Document:

Exhibit 10.13
                                                                   -------------

                               AGREEMENT OF LEASE

                                     BETWEEN

                                 RSK REALTY LTD

                                       AND

                       Herley Wireless Technologies, Inc.

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                                TABLE OF CONTENTS

SPACE ...........................................................1

TERM.............................................................1

RENT.............................................................3

USE OF PREMISES..................................................6

TAXES............................................................7

CONDITION OF PREMISES AND DELIVERY OF POSSESSION.................8

INITIAL CONSTRUCTION.............................................8

REPAIRS, MAINTENANCE, FLOOR LOADS AND PARKING RESTRICTION........9

TENANT'S ALTERATION.............................................12

UTILITIES.......................................................14

REQUIREMENTS OF LAW, SPRINKLERS.................................14

INSURANCE.......................................................17

DAMAGE OR DESTRUCTION...........................................19

SUBORDINATION...................................................21

INDEMNIFICATION.................................................23

EMINENT DOMAIN..................................................23

RIGHT TO SUBLET OR ASSIGN.......................................25

RIGHT TO INSPECT; POSTING SIGNS.................................28

DEFAULT.........................................................30

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REMEDIES OF LANDLORD............................................31

ATTORNEY'S FEES.................................................33

WAIVER OF REDEMPTION, COUNTERCLAIM, TRIAL BY JURY...............33

NO WAIVER.......................................................34

END OF TERM.....................................................35

BROKER..........................................................36

QUIET ENJOYMENT.................................................37

NONLIABIITY OF LANDLORD.........................................37

NO ABATEMENT....................................................38

APPLICABLE LAW AND CONSTRUCTION.................................38

CONSTRUCTION ON ADJACENT PREMISES OR BUILDINGS..................39

UTILITY EASEMENT................................................40

NOTICES.........................................................40

BINDING EFFECT OF LEASE.........................................40

UNAVOIDABLE DELAYS..............................................41

SANITARY SYSTEMS................................................41

COMMON AREA MAINTENANCE CHARGE..................................41

PARKING.........................................................42

CLEANING, RUBBISH REMOVAL.......................................42

EXHIBIT "A".....................................................45

                                       ii

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                               AGREEMENT OF LEASE

                  AGREEMENT  OF  LEASE  made as of the 1st  day of  March,  2000
between RSK Realty LTD a limited  partnership  having its principal office at 44
Midwood  Road,  Rockville  Centre,  New York 11570  (hereinafter  referred to as
"Landlord"),  and Herley Wireless  Technologies,  Inc., a corporation having its
principal office at 425 Smith Street,  Farmingdale,  NY (hereinafter referred to
as "Tenant").

                                      SPACE

         1.  Landlord  hereby  leases to Tenant  and  Tenant  hereby  hires from
Landlord the real property and the building and other improvements thereon known
as and  located  at 425 Smith  Street,  Farmingdale,  New York 11735 as shown on
Exhibit "A" annexed hereto (such real property,  building and improvements being
hereinafter  referred to as the "Premises"  and such building being  hereinafter
referred  to as the  "Building").  The  parties  stipulate  and  agree  that the
Premises contains 13,602 square feet in a Building containing 68,282 square feet
which  constitutes  20.00  percent  of  the  areas  of the  Building  ("Tenant's
Proportionate Share").

              The  Premises  are let  subject  to  covenants,  restrictions  and
easements of record,  governmental laws, rules,  regulations and orders, and the
reservation  by Landlord of all air rights above,  around and about the Premises
and all rights to increase the sizes of surrounding  buildings  based on the air
rights appurtenant to the Premises, and, if and when permitted by any present or
future zoning laws, ordinances, orders or regulations.

                                      TERM

         2. (a) The term  ("Term"  or  "Demised  Term" or  "term") of this lease
shall  commence  on the  date of this  lease  (the  "Term  Commencement  Date").
Tenant's  obligation  to pay Rent (as  defined in Article 3) shall  commence  on
March.  1, 2000.  The Term of this lease  shall  expire on the day  (hereinafter
referred to as the "Expiration Date") which is ten (10) years after (i) the Rent
Commencement  Date, if such date is the first day of a calendar  month,  or (ii)
the first day of the first full calendar month  following the Rent  Commencement
Date, if such date is not the first day of a calendar month.

         (b) Tenant  waives any right to rescind this lease under  Section 223-a
of the New York Real  Property Law or any  successor  statute of similar  import
then in force and  further  waives the right to recover  any  damages  which may
result from Landlord's failure to deliver possession of the Premises by the Rent
Commencement Date.

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         (c) Upon the request of Landlord,  Tenant  agrees to execute a writing,
prepared and executed by  Landlord,  setting  forth the actual date on which the
Term Commencement  Date, the Rent Commencement Date and the Expiration Date took
place or will take place.  Notwithstanding  anything to the  contrary  contained
herein,  such  writing  shall be  deemed  a part of this  lease  and  conclusive
evidence of such dates.

         (d) A "Lease Year" shall  comprise a period of twelve (12)  consecutive
calendar  months.  The first Lease Year shall commence on the Rent  Commencement
Date but,  notwithstanding  the first  sentence of this  paragraph,  if the Rent
Commencement  Date is not the first day of a month,  then the first  Lease  Year
shall include the additional  period from the Rent  Commencement Date to the end
of the  month in  which  the Rent  Commencement  Date  shall  take  place.  Each
succeeding  Lease Year shall end on the anniversary  date of the last day of the
preceding Lease Year. For example,  if the Rent  Commencement Date is January 1,
1999,  the first  Lease Year would  begin on January 1, 1999 and end on December
31,1999 and each succeeding  Lease Year would end on December 31st. If, however,
the Rent  Commencement Date is January 2, 1999, the first Lease Year would begin
on January  2, 1999 and end on January  31,  2000,  the second  Lease Year would
begin on February 1, 2000, and each  succeeding  Lease Year would end on January
31st.

                                      RENT

         3. (a) Tenant covenants to pay to Landlord at its principal  office, or
at such place as Landlord shall from time to time direct in writing, the minimum
annual  rent set  forth  below,  and the  additional  rent  required  to be paid
pursuant  to the  terms of this  lease.  Minimum  annual  rent  and  such  other
additional  rent  and  charges  which  Tenant  shall  be  required  to  pay  are
hereinafter  sometimes  referred to as "Rent".  Minimum  annual rent shall be as
follows:

         During  the  first  Lease  Year,  the  minimum  annual  rent  shall  be
         $91,813.50 payable in equal monthly installments of $7,651.13.

         During  the  second  Lease  Year,  the  minimum  annual  rent  shall be
         $95,486.16 payable in equal monthly installments of $7,957.18

         During  the  third  Lease  Year,  the  minimum  annual  rend  shall  be
         $99,305.50 payable in equal monthly installments of $8,275.46.

         During  the  fourth  Lease  Year,  the  minimum  annual  rent  shall be
         $103,277.74 payable in equal monthly installments of $8,606.48.

         During  the  fifth  Lease  Year,  the   minimum  annual  rent  shall be
         $107,408.84

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         payable in equal monthly installments of $8,950.74.

         During  the  sixth  Lease  Year,  the  minimum  annual  rent  shall  be
         $110,631.08 payable in equal monthly installments of $9,219.26.

         During  the  seventh  Lease  Year,  the  minimum  annual  rent shall be
         $113,950.05 payable in equal monthly installments of $9,495.84.

         During  the  eighth  Lease  Year,  the  minimum  annual  rent  shall be
         $117,938.31 payable in equal monthly installments of $9,828.19.

         During  the  ninth  Lease  Year,  the  minimum  annual  rent  shall  be
         $122,066.14 payable in equal monthly installments of $10,172.18

         During  the  tenth  Lease  Year,  the  minimum  annual  rent  shall  be
         $126,338.40 payable in equal monthly installments of $10,528.20.

                  (b) Tenant shall pay the minimum  annual rent in equal monthly
installments  in advance on the first day of each calendar month included in the
term, except that Tenant shall pay the first month's rent upon execution of this
lease.

                  (c) All Rent  shall  be paid in  lawful  money  of the  United
States which shall be legal tender in payment of all debts and dues,  public and
private,  at the time of payment,  at the address of Landlord  set forth in this
lease or at such other place as Landlord  in writing may  designate  without any
set-off or deduction whatsoever and without any prior demand therefor.

                  (d) Unless  another time shall be herein  expressly  provided,
any additional rent shall be due and payable on demand or together with the next
succeeding  installment of minimum annual rent, whichever shall first occur; and
Landlord shall have the same remedies for failure to pay the additional  rent as
for a non-payment of minimum annual rent.

                  (e)  For any  portion  of a  calendar  month  included  at the
beginning or end of the term, Tenant shall pay 1/30th of the closest  applicable
monthly installment of minimum annual rent (specifically  excluding month one of
the first  Lease Year and months  eleven and twelve of the tenth Lease Year) for
each day of such portion, payable in advance at the beginning of such portion.

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                  (f) In any case in which the minimum annual rent of additional
rent is not paid within five (5) days of the day when same is due,  Tenant shall
pay a late charge equal to 8-1/2 cents for each dollar so due;  and, in addition
thereto,  the sum of $100.00 for the purpose of defraying  expenses  incident to
the handling of such  delinquent  account.  Tenant  further agrees that the late
charge  imposed  herein  is  fair  and  reasonable,   complies  with  all  laws,
regulations  and statutes,  and  constitutes an agreement  between  Landlord and
Tenant as to the estimated  compensation for costs and  administrative  expenses
incurred  by  Landlord  due to the late  payment of rent to  Landlord by Tenant.
Tenant  further agrees that the late charge  assessed  pursuant to this lease is
not  interest,  and the late charge  assessed  does not  constitute  a lender or
borrower/creditor relationship between Landlord and Tenant.

                  (g) If Tenant shall default in making any payment  required to
be made by Tenant or in  performing  any  obligation  of Tenant under this lease
which shall  require the  expenditure  of money,  Landlord may, but shall not be
obligated to, make such payment on behalf of Tenant or expend such sum as may be
necessary  to perform or fulfill such  obligation.  Any sums so paid by Landlord
shall be deemed  Rent and shall be due and  payable to  Landlord  at the time of
payment of the next installment of minimum annual rent.

                                 USE OF PREMISES

         4. (a)  Tenant  shall use and  occupy  the  Premises  solely  for light
manufacturing   of  microwave   components  and  products,   and  executive  and
administrative  offices related  thereto and for no other purpose.  Tenant shall
not use or permit the use of the Premises  contrary to any  applicable  statute,
ordinance or regulation or in violation of the  Certificate  of Occupancy of the
Building, or in a manner which would cause structural injury to the Building.

                  (b) Tenant acknowledges that the value of the Premises and the
reputation  of Landlord  will be seriously  injured if the Premises are used for
any obscene or pornographic  purposes or if any obscene or pornographic material
is permitted on the Premises.  Tenant further agrees that Tenant will not permit
any such uses by Tenant or a  sublessee  of the  Premises or an assignee of this
lease.  This Paragraph shall directly bind any successors in interest to Tenant.
Tenant agrees that,  if at any time,  Tenant  violates any of the  provisions of
this  Paragraph,  such  violation  shall be  deemed a  breach  of a  substantial
obligation of the terms of this lease and  objectionable  conduct.  Pornographic
material is defined for  purposes of this  Paragraph as any written or pictorial
matter with  prurient  appeal or any objects or  instruments  that are primarily
concerned with lewd or prurient  sexual  activity.  Obscene  material is defined
here as it is in Penal Law ss.235.00.

                                      TAXES

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         5.       (a)      During the term  of  this lease, Tenant covenants and
agrees to  pay, in  the manner set forth in this Article, all Real Estate Taxes,
as additional rent.

                  (b) The term "Real  Estate  Taxes" shall be deemed to mean all
taxes and  assessments,  special or otherwise,  assessed upon or with respect to
the  ownership  and all other  taxable  interests  in the land and  improvements
thereon of which the Demised  Premises  are part,  imposed by Federal,  State or
local governmental  authority or any other taxing authority having  jurisdiction
over  Landlord's  tax lot or lots,  but shall not  include  income,  intangible,
franchise,  capital stock,  estate in inheritance taxes, or taxes based upon the
receipt of rentals  (unless the same shall be in lieu of "Real Estate  Taxes" as
herein defined by whatever name the tax may be designated).

                  (c)  Commencing on the Rent  Commencement  Date and continuing
throughout the term of this lease,  Tenant shall pay to Landlord the Real Estate
Taxes  for each  tax year  occurring  in whole or part  during  the term of this
lease.  Any amount due to Landlord under the provisions of this Article shall be
paid  within five (5) days after  receipt by Tenant from  Landlord of an invoice
therefor. Landlord shall furnish Tenant with evidence of the amount of such Real
Estate Taxes. A copy of the tax bill shall be sufficient  evidence of the amount
of Real Estate Taxes imposed upon the  Premises.  Tenant shall also pay when due
any occupancy  taxes arising under or in connection with this lease. In addition
to the  foregoing,  Tenant  shall also be  responsible  for any increase in Real
Estate Taxes resulting from Tenant's  improvements  performed by or on behalf of
Tenant.
                  (d)  Landlord's  failure  during  the  term of this  lease  to
prepare and deliver any of the  foregoing  invoices,  tax  statements,  or other
demand for payment of Real Estate Taxes or  Landlord's  failure to make a demand
for any other item of additional  rent due hereunder  shall not in any way waive
or cause  Landlord  to forfeit  or  surrender  its rights to collect  any of the
foregoing  items of additional rent which may have become due during the term of
this lease.

                  (e) If any  mortgagee of the Premises  requires that funds for
the payment of Real Estate taxes be escrowed with such  mortgagee,  Tenant shall
pay to  such  mortgagee,  in a  timely  manner,  the  amounts  required  by such
mortgagee to be escrowed for the payment of Real Estate Taxes.

                  (f) Tenant  shall pay to  Landlord  on demand any Real  Estate
Taxes  relating  to the term of this  lease  which  may  have  been  prepaid  by
Landlord. With respect to any period at the expiration of the term of this lease
which shall  constitute a partial tax year,  Tenant shall be responsible for the
Real  Estate  Taxes  allocable  to such  partial  tax  year and  Landlord's  tax
statement shall apportion the amount of the additional rental due hereunder. The
obligation of Tenant in respect of such  additional rent applicable for the last
year of the term of this lease or part thereof shall  survive the  expiration of
the term of this lease.

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                CONDITION OF PREMISES AND DELIVERY OF POSSESSION

         6. (a) Except as otherwise  specifically set forth in Article 7 hereof,
Tenant agrees to accept the Premises in its "as is"  condition  and  understands
and agrees that Landlord  shall not be required to perform any work,  supply any
materials or incur any expense to prepare the Premises for Tenant's occupancy.

                  (b) If Landlord  shall be unable to deliver  possession of the
Premises by the Rent  Commencement  Date,  Landlord  shall not be subject to any
liability  for such  failure to give  possession  and Tenant  hereby  waives the
provisions  of Section  223-a of the Real  Property Law of the State of New York
and any other law of like import now or hereafter enacted.

                              INITIAL CONSTRUCTION

         7. The heating,  ventilating and air conditioning systems servicing the
Premises shall be in good working order as of the Rent Commencement Date. Tenant
shall, at Tenant's sole cost and expense,  perform the work necessary to prepare
the  Premises  for Tenant's  occupancy  in  accordance  with and pursuant to the
provisions  of  Article 9 herein.  Upon  completion  of the  foregoing  work and
Landlord's satisfactory inspection of same, Landlord shall provide Tenant with a
work  allowance  of Twenty  Seven  Thousand  ($27,000.00)  Dollars to be used by
Tenant in  connection  with the work  necessary  to  prepare  the  Premises  for
Tenant's occupancy.

           REPAIRS, MAINTENANCE, FLOOR LOADS AND PARKING RESTRICTUION

         8. (a) Tenant shall at all times keep and maintain the Premises in good
order,  condition and repair,  and shall make all  nonstructural  repairs to the
Premises,  including,  without  limiting the  generality of the  foregoing,  (i)
maintenance and repair of the electrical,  plumbing,  heating, air conditioning,
ventilation  and all other  mechanical  systems  servicing  the  Premises;  (ii)
regularly-scheduled  cleaning and  maintenance  of the interior of the Premises;
(iii) the repair and  maintenance  of all plate  glass;  (iv) all common  areas,
landscaping,  sidewalks,  driveways and parking areas at the Building;  and (vi)
keeping the exterior  Premises  clean and free of debris,  snow and ice.  Tenant
shall  obtain and keep in full force and effect for the benefit of Landlord  and
Tenant, with a responsible company doing business in Nassau or Suffolk County, a
service,   repair  and  maintenance   contract  with  respect  to  the  heating,
ventilating  and  air  conditioning  systems  of the  Premises.  A copy  of such
contract and all renewals thereof shall,  upon issuance and thereafter not later
than ten (10) days prior to expiration,  be furnished to Landlord  together with
evidence  of  payment.  If  Tenant  fails to make any  repairs  or  replacements
required to be made by Tenant,  Landlord may, without  obligation,  perform same
for the account of Tenant at Tenant's  expense and the cost thereof shall be due
and  payable  by  Tenant to  Landlord  as  additional  rent.  In the event  that
structural  repairs,  replacements  or  alterations  or  any  other  repairs  or
replacements  included  under  Article 8 (b)  hereof  shall be  necessitated  or
occasioned, in whole or in part, by

<PAGE>

the acts,  omissions,  or negligence of Tenant or any person claiming through or
under Tenant or any of their servants, employees,  contractors, agents, visitors
or  licensees,  or by the use or  occupancy or manner of use or occupancy of the
Premises  by Tenant,  or any such  person,  Landlord  shall  make such  repairs,
replacements or alterations at Tenant's sole cost and expense.
         (b) Landlord shall be  responsible  for  maintenance  and repair of the
structural  elements of the Building,  excluding the roof, which Tenant shall be
responsible to repair and maintain.  In the event that maintenance and repair of
the  structural  elements  of the  Building  are caused or  necessitated  by the
negligence  or  intentional  acts of Tenant,  its agents,  servants,  employees,
licensees or invitees, Landlord shall perform such repairs at Tenant's sole cost
and expense.  Landlord shall not be required to commence any repairs required to
be performed by it until after notice from Tenant that same are necessary, which
notice,  except in the case of  emergency,  shall be in writing and shall permit
Landlord  ten (10) days in which to commence  such  repair.  When  necessary  by
reason  of  accident  or other  casualty  occurring  in the  Building  or at the
Premises or in order to make any necessary repairs,  alterations or improvements
in or relating to the Building or the Premises or other  portions of  Landlord's
property, Landlord reserves the right to interrupt,  temporarily, and on written
notice  to  Tenant  the  supply  of  utility   service  until  said  repairs  or
improvements  shall have been  completed.  There shall be no  abatement  in Rent
because of any such interruption.
         (c) Tenant shall not place a load upon any floor of the Premises  which
exceeds  the floor load per square  foot area which such floor was  designed  to
carry. If tenant shall desire a floor load in excess of that for which the floor
of any portion of the Premises is designed, upon submission to Landlord of plans
showing  the  location  of and the  desired  floor  live  load  for the  area in
question,  Landlord may  strengthen  and  reinforce  the same,  at Tenant's sole
expense, so as to carry the live load desired.  Business machines and mechanical
equipment used by Tenant which cause  vibration or noise that may be transmitted
to or through the  Building  shall be placed and  maintained  by Tenant,  at its
expense,  in  settings  of cork,  rubber or  spring-type  vibration  eliminators
sufficient to eliminate such vibration or noise.
         (d)      Tenant  shall comply  with  the  following  restrictions  with
respect to the Premises:
                (i)  Tenant  shall store  all  trash  and  refuse in appropriate
sealed and covered containers  either  within  the  Premises  or in a  concealed
location  at the  rear of the Building and  shall attend to the regular disposal
and removal thereof.
                (ii) Tenant shall receive all deliveries, load and unload goods,
merchandise,  supplies, fixtures, equipment,  furniture and rubbish only through
proper  service doors and loading  docks  serving the Building,  but in no event
through the main front entrance thereof.
                (iii)   Tenant   shall  not  change  the   exterior   colors  or
architectural  treatment of the Premises or make any  alterations  or changes to
the exterior of the Building or to the grading,  planting or  landscaping of the
exterior of the  Building  without  the  consent of Landlord  which shall not be
unreasonably withheld.
                (iv) Tenant shall not place or install or suffer to be placed or
installed  any sign upon the Building or the Premises  unless such sign shall be
approved  by  Landlord  and  shall be  harmonious  with the  signs of  adjoining
properties.  In any event, Tenant shall not place or cause to be placed upon the
Building any

<PAGE>

awning, canopy, banner, flag, pennant, aerial, antenna or the like. All signs or
lettering  on or  about  the  Premises  or the  Building  shall  be neat  and of
reasonable size. The following are strictly prohibited:
                     (x) Paper signs and stickers;
                     (y) Moving, flickering or flashing lights;
                     (z) Exposed neon or florescent tubes or other exposed light
                         sources.

                (v) Tenant  shall not permit the  parking of any  vehicle on the
streets and  roadways  adjoining  or  surrounding  the Building and Tenant shall
require its employees,  customers, invitees, licensees and visitors to park only
in the parking areas  serving the Premises.  Tenant agrees that any violators of
this parking restriction may be towed away by Landlord at Tenant's sole cost and
expense and Tenant shall  indemnify,  defend and hold Landlord  harmless against
any claims or  liabilities  (including  Landlord's  attorneys'  fees) arising by
reason of such towing by Landlord.
                (vi) Tenant shall not  manufacture  or store any item which,  in
the opinion of Landlord, causes offensive odors, irritations,  or any discomfort
to occupants of the Building of which the Premises form a part.

                               TENANT'S ALTERATION

         9. Tenant shall not make, without Landlord's prior written consent, any
installations,  repairs,  alterations,  improvements  or  changes  in or to  the
Premises.  All  improvements,  alterations  and  replacements,  and all building
service equipment made or installed by or on behalf of Tenant, shall immediately
upon completion or  installation  thereof be and become the property of Landlord
(except for purposes of sales tax which shall remain  Tenant's  obligation)  and
shall remain upon the Premises at the  expiration or sooner  termination of this
lease.  Notwithstanding the foregoing,  all trade fixtures,  movable partitions,
furniture  and  furnishings  installed at the expense of Tenant shall remain the
property of Tenant and Tenant may remove the same or any part thereof during the
term  of  this  lease,  or if the  term  shall  end  prior  to the  date  herein
specifically  fixed  for  such  termination,   then  within  a  reasonable  time
thereafter,  but Tenant shall, at its expense,  repair any and all damage to the
Premises  resulting from or caused by such removal.  Title to any property which
Tenant elects not to remove or which is abandoned by Tenant shall, at the end of
the term,  vest in Landlord.  Tenant shall not make any repairs,  alterations or
improvements  until it shall have first  submitted  to  Landlord  all  drawings,
plans,  layouts and specifications for such work (plans and specifications") and
Landlord shall have approved same. All such work to be performed by Tenant shall
be in accordance with the approved plans and  specifications  and Landlord shall
have the right at any time  during  the  pendency  of such work to  inspect  the
Premises and the manner of construction.  All plans and specifications  shall be
compatible with the Landlord's  building plans; comply with all applicable laws,
including  without  limitation,  the Americans with Disabilities Act of 1990, as
amended,  and the  rules,  regulations,  requirements  and orders of any and all
government agencies,  departments or bureaus having  jurisdiction;  and be fully
detailed, including

<PAGE>

locations and complete dimensions.  Tenant shall, at Tenant's expense, (i) cause
all plans and  specifications to be filed with the governmental  agencies having
jurisdiction  thereover,  (ii) obtain when necessary all  governmental  permits,
licenses  and  authorizations  required  for the  work to be done in  connection
therewith,  and (iii)  obtain all  necessary  certificates  of  occupancy,  both
temporary  and  permanent.  Landlord  shall  execute  such  documents  as may be
reasonably  required  in  connection  with  the  foregoing  and  Landlord  shall
otherwise cooperate with Tenant in connection with obtaining the foregoing,  but
without any expense to Landlord.  No work shall  commence in the Premises  until
(i) Tenant has procured all necessary  permits therefor and has delivered copies
of same to Landlord,  (ii) Tenant has procured a paid  builder's  risk insurance
policy with a combined single limit of Three Million ($3,000,000.00) Dollars for
personal  injury,  death  and  property  damage  claims  arising  out of any one
occurrence  naming  Landlord  as an  additional  insured  and has  delivered  to
Landlord a certificate of insurance  evidencing such policy, and (iii) Tenant or
its contractor has procured a worker's  compensation  insurance  policy covering
the  activities  of all persons  working at the  Premises  and has  delivered to
Landlord a certificate of insurance  evidencing such policy.  Tenant may use any
licensed architect or engineer,  reasonably approved by Landlord, to prepare its
plans and specifications to file for permits. However, all such plans and permit
applications  shall be subject to review,  revision  and approval by Landlord or
its architect.  In the event of any such repairs,  alterations or  improvements,
Landlord  shall  have the option to require  Tenant to  deliver to  Landlord  at
Tenant's  cost and expense a bond  satisfactory  to Landlord in the sum equal to
the cost of the  work.  Any  mechanic's  liens  filed at any  time  against  the
Premises,  for work claimed to have been  performed or for materials  claimed to
have been furnished to Tenant or Tenants contractors or subcontractors, shall be
discharged  by Tenant  within ten (10) days after filing by bonding,  payment or
otherwise, and upon Tenant's failure to timely discharge any such lien, Landlord
may  discharge  same  through  payment,  bonding or  otherwise  and Tenant shall
reimburse  Landlord,  upon  demand,  for  all  costs  incurred  by  Landlord  in
connection therewith.

                                    UTILITIES

         10. (a) Tenant shall provide (through a provider selected by Landlord),
at its own expense,  fuel,  heat,  water,  electricity  and all other  utilities
required in connection with its use of the Premises. Landlord shall be obligated
only to make available to Tenant the utility lines and facilities  servicing the
Premises in working order at the commencement of the term of this lease.
         (b)  Tenant  shall be  responsible  for all  deposits  required  by the
respective  utilities for service.  Tenant shall comply with all requirements of
the utilities supplying said service.  Landlord shall have no responsibility for
the installation of telephone or data service.

                         REQUIREMENTS OF LAW, SPRINKLERS

<PAGE>

11. (a) Tenant shall promptly execute and comply with all statutes,  ordinances,
rules,  orders,  regulations  and  requirements  (including  those which require
structural  alterations) of the federal,  state, county and local government and
of any and all their departments and bureaus applicable to the Premises, for the
correction,  prevention or abatement of nuisances or other  grievances in, upon,
or connected with the Premises  during the term; and shall also promptly  comply
with and execute all rules, orders and regulations of the New York Board of Fire
Underwriters  for the  prevention of fires at the Tenant's own cost and expense.
In the event Tenant is required by the  provisions  of this  paragraph to make a
structural  alteration,  Landlord shall perform such alteration at Tenant's sole
cost and expense.
          b)  Tenant  shall  keep  and  maintain  any  sprinkler  system  now or
hereafter installed in the Premises in good repair and working condition, and if
the New York Board of Fire Underwriters or the New York Fire Insurance  Exchange
or  any  bureau,   department  or  official  of  any  federal,  state  or  local
governmental  or  quasi-governmental  authority  shall  require or recommend any
changes, modifications or alterations, including, without limitation, additional
sprinkler  heads or other  equipment,  to be made or  supplied  by reason of the
Tenant's  business  or the  location of  partitions,  trade  fixtures,  or other
contents  of the  Premises,  or if  such  changes,  modifications,  alterations,
additional  sprinkler  heads or other equipment in the Premises are 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 said Exchange or by any
fire  insurance  company  with  respect to the  Building,  the  Premises  or any
adjoining or nearby  buildings or  improvements,  Tenant shall at Tenant's  sole
cost  and  expense,  promptly  make  and  supply  such  changes,  modifications,
alterations, additional sprinkler heads or other equipment.
         (c) If by reason of Tenant's use and  occupancy or  abandonment  of the
Premises,  or if by reason of the  improper or careless  conduct of any business
upon or use of the Premises,  the fire insurance rates for the Building,  or any
other tenants or occupants of the Building or any adjoining or nearby  buildings
or improvements (including contents and equipment coverage) shall at any time be
higher  than  it  otherwise  would  be,  Tenant  shall  reimburse  Landlord,  as
additional rent hereunder,  for that part of all fire insurance premiums charged
to such other owners,  tenants or occupants  because of the improper or careless
conduct  of any  business  upon or use of the  Premises,  and  shall  make  such
reimbursement  upon the first  day of the month  following  billing  thereof  by
Landlord.  In any  action  or  proceeding  based  upon  or  arising  out of this
provision,  a  schedule  or  "make  up" of rates of the  Building  or any  other
affected insurance coverage  purporting to have been issued by the New York Fire
Insurance  Exchange,  or other body making fire insurance rates,  shall be prima
facie evidence of the facts therein stated.
         (d)  Tenant  shall  keep or  cause  the  Premises  to be  kept  free of
Hazardous Materials (hereafter defined). Without limiting the foregoing,  Tenant
shall not cause or permit  the  Premises  to be used to  generate,  manufacture,
refine, transport,  treat, store, handle, dispose,  transfer, produce or process
Hazardous Materials excepts in compliance with all applicable federal, state and
local laws or regulations,  nor shall Tenant cause or permit, as a result of any
intentional  or  unintentional  act or  omission  on the part of  Tenant  or any
subtenant,

<PAGE>

a release of Hazardous  Materials onto the Premises or onto any other  property.
Tenant  shall  comply  with and ensure  compliance  by all  subtenants  with all
applicable  federal,  state and local laws,  ordinances,  rules and  regulations
whenever and by whomever triggered,  and shall obtain and comply with and ensure
that all subtenants obtain and comply with, any and all approvals, registrations
or permits  required  thereunder.  Tenant  shall (A)  conduct and  complete  all
investigations,  studies,  samplings, and testing, and all remedial removal, and
other  actions  necessary to clean up and remove all  Hazardous  Materials,  on,
from, or affecting the Premises (i) in accordance  with all applicable  federal,
state and local laws, ordinances,  rules, regulations, and policies, (ii) to the
satisfaction of Landlord, and (iii) in accordance with the orders and directives
of all  federal,  state,  and local  governmental  authorities,  and (B) defend,
indemnify,  and hold harmless Landlord,  its employees,  agents,  officers,  and
directors from and against any claims, demands,  penalties,  fines, liabilities,
settlements,  damages,  costs, or expenses of whatever kind or nature,  known or
unknown, contingent or otherwise,  arising out of, or in any way related to, (i)
the presence, disposal, release or threatened release of any Hazardous Materials
which are on,  from,  or  affecting  the  soil,  water,  vegetation,  buildings,
personal  property,  persons,  animals,  otherwise;  (ii)  any  personal  injury
(including  wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Materials; (iii) any lawsuit brought or threatened,
settlement  reached,  or government order relating to such Hazardous  Materials;
and/or (iv) any violation of laws, orders, regulations, requirements, or demands
of government authorities, or any policies or requirements of Landlord which are
based upon or in any way related to such Hazardous Materials, including, without
limitation,  attorney and consultant  fees,  investigation  and laboratory fees,
court costs, and litigation expenses. In the event this lease is terminated,  or
Tenant is  dispossessed,  Tenant shall  deliver the Premises to Landlord free of
any and all Hazardous  Materials so that the  conditions  of the Premises  shall
conform with all applicable Federal, State and Local laws, ordinances,  rules or
regulations affecting the Premises.  For purposes of this paragraph,  "Hazardous
Materials"  includes,  without  limit,  any  flammable  explosives,  radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic substances,
or  related  materials  defined  in the  Comprehensive  Environmental  Response,
Compensation,  and Liability Act of 1980, as amended (42 U. S.C.  Sections 9601,
et seq.), the Hazardous  Materials  Transportation  Act, as amended (49 U. S. C.
Sections 1801 et seq.),  the Resource  Conservation and Recovery Act, as amended
(42 U. S. C.  Sections  9601,  et  seq.),  and in the  regulations  adopted  and
publications  promulgated pursuant thereto, or any other federal, state or local
environmental law, ordinance, rule, or regulation.

                                    INSURANCE

         12. (a) Tenant  shall  obtain and keep in full force and effect  during
the Term,  at its own cost and  expense,  (i) General  Comprehensive  Commercial
Liability  Insurance,  such  insurance to afford  protection in an amount of not
less than Three Million  $3,000,000)  Dollars combined single limit coverage for
injury, death and property damage arising out of any one occurrence,  protecting
Tenant as insured and Landlord as additional  insured against any and all claims
for personal injury, death or property damage, such policy or

<PAGE>

policies to cover the Premises,  inclusive of sidewalks and parking  facilities;
and (ii) Fire and Extended  Coverage  Insurance on Tenant's  property,  insuring
against damage by fire, and such other risks and hazards as are insurable  under
present  and  future  standard  forms of fire and  extended  coverage  insurance
policies, to Tenant's property for the full insurable value thereof,  protecting
Tenant as insured and Landlord as additional insured.
         (b) Said insurance is to be written in form and substance  satisfactory
to Landlord  by a good and solvent  insurance  company of  recognized  standing,
admitted  to do business  in the State of New York,  which  shall be  reasonably
satisfactory  to  Landlord.  Tenant  shall  procure,  maintain  and  place  such
insurance  and pay all premiums  and charges  therefor and upon failure to do so
Landlord  may, but shall not be obligated to,  procure,  maintain and place such
insurance or make such payments,  and in such event the Tenant agrees to pay the
amount thereof,  plus interest at the maximum rate permitted by law, to Landlord
on demand and said sum shall be in each instance  collectible as additional rent
on the first day of the month following the date of payment by Landlord.  Tenant
shall  cause to be included in all such  insurance  policies a provision  to the
effect that the same will be non-cancelable except upon twenty (20) days written
notice to  landlord.  At least ten (10) days prior to Tenant's  occupancy of the
Premises,  the original insurance policies or appropriate  certificates shall be
deposited with landlord.  Any renewals,  replacements  or  endorsements  thereto
shall also be deposited with Landlord to the end that said insurance shall be in
full force and effect during the Term.

         (c) Each party agrees to use its best efforts to include in each of its
insurance policies (insuring the Building and Landlord's  property , in the case
of Landlord,  and insuring  Tenant's  property,  in the case of Tenant,  against
loss, damage or destruction by fire or casualty) a waiver of the insurer's right
of subrogation against the other party, or if such waiver should be unobtainable
or  unenforceable  (i) an  express  agreement  that  such  policy  shall  not be
invalidated if the insured  waives or has waived before the casualty,  the right
of recovery against any party  responsible for a casualty covered by the policy,
or (ii) any other form of  permission  for the  release of the other  party,  or
(iii) the inclusion of the other party as an additional insured, but not a party
to whom any loss shall be payable. If such waiver, agreement or permission shall
not be, or shall cease to be,  obtainable  without  additional charge or at all,
the  insured  party  shall so notify the other  party  promptly  after  learning
thereof.  In such case,  if the other  party  shall  agree in writing to pay the
insurer's additional charge therefor, such waiver, agreement or permission shall
be included in the  policy,  or the other party shall be named as an  additional
insured in the policy,  but not a party to whom any loss shall be payable.  Each
such policy which shall so name a party hereto as an  additional  insured  shall
contain,  if  obtainable,  agreements by the insurer that the policy will not be
cancelled  without at least twenty (20) days prior  notice to both  insureds and
that the act or omission of one insured will not invalidate the policy as to the
other insured.
         (d) As long as Landlord's fire insurance policies then in force include
the waiver of  subrogation  or  agreement  or  permission  to release  liability
referred  to in  Subsection  (c) or name the  tenant as an  additional  insured,
Landlord  hereby waives (i) any obligation on the part of Tenant to make repairs
to the Premises  necessitated or occasioned by fire or other casualty that is an
insured risk under such policies, and (ii) any right

<PAGE>

of recovery against Tenant,  any other permitted  occupant of the Premises,  and
any of their servants, employees, agents or contractors, for any loss occasioned
by fire or other  casualty that is an insured risk under such  policies.  In the
event that at anytime  Landlord's fire insurance carriers shall not include such
or similar  provisions in Landlord's  fire insurance  policies,  the waivers set
forth in the foregoing sentence shall be deemed of no further force or effect.
         (e) As long as Tenant's fire  insurance  policies then in force include
the waiver or  subrogation  or  agreement  or  permission  to release  liability
referred to in Subsection  (c), or name the Landlord as an  additional  insured,
Tenant hereby waives (and agrees to cause any other  permitted  occupants of the
Premises to execute and deliver to Landlord  written  instruments  waiving)  any
right of  recovery  against  Landlord,  any other  tenants or  occupants  of the
Building, and any servants,  employees,  agents or contractors of Landlord or of
any such other tenants or occupants  for any;  loss  occasioned by fire or other
casualty which is an insured risk under such policies.  In the event that at any
time  Tenant's  fire  insurance  carriers  shall  not  include  such or  similar
provisions  in Tenant's  fire  insurance  policies,  the waiver set forth in the
foregoing sentence shall, upon notice given by Tenant to Landlord,  be deemed of
no further  force or effect with respect to any insured  risks under such policy
from and after the giving of such notice.  During any period while the foregoing
waiver  of right of  recovery  is in  effect,  Tenant,  or any  other  permitted
occupant of the Premises,  as the case may be, shall look solely to the proceeds
of such policies to compensate  Tenant or such other permitted  occupant for any
loss  occasioned by fire or other  casualty  which is an insured risk under such
policies.
         (f) Tenant  shall  reimburse  Landlord,  as  additional  rent,  for one
hundred  (100%)  percent of all premiums  payable by Landlord for fire insurance
upon the Building,  including  extended  coverage,  rental value,  vandalism and
malicious  mischief,  to be maintained upon the Building during the Term of this
lease.  The aforesaid  charge shall be due and payable to Landlord as additional
rent on the Rent date next  following the giving of notice to Tenant by Landlord
of the amount due for such premium.  The parties shall apportion such premium at
the commencement and termination of the lease Term.

                              DAMAGE OR DESTRUCTION

         13. (a) If the Building or the  Premises or any part  thereof  shall be
damaged by fire or other  casualty  and Tenant gives  prompt  notice  thereof to
Landlord, Landlord shall proceed with reasonable diligence to repair or cause to
be repaired such damage.  The minimum  annual rent shall be abated to the extent
that the Premises  shall have been rendered  untenantable,  such abatement to be
from the date of such damage or  destruction  to the date the Premises  shall be
substantially  repaired or rebuilt,  in proportion which the area of the part of
the Premises so rendered untenantable bears to the total area of the Premises.
         (b) If the  Premises  shall  be  totally  damaged  or  rendered  wholly
untenantable  by fire or other  casualty,  and Landlord has not terminated  this
lease  pursuant to Subsection  (c) and Landlord has not completed  making of the
required  repairs and  restored and rebuilt the  Premises  an/or access  thereto
within twelve (12)

<PAGE>

months from the date of such damage or  destruction,  and such  additional  time
after  such date (but in no event to exceed six (6)  months) as shall  equal the
aggregate  period  Landlord  may have been  delayed  in doing so by  unavoidable
delays or adjustment  of  insurance,  Tenant may serve notice on Landlord of its
intention to terminate  this lease,  and, if within thirty (30) days  thereafter
Landlord  shall not have  completed  the  making  of the  required  repairs  and
restored and rebuilt the Premises,  this lease shall terminate on the expiration
of such thirty (30) day period as if such  termination  date were the Expiration
Date, and the Rent shall be  apportioned as of such date any prepaid  portion of
Rent for any period after such date shall be refunded by Landlord to Tenant.
         (c) If the  Premises  shall  be  totally  damaged  or  rendered  wholly
untenable by fire or other  casualty or if the  Building  shall be so damaged by
fire or other  casualty that  substantial  alteration or  reconstruction  of the
Building shall, in Landlord's  opinion, be required (whether or not the Premises
shall  have been  damaged by such fire or other  casualty),  then in any of such
events Landlord may, at its option, terminate this lease and the Term and estate
hereby  granted,  by giving Tenant  thirty (30) days notice of such  termination
within  ninety (90) days after the date of such  damage.  In the event that such
notice of termination  shall be given, this lease and the Term and estate hereby
granted,  shall  terminate as of the date provided in such notice of termination
(whether or not the Term shall have  commenced)  with the same effect as if that
were the  Expiration  Date, and the Rent shall be apportioned as of such date or
sooner  termination and any prepaid portion of minimum annual rent or additional
rent for any period after such date shall be refunded by Landlord to Tenant.
         (d) Landlord shall not be liable for any  inconvenience or annoyance to
Tenant or injury to the business of Tenant resulting in any way from such damage
by fire or other  casualty  or the  repair  thereof.  Landlord  will  not  carry
insurance of any kind on Tenant's property,  and Landlord shall not be obligated
to repair any damage thereto or replace the same.
         (e) This lease shall be considered an express  agreement  governing any
case of damage to or  destruction of the Building or any part thereof by fire or
other  casualty,  and Section 227 of the Real  Property  Law of the State of New
York providing for such a contingency in the absence of such express  agreement,
and any  other  law of like  import  now or  hereafter  enacted,  shall  have no
application in such case.

                                  SUBORDINATION

         14.  This lease shall be subject  and  subordinate  at all times to the
lien of any  mortgages (i) now  encumbering  the Building or the Premises and to
all advances  made or hereafter to be made upon the security  thereof,  and (ii)
hereafter  made  provided same are made to a lending  institution.  Tenant shall
execute and deliver such further  instrument or instruments  subordinating  this
lease to the lien of any such  mortgage or  mortgages as shall be desired by any
mortgagee  or  proposed  mortgagee  and  Tenant  hereby  appoints  Landlord  the
attorney-in-fact  of  Tenant,  irrevocably,  to  execute  and  deliver  any such
instrument or instruments for the

<PAGE>

Tenant. As used in this lease, the term "lending institution" shall mean savings
bank,  savings  and  loan  association,  bank or  trust  company,  real  estates
investment trust,  investment bank or an affiliate  thereof,  insurance company,
university,  public or private, or employee, welfare, pension or retirement fund
or system.
         (b) Upon demand,  Tenant shall  furnish to Landlord  certified  balance
sheets  and  operating  statements  for the past five (5)  years and such  other
information,  financial or otherwise,  concerning Tenant which may reasonably be
required by any prospective mortgagee.
         (c) Tenant  shall,  upon not less than five (5) days' prior  request by
Landlord,  execute,  acknowledge  and deliver to Landlord a statement in writing
certifying  (i) that the lease is unmodified and in full force and effect (or if
there  have been  modifications  that the same are in full  force and  effect as
modified and  identifying the  modifications),  (ii) the dates to which the Rent
and other charges have been paid, and (iii) that so far as the person making the
certificate knows, Landlord is not in default under any provision of this lease.
It is  intended  that  any  such  statement  may be  relied  upon by any  person
proposing  to  acquire  Landlord's  interest  in  this  lease,  any  prospective
purchaser of the  Premises,  or any  prospective  mortgagee,  or assignee of any
mortgage upon the Premises.
         (d) So long as there is a first mortgage lien encumbering the Premises,
Landlord and Tenant shall not,  without first  obtaining the written  consent of
such  mortgagee,  enter into any agreement,  the effect of which would be to (i)
modify, cancel,  terminate or surrender this lease; (ii) grant any concession in
respect thereof;  (iii) reduce the Rent or require the prepayment of any rent in
advance of the due date thereof; (iv) create any offsets or claims against Rent;
(v) assign in whole or in part any of the rents therefrom or Tenant's  interests
in this  lease or sublet  the whole or any  portion  of the  Premises  except as
provided in this lease.
         (e) Tenant shall,  within ninety (90) days after the end of each fiscal
year of Tenant,  furnish to Landlord and any first  mortgagee  of the  Premises,
copies  of  balance  sheets of  Tenant  for such  fiscal  year,  certified  by a
certified public accountant.
          (f) In the event of any act or omission  by Landlord  which would give
Tenant  the  right  to  terminate  this  lease or to  claim a  partial  or total
eviction,  Tenant  shall not  exercise  any such  right  until (i) it shall have
served written notice, by registered mail, of such act or omission,  to Landlord
and to the  holder  of any  mortgage  whose  name and  address  shall  have been
furnished  to Tenant in writing,  at the last address so  furnished,  and (ii) a
reasonable  period of time for remedying such act or omission shall have elapsed
following  the serving of such notice;  provided,  however,  that  following the
serving  of  such  notice,  Landlord  or  said  holder  shall,  with  reasonable
diligence,  have  commenced  and  continued to remedy such act or omission or to
cause the same to be remedied.

                                 INDEMNIFICATION

         15. Tenant shall  indemnify,  defend,  save and hold Landlord  harmless
from and against any and all liability and damages and any and all injury, loss,
claim, damage or suite of every kind and nature, including Landlord's reasonable
counsel  fees,  to  any  person,  firm,  association  or  corporation  or to any
property, arising

<PAGE>

out of or based  upon,  related  to, or in any way  connected  with,  the use or
occupancy  of the  Premises or the  conduct or  operation  of Tenant's  business
unless  such  injury,  loss,  claim or  damage  is  attributable  solely  to the
negligence of Landlord or its agents, servants or employees.

                                 EMINENT DOMAIN

         16.  (a) If the  whole of the  Premises  be taken  under  the  power of
eminent  domain for any public or  quasi-public  improvement or use, the term of
this lease  shall  expire as of the date of  vesting of title in the  condemning
authority.
         (b) If 25% or more of the  Building is taken under the power of eminent
domain or for any public or quasi-public purpose, Landlord shall have the option
of cancelling and  terminating  this lease by written notice served within sixty
(60) days after the taking,  and this lease shall  thereupon  expire on the 90th
day after the serving by Landlord of said notice.
         (c) If less than 25% of the Building is taken,  this lease shall remain
in full  force and  effect,  however,  minimum  annual  rent shall be reduced in
proportion  to the  percentage  of square  feet of the  Building  so  taken.  If
Tenant's  parking  area  only is taken,  then (i) if 25% or less is taken,  this
lease shall not terminate but minimum annual rent only shall be apportioned  pro
rata in accordance  with the size and  usefulness of the portion  taken,  unless
Landlord  provides  substitute  parking  for Tenant  within  reasonable  walking
distance of the Premises,  substantially  equal in size to that which was taken,
within  sixty  (60) days  after the  taking;  or (ii) if more than 25% is taken,
then, unless Landlord provides substitute  parking,  substantially equal in size
to that which was taken, and within reasonable walking distance of the Premises,
within  sixty (60) days after the  taking,  this lease  shall,  at the option of
either  Landlord or Tenant,  by written  notice served between the 61st and 90th
day after the taking,  be canceled and  terminated  effective (60) days from the
date of said  taking and if such  notice is not  served,  this  lease  shall not
terminate  but  minimal  annual  rent  only  shall  be  apportioned  pro rata in
accordance with the size and usefulness of the portion taken.
         (d) If this lease is not terminated or terminable  under the provisions
of this Article 16, Landlord shall,  with reasonable  dispatch and at Landlord's
sole cost and expense, restore, reconstruct and rebuild the remaining portion of
the Premises and the Building and all the appurtenances,  equipment,  utilities,
facilities and  installations  to their condition prior to such taking,  in such
manner that the resulting  building and parking area and  driveways;  shall be a
complete and integrated structural, architectural and functional unit similar to
and of equal  material  and  workmanship  to the  Building  and parking area and
driveways  prior  to  such  taking,  with  all  the  appurtenances,   equipment,
utilities,  facilities and installations  throughout in good working order so as
to put both the parking area and driveways and the Premises in proper  condition
to be used by Tenant for the same purpose as at the time of such taking,  all in
accordance with plans and specifications to be prepared by Landlord, at the sole
cost and expense of Landlord.
         (e) If the nature of the work to be performed as a result of the taking
is such as to  prevent  the  operation  of the  business  then  being  conducted
thereon, or to make it impractical so to do, then the Rent and

<PAGE>

other  charges  to be  paid  by  Tenant  under  this  lease  shall  abate  until
substantial completion of such work by Landlord.
         (f) If in the event of any taking  under the power of  eminent  domain,
Landlord  shall be entitled to and shall receive the entire  award,  except that
Tenant  shall be  entitled  to and shall  receive any part of any award made for
Tenant's cost of moving  Tenant's trade fixtures  (provided same does not reduce
the amount of Landlord's award).
         (g) In the event of any dispute  under the  provisions  of this Article
16, it shall be resolved by arbitration in Suffolk County, New York before three
disinterested  and impartial  arbitrators,  in accordance  with the rules of the
American Arbitration  Association.  Each arbitrator shall have a minimum of then
(10) years  experience in dealing with,  renting or appraising  industrial  real
estate.  All fees and expenses of the arbitrators  and the American  Arbitration
Association shall be borne equally by the parties.

                            RIGHT TO SUBLET OR ASSIGN

         17. (a) Tenant covenants that it shall not assign this lease nor sublet
the  Demised  Premises or any part  thereof by  operation  of law or  otherwise,
including,  without  limitation,  an  assignment or subletting as defined in (d)
below, without the prior written consent of Landlord in each instance, except on
the conditions hereinafter stated. Tenant may assign this lease or sublet all or
a portion of the Demised Premises with Landlord's written consent, provided:

                  (i)      That such assignment or sublease is for  a use  which
is in compliance with this lease and  the then  existing  zoning regulations and
the Certificate of Occupancy;
                  (ii)     That,  at the time  of such assignment or subletting,
there is no default under the terms of this lease on the Tenant's part;
                  (iii)    That, in  the  event of  an assignment,  the assignee
shall assume in writing the  performance of  all of the terms and obligations of
the within lease;
                  (iv) That a duplicate  original of said assignment or sublease
shall be delivered by certified  mail to the Landlord at the address  herein set
forth  within  ten (10) days from the said  assignment  or  sublease  and within
ninety (90) days of the date that Tenant first advises  Landlord of the name and
address  of  the  proposed  subtenant  or  assignee,  as  required  pursuant  to
subparagraph (b) hereof;
                  (v) Such assignment or subletting shall not, however,  release
the within Tenant or any successor  tenant or any guarantor from their liability
for the full and faithful performance of all of the terms and conditions of this
lease;
                  (vi) If this lease be assigned,  or if the Demised Premises or
any part thereof be underlet or occupied by anybody other than Tenant,  Landlord
may after  default by Tenant  collect  rent from the  assignee,  undertenant  or
occupant, and apply the net amount collected to the rent herein reserved; and

<PAGE>

                  (vii)  That,  in the event  Tenant  shall  request  Landlord's
consent to a proposed  assignment of this lease or proposed sublease of all or a
portion of the Demised  Premises,  Tenant shall pay or reimburse to Landlord the
reasonable attorney fees incurred by Landlord in processing such request.
         (b)  Notwithstanding  anything  contained  in  this  Article  17 to the
contrary,  no  assignment or  underletting  shall be made by Tenant in any event
until  Tenant  has  offered  to  terminate  this lease as of the last day of any
calendar  month during the Term hereof and to vacate and  surrender  the Demised
Premises  to  Landlord  on the date  fixed in the notice  served by Tenant  upon
Landlord  (which date shall be prior to the date of such proposed  assignment or
the commencement date of such proposed lease). Simultaneously with said offer to
terminate this lease, Tenant shall advise the Landlord,  in writing, of the name
and  address of the  proposed  assignee  or  subtenant,  a  reasonably  detailed
statement of the proposed  subtenant/assignee's  business,  reasonably  detailed
financial  references,  and all the  terms,  covenants,  and  conditions  of the
proposed sublease or assignment.
         (c) Tenant may,  without the consent of Landlord,  assign this lease to
an affiliated  (i.e., a corporation  20% or more of whose capital stock is owned
by the same stockholders owning 20% or more of Tenant's capital stock), a parent
or subsidiary  corporation  of Tenant or to a  corporation  to which it sells or
assigns all or substantially  all of its assets or stock or with which it may be
consolidated  or  merged,  provided  such  purchasing,   consolidated,   merged,
affiliated  or subsidiary  corporation  shall,  in writing,  assume and agree to
perform all of the  obligations  of Tenant under this lease and it shall deliver
such  assumption with a copy of such assignment to Landlord within ten (10) days
thereafter, and provided further than Tenant shall not be released to discharged
from any liability under this lease by reason of such assignment.
         (d) For  purposes of this Article 17, (i) the transfer of a majority of
the  issued and  outstanding  capital  stock of any  corporate  tenant,  or of a
corporate subtenant,  or the transfer of a majority of the total interest in any
partnership  tenant or  subtenant,  however  accomplished,  whether  in a single
transaction or in a series of related or unrelated transactions, shall be deemed
an assignment of this lease,  or of such sublease,  as the case may be; (ii) any
person or legal  representative  of Tenant, to whom Tenant's interest under this
lease passes by operation of law or otherwise,  shall be bound by the provisions
of this Article 17; and (iii) a modification or amendment of a sublease shall be
deemed a sublease.
         (e) Whenever Tenant shall claim under this Article or any other part of
this lease that  Landlord  has  unreasonably  withheld or delayed its consent to
some request of Tenant, Tenant shall have no claim for damages by reason of such
alleged  withholding or delay, and Tenant's sole remedy thereof shall be a right
to obtain  specific  performance  or injunction but in no event with recovery of
damages.
         (f)  Tenant  shall  not  mortgage,  pledge,  hypothecate  or  otherwise
encumber its interest under this lease without Landlord's prior written consent.
         (g)  Notwithstanding  anything  contained  in  this  Article  17 to the
contrary, no assignment or underletting shall be made by Tenant to any brokerage
firm.

                         RIGHT TO INSPECT; POSTING SIGNS

<PAGE>

         18. (a) Tenant shall permit Landlord or Landlord's  agents to enter the
Premises at all  reasonable  hours for the purpose of (i)  inspecting  the same;
(ii) making repairs required by the terms of this lease to be made by Tenant and
which  Tenant  neglects or refuses to make;  (iii)  exhibiting  the  Premises to
prospective  purchasers  and  mortgagees;  (iv)  during the twelve  (12)  months
preceding the  expiration of this lease,  exhibiting the Premises to brokers and
prospective  tenants;  and  (v) for the  purpose  of  making  any  additions  or
alterations to the Building or to any surrounding building provided, in each and
every  case,  Landlord  shall  use its  reasonable  effort  not to  unreasonably
interfere  with the  conduct  of  Tenant's  business  at the  Premises.  If,  at
reasonable hours, admission to the Premises for the aforesaid purposes cannot be
obtained or, if at any time entry shall be deemed  necessary for the  inspection
or protection of the Premises or for making any repairs, whether for the benefit
of Tenant or not,  Landlord or  Landlord's  agents may enter the Premises by any
lawful  means  without  rendering  Landlord  or its agents  liable to Tenant for
damages by reason thereof.
          (b) During  the  twelve  (12)  months  preceding  the end of the term,
Landlord  may post and  maintain,  without  hindrance or  molestation,  signs or
notices indicating that the Premises are for sale and/or for rent;  however,  no
such sign shall be affixed to a door or window of the premises.

                                   BANKRUPTCY

         19. (a) If, at any time prior to the  commencement  of the term of this
lease,  or if at any time  during the term,  there  shall be filed by or against
Tenant in any court, pursuant to any statute, either of the United States of any
State, a petition in bankruptcy or insolvency or for  reorganization  or for the
appointment  of a receiver or trustee of all or a portion of Tenant's  property,
and within thirty (30) days thereof Tenant fails to secure a discharge  thereof,
or if Tenant makes an assignment for the benefit of creditors or petition for or
enters into an  arrangement,  this lease at the option;  of Landlord,  exercised
within a  reasonable  time after  notice of the  happening of any one or more of
such events,  may be canceled and terminated,  in which event neither Tenant nor
any person  claiming  through or under Tenant by virtue of any statute or of any
order of any court,  shall be entitled to  possession or to remain in possession
of the  Premises  but shall  forthwith  quit and  surrender  the  Premises,  and
Landlord, in addition to any other rights, may retain any rent, security deposit
or monies  received  by it from  Tenant or others in behalf of Tenant as partial
liquidated damages.

         (b) In the event of the termination of this lease pursuant to paragraph
(a) of this Article 19,  Landlord  shall  forthwith,  notwithstanding  any other
provision of this lease to the  contrary,  be entitled to recover from Tenant as
and for liquidated  damages an amount equal to the  difference  between the Rent
reserved  hereunder for the unexpired  portion of the term and the then fair and
reasonable  rental value of the Premises for the same period. In the computation
of such damages,  the  difference  between any  installment of Rent becoming due
hereunder after the date of termination and the fair and reasonable rental value
of the Premises for the period for which such  installment  was payable shall be
discounted to the date of termination

<PAGE>

at the rate of 4% per annum. If the Premises,  or any part thereof,  be relet by
Landlord for the unexpired term of this lease,  the amount of rent reserved upon
such reletting shall prima facie be the fair and reasonable rental value for the
part or the whole of the  Premises  so relet  during the term of the  reletting.
Nothing herein contained shall limit or prejudice the right of Landlord to prove
for and obtain as  liquidated  damages by reason of such  termination  an amount
equal to the  maximum  allowed by any  statute or rule of law,  in effect at the
time when, and governing the proceeding in which, such damages are to be proved,
whether or not such amount be greater,  equal to, or less than the amount of the
difference referred to above.

                                     DEFAULT

         20. (a) If Tenant shall fail to pay any  installment  of minimum annual
rent or any additional  rent or other charges within five (5) days of the day on
which  same  are  required  to be  paid  hereunder,  or if  Tenant  defaults  in
fulfilling  any of the other  covenants  of this  lease and such  default  shall
continue for a period of ten (10) days after notice, or if Tenant shall dissolve
or liquidate  or commence to dissolve or  liquidate,  or if the Premises  become
vacant or deserted,  or if the said default or omission  complained  of shall be
such a nature that the same cannot be completely  cured or remedied  within said
ten (10) day period,  and if Tenant shall not have diligently  commenced  during
such  default  within such ten (10) day period,  and shall not  thereafter  with
reasonable  diligence  and in good faith proceed to remedy or cure such default,
then, in any one or more of such events,  Landlord may serve a written three (3)
day notice of cancellation of this lease upon Tenant, and upon the expiration of
said three (3) days, this lease and the term thereunder  shall end and expire as
fully and  completely  as if the date of expiration of such three (3) day period
were the day herein  definitely  fixed for the end and expiration of this lease,
and the term  thereof,  and Tenant shall then quit and surrender the Premises to
Landlord butTenant shall remain liable as hereinafter  provided. If Tenant shall
default (i) in the timely  payment of any item of Rent,  and such default  shall
continue or be repeated for two consecutive months for a total of four months in
any period of twelve months,  or (ii) in the performance of any particular term,
condition  or covenant of this lease more than six times in any period of twelve
months,  then,  notwithstanding  that such  defaults  shall have each been cured
within the period after notice,  if any, as provided in this lease,  any further
similar  default shall be deemed to be deliberate  and Landlord  thereafter  may
serve a written  ten (10) day  notice  of  termination  of this  lease to Tenant
without affording Tenant an opportunity to cure such further default.
         (b) If (i) the notice  provided for in  paragraph  (a) above shall have
been given and the term shall expire as  aforesaid,  or (ii) if any execution or
attachment shall be issued against Tenant or any of Tenant's property  whereupon
the Premises or any part  thereof  shall be taken or occupied or attempted to be
taken or occupied by someone  other than  Tenant,  or (iii) if Tenant shall make
default with respect to any other lease between Landlord and Tenant,  or (iv) if
Tenant shall fail to move into or take possession of the Premises within fifteen
(15) days after the Premises are  substantially  complete,  then,  and in any of
such events Landlord may, without notice,  re-enter the Premises either by force
or by any lawful means, and dispossess Tenant (or the

<PAGE>

legal  representative  of Tenant or other  occupant of the  Premises) by summary
proceedings  or otherwise  and remove their  effects and hold the Premises as if
this lease had not been made,  and Tenant hereby waives the service of notice of
intention to re-enter or to institute  legal  proceedings to that end. If Tenant
shall be in default hereunder prior to the date fixed as the commencement of any
renewal or  extension  of this lease,  Landlord  may cancel and  terminate  such
renewal or extension agreement by written notice.

                              REMEDIES OF LANDLORD

         21.  (a) If this  lease is  terminated  or if  Landlord  re-enters  the
Premises under Article 20 or any other such default provision  contained herein,
Tenant shall pay to Landlord as damages, at the election of Landlord, sums equal
to the minimum annual rent and  additional  rent that would have been payable by
Tenant through and including the  Expiration  date had this lease not terminated
or had Landlord not re-entered the Premises, payable upon the due dates therefor
specified in this lease; provided,  that if Landlord shall relet all or any part
of the  Premises  for  all or any  part  of the  period  commencing  on the  day
following  the  date  of such  termination  or  re-entry  to and  including  the
Expiration  date,  Landlord  shall credit Tenant with the net rents  received by
Landlord from such reletting, such net rents to be determined by first deducting
from the gross rents as and when  received by Landlord  from such  reletting the
expenses  incurred  or  paid  by  Landlord  in  terminating  this  lease  and of
re-entering  the Premises  and of securing  possession  thereof,  as well as the
expenses of reletting, including, without limitation, altering and preparing the
Premises for new tenants, brokers' commissions,  and all other expenses properly
chargeable against the Premises and the rental therefrom in connection with such
reletting,  it being  understood  that any such  reletting  may; be for a period
equal to or shorter or longer than said period;  provided,  further, that (i) in
no event  shall  Tenant be entitled to receive any excess of such net rents over
the sums payable by Tenant to Landlord under this lease,  (ii) in no event shall
Tenant be entitled,  in any suit for the collection of damages  pursuant to this
Article 21(a),  to a credit in respect of any net rents from a reletting  except
to the extent that such net rents are actually received by Landlord prior to the
commencement  of such suit,  and (iii)  Landlord shall have not obligation to so
relet the Premises and Tenant hereby waives any right Tenant may have, at law or
in equity, to require Landlord to so relet the Premises.

         At any time after the  Demised  Term shall have  expired and come to an
end or Landlord  shall have  re-entered  upon the premises,  as the case may be,
whether or not  Landlord  shall  have  collected  any  monthly  deficiencies  as
provided  below,  Landlord shall be entitled to recover from Tenant,  and Tenant
shall pay to  Landlord,  on  demand,  as and for  liquidated  and  agreed  final
damages,  a sum  equal  to the  amount  by which  the  minimum  annual  rent and
additional rent reserved in this lease for the period which otherwise would have
constituted the unexpired  portion of the Demised Term exceeds the then fair and
reasonable rental value of the Premises for the same period,  both discounted to
present  worth  at  the  rate  of  four  (4%)  percent  per  annum.  If,  before
presentation of proof of such liquidated  damages to any court,  commission,  or
tribunal, the Premises,

<PAGE>

or any part  thereof,  shall have been relet by  Landlord  for the period  which
otherwise would have  constituted the unexpired  portion of the Demised Term, or
any part  thereof,  the amount of Rent  reserved  upon such  reletting  shall be
deemed,  prima facie, to be the fair and reasonable rental value for the part or
the whole of the Premises so relet during the term of the reletting.

         Suit or suits for the  recovery of any  damages  payable  hereunder  by
Tenant or any installments thereof, may be brought by Landlord from time to time
at its election, and nothing contained herein shall require Landlord to postpone
suit until the date when the Term would have expired but for such termination or
re- entry. In all cases hereunder,  and in any suit, action or proceeding of any
kind between the parties,  it shall be  presumptive  evidence of the fact of the
existence of a charge  being due, if Landlord  shall  produce a bill,  notice or
certificate  of any  public  official  entitled  to give  such  bill,  notice or
certificate to the effect that such charge appears of record on the books in his
or her office and has not been paid.
         (b) Nothing  contained  in this lease shall be construed as limiting or
precluding  the  recovery by Landlord  against  Tenant of any sums or damages to
which,  in ddition to the damages  particularly  provided  above,  Landlord  may
lawfully be entitled by reason of any default  hereunder  on the part of Tenant.
Anything in this lease to the contrary notwithstanding,  during the continuation
of any default by Tenant, Tenant shall not be entitled to exercise any rights or
options,  or to receive any funds or proceeds  being held,  under or pursuant to
this lease.
         (c) The specified  remedies to which Landlord may resort  hereunder are
cumulative  and are not intended to be exclusive of any other  remedies or means
of redress to which  Landlord may lawfully be entitled,  and Landlord may invoke
any remedy  allowed at law or in equity as if specific  remedies were not herein
provided for.

                                 ATTORNEY'S FEES

         22.  If  Tenant  shall  at any  time be in  default  hereunder,  and if
Landlord shall  institute an action or summary  proceeding  against Tenant based
upon such  default  and  Landlord  shall be  successful,  or if  Landlord  shall
otherwise engage an attorney in connection with the enforcement of any provision
of this lease, then Tenant shall reimburse Landlord for the reasonable  expenses
of attorney's fees and  disbursements  incurred by Landlord.  The amount of such
expenses shall be deemed to be "additional rent" hereunder and shall be due from
Tenant to Landlord on the first day of the month following the incurring of such
expenses.

                WAIVER OR REDEMPTION, COUNTERCLAIM, TRIAL BY JURY

         23. Tenant hereby expressly (i) waives any and all rights of redemption
granted  by or under any  present  or future  laws in the event of Tenant  being
evicted  or  dispossessed  for any cause or in the event of  Landlord  obtaining
possession  of the  Premises by reason of the  violation by Tenant of any of the
covenants

<PAGE>

and  conditions  of this  lease or  otherwise;  (ii)  waives  all rights to stay
summary  proceedings;   and  (iii)  agrees  that  it  shall  not  interpose  any
counterclaim  in any summary  proceeding or any action based on  non-payment  of
Rent or any other payments or charges required to be made by Tenant to Landlord.
Landlord  and Tenant  hereby  waive trial by jury in any action,  proceeding  or
counterclaim  brought by either of them  against  the other with  respect to any
matters  arising  out of or  connected  with this  lease,  the  relationship  of
Landlord and Tenant, Tenant's use or occupancy of the premises, and/or any claim
of injury or damage and any emergency statutory or any other statutory remedy.

                                    NO WAIVER

         24. No act or thing done by Landlord or  Landlord's  agents  during the
term  hereby  demised  shall be  deemed  an  acceptance  of a  surrender  of the
Premises,  and no  agreement to accept such  surrender  shall be valid unless in
writing  signed by  Landlord.  No employee of Landlord or of  Landlord's  agents
shall have any power to accept the keys of the Premises prior to the termination
of this lease. The delivery of keys to any employee of Landlord or of Landlord's
agents  shall not operate as a  termination  of this lease or a surrender of the
premises. The failure of Landlord to seek redress for violation of, or to insist
upon the strict  performance  of, any  covenant or condition of this lease shall
not  prevent a  subsequent  act,  which  would  have  originally  constituted  a
violation,  from having all the force and effect of an original  violation.  The
receipt by Landlord of rent with knowledge of the breach of any covenant of this
lease shall not be deemed a waiver of such  breach.  No  provision of this lease
shall be deemed to have been waived by Landlord unless such waiver be in writing
signed by Landlord.  The words  "re-enter" and "re-entry" as used herein are not
restricted to their technical legal meaning.

                                   END OF TERM

         25.  (a)  On  the  last  day  of the  term  hereof  or on  the  earlier
termination  thereof,  Tenant shall  peaceably and quietly leave,  surrender and
deliver the Premises up to  Landlord,  broom  clean,  together  with any and all
alterations,  changes, additions, and improvements which may have been made upon
the Premises  (except movable  furniture or movable trade fixtures  installed at
the expense of Tenant) in good repair and good order and safe condition,  except
for reasonable wear and tear and damage by; fire,  other insured casualty or the
elements excepted, and Tenant shall remove all of its personal property from the
Premises and any property not so removed shall be deemed to have been  abandoned
and may be appropriated,  sold,  stored,  destroyed or otherwise  disposed of by
Landlord without notice to Tenant and without  obligations to account  therefor.
Tenant's  obligation under this Article 25 shall survive the expiration or other
termination of this lease.
         (b) In the event of any holding over by Tenant after the  expiration or
termination of this lease without the consent of Landlord, Tenant shall:
                  (i) pay  as  holdover rental for  each  month  of the holdover
tenancy an amount equal to the

<PAGE>

greater of (y) the fair market  rental  value of the Premises for such month (as
reasonably  determined  by  Landlord) or (z) two hundred  (200%)  percent of the
minimum  annual  rent  payable  by  Tenant  for the  third  month  prior  to the
Expiration Date of the term of this lease,  and otherwise  observe,  fulfill and
perform all of its obligations  under this lease,  including but not limited to,
those pertaining to additional rent, in accordance with its terms;
                  (ii) be liable to Landlord for any payment or rent  concession
which  Landlord  may be  required  to make to any tenant in order to induce such
tenant not to  terminate  an executed  lease  covering all or any portion of the
Premises by reason of the holdover by Tenant; and
                  (iii) be  liable  to  Landlord  for any  damages  suffered  by
Landlord as the result of Tenant's failure to surrender the Premises.
         No holding  over by Tenant  after the Term shall  operate to extend the
Term.
         The  holdover,  with respect to all or any part of the  Premises,  of a
person deriving an interest in the Premises from or through  Tenant,  including,
but not  limited to, an  assignee  or  subtenant,  shall be deemed a holdover by
Tenant.

         Notwithstanding anything in this Article contained to the contrary, the
acceptance of any Rent paid by Tenant  pursuant to this  Paragraph 25 (b), shall
not preclude  Landlord from  commencing  and  prosecuting a holdover or eviction
action or  proceeding or any action or  proceeding  in the nature  thereof.  The
preceding  sentence  shall be deemed  to be an  "agreement  expressly  providing
otherwise"  within the meaning of Section  232-c of the Real Property Law of the
State of New York and any successor law of like import.

         (c) If at any  time  during  the last  month of the term of this  lease
Tenant shall have removed all or substantially all of Tenant's property from the
Premises,  Landlord  may,  and Tenant  hereby  irrevocably  grants to Landlord a
license to,  immediately enter and alter,  renovate and redecorate the Premises,
without  elimination,   diminution  or  abatement  of  minimum  annual  rent  or
additional rent, or incurring liability to Tenant for any compensation, and such
acts shall have no effect upon this lease.

                                     BROKER

         26. Tenant  represents  that this lease was brought about by M. Barrett
Associates  LLC as broker and all  negotiations  with respect to this lease were
conducted  exclusively  through said broker.  Tenant agrees that if any claim is
made for  commissions  by any broker other than said broker,  by,  through or on
account of any acts of Tenant,  Tenant will hold Landlord free and harmless from
any  and  all  liabilities  and  expenses  in  connection  therewith,  including
Landlord's reasonable attorney's fees.

                                 QUIET ENJOYMENT

         27. Landlord  covenants that if  and so long as Tenant pays the minimum
annual rent and

<PAGE>

additional rent and other charges  reserved by this lease,  and performs all the
terms,  covenants  and  conditions  of this  lease on the part of  Tenant  to be
performed,  Tenant shall quietly  enjoy the premises  subject,  however,  to the
terms of this lease and of any  mortgage or mortgages to which this lease by its
terms is subject.

                            NONLIABILITY OF LANDLORD

         28. (a)  Landlord  and  Landlord's  agents and  employees  shall not be
liable  for,  and  Tenant  waives  all claims  for,  loss or damage to  Tenant's
business or damage to person or property  sustained by Tenant resulting from any
accident or occurrence  (unless  caused by or resulting  from the  negligence of
Landlord, its agents,  servants or employees other than accidents or occurrences
against  which  Tenant is  insured)  in or upon the  Premises  or the  Building,
including,  but not  limited  to,  claims for  damage  resulting  from:  (i) any
equipment  or  appurtenances  becoming  out  of  repair;  (ii)  injury  done  or
occasioned by wind;  (iii) any defect in or failure of plumbing,  heating or air
conditioning equipment,  electric wiring or installation thereof, gas, water, or
steam pipes,  stairs,  porches,  railings or walks;  (iv) broken glass;  (v) the
backing up of any sewer pipe or downspout; (vi) the bursting, leaking or running
of any tank, tub,  washstand,  water closet,  waste pipe, drain or other pipe or
tank in, upon or about the Building or the  Premises;  (vii) the escape of steam
or hot water;  (viii) water,  snow or ice being upon or coming through the roof,
skylight,  trapdoor, stairs, doorways, windows, walks or any other place upon or
near the Building or the Premises or otherwise; (ix) the falling of any fixture,
plaster,  tile or  stucco;  and (x) any act,  omission  or  negligence  of other
tenants,  licensees  or of any other  persons or occupants of the Building or of
adjoining  or  contiguous  buildings  or of owners  of  adjacent  or  contiguous
property.

                  (b) If Landlord or a  successor  in interest is an  individual
(which term as used herein  includes  aggregates  of  individuals  such as joint
ventures,  general or limited  partnerships,  or associations),  such individual
shall be under no personal  liability with respect to its obligations under this
lease, Tenant shall look solely to the equity of such individual in the land and
building  constituting the Premises for the  satisfaction of Tenant's  remedies,
and in no event shall Tenant  attempt to secure any personal  judgement  against
any such individual or any principal,  partner, employee or agent of Landlord by
reason of such default by Landlord.

                  (c) The word "Landlord" as used herein means only the owner in
fee for the time  being  of the  Premises,  and in the  event of any sale of the
Premises,  Landlord  shall be and hereby is entirely  freed and  relieved of all
covenants  and  obligations  of  Landlord  hereunder  and it shall be deemed and
construed  without further  agreement between the parties or between the parties
and the purchaser of the Premises, that such purchaser has assumed and agreed to
carry out any and all covenants and obligations of Landlord hereunder.

                                  NO ABATEMENT

         29. No diminution or abatement of Rent or other  compensation  shall be
claimed or allowed for  inconvenience or discomfort  arising from the Landlord's
making of additions, repairs or improvements to the Building or to its equipment
and fixtures, nor for any space taken to comply with any law, ordinance or order

<PAGE>

of a governmental authority except as specifically provided in this lease.

                         APPLICABLE LAW AND CONSTRUCTION

         30.  The laws of the  State  of New York  shall  govern  the  validity,
performance and enforcement of this lease. The invalidity or unenforceability of
any provision of this lease shall not affect or impair any other provision.  The
submission of this  document to Tenant for  examination  does not  constitute an
offer to lease,  or a reservation of or option to lease,  and becomes  effective
only  upon  execution  and  delivery   thereof  by  Landlord  and  Tenant.   All
negotiations,  considerations,  representations  and understandings  between the
parties are incorporated in this lease.  Landlord or Landlord's agents have made
no  representations  or promises  with  respect to the  Building or the Premises
except as herein  expressly set forth.  The headings of the several articles and
sections  contained herein are for convenience only and do not define,  limit or
construe the contents of such articles or sections. Whenever herein the singular
number is used,  the same shall include the plural,  and the neuter gender shall
include the masculine and feminine genders. Neither this lease nor any provision
hereof may be changed,  waived,  discharged or terminated orally, but only by an
instrument  in  writing  signed by the party  against  whom  enforcement  of the
change, waiver, discharge or termination is sought.

                 CONSTRUCTION ON ADJACENT PREMISES OR BUILDINGS

         31. If any  construction is in progress at, on or about the Building or
any excavation or other building operation shall be about to be made or shall be
made on any premises  adjoining or above or below the Premises or on any portion
of the Building,  Tenant shall permit  Landlord or the adjoining owner or tenant
and their respective agents, employees,  licensees and contractors, to enter the
Premises  and to  shore  the  foundations  and/or  walls  thereof  and to  erect
scaffolding and/or protective  barricades around and about the Premises (but not
so as to preclude  entry  thereto) and to do any act or thing  necessary for the
safety or preservation of the Premises.  Tenant's  obligations  under this lease
shall not be affected by any such  construction or excavation work,  shoring-up,
scaffolding  or  barricading.  Landlord shall not be liable in any such case for
any inconvenience,  disturbance, loss of business or any other annoyance arising
from such construction,  excavation,  shoring-up, scaffolding or barricades, but
Landlord  shall use its best  efforts  so that  such  work will  cause as little
inconvenience,  annoyance or disturbance to Tenant as possible  consistent  with
accepted  construction  practice in the  vicinity and so that such work shall be
expeditiously completed.

                                UTILITY EASEMENT

         32. This lease is subject and  subordinate to any utility,  gas, water,
electric, or telephone line easements,  now or hereafter granted,  affecting the
Premises,  the Building, or the land upon which they are located,  provided that
the same do not  unreasonably  interfere  with  the  Building  nor  unreasonably
interfere with the use of the Premises by Tenant.

<PAGE>

                                     NOTICES

         33. All notices to be given  hereunder shall be in writing and given by
hand  delivery or by certified  or  registered  mail  addressed to either of the
parties at the  address  hereinabove  given or at any other  subsequent  mailing
address they may indicate by written notice.  Any notice given hereunder by mail
shall be deemed  delivered  when  deposited in a United States general or branch
post  office,  addressed  as  above  provided.   Tenant  hereby  authorizes  and
designates  the manger of the  Premises as an officer  authorized  to accept and
receive service of process.

                             BINDING EFFECT OF LEASE

         34. The covenants,  agreements and obligations  contained in this Lease
shall,  except as herein  otherwise  provided,  extend to, bind and inure to the
benefit of the parties  hereto and their  respective  personal  representatives,
heirs, successors and permitted assigns. Each covenant, agreement, obligation or
other provision herein contained shall be deemed and construed as a separate and
independent  covenant of the party bound by, undertaking or making the same, not
dependent  on any other  provision  of this  lease  unless  otherwise  expressly
provided.

                               UNAVOIDABLE DELAYS

         35.  Whenever  Landlord shall be required by the terms of this lease or
otherwise  to make any  improvements  or  repairs,  to furnish any  service,  to
perform any  construction or  reconstruction,  or to fulfill in other obligation
hereunder,  and  Landlord  shall be delayed  in, or  prevented  from,  so doing,
Landlord  shall not be deemed to be in default and this lease and the obligation
of Tenant to pay Rent  hereunder  and to perform all of the other  covenants and
agreements  hereunder  on the  part  of  Tenant  to be  performed  shall  not be
affected,  impaired or excused,  and any time limit herein fixed for  Landlord's
performance   thereof   shall  be  extended   if  and  so  long  as   Landlord's
non-performance,  delay or default  shall be caused by reason of strike or labor
troubles,  accidents,  any rule, order,  regulation or delay of any governmental
agency, or any department or subdivision  thereof,  governmental  pre-emption in
connection  with any national  emergency or war,  insurance claim or adjustment,
the  conditions  of supply and demand  which have been or are affected by war or
other emergency, or any other cause beyond Landlord's reasonable control.

                                SANITARY SYSTEMS

         36.  Tenant  shall only permit  sanitary  discharge  into the  sanitary
system servicing the Premises.  Tenant shall comply with all requirements of the
County of  Suffolk,  Department  of Public  Works,  as they relate to use of the
sanitary  system,  including  the  payment  of  any  excess  volume  charges  as
determined by the County of Suffolk.

                                     PARKING

         37. Tenant shall have the right to use the parking areas designated for
the Building.  The parking

<PAGE>

areas  available  for the use of Tenant  herein  are to be used by  Tenant,  its
servants,  employees, agents, business invitees and patrons subject to the rules
and  regulations of Landlord and it is also  understood and agreed that Landlord
shall  have the  right at any time to modify or alter  the  parking  layout  and
traffic pattern in the parking areas and to diminish the available parking areas
without  any  liability  to Tenant or any  diminution  or  abatement  of rent or
additional rent. Tenant shall not use nor permit any of its officers,  agents or
employees  to use any parking  spaces in excess of Tenant's  allotted  number of
spaces therein.

                            CLEANING, RUBBISH REMOVAL

         38. All  janitorial  work at the Premises shall be done at the cost and
expense of Tenant.  Tenant shall provide for its own trash,  rubbish and garbage
removal at its own expense and all rubbish,  trash and garbage  shall be kept at
the Premises  subject to the rules and regulations of the appropriate  municipal
authorities having jurisdiction thereof, and subject to the reasonable rules and
regulations set by Landlord, and shall at all times be kept in closed containers
reasonably acceptable to Landlord.

         IN WITNESS WHEREOF,  the parties have executed this agreement as of the
day and year first above written.

                              Landlord:  ________________________
                                         By:      M. Barrett
                                              Managing Agent

                              Tenant:  ________________________
                                       By:   Anello C. Garefino
                                             Secretary, TreasurerCERTIFICATE OF DESIGNATIONS

 CERTIFICATE OF DESIGNATIONS, PREFERENCES

AND RIGHTS OF SERIES C PREFERRED STOCK

OF

QUENTRA NETWORKS, INC.

Pursuant to Section 151 of the General Corporation

Law of the State of Delaware

         QUENTRA NETWORKS, INC., a Delaware corporation (the "Corporation"), certifies that pursuant to the authority contained in
Article IV of its Certificate of Incorporation, and in accordance with the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors has adopted the following resolution creating a series of its Preferred Stock, par
value $.01 per share, designated as Series C Preferred Stock:

         RESOLVED, that a series of the class of authorized Preferred Stock, par value $.01 per share, to be known as "Series C
Preferred Stock", of the Corporation be hereby created, and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:

         A.       Designation and Amount.  The shares of this series shall be designated as "Series C Preferred Stock" (the "Series C
Preferred Stock") and the number of shares constituting such series shall be 1,795,753.

         B.       Terms of Series C Preferred Stock.

         1.       Dividends.  Holders of shares of Series C Preferred Stock shall be entitled to receive, when and as declared by the
Board of Directors and to the extent permitted under the Delaware General Corporation Law, and the Corporation shall pay on a
quarterly basis commencing on December 31, 2000 preferential dividends in cash or in Common Stock, at the discretion of the Board of
Directors, to the holders of shares of Series C Preferred Stock as provided in this Section 1.  If such dividend is to be paid in
Common Stock, as aforesaid, such Common Stock shall be valued at the average Trading Price for the most recent five Business Days.
Dividends on each share of Series C Preferred Stock shall accrue on a daily basis at the rate of 6% per annum of the sum of (A)
Series C Preferred Original Issuance Price plus (B) all accumulated and unpaid dividends thereon commencing on the Series C Preferred
Original Issuance Date of such shares of Series C Preferred Stock.  Such dividends shall accrue whether or not they have been
declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of
dividends; provided, however, that such dividends shall not be paid unless and until all amounts then due to the holders of the
Series A Preferred Stock have theretofore been paid.

         The Corporation shall not declare or pay any dividend, or order or make any other distribution, upon any Junior Stock or
Liquidation Parity Stock (other than a dividend payable in such Junior Stock) unless the Corporation shall first pay, or

                                                                         -1-
simultaneously therewith declare and set apart a sum sufficient for the payment of, all accumulated and unpaid dividends upon the
Series C Preferred Stock.

         2.       Liquidation Preference.  In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation, the assets of the Corporation available for distribution to its stockholders, whether from capital, surplus or earnings,
shall be distributed in the following order of priority:

         The holders of Series C Preferred Stock shall be entitled to receive, prior and in preference to any distribution to the
holders of any Junior Stock but only after the holders of the Series A Preferred Stock have been paid in full and pari passu with any
distribution to the holder of any Liquidation Parity Stock, an amount per share equal to the Series C Preferred Original Issuance
Price (subject to appropriate adjustment upon the occurrence of any stock split, stock dividend or combination of the outstanding
shares of Series C Preferred Stock) and, in addition, an amount equal to any accumulated but unpaid dividends on the Series C
Preferred Stock.  If the assets of the Corporation available for distribution to the holders of Series C Preferred Stock shall be
insufficient to permit the payment of the full preferential amount set forth herein, then the holders of shares of Series C Preferred
Stock shall share ratably in any distribution of the assets of the Corporation (A) as to any Liquidation Parity Stock, in proportion
to the respective liquidation preferences of the Series C Preferred Stock and such Liquidation Parity Stock and (B) as to the other
holders of the Series C Preferred Stock, in proportion to their respective number of shares of Series C Preferred Stock.

         3.       Voting Rights.

                  (a)      The holders of the Series C Preferred Stock shall be entitled to vote as holders of Common Stock as though
all shares of Series C Preferred Stock had been converted into Common Stock.

                  (b)      The Corporation shall not, without the affirmative approval of the holders of shares representing at least
a majority of the voting power of the shares of Series C Preferred Stock then outstanding (which voting power shall be determined,
for purposes of this Section 3(b), based upon the number of votes per share that equals the number of shares of Common Stock
(including fractional shares) into which each such share of Series C Preferred Stock is then convertible, rounded up to the nearest
share), acting separately from the holders of Common Stock and the holders of any other series or class of capital stock of the
Corporation, given by written consent in lieu of a meeting or by vote at a meeting called for such purpose, for which meeting timely
and specific notice shall have been given to each holder of Series C Preferred Stock, in the manner provided in the By-Laws of the
Corporation:

                  (i)      alter or change the powers, preferences or rights of any class or series of capital stock of the
         Corporation, or the qualifications, limitations or restrictions thereon, if any such alteration or change would adversely
         affect the rights of the holders of Series C Preferred Stock; provided, however, that (A) the change in the qualifications,
         limitations or restrictions of the Series B Preferred Stock to provide voting rights equal to those granted under this
         Section 3(b), and (B) the alteration creation and issuance of another series of Preferred Stock shall not be deemed to

                                                                        -2-

         require the consent of the holders of the Series C Preferred Stock pursuant to this clause (i) so long as the proposed terms
         do not require consent of the holders of the Series C Preferred Stock pursuant to clause (ii) below; or

                  (ii)     authorize, designate, create, issue or agree to issue any shares of any class or series of capital stock of
         the Corporation unless such class or series of capital stock constitutes Junior Stock.

         4.       Optional Conversion.

         (a)      The holder of any shares of Series C Preferred Stock shall have the right, at such holder's option, at any time or
from time to time commencing on or after the date hereof, to convert any of such shares into such whole number of fully paid and
nonassessable shares of Common Stock as is equal to the quotient obtained by dividing (A) the product obtained by multiplying the
Series C Preferred Original Issuance Price by the number of shares of Series C Preferred Stock being converted, by (B) the Series C
Preferred Conversion Price, as last adjusted and then in effect, by surrender of the certificates representing the shares of Series C
Preferred Stock so to be converted in the manner provided in Section 4(b) hereof.  The holder of any shares of Series C Preferred
Stock exercising the aforesaid right to convert such shares into shares of Common Stock shall be entitled to payment of any dividends
accrued but unpaid with respect to such shares of Series C Preferred Stock.

         (b)      The holder of any shares of Series C Preferred Stock may exercise the conversion right pursuant to Section 4(a)
hereof as to any part thereof at any time after the Series C Preferred Original Issue Date by delivering to the Corporation during
regular business hours, at the principal executive office of the Corporation or any transfer agent of the Corporation for the
Series C Preferred Stock as may be designated by the Corporation, the certificate or certificates for the shares to be converted, duly
endorsed or assigned in blank or to the Corporation (if required by it), accompanied by written notice stating that the holder elects
to convert such shares and stating the name or names (with addresses) in which the certificate or certificates for the shares of
Common Stock are to be issued.  Conversion shall be deemed to have been effected on the date when the aforesaid delivery is made (the
"Conversion Date").  As promptly as practicable thereafter, the Corporation shall issue and deliver to or upon the written order of
such holder, to the place designated by such holder, a certificate or certificates for the number of full shares of Common Stock to
which such holder is entitled and a check or cash in respect of any fractional interest in a share of Common Stock as provided in
Section 4(c) hereof and a check or cash in payment of all dividends declared but unpaid, if any (to the extent permissible under
law), with respect to the shares of Series C Preferred Stock so converted.  The Person in whose name the certificate or certificates
for Common Stock are to be issued shall be deemed to have become a holder of record of Common Stock on the applicable Conversion Date
unless the transfer books of the Corporation are closed on that date, in which event such Person shall be deemed to have become a
holder of record of Common Stock on the next succeeding date on which the transfer books are open, but the Series C Preferred
Conversion Price shall be that in effect on the Conversion Date.  Upon conversion of only a portion of the number of shares covered
by a certificate representing shares of Series C Preferred Stock surrendered for conversion, the Corporation shall issue and deliver

                                                                        -3-

to or upon the written order of the holder of the certificate so surrendered for conversion, at the expense of the Corporation, a new
certificate covering the number of shares of Series C Preferred Stock representing the unconverted portion of the certificate so
surrendered, which new certificate shall entitle the holder thereof to dividends on the shares of Series C Preferred Stock
represented thereby to the same extent as if the portion of the certificate theretofore covering such unconverted shares had not been
surrendered for conversion.

         (c)      No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Series C Preferred
Stock.  If more than one share of Series C Preferred Stock shall be surrendered for conversion at any one time by the same holder,
the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of
shares of Series C Preferred Stock so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable
upon conversion of any shares of Series C Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional
interest in an amount equal to the then Current Market Price of a share of Common Stock multiplied by such fractional interest.
Fractional interests shall not be entitled to dividends, and the holders of fractional interests shall not be entitled to any rights
as stockholders of the Corporation in respect of such fractional interest.

         (d)      The Series C Preferred Conversion Price shall be subject to adjustment from time to time as follows:

                  (i)      If, at any time after such Series C Preferred Original Issuance Date, the number of shares of Common Stock
         outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of
         Common Stock, then, following the record date fixed for the determination of holders of Common Stock entitled to receive
         such stock dividend, subdivision or split-up, the Series C Preferred Conversion Price shall be appropriately decreased so
         that the number of shares of Common Stock issuable on conversion of each share of Series C Preferred Stock shall be
         increased in proportion to such increase in outstanding shares.

                  (ii)     If, at any time after the Series C Preferred Original Issuance Date, the number of shares of Common Stock
         outstanding is decreased by a combination of the outstanding shares of Common Stock, then, following the record date for
         such combination, the Series C Preferred Conversion Price shall be appropriately increased so that the number of shares of
         Common Stock issuable on conversion of each share of Series C Preferred Stock shall be decreased in proportion to such
         decrease in outstanding shares.

                  (iii)    In case, at any time after the Series C Preferred Original Issuance Date, of any capital reorganization, or
         any reclassification of the stock of the Corporation (other than a change in par value or from par value to no par value or
         from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), or the
         consolidation or merger of the Corporation with or into another Person (other than a consolidation or merger in which the
         Corporation is the continuing company and which does not result in any change in the Common Stock) or of the sale or other
         disposition of all or substantially all the properties and assets of the Corporation as an entirety to any other Person,

                                                                        -4-

         each share of Series C Preferred Stock shall, after such reorganization, reclassification, consolidation, merger, sale or
         other disposition, be convertible into the kind and number of shares of stock or other securities or property of the
         Corporation or of the company resulting from such consolidation or surviving such merger or to which such properties and
         assets shall have been sold or otherwise disposed to which the holder of the number of shares of Common Stock deliverable
         (immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or other disposition)
         upon conversion of such share of Series C Preferred Stock would have been entitled upon such reorganization,
         reclassification, consolidation, merger, sale or other disposition.  The provisions of this Section 4 shall similarly apply
         to successive reorganizations, reclassifications, consolidations, mergers, sales or other dispositions.

         (e)      Whenever the Series C Preferred Conversion Price shall be adjusted as provided in Section 4(d) hereof, the
Corporation shall forthwith file, at the office of Corporation or any transfer agent designated by the Corporation for the Series C
Preferred Stock, a statement, signed by its Chief Financial Officer, showing in detail the facts requiring such adjustment and the
Series C Preferred Conversion Price then in effect.  The Corporation shall also cause a copy of such statement to be sent by
first-class certified mail, return receipt requested, postage prepaid, to each holder of shares of Series C Preferred Stock at such
Person's address appearing on the Corporation's records.  Where appropriate, such copy may be given in advance and may be included as
part of a notice required to be mailed under the provisions of Section 4(f) hereof.

         (f)      In the event the Corporation shall propose to take any action of the types described in clauses (i), (ii) or (iii)
of Section 4(d) hereof, the Corporation shall give notice to each holder of shares of Series C Preferred Stock, in the manner set
forth in Section 4(e) above, which notice shall specify the record date, if any, with respect to any such action and the date on
which such action is to take place.  Such notice shall also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Series C
Preferred Conversion Price and the number, kind or class of shares or other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon conversion of shares of Series C Preferred Stock.  In the case of
any action which would require the fixing of a record date, such notice shall be given at least ten (10) days prior to the date so
fixed, and in case of any other action, such notice shall be given at least fifteen (15) days prior to the taking of such proposed
action.  Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action.

         (g)      The Corporation shall pay all documentary, stamp or other transactional taxes attributable to the issuance or
delivery of shares of Common Stock upon conversion of any shares of Series C Preferred Stock, except for any transfer taxes.

         (h)      The Corporation shall reserve, free from preemptive rights, out of its authorized but unissued shares of Common
Stock a sufficient number of shares of Common Stock to provide for the conversion of all outstanding shares of Series C Preferred
Stock.

         (i)      All shares of Common Stock which may be issued in connection with the conversion provisions set forth herein will,
upon issuance by the Corporation, be validly issued, fully paid and nonassessable, with no personal liability attaching to the

                                                                        -5-

ownership thereof, and free from all taxes, liens or charges with respect thereto.

         5.       Definitions.  As used herein, the following terms shall have the following meanings:

         (a)      The term "Business Day" shall mean any day other than a Saturday, Sunday or United States federal holiday.

         (b)      The term "Common Stock" shall mean the Corporation's common stock, $1.00 par value per share.

         (c)      The term "Current Market Price" shall mean, as of the day in question, the fair market value of a share of Common
Stock on such date, as determined in good faith by the Board of Directors of the Corporation.

         (d)      The term "Junior Stock" shall mean the Common Stock and any class or series of capital stock of the Corporation
ranking, as to payment of dividends or distribution of assets, junior to the Series C Preferred Stock.

         (e)      The term "Liquidation Parity Stock" shall mean the Series B Preferred Stock and any other class or series of capital
stock of the Corporation ranking, as to distribution of assets, pari passu to the Series C Preferred Stock.

         (f)      The term "Series C Preferred Conversion Price" shall mean the Series C Preferred Original Price, as adjusted from
time to time pursuant to the provisions of Section 4(d) hereof.

         (g)      The term "Series C Preferred Original Issuance Date" shall mean the date on which the first share of Series C
Preferred Stock has been issued.

         (h)      The term "Series C Preferred Original Issuance Price" shall mean $3.50 per share of Series C Preferred Stock.

         (i)      The term "Trading Price" shall mean the last reported sale price of the Common Stock or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked prices, in either case, as reported by the Nasdaq
National Market or such other United States securities exchange registered under the Securities and Exchange Act of 1934, as amended,
on which the Common Stock are listed or admitted to trading.

                                                                        -6-

         IN WITNESS WHEREOF, said QUENTRA NETWORKS, INC. has caused this Certificate of Designations, Preferences and Rights of
Series C Preferred Stock to be duly executed by its Chief Executive Officer this 19th day of October, 2000.

                                                                     QUENTRA NETWORKS, INC.

                                                                     By:  /s/ James R. McCullough
                                                                          -------------------------
                                                                          James R. McCullough
                                                                          Chief Executive Officer

                                                                             -7-

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