and all rights
of Tenant hereunder are and shall be subject and subordinate to the lien and
security title of any Mortgage. Tenant recognizes and acknowledges the right of
Lender to foreclose or exercise the power of sale against the Demised Premises
under any Mortgage. Tenant's subordination hereunder shall be conditioned upon
entering into a subordination, nondisturbance and attornment agreement with the
Mortgagee, reasonably acceptable to Tenant and consistent with this Paragraph
24.

                  (c) Tenant shall, in confirmation of the subordination set
forth in Section 24(b) and notwithstanding the fact that such subordination is
self-operative, and no further instrument or subordination shall be necessary,
upon demand, at any time or times, execute, acknowledge, and deliver to Landlord
or to Lender any and all instruments reasonably acceptable to Tenant requested
by either of them to evidence such subordination.

                                      -15-
<PAGE>
                  (d) At any time during the Term, Lender may, by written notice
to Tenant, make this Lease superior to the lien of its Mortgage. If requested by
Lender, Tenant shall, upon demand, at any time or times, execute, acknowledge,
and deliver to Lender, any and all instruments reasonably acceptable to Tenant
that may be necessary to make this Lease superior to the lien of any Mortgage.

                  (e) If Lender (or Lender's nominee, or other purchaser at
foreclosure) shall hereafter succeed to the rights of Landlord under this Lease,
whether through possession or foreclosure action or delivery of a new lease,
Tenant shall attorn to and recognize such successor as Tenant's landlord under
this Lease without change in the terms and provisions of this Lease and shall
promptly execute and deliver any instrument that may be necessary to evidence
such attornment, provided that such successor shall not be bound by (i) any
payment of Base Rent or Additional Rent for more than one month in advance,
except prepayments in the nature of security for the performance by Tenant of
its obligations under this Lease, and then only if such prepayments have been
deposited with and are under the control of such successor, (ii) any provision
of any amendment to the Lease to which Lender has not consented, (iii) the
defaults of any prior landlord under this Lease, or (iv) any offset rights
arising out of the defaults of any prior landlord under this Lease. Upon such
attornment, this Lease shall continue in full force and effect as a direct lease
between each successor landlord and Tenant, subject to all of the terms,
covenants and conditions of this Lease.

                  (f) In the event there is a Mortgage at any time during the
Term, Landlord shall use reasonable efforts to cause the Lender to enter into a
subordination, nondisturbance and attornment agreement with Tenant reasonably
satisfactory to Tenant and consistent with this Section 24.

         25. Estoppel Certificate. Landlord and Tenant agree, at any time, and
from time to time, within fifteen (15) days after written request of the other,
to execute, acknowledge and deliver a statement in writing in recordable form to
the requesting party and/or its designee certifying that: (i) this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that the same is in full force and effect, as modified), (ii) the dates to which
Base Rent, Additional Rent and other charges have been paid, (iii) whether or
not, to the best of its knowledge, there exists any failure by the requesting
party to perform any term, covenant or condition contained in this Lease, and,
if so, specifying each such failure, (iv) (if such be the case) Tenant has
unconditionally accepted the Demised Premises and is conducting its business
therein, and (v) and as to such additional matters as may be requested by
Landlord and approved by Tenant, it being intended that any such statement
delivered pursuant hereto may be relied upon by the requesting party and by any
purchaser of title to the Demised Premises or by any mortgagee or any assignee
thereof or any party to any sale-leaseback of the Demised Premises, or the
landlord under a ground lease affecting the Demised Premises.

         26. Landlord Liability. No owner of the Demised Premises, whether or
not named herein, shall have liability hereunder after it ceases to hold title
to the Demised Premises. Neither Landlord nor any officer, director,
shareholder, partner or principal of Landlord, whether disclosed or undisclosed,
shall be under any personal liability with respect to any of the provisions of
this Lease. In the event Landlord is in breach or default with respect to
Landlord's obligations or otherwise under this Lease, Tenant shall look solely
to the equity of Landlord in the Building for the satisfaction of Tenant's
remedies. It is expressly understood and agreed that Landlord's liability under
the terms, covenants, conditions, warranties and obligations of this Lease shall
in no event exceed the loss of Landlord's equity interest in the Building.

         27. Notices. Any notice required or permitted to be given or served by
either party to this Lease shall be deemed given when made in writing, and
either (i) personally delivered, (ii) deposited with the United States Postal
Service, postage prepaid, by registered or certified mail, return receipt
requested, or (iii) delivered by licensed overnight delivery service providing
proof of delivery, properly addressed to the address set forth in Section 1(m)
(as the same may be changed by giving written notice of the aforesaid in
accordance with this Section 27). If any notice mailed is properly addressed
with appropriate postage but

                                      -16-
<PAGE>
returned for any reason, such notice shall be deemed to be effective notice and
to be given on the date of mailing.

         28. Brokers. Tenant represents and warrants to Landlord that, except
for those parties set forth in Section 1(o) (the "Brokers"), Tenant has not
engaged or had any conversations or negotiations with any broker, finder or
other third party concerning the leasing of the Demised Premises to Tenant who
would be entitled to any commission or fee based on the execution of this Lease.
Tenant hereby further represents and warrants to Landlord that Tenant is not
receiving and is not entitled to receive any rebate, payment or other
remuneration, either directly or indirectly, from the Brokers, and that it is
not otherwise sharing in or entitled to share in any commission or fee paid to
the Brokers by Landlord or any other party in connection with the execution of
this Lease, either directly or indirectly. Tenant hereby indemnifies Landlord
against and from any claims for any brokerage commissions (except those payable
to the Brokers, all of which are payable by Landlord pursuant to a separate
agreement) and all costs, expenses and liabilities in connection therewith,
including, without limitation, reasonable attorneys' fees and expenses, for any
breach of the foregoing. The foregoing indemnification shall survive the
termination of this Lease for any reason.

         29. Assignment and Subleasing.

                  (a) Tenant may not assign, mortgage, pledge, encumber or
otherwise transfer this Lease, or any interest hereunder, or sublet the Demised
Premises, in whole or in part, without on each occasion first obtaining the
prior express written consent of Landlord, which consent Landlord shall not
unreasonably withhold or delay. Permitted subtenants or assignees shall become
liable directly to Landlord for all obligations of Tenant hereunder, without,
however, relieving Tenant of any of its liability hereunder. No such assignment,
subletting, occupancy or collection shall be deemed the acceptance of the
assignee, tenant or occupant, as Tenant, or a release of Tenant from the further
performance by Tenant of Tenant's obligations under this Lease. Any assignment
or sublease consented to by Landlord shall not relieve Tenant (or its assignee)
from obtaining Landlord's consent to any subsequent assignment or sublease.

         30. Termination or Expiration.

                  (a) No termination of this Lease prior to the normal ending
thereof, by lapse of time or otherwise, shall affect Landlord's right to collect
rent for the period prior to termination thereof.

                  (b) Except as provided in Section 18 above, at the expiration
or earlier termination of the Term of this Lease, Tenant shall surrender the
Demised Premises and all improvements, alterations and additions thereto, and
keys therefor to Landlord, clean and neat, and in the same condition as at the
Lease Commencement Date, excepting normal wear and tear, condemnation and
casualty other than that required to be insured against by Tenant hereunder.

                  (c) If Tenant remains in possession of the Demised Premises
after expiration of the Term, with or without Landlord's acquiescence and
without any express agreement of the parties, Tenant shall be a
tenant-at-sufferance at 125% of the Base Rent in effect at the end of the Term
for sixty (60) days, and thereafter at one hundred fifty percent (150%) of the
Base Rent in effect at the end of the Term. Tenant shall also continue to pay
all other Additional Rent due hereunder, and there shall be no renewal of this
Lease by operation of law. In addition to the foregoing, Tenant shall be liable
for all costs incurred by Landlord in enforcing the provisions of this Section
30. No receipt of money by Landlord from Tenant after the termination of this
Lease or Tenant's right of possession of the Demised Premises shall reinstate,
continue or extend the Term or Tenant's right of possession.

         31. Intentionally Omitted.

                                      -17-
<PAGE>
         32. Late Payments. In the event any installment of rent, inclusive of
Base Rent, or Additional Rent or other sums due hereunder, if any, is not paid
within ten (10) days after the date when due, Tenant shall pay interest on the
amount past due at the lesser of (i) the maximum interest rate allowed by law or
(ii) a rate of fifteen percent (15%) per annum (the "Interest Rate") to defray
the additional expenses incurred by Landlord in processing such payment.

         33. Rules and Regulations. Tenant agrees to abide by the rules and
regulations set forth on Exhibit D attached hereto, as well as other rules and
regulations reasonably promulgated by Landlord from time to time, so long as
such rules and regulations are uniformly enforced against all tenants of
Landlord in the Project and reasonably acceptable to Tenant.

         34. Quiet Enjoyment. So long as Tenant has not committed an Event of
Default hereunder, Landlord agrees that Tenant shall have the right to quietly
use and enjoy the Demised Premises for the Term.

         35. Miscellaneous.

                  (a) The parties hereto hereby covenant and agree that Landlord
shall receive the Base Rent, Additional Rent and all other sums payable by
Tenant hereinabove provided as net income from the Demised Premises, without any
abatement (except as set forth in Section 20 and Section 21), reduction,
set-off, counterclaim, defense or deduction whatsoever, except as set forth in
Exhibit C attached hereto.

                  (b) If any clause or provision of this Lease is determined to
be illegal, invalid or unenforceable under present or future laws effective
during the Term, then and in that event, it is the intention of the parties
hereto that the remainder of this Lease shall not be affected thereby, and that
in lieu of such illegal, invalid or unenforceable clause or provision there
shall be substituted a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.

                  (c) All rights, powers, and privileges conferred hereunder
upon the parties hereto shall be cumulative, but not restrictive to those given
by law.

                  (d) TIME IS OF THE ESSENCE OF THIS LEASE.

                  (e) No failure of Landlord or Tenant to exercise any power
given Landlord or Tenant hereunder or to insist upon strict compliance by
Landlord or Tenant with its obligations hereunder, and no custom or practice of
the parties at variance with the terms hereof shall constitute a waiver of
Landlord's or Tenant's rights to demand exact compliance with the terms hereof.

                  (f) This Lease contains the entire agreement of the parties
hereto as to the subject matter of this Lease and no representations,
inducements, promises or agreements, oral or otherwise, between the parties not
embodied herein shall be of any force and effect. The masculine (or neuter)
pronoun, singular number shall include the masculine, feminine and neuter gender
and the singular and plural number.

                  (g) This contract shall create the relationship of landlord
and tenant between Landlord and Tenant; no estate shall pass out of Landlord;
Tenant has a usufruct, not subject to levy and sale, and not assignable by
Tenant except as expressly set forth herein.

                  (h) Under no circumstances shall Tenant have the right to
record this Lease or a memorandum thereof.

                                      -18-
<PAGE>
                  (i) The captions of this Lease are for convenience only and
are not a part of this Lease, and do not in any way define, limit, describe or
amplify the terms or provisions of this Lease or the scope or intent thereof.

                  (j) This Lease may be executed in multiple counterparts, each
of which shall constitute an original, but all of which taken together shall
constitute one and the same agreement.

                  (k) This Lease shall be interpreted under the laws of the
State where the Demised Premises are located.

                  (l) The parties acknowledge that this Lease is the result of
negotiations between the parties, and in construing any ambiguity hereunder no
presumption shall be made in favor of either party. No inference shall be made
from any item which has been stricken from this Lease other than the deletion of
such item.

         36. Special Stipulations. The Special Stipulations, if any, attached
hereto as Exhibit C, are incorporated herein and made a part hereof, and to the
extent of any conflict between the foregoing provisions and the Special
Stipulations, the Special Stipulations shall govern and control.

         37. Lease Date. For purposes of this Lease, the term "Lease Date" shall
mean the later date upon which this Lease is signed by Landlord and Tenant.

         38. Authority. If Tenant is not a natural person, Tenant shall cause
its corporate secretary or general partner, as applicable, to execute the
certificate attached hereto as Exhibit E. Tenant is authorized by all required
corporate or partnership action to enter into this Lease and the individual(s)
signing this Lease on behalf of Tenant are each authorized to bind Tenant to its
terms.

         39. No Offer Until Executed. The submission of this Lease to Tenant for
examination or consideration does not constitute an offer to lease the Demised
Premises and this Lease shall become effective, if at all, only upon the
execution and delivery thereof by Landlord and Tenant.

                                      -19-
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
under seals, the day and year first above written.

Date:    MAR 31, 1999                     LANDLORD:
     ---------------------

                                          NEW YORK LIFE INSURANCE COMPANY, a
                                          New York mutual insurance company

                                          By:      /s/ RON F. PETIT
                                             -----------------------------------
                                          Name:  Ron F. Petit
                                             -----------------------------------
                                          Title:    Assistant Vice President
                                             -----------------------------------

                                                       [CORPORATE SEAL]

Date:    3-26-99                          TENANT:
     ---------------------

                                          DAISYTEK, INC., a Delaware corporation

                                          By:       /s/ HARVEY ACHATZ
                                             -----------------------------------
                                          Name:  Harvey Achatz
                                             -----------------------------------
                                          Title:    VP Admin/Secretary
                                             -----------------------------------

                                          Attest:  /s/ LEE MARSHALL
                                             -----------------------------------
                                          Name:  Lee Marshall
                                             -----------------------------------
                                          Title:    Exec. Asst.
                                             -----------------------------------

                                                       [CORPORATE SEAL]

                                      -20-

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