Document:

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                                                       Exhibit 10.27

                                                    LEASE NO: 117500

                           CRESTWOOD CORPORATE CENTRE
                                 Richmond, B.C.

LEASE

Between -      BENTALL PROPERTIES LTD. and
               WESTMINSTER MANAGEMENT CORPORATION

                                               as Landlord

and -          BROOKS AUTOMATION (CANADA) CORP.

                                               as Tenant
<PAGE>
                           CRESTWOOD CORPORATE CENTRE

                                 Richmond, B.C.

                                Table of Contents

<TABLE>
<S>                                                                          <C>
Basic Terms: ............................................................      1

     .01 Area of Leased Premises., ......................................      1
     .02 Basic Rent .....................................................      1
     .03 Permitted Use ..................................................      1
     .04 Term ...........................................................      2

Article 1 - Demise and Term: ............................................      2

     1.01 Demise and Term ...............................................      2
     1.02 Surrender of Leased Premises ..................................      2

Article 2 - Rent: 2

     2.01 Basic Rent ....................................................      2
     2.02 Additional Rent ...............................................      2
     2.03 Adjustment of Additional Rent .................................      3
     2.04 Manner and Place of Payment ...................................      3
     2.05 Irregular Calculation of Basic Rent ...........................      3
     2.06 Disproportionate Allocation ...................................      3
     2.07 Net Lease Intent ..............................................      3

Article 3 - Construction and Fixturing of Leased Premises: ..............      4

     3.01 Landlords and Tenants Work ....................................      4
     3.03 Payment for Landlord's Work ...................................      4
     3.04 Acceptance of Leased Premises .................................      4

Article 4 - Conduct of Business: ........................................      5

     4.01 Use of Leased Premises ........................................      5
     4.02 Prohibited Uses ...............................................      5
     4.04 Signs and Advertising Displays ................................      5
     4.05 Nuisance and Annoyance ........................................      5
     4.06 Coin Operated Machines ........................................      6
     4.07 Loud Speakers and Other Advertising Apparatus .................      6
     4.08 Delivery of Supplies and Materials ............................      6
     4.09 Ordinances and Regulations ....................................      6
     4.10 Rules and Regulations .........................................      6

Article 5 - Repairs: ....................................................      6

     5.01 Tenant's Repairs ..............................................      6
     5.02 Perimeter Walls and Glass .....................................      7
     5.03 Landlord's Examination of Leased Premises .....................      7
     5.04 Landlord's Right to Repair ....................................      7
     5.05 Landlord's Right to Enter for Other Repairs ...................      7
     5.06 Landlord's Repairs ............................................      7
     5.07 Landlord's Obligation to Maintain .............................      8
     5.08 Damage and Destruction ........................................      8
     5.09 Qualifications ................................................      8
     5.10 Condition of Expiration .......................................      9

Article 6 - Common Areas and Common Facilities: .........................      9

     6.01 Tenant's Use of Parking Areas .................................      9
     6.02 Landlord's Right to Remove Vehicles ...........................      9
     6.03 Control of Common Areas and Common Facilities .................      9
     6.04 Merchandise on Common Area ....................................     10
     6.05 Customer Parking ..............................................     10
</TABLE>
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<TABLE>
<S>                                                                          <C>
Article 7 - Assignment and Sub-letting: .................................     10

     7.01 Prohibitions ..................................................     10
     7.02 Control of Corporation ........................................     11
     7.03 Assignment by Landlord ........................................     11

Article 8 - Insurance: ..................................................     11

     8.01 Tenant to Insure ..............................................     11
     8.02 Not to Affect Landlord's Insurance ............................     11
     8.03 Landlord to Insure ............................................     11

Article 9 - Tenant Alterations: .........................................     12

     9.01 Painting, Decorating and Alterations ..........................     12
     9.02 Landlord's Property ...........................................     12
     9.03 Prohibitions ..................................................     12
     9.04 No Liens ......................................................     13

Article 10 - Public Utilities and Taxes: ................................     13

     10.01 Public Utilities, Business Tax and Machinery Tax .............     13
     10.02 Payment of Real Property Taxes by Landlord ...................     13
     10.03 Increase in Real Property Taxes Attributable to Tenant .......     13
     10.04 Goods and Services Tax .......................................     13

Article 11- Exclusion of Liability and Indemnity: .......................     14

     11.01 Exclusion of Liability .......................................     14
     11.03 Mutual Waiver of Subrogation and Indemnity ...................     15

Article 12 - Landlord's Rights and Remedies .............................     15

     12.01 Default ......................................................     15
     12.02 Consequences of Default ......................................     16
     12.03 Non-Waiver ...................................................     17
     12.04 Right of Landlord to Perform Tenant's Covenants ..............     17
     12.05 Time for Payment and Legal Costs .............................     17
     12.06 Remedies Cumulative ..........................................     17

Article 13 - Mortgages and Assignment by Landlord: ......................     17

     13.01 Sale or Financing of Development .............................     17
     13.02 Subordination and Acknowledgment .............................     18
     13.03 Offset Statement .............................................     18
     13.04 Registration .................................................     18

Article 14 - Overholding Tenant: ........................................     18

     14.01 No Tacit Renewal .............................................     18

Article 15 - Quiet Possession: ..........................................     19

     15.01 Quiet Possession .............................................     19

Article 16 - Legal Relationships: .......................................     19

     16.01 No Partnership ...............................................     19
     16.02 Joint and Several Liability ..................................     19
     16.03 Successors and Assigns .......................................     19

Article 17 - Notices: ...................................................     19

     17.01 Notices ......................................................     19

Article 18 - General: ...................................................     20

  18.01 Collateral Representations and Agreements .......................     20
</TABLE>
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<TABLE>
<S>                                                                          <C>
     18.02 Management of Development ....................................     20
     18.03 Time of the Essence ..........................................     20
     18.04 Unavoidable Delays ...........................................     20
     18.05 Accord and Satisfaction ......................................     20
     18.06 Competition Act ..............................................     20
     18.07 Covenants ....................................................     21
     18.08 Consent or Approval of Landlord ..............................     21
     18.09 For Lease Signs ..............................................     21
     18.10 The Commercial Tenancy Act ...................................     21
     18.11 No Exclusivity ...............................................     21
     18.12 Schedules ....................................................     21
     18.13 Applicable Law ...............................................     21
     18.14 Headings .....................................................     21
     18.15 Tenant's Acceptance ..........................................     21
     18.16 Arbitration ..................................................     21
     18.17 Severability .................................................     21

Article 19 - Definitions: ...............................................     22

     19.01 Additional Rent ..............................................     22
     19.02 Area of Leased Premises ......................................     22
     19.03 Basic Rent ...................................................     22
     19.04 Basic Term ...................................................     22
     19.05 Building .....................................................     22
     19.06 Budding Operation and Maintenance Costs ......................     22
     19.07 Commencement Date ............................................     23
     19.08 Common Areas .................................................     23
     19.09 Common Facilities ............................................     23
     19.10 Development ..................................................     23
     19.11 Development Operation and Maintenance Costs ..................     23
     19.12 Force Majeure ................................................     24
     19.13 Gross Leasable Area ..........................................     24
     19.14 HVAC Costs ...................................................     24
     19.15 Landlord's Architect .........................................     24
     19.16 Landlord's Work ..............................................     24
     19.17 Lands ........................................................     24
     19.18 Lease ........................................................     24
     19.19 Lease Year ...................................................     24
     19.20 Leased Premises ..............................................     25
     19.21 Other Buildings ..............................................     25
     19.22 Permitted Use ................................................     25
     19.23 Prime Rate ...................................................     25
     19.24 Real Property Taxes ..........................................     25
     19.25 Rent .........................................................     25
     19.26 Tax Cost .....................................................     25
     19.27 Tenants Proportionate Share ..................................     25
     19.28 Tenants Work .................................................     25
     19.29 Term .........................................................     25
     19.30 Year of the Term .............................................     25

Article 20 - Special Provisions: ........................................     25

     20.01 Deposit ......................................................     25
     20.02 Pre-Authorized Payment Plan ..................................     25
     20.03 Rent Abatement ...............................................     26
     20.04 Signage ......................................................     26
     20.05 Right of Second Refusal ......................................     26
     20.06 Expansion Option .............................................     26
     20.07 Tenant Improvement Allowance .................................     27
     20.08 Extension of Term ............................................     27

SCHEDULES: ..............................................................     29

     Schedule A Plan of the Premises ....................................     29
     Schedule B Landlord's Work .........................................     32
     Schedule C Signage .................................................     34
     Schedule D Indemnity Agreement .....................................     35
     Schedule E Environmental Covenants .................................     38
</TABLE>
<PAGE>
THIS LEASE made the 21st day of August, 1996.

BETWEEN:

                  BENTALL PROPERTIES LTD.,
                  a body corporate, having its head office
                  at Suite 3100, Three Bentall Centre, in the
                  City of Vancouver, in the Province of
                  British Columbia and

                  WESTMINSTER MANAGEMENT CORPORATION,
                  a body corporate, having a business office
                  at Suite 600, 355 Burrard Street, in the City
                  of Vancouver, in the Province of British Columbia

                  (collectively the "Landlord")

                                                  OF THE FIRST PART

AND:

                  BROOKS AUTOMATION (CANADA) CORP.,
                  a body corporate, having a business address of
                  Main Floor, 13777 Commerce Parkway, Richmond,
                  British Columbia.

                  (the "Tenant")

                                                 OF THE SECOND PART

WHEREAS:

(A)         by agreement dated July 5, 1996 (the "Agreement") the Landlord and
the Tenant agreed to enter into a lease with respect to the Leased Premises; and

(B)         the Landlord has represented to the Tenant that the Landlord is the
registered owner of the Lands, subject however to such liens, charges and
encumbrances as are registered against the title thereto as at the date hereof,
and has constructed, or is in the process of constructing, improvements thereon,
including the Building generally in accordance with the plans set forth in
Schedule "A";

            NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
rents, covenants and agreements hereinafter reserved and contained, the parties
agree to this Lease of the Leased Premises on the terms and conditions set forth
herein:

                                   BASIC TERMS

 .01   Area of Leased Premises:      approximately 41,200 square feet.

 .02   Basic Rent:                   years 1 to 4: $576,800.00 per annum,
                                    $48,066.67 per month, based on an annual
                                    rate of $14.00 per square foot of the Area
                                    of Leased Premises; and

                                    years 5 and 6: $597,400.00 per annum,
                                    $49,783.33 per month, based on an annual
                                    rate of $14.50 per square foot of the Area
                                    of Leased Premises.

 .03   Permitted Use:                Approximately 85% of the Area of Leased
                                    Premises shall be used for commercial
                                    offices and approximately 15% of the Area of
                                    Leased Premises shall be used for light
                                    assembly. The Tenant shall be permitted to
                                    install and operate, subject to the
                                    Landlord's prior approval of design and
                                    location and further subject to such
                                    installation and operation conforming to all
                                    applicable codes and by-laws, the following:

                                    (a)   a wave solder machine requiring
                                          venting to the exterior of the
                                          Building;

                                      -1-

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                                    (b)   pressurized gas bottles, provided they
                                          are inert gases or air such as
                                          nitrogen or helium;

                                    (c)   a small cafeteria including steam
                                          tables, microwaves and oven; and

                                    (d)   a bike rack in the outdoor area.

 .04         Term:                   Six (6) years commencing on the Commencement
                                    Date and ending on October 31, 2002.

            The foregoing Basic Terms are agreed to by the Landlord and the
Tenant and any reference in this Lease to any one of the same shall include the
provisions set forth above with respect thereto and in addition any more
specific definition or reference hereinafter provided.

                                    ARTICLE 1
                                 Demise and Term

1.01        Demise and Term

            The Landlord does hereby demise and lease unto the Tenant the Leased
Premises to have and to hold for and during the Term. For so long as the Tenant
duly and punctually pays the Rent, and performs and observes its covenants
herein undertaken, the Tenant shall be entitled for the benefit of the Leased
Premises to enjoy, upon the terms and conditions established or altered pursuant
to this Lease, the use in common with others entitled thereto of the Common
Areas and the Common Facilities.

1.02        Surrender of Leased Premises

            Upon the expiration or sooner termination of this Lease, the Tenant
shall vacate and surrender to the Landlord the Leased Premises in accordance
with the provisions of this Lease. Except to the extent as otherwise expressly
agreed by the Landlord in writing, no leasehold improvements, trade fixtures,
furniture or equipment shall be removed by the Tenant from the Leased Premises
either during or at the expiration or sooner termination of the Term except that
the Tenant:

            (a)   may at the end of the Term, if it is not in default hereunder,
                  remove its trade fixtures;

            (b)   shall at the end of the Term remove such trade fixtures,
                  furnishings, equipment and inventory as the Landlord shall
                  require to be removed;

            (c)   may, if it is not in default hereunder, remove its
                  furnishings, equipment and inventory at the end of the Term,
                  and also during the Term in the usual and normal course of its
                  business where such furnishings or equipment have become
                  excess for the Tenant's purposes or the Tenant is substituting
                  therefor new furnishings and equipment.

            The Tenant shall, in the case of every removal either during or at
the end of the Term, make good any damage caused to the Leased Premises and any
leasehold improvements therein by the installation and removal.

                                    ARTICLE 2
                                      Rent

2.01        Basic Rent

            The Tenant shall pay to the Landlord for each and every Year of the
Term, the Basic Rent specified in Basic Term .02, by equal monthly instalments,
each in advance on the first day of each and every month during the Term, the
first of such monthly instalments to be paid on the Commencement Date. If the
Term commences on a day which is not the first day of a calendar month then the
instalment of Basic Rent payable on the broken portion of a calendar month at
the beginning of the Term shall be calculated at a rate per day of 1/365th of
the annual Basic Rent.

2.02        Additional Rent

            The Tenant shall pay to the Landlord for each and every Lease Year
or portion thereof, the Additional Rent for such Lease Year or portion thereof.
The amount of Additional Rent which the Tenant is to pay in each Lease Year or
portion thereof shall be estimated by the Landlord in advance and the Tenant
shall pay to the Landlord such amount in equal monthly instalments in advance
during such Lease Year or the portion thereof.

                                      -2-
<PAGE>
The amount of the estimated Additional Rent may be adjusted, from time to time,
during a Lease Year by the Landlord giving notice to the Tenant, in which event
the remaining payments to be made by the Tenant as aforesaid in such Lease Year
shall be adjusted accordingly. All remedies of the Landlord on non-payment of
rent shall be applicable to the Additional Rent and the obligation of the Tenant
to pay any monies pursuant to this Lease shall survive the expiration or sooner
termination of this Lease.

2.03        Adjustment of Additional Rent

            Within ninety (90) days after the end of each Lease Year, the
Landlord shall furnish to the Tenant a statement of the actual amount of
Additional Rent payable by the Tenant for such preceding Lease Year and showing
in reasonable detail the information relevant and necessary to the calculation
thereof. If the amount payable by the Tenant as shown on such statement is more
or less than the Additional Rent paid by the Tenant to the Landlord for such
Lease Year pursuant to Article 2.02, the appropriate adjustment as between the
Landlord and the Tenant shall be made within thirty (30) days of delivery of
such statement. Any payment made by the Landlord or made by the Tenant and
accepted by the Landlord in respect of any adjustment made pursuant to this
Article 2.03 shall be without prejudice to the right of the Landlord or the
Tenant to claim a re-adjustment provided such claim if made by the Tenant or the
Landlord is made within one hundred twenty (120) days after, the date of
delivery of the statement referred to in this Article 2.03. The Tenant shall
have the right for a period of one hundred twenty (120) days following receipt
of the aforesaid statement to, at its sole expense, inspect during the
Landlord's normal business hours, subject to the inspection being reasonable in
all the circumstances, any record kept or held by the Landlord of the costs or
expenses claimed by the Landlord for such Lease Year and the Landlord shall make
its said records available accordingly.

2.04        Manner and Place of Payment

            All Rent and all other sums payable by the Tenant to the Landlord
hereunder shall be paid to the Landlord at the office of the Landlord
hereinafter set forth, or at such other place as the Landlord may in writing,
from time to time, direct, without notice or demand, except as otherwise
specifically provided herein, and without deduction, set off or abatement for
any reason whatsoever. The Landlord may at its option apply all or any sums
received from or due to the Tenant against amounts due and payable by the Tenant
hereunder in such manner as the Landlord sees fit, regardless of any designation
or instructions by the Tenant to the contrary. The Tenant shall pay to the
Landlord interest at a rate equal to the lesser of the maximum rate permitted by
law or the rate that is three (3%) percent per annum above the Prime Rate on all
arrears of Rent or other sums payable by the Tenant to the Landlord pursuant to
the terms hereof, from, except as otherwise specifically provided herein, the
date of default in payment, until payment is received by the Landlord.

2.05        Irregular Calculation of Basic Rent

            If for any reason it is necessary to calculate Basic Rent for a
period of one or more months, but less than a Year of the Term, the same shall
be calculated on the basis of 1/12 of the Basic Rent being payable for each
month. If for any reason it becomes necessary to calculate Basic Rent for a
period of less than one month the same shall be calculated on the basis of 1/365
of the Basic Rent being payable for each day in such period. Without restricting
the generality of the foregoing, in the event the Commencement Date occurs other
than on the first day of a month, the first instalment of Basic Rent paid by the
Tenant in accordance with Article 2.01 shall be based on the period from the
Commencement Date to and including the last day of the month in which the
Commencement Date occurs.

2.06        Disproportionate Allocation

            Notwithstanding anything else herein otherwise contained, to the
extent that the Landlord, acting reasonably, determines that an item included in
Additional Rent properly related to only a portion of the Development or to a
portion of the Building, the Landlord may allocate such item to such portion of
the Development or Building, as the case may be, in which event the Tenant's
Proportionate Share, if the Leased Premises are within such portion, shall be
calculated in relation to the Gross Leasable Area of all leasable premises in
such portion.

2.07        Net Lease Intent

            Except to that extent otherwise specifically provided herein this
Lease shall be a net lease to the Landlord such that the Basic Rent shall be
received by the Landlord free of all outgoings whatsoever, the Tenant to pay for
its own account all amounts, charges, costs, duties, fees, rates and taxes in
any way relating to the Leased Premises as well as the Additional Rent herein
provided.

                                      -3-
<PAGE>
                                    ARTICLE 3

                  Construction and Fixturing of Leased Premises

3.01        Landlord's and Tenant's Work

            The parties agree that the work to be done by the Landlord is as set
out in Schedule "B" hereto and that any additional work shall be Tenant's Work
hereunder.

            For greater certainty, the Tenant acknowledges and agrees that it is
accepting possession of the Leased Premises in "as is where is" condition as of
the commencement of the Fixturing Period (as hereinafter defined). Prior to the
Tenant accepting possession of the Leased Premises the Landlord will provide and
install at the Landlord's expense the following Landlord's work:

            (a)   providing the Leased Premises according to Base Building
                  Specifications as set out in Schedule "B" hereto;

            (b)   building standard demising walls;

            (c)   building standard entrance and exit doors for the Leased
                  Premises including a door connecting the lunch area to the
                  outdoor area; and

            (d)   a scissor lift of the same general specifications as in Xillix
                  Technologies Corp. premises at 13775 Commerce Parkway. The
                  Landlord shall also ensure that there is access for five tonne
                  trucks to the Tenant's loading areas.

            The Landlord shall provide the Tenant with a preliminary space plan
at a cost not to exceed $0.10 per square foot of the Area of Leased Premises and
a full set of base building construction drawings including specifications at no
cost to the Tenant.

            The Tenant shall be responsible for its own improvements to the
Leased Premises and shall have the right to improve the internal stairwell
connecting the Leased Premises. Should the Tenant require additional utilities
because of the nature of its business, in excess of those already provided to
the Leased Premises, then the Tenant shall be responsible for the cost of
installing and/or supplying such additional utilities, subject to the Landlord's
prior approval. In addition, the Tenant shall have the right to make minor
improvements to the landscaped area outside of the Building and to install
picnic tables near the door adjacent to the Tenant's lunch room, subject to the
Landlord's prior approval.

            The Tenant shall be entitled to a Rent free fixturing period (the
"Fixturing Period") which shall expire October 31, 1996 for the purposes of
fixturing and installing improvements in the Leased Premises. All the terms of
this Lease shall be applicable during the Fixturing Period save for the payment
of Rent.

3.03        Payment for Landlord's Work

            All work done at the Tenant's request (including the supplying of
materials or equipment) by the Landlord or its contractors or sub-contractors in
or relating to the Leased Premises, over and above Landlord's Work, shall be
paid for by the Tenant in accordance with the terms agreed to by the
Landlord and the Tenant prior to commencement of any such work.

3.04        Acceptance of Leased Premises

            The taking of possession of the Leased Premises by the Tenant to
construct the Tenant's Work shall be deemed to be conclusive proof that except
for items noted in a list prepared by the Tenant during a joint inspection by
the Tenant and the Landlord at the time of the taking of such possession and
within thirty (30) days thereafter, the Leased Premises are in the condition
called for by this Lease to the extent that the Landlord is responsible therefor
and that the Landlord has performed all of the Landlord's Work with respect
thereto in a good

                                      -4-
<PAGE>
and workmanlike manner. The itemizing of any matter in such list by the Tenant
shall not preclude the Landlord from disputing the categorization of such matter
as a deficiency.

                                    ARTICLE 4
                               Conduct of Business

4.01        Use of Leased Premises

            The Tenant shall not use or occupy the Leased Premises or any part
thereof for any purpose other than the Permitted Use, without consent of the
Landlord first had and obtained.

4.02        Prohibited Uses

            The Tenant shall not, at any time, carry on nor suffer, permit or
allow to be carried on in the Leased Premises any fire sale, distress sale,
bankruptcy sale, going-out-of-business sale, or any other business sale designed
to convey to the public that business operations are to be discontinued, an
auction, a pawn business, a mail order business or any other business which
because of the merchandise likely to be sold or the merchandising or pricing
methods likely to be used would, in the reasonable opinion of the Landlord, tend
to lower the character of the Development, or any other business or occupation
which shall be deemed by the Landlord to be a nuisance.

4.04        Signs and Advertising Displays

            The Tenant, after first obtaining the written approval of the
Landlord, which approval shall not be unreasonably withheld or delayed, to, or
at the request of the Landlord with instructions as to the specifications,
design, location and method of installation, shall at the expense of the Tenant
install, maintain and operate during such reasonable hours as the Landlord may
determine a sign in accordance with the sign criteria of the Landlord as such
criteria are set out in Schedule "C" hereto. The Tenant shall not erect or
place, or suffer to be erected or placed or maintain any other signs of any
nature or kind whatsoever either on the exterior walls of the Leased Premises or
elsewhere in the Development without the approval of the Landlord. The Tenant
shall not erect or place or suffer to be erected or placed in the display
windows of the Leased Premises, any signs, decoration, lettering or advertising
matter of any kind (including signs placed in the interior of the Leased
Premises for exterior view) without first obtaining the Landlord's written
approval, which approval may not be unreasonably withheld. All signs or other
materials, referred to in this Article 4.04 shall remain the property of the
Tenant and the Tenant shall remove the same at the expiration of the Term or
such shorter period to which the approval relates and shall make good any damage
caused by such installation or removal.

4.05        Nuisance and Annoyance

            The Tenant shall not use or occupy the Leased Premises or suffer or
permit the same to be used or occupied for any unlawful purpose, or for any
dangerous, noxious or offensive trade or business, or for any purpose likely to
cause a nuisance or annoyance to the Landlord or any other tenants of the
Development nor undertake any operation likely to cause the same, nor commit or
suffer to be done any waste, damage or disfigurement or injury to the
Development or any part thereof nor permit or suffer the overloading of any
floors therein.

                                      -5-
<PAGE>
4.06        Coin Operated Machines

            The Tenant shall not have or permit or suffer to be on the Leased
Premises any machines selling merchandise or services or providing
entertainment, whether by coins, credit cards or otherwise except for machines
providing food, cigarettes or beverages for employee use, unless expressly
approved by the Landlord in writing.

4.07        Loud Speakers and Other Advertising Apparatus

            The Tenant shall not have or permit any public address, music
broadcast or other sound system which may be heard beyond the limits of the
Leased Premises.

4.08        Delivery of Supplies and Materials

            The delivery and shipping of merchandise, supplies, fixtures and
other materials or goods of whatsoever nature to or from the Leased Premises and
all loading, unloading and handling thereof shall be done through such entrances
as designated by the Landlord and at such times and by such means as approved by
the Landlord.

4.09        Ordinances and Regulations

            The Tenant shall observe and fulfil the provisions and requirements
of all statutes, orders in council, bylaws, rules and regulations, relating
directly or indirectly to the use of the Leased Premises and shall comply with
all reasonable requirements of any insurer under any policy of insurance
affecting the Development except to the extent such observation, fulfillment and
compliance require structural repairs or changes.

4.10        Rules and Regulations

            The Tenant shall observe and comply with and use its best efforts to
cause its employees, agents, licensees and invitees to observe and comply with
any and all rules and regulations communicated by the Landlord to the Tenant,
from time to time, which in the reasonable, good faith judgment of the Landlord
are necessary or desirable in relation to all aspects of the use and occupancy
by the Tenant of the Leased Premises, the Building, the Common Areas and the
Common Facilities including for the reputation, care, safety and appearance of
the Development, the preservation of good order therein and the operation and
maintenance thereof, provided that such rules and regulations do not conflict
with any express provisions of this Lease and are not discriminatory against the
Tenant and are enforced in a uniform manner. The Tenant specifically
acknowledges that the Landlord has and shall have the right to make rules and
regulations as aforesaid.

                                    ARTICLE 5
                                     Repairs

5.01        Tenant's Repairs

            The Tenant shall at all times during the Term, at its own cost and
expense, repair, maintain, operate and keep the Leased Premises, all equipment,
fixtures and mechanical systems (including heating, ventilating and
air-conditioning systems) within the Leased Premises or elsewhere (if such
equipment, fixtures or systems are provided for the use or benefit of the Leased
Premises) and any improvements now or hereafter made to the Leased Premises in
good order, firstclass condition and repair (reasonable wear and tear and
repairs which are the Landlord's responsibility pursuant to Article 5.06 hereof
only excepted) in accordance with the statutory building scheme registered
against title to the Lands and without limiting the generality of the foregoing,
the Tenant shall, during the Term, cause such good management and care to be
taken of the Leased Premises and various parts thereof that no material injury
to the same shall occur and all water closets, sinks, heating and
air-conditioning and ventilating apparatus located in the Leased Premises shall
be maintained in a state of efficient and good working order. The Tenant shall
be responsible for all such maintenance, repairs, replacements and such
decorating and shall promptly with due diligence, at its sole expense, carry out
any and all of the foregoing. The Tenant shall be responsible for all janitorial
services respecting the Leased Premises (including the washing of windows
therein) so as to keep the Leased Premises in a clean and tidy condition. The
Landlord shall arrange to have the outside of the exterior windows washed twice
a year with the cost of such cleaning to be included in Additional Rent.

            Notwithstanding the foregoing provisions of this Section 5.01, if
the Building is primarily used for office purposes, the task of repairing,
maintaining and operating the heating, ventilating and air-conditioning systems
and other building standard equipment and mechanical systems within or serving
the Leased Premises shall be the responsibility of the Landlord (save only to
the extent that any such equipment or systems are installed

                                      -6-
<PAGE>
by or for the sole use of the Tenant) and the costs thereof shall form part of
the HVAC Costs or Building Operation and Maintenance Costs, as the case may be
hereunder.

5.02        Perimeter Walls and Glass

            The Tenant shall promptly repair or make whole all damaged glass,
plate glass, doors and windows in the Leased Premises as and whenever the same
is required.

5.03        Landlord's Examination of Leased Premises

            The Landlord and any employee, servant, agent or contractor of the
Landlord shall be entitled, upon reasonable notice during normal business hours
and at any time in the event of an emergency, to enter and examine the state of
maintenance, repair, decoration and cleanliness of the Leased Premises, all
equipment and fixtures within the Leased Premises and any improvements now or
hereafter made to the Leased Premises and the Landlord may give notice to the
Tenant requiring that the Tenant perform such maintenance or effect such
repairs, replacements or decoration or cleaning as is the responsibility of the
Tenant and as may be found necessary from such examination.

5.04        Landlord's Right to Repair

            In the event that the Tenant fails forthwith after receipt of
written notice thereof, or within such reasonable time thereafter if for any
cause beyond the control of the Tenant it is not reasonable in the circumstances
(it being agreed that lack of finances on the part of the Tenant shall not be
treated as a cause beyond the Tenant's control), to commence and diligently
proceed to perform such maintenance or effect such repairs, replacements,
decorations or cleaning as so specified in any notice given by the Landlord
which is in accordance with the Tenant's obligation hereunder, the Landlord, its
employees, servants, agents or contractors may, but shall not be obligated to,
enter the Leased Premises and at the Tenant's expense, perform and carry out the
same and the Landlord in so doing shall not be liable for inconvenience,
disturbance, loss of business or other damage resulting therefrom and in the
event the Landlord expends any monies pursuant to the provisions of this Article
5.04, the Tenant shall pay the same to the Landlord on demand with a fee of
fifteen (15%) percent of such amount for the Landlord's supervisory function and
in addition shall pay interest on the aggregate of the foregoing at the rate
provided in this Lease from the date of the expenditure of such first mentioned
monies by the Landlord.

5.05        Landlord's Right to Enter for Other Repairs

            The Landlord, and any employee, servant, agent or contractor of the
Landlord shall have the right to enter the Leased Premises at all times during
business hours and at any time in the case of an emergency to make such
alterations or repairs as the Landlord is required to make pursuant to the terms
of this Lease or shall deem necessary for the safety, preservation, proper
administration or improvement of the Development or any portion thereof and the
Landlord in so doing, shall not be liable for inconvenience, disturbance, loss
of business or other damage resulting therefrom provided the Landlord acts in a
commercially reasonable manner to mitigate the disruption to the business of the
Tenant and to comply with the Tenant's reasonable security requirements.

5.06        Landlord's Repairs

            The Landlord shall, from time to time, throughout the Term:

            (a)   at its sole cost, carry out as soon as possible in the
                  circumstances after receipt of notice thereof in writing from
                  the Tenant, structural repairs to the foundations, exterior
                  walls (excluding store-fronts and glass), structural
                  subfloors, the roof, the structural portions of bearing walls
                  and structural columns and beams which interfere with or
                  impair the use, occupancy or safety of the Leased Premises;

            (b)   carry out repairs or replacements to the Common Areas and
                  the Common Facilities, including the heating, ventilating and
                  air-conditioning systems forming part of the Common
                  Facilities; and

            (c)   repair all damage to the Leased Premises which is covered by
                  any insurance effected by the Landlord in accordance with the
                  provisions of Article 8.03 hereof to the extent of the
                  proceeds of such insurance applicable thereto;

            PROVIDED HOWEVER that if any such repairs are necessitated by the
negligence or misconduct of the Tenant, its servants, agents, contractors,
licensees, employees or others for whom in law the Tenant is responsible, the
Tenant shall pay to the Landlord on demand the cost of such repairs and a fee of
fifteen (15%) percent for the Landlord's supervisory function and interest on
the aggregate amount of both of the foregoing from the date of expenditure of
the first mentioned monies by the Landlord.

                                      -7-
<PAGE>
            PROVIDED FURTHER that in any event the Landlord shall not be
responsible for any damages, loss or injury sustained by the Tenant or any
person or persons claiming through or under it, by reason of defects giving rise
to the need for such repairs or the consequence thereof, including the
inconvenience occasioned to the Tenant by the entry of the Landlord, its
employees, servants, agents, or contractors on the Leased Premises to effect
such repairs, provided the Landlord acts in a commercially reasonable manner
when the presence and extent of any defects comes to its notice.

5.07        Landlord's Obligation to Maintain

            The Landlord shall maintain and keep the Common Areas and the Common
Facilities in a state of repair and cleanliness consistent with the standard of
a first class development of a similar nature.

5.08        Damage and Destruction

            In the event of damage or destruction of the Leased Premises of the
Building by fire, lightning, earthquake, tempest or other casualty so that:

            (a)   the same is damaged or destroyed to the extent that the same
                  cannot with reasonable diligence be rebuilt, repaired or
                  restored within one hundred and twenty (120) days of the date
                  of damage or destruction (as determined in the opinion in
                  writing of the Landlord's Architect, which written opinion
                  shall be delivered to the Tenant within thirty (30) days of
                  the occurrence of such damage or destruction) or the estimated
                  cost of rebuilding, repairing or restoring such damage or
                  destruction will exceed by $250,000 or more, the anticipated
                  proceeds of insurance available to the Landlord for that
                  purpose, then, notwithstanding any other term or condition of
                  this Lease to the contrary, the Landlord or the Tenant may
                  terminate this Lease by notice in writing to the Tenant or the
                  Landlord, as the case may be, given within sixty (60) days of
                  the occurrence of such damage or destruction, such notice to
                  be effective as at the date of the damage or destruction if
                  the Leased Premises are not capable of being utilized by the
                  Tenant as determined by the Landlord's Architect and otherwise
                  to be effective at the date specified in such notice of
                  termination which shall not be less than thirty (30) days
                  following receipt of such notice by the Tenant and in either
                  of such events, the Rent hereby reserved shall be forthwith
                  payable by the Tenant to the effective date of the
                  termination, the Term hereby granted shall terminate as at
                  that date and the Landlord may as at the effective date of
                  termination re-enter and take possession of the Leased
                  Premises and deal with the same as fully and effectively as if
                  these presents had not been entered into. But if within the
                  said period of sixty (60) days, the Landlord and the Tenant
                  shall not give notice terminating this Lease, then as soon as
                  reasonably practicable thereafter, the Landlord shall
                  undertake or continue the rebuilding, repair or restoration
                  with all reasonable diligence and the Basic Rent hereby
                  reserved, or a proportionate part thereof depending upon the
                  proportion of the Leased Premises that are not fit for use by
                  the Tenant for the intended purpose of this Lease, shall
                  abate until the Leased Premises have been rebuilt and made fit
                  for the intended purposes of this Lease;

            (b)   the same is damaged or destroyed to the extent that the same
                  can with reasonable diligence be rebuilt, repaired or restored
                  within one hundred and twenty (120) days of the date of such
                  damage or destruction (as determined in the opinion in writing
                  of the Landlord's Architect, which written opinion shall be
                  delivered to the Tenant within thirty (30) days of the
                  occurrence of such damage or destruction) and the Landlord is
                  not otherwise entitled to terminate this Lease pursuant to
                  Article 5.08(a) the Landlord shall as soon as reasonably
                  practicable after such determination, undertake or continue
                  the repair of the same with all reasonable diligence provided,
                  however, that nothing herein contained shall impose any
                  obligation upon the Landlord to complete such repair within
                  the said period of one hundred and twenty (120) days and the
                  Basic Rent hereby reserved, or a proportionate part thereof
                  depending upon the proportion of the Leased Premises that are
                  not fit for use by the Tenant for the intended purposes of
                  this Lease, shall abate until the Leased Premises have been
                  rebuilt and made fit for the intended purposes of this Lease.

5.09        Qualifications

            (a)   For the purposes of Article 5.08 the terms "Leased Premises"
                  and "Building" shall be deemed not to include the Tenant's
                  trade fixtures, merchandise, stockin-trade, furniture or any
                  other improvements installed in the Leased Premises by or on
                  behalf of the Tenant including the Tenant's Work.

                                      -8-
<PAGE>
            (b)   If the Landlord rebuilds, repairs, or restores the Building or
                  the Leased Premises as contemplated in Article 5.08 it will
                  not be required to reproduce exactly the Leased Premises or
                  the Building or restore the same to the exact condition that
                  existed before the damage or destruction provided that it
                  reproduces or restores or rebuilds the same to a comparable
                  condition and configuration provided that the Tenant's
                  premises can be reasonably accommodated in the reproduced or
                  restored building and the Tenant's Rent shall be adjusted to
                  the correct square footage.

            (c)   The certificate of the Landlord's Architect in charge of the
                  rebuilding, repair or restoration shall bind the Landlord and
                  the Tenant as to the state and proportion of the suitability
                  for occupancy of the Leased Premises and as to the date upon
                  which the Landlord's work of reconstruction or restoration is
                  completed and the Leased Premises fit for the purposes of the
                  Tenant.

5.10        Condition of Expiration

            Upon the expiration of the Term the Tenant shall surrender and
deliver up to the Landlord vacant possession of the Leased Premises, which
Leased Premises at such time, unless the expiration of the Term has occurred
pursuant to Article 5.08(1), shall be in the condition in which the same must be
maintained during the Term pursuant to Articles 5.01 and 5.02 and as the same
must otherwise be restored pursuant to Article 9.02.

                                    ARTICLE 6
                       Common Areas and Common Facilities

6.01        Tenant's Use of Parking Areas

            The Tenant, its employees, suppliers and other persons not licensees
or invitees and having business with the Tenant shall be prohibited from using
for parking of vehicles and loading or unloading of vehicles any part of the
customer parking areas as such may be designed and changed from time to time by
the Landlord. Tenant and employee parking shall be limited to specified times
and places, arranged so as to cause minimal interference to business within the
Development. If requested by the Landlord the Tenant shall supply its employees'
automobile license numbers to the Landlord.

            Throughout the Term, the Tenant shall be provided with parking on
the basis of three (3) stalls per 1,000 square feet of the Area of Leased
Premises. The parking stalls shall be located on a random basis around the
perimeter of the Building and shall be free of charge. Of the total allotment of
parking stalls, twelve (12) shall be reserved exclusively for the Tenant's use
with a portion of the reserved stalls being within close proximity to the front
entrance of the Building and the remainder at the rear or side of the Building.
Additional street parking is also available subject to applicable municipal
by-laws.

6.02        Landlord's Right to Remove Vehicles

            Should the Tenant, its employees, suppliers or other persons not
licensees or invitees of the Tenant park vehicles in areas not allocated for
that purpose and the prohibition of the use of which is posted, the Landlord
shall have the right to remove the said trespassing vehicles and the Tenant will
save harmless the Landlord from any and all damages arising therefrom and the
Tenant will pay the costs of such removal excluding damage resulting from
negligence or misconduct by the Landlord.

6.03        Control of Common Areas and Common Facilities

            The Landlord shall at all times have exclusive control and
management of the Common Areas and the Common Facilities. Such control applies
to signs, use of show windows, and the Tenant's publicity visible from the
Common Areas, as well as to the use made by the Tenant and/or the public of the
Common Areas. The Landlord shall have the right to alter, vary, designate and
redesignate the Common Areas and the Common

                                      -9-
<PAGE>
Facilities from time to time and to interfere with the use of the Common Areas
and the Common Facilities to the extent necessary to make such alterations or
variations or any other repairs required or permitted to be made by the Landlord
under this Lease.

6.04        Merchandise on Common Area

            In particular, but without in any way limiting the generality of the
provisions of Article 6.03, the Tenant shall not keep, display, or sell any
merchandise on or otherwise obstruct or use any part of the Common Areas on the
Common Facilities, except as permitted by the Landlord and except for displays
included in Development promotions when recognized and permitted by the
Landlord.

6.05        Customer Parking

            The Landlord shall at all times during the Term maintain for the
benefit of licensees and invitees of the Tenant parking facilities.

                                    ARTICLE 7
                           Assignment and Sub-Letting

7.01        Prohibitions

            The Tenant shall not assign or transfer this Lease or the Term or
any portion thereof or let or sub-let all or any part of the Leased Premises or
grant any license with respect thereto (any of the foregoing being hereinafter
called a "Transfer") without the written consent of the Landlord first had and
obtained, which consent shall not be unreasonably withheld, provided that it
shall not be unreasonable for the Landlord to withhold its consent where the
Tenant is assigning or subletting at a profit to the Tenant, unless all profit
above Tenant's leasing expenses and inducements shall be paid directly to the
Landlord.

            All requests to the Landlord for consent to any Transfer shall be
made to the Landlord in writing together with payment to the Landlord of one
hundred dollars ($100.00) as a deposit on account of all costs incurred by the
Landlord in considering and processing the request for consent and such
information in writing as the Landlord might reasonably require respecting a
transferee including, without limiting the generality of the foregoing, the
name, address, business experience, financial position and banking and personal
references of such transferee, and in the event the transferee is a corporation,
similar information respecting the corporation and its principal shareholders,
officers and directors. In addition, the request shall contain a comprehensive
summary of the terms and conditions upon which the Transfer is to occur.

            Notwithstanding any provisions of this Article 7.01 to the contrary,
after the Landlord receives such request and information in writing, it shall
have the option, to be exercised by written notice within thirty (30) days after
the receipt of such request and information, to terminate this Lease and the
Term hereof with respect to the portion of the Leased Premises which is the
subject of the Transfer or alternatively to take an assignment of the Transfer
from the Tenant (to the effect that the Tenant shall surrender to the Landlord
such portion of the Leased Premises and the Landlord shall thereafter have the
right to lease the same directly to the proposed assignee or subtenant) on not
less than thirty (30) days and not more than ninety (90) days notice to the
Tenant. If the Landlord elects to terminate this Lease as aforesaid, the Tenant
shall have the right, to be exercised by written notice to the landlord within
ten (10) days after receipt of such notice of termination, to withdraw the
request for consent to the proposed Transfer, in which case the Tenant shall not
proceed with such Transfer, the notice of termination shall be null and void and
this Lease shall continue in full force and effect in accordance with its terms.

            If the Landlord consents to a Transfer, the Landlord shall have the
            following rights:

            (a)   to require the Tenant to enter into an agreement in writing
                  and under seal to implement all amendments to the Lease to
                  give effect to the Landlord's exercise of its foregoing
                  rights; and

            (b)   to require the Transferee to enter into an agreement directly
                  with the Landlord to perform and observe all the terms and
                  conditions of the Tenant pursuant to this Lease.

            Whether or not the Landlord consents to any request to Transfer, the
Tenant shall pay reasonable costs incurred by the Landlord in considering any
request for consent to Transfer and in completing any of the documentation
involved in implementing such Transfer.

            PROVIDED FURTHER that, notwithstanding any other provisions of this
Article 7.01 to the contrary, neither the Transfer nor the taking of any
documentation in relation thereto shall affect the obligation of the Tenant to
perform and observe all of the terms and conditions in this Lease to be observed
and performed by the Tenant.

                                      -10-
<PAGE>
7.02        Control of Corporation

            If the Tenant is a corporation, other than a corporation the shares
of which are listed on any recognized stock exchange, effective control of the
corporation shall not be changed directly or indirectly by a sale, encumbrance
or other disposition of shares or otherwise howsoever without first obtaining
the written consent of the Landlord which consent shall not be unreasonably
withheld or delayed; provided that the Landlord's consent shall not be required
for any sale or other disposition of shares by present shareholders to and
between themselves or in the event of any transmission of shares on death and
provided further that the Landlord's consent shall not be unreasonably withheld
where control of the Tenant is to pass to a subsidiary or parent of the Tenant.
Notwithstanding the foregoing, the Landlord's consent Shall not be required (but
the Tenant shall provide the Landlord with notice at the time thereof or as soon
as reasonably possible thereafter) in the case of a bona ride corporate
reorganization.

7.03        Assignment by Landlord

            The Landlord may assign all or a part of its interest in this Lease
without the Tenant's knowledge or consent.

                                    ARTICLE 8
                                    Insurance

8.01        Tenant to Insure

            The Tenant, at its sole cost and expense, shall take out and keep in
force during the Term, standard fire and extended coverage, and malicious damage
insurance on the stock-in-trade, furniture, fixtures, glass, improvements and
all other contents of the Leased Premises to their full replacement value, and
comprehensive general liability insurance in an amount of not less than five
million dollars ($5,000,000) and tenant's fire legal liability insurance all in
amounts and with policies in a form satisfactory to the Landlord with insurers
acceptable to the Landlord, acting reasonably. The comprehensive general
liability policy shall name the Landlord as an additional insured as its
interest may appear and such comprehensive public liability insurance shall
contain a provision for cross liability as between the Landlord and the Tenant.
Each policy other than public liability policies shall provide that the insurer
shall not have any right of subrogation against the Landlord, its servants,
agents or employees on account of any loss or damage covered by such insurance
or on account of payments made to discharge claims against or liabilities of the
Landlord or Tenant covered by such insurance. The cost or premium for each and
every such policy shall be paid by the Tenant. The Tenant shall use commercially
reasonable efforts to obtain from the insurers under such policies, undertakings
to notify the Landlord in writing at least thirty (30) days prior to any
cancellation or reduction in coverage thereof. If the Tenant fails to take out
or keep in force, or provide to the Landlord proof, as hereafter contemplated,
of such insurance, the Landlord shall have the right to place such insurance on
behalf of the Tenant and to pay the premium therefor and in such event, the
Tenant shall repay to the Landlord the amount paid therefor, which repayment
shall be deemed to be Additional Rent payable on the first day of the next month
following the said payment by the Landlord The Tenant agrees to provide the
Landlord with current copies of the insurance policies or certificates of
insurance as described herein.

8.02        Not to Affect Landlord's Insurance

            The Tenant will not upon the Leased Premises do or permit to be
done, or omit to do anything which causes or has the effect of causing the rate
of insurance upon the Development or any part thereof to be increased and if the
insurance rate shall be thereby increased by any action of the Tenant, the
Tenant shall pay to the Landlord on demand as Additional Rent the amount by
which the insurance premiums shall be so increased. The Tenant will not store or
permit to be stored upon or in the Leased Premises anything of a dangerous,
inflammable or explosive nature nor anything which would have the effect of
increasing the Landlord's insurance costs or of leading to the cancellation of
such insurance. It is agreed that if any insurance policy upon the Leased
Premises shall be cancelled by the insurer by reason of the use and occupation
of the Leased Premises or any part thereof by the Tenant or by any assignee,
sub-tenant, concessionaire or licensee of the Tenant, or by anyone permitted by
the Tenant to be upon the Leased Premises, the Landlord may, at its option,
forthwith enter upon the Leased Premises and rectify the situation causing such
cancellation or rate increase, and the Tenant shall forthwith on demand pay to
the Landlord the costs of the Landlord related to such rectification together
with a supervisory fee of twenty (20%) percent of such cost and with interest on
the aggregate of the foregoing from the date funds were expended by the
Landlord.

8.03        Landlord to Insure

            The Landlord shall throughout the Term, carry fire insurance with
normal coverage endorsements in respect of the buildings and improvements
forming part of the Development (but excluding the Tenant's trade fixtures,
merchandise, stock-in-trade, furniture or any other improvements installed in
the Leased Premises by or on behalf of the Tenant including the Tenant's Work)
in an amount not less than ninety (90)

                                      -11-
<PAGE>
percent of the full replacement cost (excluding the cost of foundations,
footings, underground utilities and architects and other fees associated with
these items) from time to time, on a stated amount basis, provided that such
insurance, without further consent or notice to the Tenant, may have a
deductible amount, provided that such deductible amount shall not exceed three
(3%) percent of the amount insured under such policy or policies. The Landlord
may, but shall not be obligated to, carry such other insurance including public
liability insurance and rental loss insurance related to the Lands or such risks
and perils in relation thereto or the Landlord's interest derived therein as the
Landlord may so determine. All such insurance so obtained by the Landlord shall
be for the sole benefit of the Landlord and the Tenant shall be entitled to no
interest therein or benefit thereof.

                                    ARTICLE 9
                               Tenant Alterations

9.01        Painting, Decorating and Alterations

            The Tenant may, provided it first obtains the consent of the
Landlord, such consent not to be unreasonably withheld, at any time and from
time to time at its expense, paint and decorate, in accordance with the manner
and standard referred to in Article 5.01, the interior of the Leased Premises
and make such changes, alterations, additions and improvements in and to the
Leased Premises as will in the judgment of the Tenant better adapt the Leased
Premises for the purposes of its business; provided, however, that no changes,
alterations, additions or improvements to the structure, any perimeter wall, the
sprinkler system, the heating, ventilating, air conditioning, plumbing,
electrical or mechanical equipment or the concrete floor or the roof shall be
made without the prior written consent of the Landlord, not to be unreasonably
withheld, and without the use of contractors or other qualified workmen approved
by the Landlord. All changes, alterations, additions and improvements, whether
structural or otherwise, shall be carried out in accordance with the reasonable
requirements or rules of the Landlord and shall comply with all applicable
statutes, regulations or by-laws of any municipal, provincial or other
governmental authority. As part of the process of the Landlord's examination and
approval of the Tenant's plans and specifications, materials may, in addition to
being submitted to the Landlord's Architect, be submitted by the Landlord to
other architects, engineers, and special consultants, and progress and
completion of the work may require supervision and/or inspection by the Landlord
or any of the foregoing persons on behalf of the Landlord. At the Tenant's
option, the Landlord will advise the Tenant at such time as to which leasehold
improvements will be required to be removed at the end of the Term. Any fees and
costs incurred by the Landlord in relation to the foregoing will be paid by the
Tenant to the Landlord within fifteen (15) days of billing. .The Tenant shall
pay to the Landlord the amount of the increase for any insurance coverage of the
Landlord directly attributable to any action by the Tenant as hereinbefore in
this Article 9.01 provided and the Tenant covenants that such insurance shall
not thereby be made liable to avoidance or cancellation by the insurer by reason
of such changes, alterations, additions or improvements.

9.02        Landlord's Property

            At the expiration of the Term all changes, alterations, additions
and improvements made to or installed upon or in the Leased Premises whether
made pursuant to this Article 9 of otherwise and which in any manner are
attached in, to on or under the floors, walls or ceilings (other than unattached
movable trade fixtures) shall remain upon and be surrendered to the Landlord
with the Leased Premises as part thereof, without disturbance, molestation or
injury and shall be and become the absolute property of the Landlord without any
payment or indemnity by the Landlord or any third party to the Tenant or any
other party. Notwithstanding the foregoing provisions of this Article 9.02,
unless the Lease has been terminated pursuant to Article 5.08(a) the Landlord
may by notice in writing require the Tenant to remove the aforesaid changes,
alterations, additions and improvements in whole or in part, which the Landlord
in accordance with Article 9.01 has previously advised the Tenant will be
required to be removed, in which event the Tenant shall remove the same and
restore to the extent so requested that Leased Premises to the state in which
they were prior to the commencement of any of the Tenant's Work and shall make
good any damage or injury caused to the Leased Premises resulting from such
installation and removal, reasonable wear and tear and the Landlord's repair
obligations only excepted. The obligations of the Tenant under this Article 9.02
shall survive the expiration of the Term.

9.03        Prohibitions

            The Tenant, its employees, agents and representatives, are expressly
prohibited from entering upon the roof of the Building or any Other Buildings
for any reason whatsoever. The Tenant shall not make any repairs, openings or
additions to any part of the exterior of the Leased Premises, nor place any
attachments, decorations, signs or displays in or upon any Common Area or the
exterior of the Leased Premises failing which the Tenant will be held
responsible for all ensuing costs and damages whether to remove such items or to
effect repairs needed as a result of such acts and shall pay the cost thereof to
the Landlord forthwith on demand together with a supervisory fee to the Landlord
of twenty (20%) percent of such cost as well as interest on the aggregate of the
foregoing from the date funds are so expended by the Landlord.

                                      -12-

<PAGE>
9.04              No Liens

                  The Tenant covenants with the Landlord that it will not
permit, do, or cause anything to be done to the Leased Premises during the
period of construction and fixturing of the Leased Premises or at any time which
would allow any lien, lis pendens, judgment or certificate of any court or any
mortgage, charge or encumbrance of any nature whatsoever to be imposed or to
remain upon the Leased Premises or the Development. In the event of the
registration of any lien or other encumbrance as aforesaid, the Tenant shall at
its own expense immediately cause the same to be discharged. Should the Tenant
fail to discharge such lien or encumbrance within seven (7) business
days of notice from the Landlord so to do, the Landlord shall be at liberty to
pay and discharge such lien or encumbrance and any amount so paid by the
Landlord together with any disbursements and costs incurred by the Landlord on a
solicitor-client basis together with interest on any such amounts from the date
of expenditure of such funds by the Landlord shall be paid by the Tenant to the
Landlord forthwith.

                                   ARTICLE 10
                           Public Utilities and Taxes

10.01             Public Utilities, Business Tax and Machinery Tax

                  The Tenant shall pay and discharge as the same fall due all
charges for utilities provided to or consumed on the Leased Premises during the
Term including telephone installations, water, electrical power, gas and
telephone charges metered separately or charged separately by the authority
providing the same to the Leased Premises as well as any charges of any such
authority based thereon for treatment or other facilities and all other charges
similar in nature, and shall also pay and discharge as the same fall due all
business taxes and rates, floor space and personal property taxes, licence fees
or similar fees which may be imposed by any municipal, legislative or other
authority in respect of the use or occupancy of the Leased Premises or any
personal property situate thereon or in respect of any fixtures, machinery,
equipment or apparatus installed in the Leased Premises (or elsewhere in the
Development by the Tenant).

                  PROVIDED ALWAYS that if any of the aforesaid utilities are
provided to the Leased Premises through a common metering device or on any other
shared basis with any other premises or portions of the Building or the
Development, the Tenant shall pay to the Landlord forthwith on demand, from time
to time by the Landlord, the Tenant's, share of the cost thereof based on such
allocation as the Landlord may reasonably determine in relation to the other
premises or portions of the Building or the Development being so served.

10.02             Payment of Real Property Taxes by Landlord

                  The Landlord shall, without derogating from any of the
Tenant's obligations with respect to payment of Additional Rent, pay or cause to
be paid when due to the municipality or other taxing authorities having
jurisdiction all Real Property Taxes, PROVIDED ALWAYS that the Landlord may
postpone such payment to the extent permitted by law if pursuing in good faith
any appeal against the imposition thereof but the Tenant shall not be charged
with any interest penalties caused by the Landlord's delay in payment.

10.03             Increase in Real Property Taxes Attributable to Tenant

                  The Tenant shall from time to time if requested by the
Landlord, pay to the Landlord forthwith on demand by the Landlord, an amount
equal to any increase in the amount of Real Property Taxes by reason of any
installation, alteration, or use made in or to the Leased Premises by or for the
benefit of the Tenant or any party claiming by or through the Tenant.

10.04             Goods and Services Tax

                  Despite any other section or clause of this Lease, the Tenant
shall pay to the Landlord upon demand an amount equal to any and all Goods and
Services Tax, it being the intention of the parties that the Landlord shall be
fully reimbursed by the Tenant with respect to any and all Goods and Services
Tax at the full tax rate applicable from time to time in respect of the Rent
payable for the lease of the Leased Premises pursuant to this Lease. The amount
of the Goods and Services Tax so payable by the Tenant shall be calculated by
the Landlord in accordance with the applicable legislation and shall be paid to
the Landlord at the same time as the amounts to which such Goods and Services
Tax apply and is payable to the Landlord under the terms of this Lease or upon
demand at such other time or times as the Landlord from time to time determines.
Despite any other section or clause in this Lease, the amount payable by the
Tenant under this paragraph shall be deemed not to be Rent, but the Landlord
shall have all of the same remedies for and rights of recovery of such amount as
it has for recovery of Rent under this Lease. As referred to herein "Goods and
Services Tax" means the tax imposed under part IX of the Excise Tax Act (Canada)
or any similar tax hereafter imposed in substitution therefor or in addition
thereto.

                                      -13-
<PAGE>

                                   ARTICLE 11
                      Exclusion of Liability and Indemnity

11.01             Exclusion of Liability

                  It is agreed between the Landlord and the Tenant that:

                  (a)      the Landlord, its agents, servants and employees
                           shall not be liable for damage or injury to any
                           property of the Tenant which is entrusted to the care
                           or control of the Landlord, its agents, servants or
                           employees;

                  (b)      the Landlord, its agents, servants and employees
                           shall not be liable nor responsible in any way for
                           any personal or consequential injury of any nature
                           whatsoever that may be suffered or sustained by the
                           Tenant or any employee, agent, customer, invitee or
                           licensee of the Tenant or any other person who may be
                           upon the Leased Premises or the Development or for
                           any loss of or damage or injury to any property
                           belonging to the Tenant or to its employees or to
                           any other person while such property is on the Leased
                           Premises or the Development and, in particular
                           (without limiting the generality of the foregoing)
                           the Landlord shall not be liable for any damage or
                           damages of any nature whatsoever to any such property
                           caused by the failure by reason of a breakdown or
                           other cause, to supply adequate drainage, snow or ice
                           removal, or by reason of the interruption of any
                           public utility of service or in the event that steam
                           water, rain or snow may leak into, issue or flow from
                           any part of the Development or from the water, steam,
                           sprinkler, or drainage pipes or plumbing works the
                           same, or from another place or quarter or for any
                           damage caused by any thing done or omitted by any
                           tenant, but the Landlord shall, after notice of the
                           same and where it is within its obligation so to do,
                           use all reasonable diligence to remedy such
                           condition, failure or interruption of service when
                           not directly or indirectly attributable to the
                           Tenant, and the Tenant shall not be entitled to any
                           abatement of Rent in respect of any such condition,
                           failure or interruption of service; and

                  (c)      the Landlord, its agents, servants, employees or
                           contractors shall not be liable for any damage
                           suffered to the Leased Premises or the contents
                           thereof by reason of the Landlord, its agents,
                           servants, employees or contractors entering upon the
                           Leased Premises to undertake any examination thereof
                           or any work therein or in the case of an emergency.

                                      -14-
<PAGE>

11.03             Mutual Waiver of Subrogation and Indemnity

                  The Landlord and the Tenant confirm and acknowledge that it is
their intent that any loss, damage or expense to which either party may be put
(in this Article 11.03, the "Injured Party") as a result of the act, omission or
negligence of the other party (in this Article 11.03, the "Offending Party")
shall be recoverable from the Offending Party, but only to the extent that the
Injured Party cannot recover its loss, damage or expense under policies of
insurance which it is required to take out or has in fact taken out hereunder.
To such end, the parties covenant and agree with each other as follows:

                  (a)      to the extent obtainable, each party will ensure that
                           all relevant policies of insurance taken out
                           hereunder will contain a waiver of subrogation rights
                           which such party's insurer may have against the other
                           party hereunder and those for whom the other party is
                           in law responsible, whether or not any loss, damage
                           or expense is caused by the act, omission or
                           negligence of such other party or those for whom the
                           other party is in law responsible;

                  (b)      the Offending Party shall indemnify the Injured Party
                           and save it harmless from and against any and all
                           loss, damage and expense whatsoever arising out of
                           the act, omission or negligence of the Offending
                           Party or those for whom the Offending Party is in law
                           responsible; and

                  (c)      notwithstanding the indemnity contained in (b) above,
                           the Injured Party covenants and agrees to look first
                           to its own policies of insurance taken out or
                           required to be taken out hereunder to recover any
                           loss, damage or expense to which the foregoing
                           indemnity may apply (it being understood and agreed
                           that the foregoing indemnity shall not apply to, and
                           the Offending Party shall have no responsibility for,
                           any loss, damage or expense against which the Injured
                           Party is required hereunder to take out insurance or
                           has in fact taken out insurance).

                                   ARTICLE 12
                         Landlord's Rights and Remedies

12.01             Default

                  If and whenever:

                  (a)      the Rent hereby reserved, or any part thereof, be not
                           paid when due, or there is non payment of any other
                           sum which the Tenant is obligated to pay under any
                           provisions hereof, and such default shall continue
                           for ten (10) days after written notice by the
                           Landlord requiring the Tenant to rectify the same;

                  (b)      the Term on a material number of the goods, chattels,
                           equipment or other personal property of the Tenant,
                           shall be taken or be exigible in execution or
                           attachment, or if a writ of execution shall issue
                           against the Tenant;

                  (c)      the Tenant shall become insolvent or commit any act
                           of bankruptcy or become bankrupt or take the benefit
                           of any Act that maybe in force for bankrupt or
                           insolvent debtors, or become involved in a winding-up
                           proceeding, voluntary or otherwise, or if a receiver
                           shall be appointed for the business property,
                           affairs or revenues of the Tenant, or if any
                           governmental authority should take possession of the
                           business or property of the Tenant;

                  (d)      the Tenant shall fail to commence business actively
                           and diligently from and on the Leased Premises within
                           sixty (60) days after the Commencement Date;

                  (e)      the Tenant shall make a bulk sale of its goods;

                  (f)      the Tenant shall abandon the Leased Premises in whole
                           or in part;

                                      -15-
<PAGE>

                  (g)      this Lease is transferred in violation of the
                           provisions of Article 7;

                  (h)      the Tenant shall fail to remedy any condition giving
                           rise to cancellation, threatened cancellation,
                           reduction or threatened reduction of any insurance
                           policy on the Development or any part thereof within
                           the lesser of three (3) days or the effective date of
                           the cancellation of insurance after notice thereof by
                           the Landlord; or

                  (i)      the Tenant shall not observe, perform and keep any
                           other of the covenants, agreements, provisions,
                           stipulations and conditions herein to be observed,
                           performed and kept by the Tenant and shall persist in
                           such failure for ten (10) days after notice by the
                           Landlord requiring that the Tenant remedy, correct,
                           desist or comply (or in the case of any such breach
                           which reasonably would require more than ten (10)
                           days to rectify unless the Tenant shall commence
                           rectification within the said ten (10) day period and
                           thereafter promptly and diligently and continuously
                           proceed with the rectification of the breach);

then and in any of such cases at the option of the Landlord, the full amount of
the current month's and the next ensuing three (3) month's Rent shall
immediately become due and payable as Additional Rent and the Landlord may
immediately distrain for the same, together with any arrears then unpaid; and
the Landlord may without notice or any form of legal process forthwith re-enter
upon and take possession of the Leased Premises or any part thereof in the name
of the whole and remove and sell the Tenant's goods, chattels, equipment and any
other property therefrom, any rule of law or equity to the contrary
notwithstanding; and the Landlord may seize and sell such goods, chattels,
equipment and other property of the Tenant as are in the Leased Premises or at
any place to which the Tenant or any other person may have removed them in the
same manner as if they had remained and been distrained upon the Leased
Premises; and such sale may be effected in the discretion of the Landlord either
by public auction or by private treaty, and either in bulk or by individual
item, or partly by one means and partly by another, all as the Landlord in its
entire discretion may decide, and the Tenant waives and renounces the benefit of
any present or future statute or amendments thereto taking away or limiting the
Landlord's right of distress.

12.02             Consequences of Default

                  If and whenever the Landlord is entitled to re-enter the
Leased Premises, the Landlord may terminate this Lease and the Term by giving
written notice of termination to the Tenant or by posting notice of termination
in the Leased Premises, and in such event the Tenant will forthwith vacate and
surrender the Leased Premises. Alternatively, the Landlord may from time to time
without terminating the Tenant's obligations under this Lease, make alterations
and repairs considered by the Landlord necessary to facilitate a sub-letting and
sub-let the Leased Premises or any part thereof as agent of the Tenant for such
term or terms and at such rent or rents and upon such other terms and conditions
as the Landlord in its sole discretion considers advisable. Upon each subletting
all rent and other monies received by the Landlord from the sub-letting shall be
applied first to the payment of indebtedness other than Rent due hereunder from
the Tenant to the Landlord, second to the payment of costs and expenses of the
sub-letting including brokerage fees and solicitors fees and the cost of
alterations and repairs, and third to the payment of Rent due and unpaid
hereunder. The residue, if any, shall be held by the Landlord and applied in
payment of future Rent as it becomes due and payable. If the Rent received from
the subletting during a month and any surplus then held by the Landlord to the
credit of the Tenant is less than the Rent to be paid during that month by the
Tenant, the Tenant will pay the deficiency to the Landlord. The deficiency will
be calculated and paid monthly. No re-entry by the Landlord will be construed as
an election on its part to terminate this Lease unless a written notice of that
termination is given to the Tenant or posted as aforesaid. Despite a subletting
without termination, the Landlord may elect at any time to terminate this Lease
for a previous breach. If the Landlord so terminates this Lease, the Tenant
shall pay to the Landlord on demand therefor:

                  (a)      Basic Rent and Additional Rent accrued due up to the
                           time of re-entry or termination, whichever is later,
                           plus the next three (3) months' Rent payable as
                           Additional Rent as provided in Article 12.01;

                  (b)      all costs payable by the Tenant pursuant to the
                           provisions of this Lease up until the date of
                           re-entry or termination, whichever is later;

                  (c)      such expenses as the Landlord may incur or has
                           incurred in connection with re-entering or
                           terminating and re-letting, or collecting sums due or
                           payable by the Tenant or realizing upon assets seized
                           including brokerage expenses, legal fees and
                           disbursements determined on a full indemnity basis,
                           and including the expense of keeping the Leased
                           Premises in good order and repairing or maintaining
                           the same or preparing the Leased Premises for
                           re-letting; and

                  (d)      as liquidated damages for the loss of Rent and other
                           income of the Landlord expected to be derived from
                           this Lease during the period which would have
                           constituted the unexpired portion of the Term had the
                           Lease not been so terminated, the amount, if any, by
                           which the rental value of the Leased Premises for
                           such period established by

                                      -16-
<PAGE>

                           reference to the terms and provisions of this Lease
                           exceeds the rental value of the Leased Premises for
                           such period established by reference to the terms and
                           provisions upon which the Landlord relets them, if
                           such re-letting is accomplished within a reasonable
                           time after termination of this Lease, and otherwise
                           with reference to all market and other relevant
                           circumstances. Rental value is to be computed in each
                           case by reducing to present worth at an assumed
                           interest rate of ten percent (10%) per annum all Rent
                           and other amounts to become payable for such period
                           and where the ascertainment of amounts to become
                           payable requires the same, the Landlord may make
                           estimates and assumptions of fact which will govern
                           unless shown to be unreasonable or erroneous;

such obligations of the Tenant to survive the expiration of the Term.

12.03             Non-Waiver

                  The failure of the Landlord to insist in any one or more cases
upon the strict performance of any of the covenants of this Lease or to exercise
any option herein contained shall not be construed as a waiver or a
relinquishment for the future of such covenant or option and the acceptance of
Rent by the Landlord with knowledge of the breach by the Tenant of any covenants
or conditions of this Lease shall not be deemed to be a waiver of such breach
and no waiver by the Landlord of any provisions of this Lease shall be deemed to
have been made unless expressed in writing by the Landlord.

12.04             Right of Landlord to Perform Tenant's Covenants

                  If at any time and so often as the same shall happen, the
Tenant shall make default in the observance or performance of any of the
Tenant's covenants herein contained beyond applicable periods of time to cure
the default, then the Landlord may, but shall not be obligated to, without
waiving or releasing the Tenant from its obligations under the terms of this
Lease, itself observe and perform the covenant or covenants in respect of which
the Tenant is in default, and in that connection may pay such monies as may be
required or as the Landlord may reasonably deem expedient, and the Landlord may
thereupon charge all monies so paid and expended by it to the Tenant together
with interest thereon from the date upon which the Landlord shall have paid out
the same; provided however that if the Landlord commences and completes either
the performance of any such covenant or covenants or any part thereof, the
Landlord shall not be obliged to complete such performance or be later obliged
to act in like fashion.

12.05             Time for Payment and Legal Cost

                  Unless otherwise expressly provided in this Lease, all
reasonable sums and costs paid by the Landlord including costs paid between
solicitor and client, on account of any default by the Tenant under this Lease,
shall be payable to the Landlord by the Tenant forthwith, with interest thereon
at the rate aforesaid from date of payment of such sums or costs by the
Landlord.

                  Unless otherwise expressly provided in the Lease, all amounts
(other than Rent) required to be paid by the Tenant to the Landlord pursuant to
this Lease shall be payable on demand at the place designated by the Landlord
for payment of Rent and if not so paid within ten (10) days of such demand shall
be treated as Rent in arrears and the Landlord may, in addition to any other
remedy it may have for the recovery of the same, distrain for the amount thereof
as Rent in arrears.

12.06             Remedies Cumulative

                  All rights and remedies of the Landlord in this Lease
contained shall be cumulative and not alternative and are not dependent the one
on the other and mention of any particular remedy or remedies of the Landlord in
respect of any default by the Tenant shall not preclude the Landlord from any
other remedy in respect thereof, whether available at law or in equity or as
expressly provided for herein.

                                   ARTICLE 13
                      Mortgages and Assignment by Landlord

13.01             Sale or Financing of Development

                  The Landlord may sell, transfer, lease, mortgage, encumber or
otherwise dispose of the Development or any portion thereof or any interest of
the Landlord therein, in every case without the consent of the Tenant, and the
rights of the Landlord under this Lease may be mortgaged, charged, transferred
or assigned in conjunction therewith. The Tenant acknowledges that in the event
of the sale or lease by the Landlord of the lands or a portion thereof
containing the Leased Premises or the assignment by the Landlord of this Lease
or of any interest of the Landlord hereunder, to the extent that any such
purchaser, lessee or assignee has assumed the covenants and obligations of the
Landlord hereunder, the Landlord shall, without further written agreement, be

                                      -17-
<PAGE>

freed and relieved of liability upon such covenants and obligations except for
the Allowance to be paid to the Tenant under the provisions of Article 20.07
hereof, for which the Landlord shall still remain liable.

13.02             Subordination and Acknowledgment

                  This Lease shall at the option of the Landlord or the
mortgagee under any mortgage now or hereafter existing affecting the
Development, exercisable at any time and from time to time by the Landlord or
such mortgagee, be either subject and subordinate to such mortgage and
accordingly not binding upon such mortgagee or alternatively rank prior to such
mortgage and accordingly be binding upon such mortgagee. On request at any time
and from time to time of the Landlord or such mortgagee, the Tenant shall either
postpone and subordinate this Lease or any caveat based thereon to such mortgage
with the intent and effect that this Lease and all rights of the Tenant shall be
subject to the rights of such mortgagee as fully as if the mortgage (regardless
of when made) had been made prior to the making of this Lease, or alternatively
to attorn to such mortgagee and become bound to it as its tenant of the Leased
Premises for the then expired residue of the Term and upon the terms and
conditions contained in this Lease, in each case as the Landlord or such
mortgagee may require. Without limiting the foregoing (and notwithstanding that
any previous attornment or subordination in favour of such mortgagee shall have
been given) the Tenant shall execute promptly the appropriate instrument or
postponement and subordination or alternatively the appropriate instrument of
attornment, as the case may be, in order to give effect to the foregoing. Any
reasonable legal fees incurred by the Tenant with respect to the execution of
such instruments shall be paid by the Landlord.

                  The Landlord shall obtain a non-disturbance agreement from any
mortgagee or other encumbrancer of the Building who has, or may in the future
have, priority to the Tenant's leasehold interest in the Building. Such
non-disturbance agreement shall provide that, notwithstanding the exercise of
any rights by any such mortgagee or other encumbrancer, so long as the Tenant is
not then in default the Tenant shall be entitled to remain undisturbed in its
possession of the Leased Premises, subject to the terms and conditions of this
Lease. Notwithstanding the foregoing provisions of this Article 13.02, the
Tenant will not be required to subordinate or postpone the Lease nor to attorn
to any mortgagee or encumbrancer unless the Landlord has obtained such a
non-disturbance agreement.

13.03             Offset Statement

                  Either party will, within ten (10) days following request
therefor by the Landlord, from time to time, the Tenant shall execute and
deliver to the Landlord and if required by the Landlord, to any mortgagee,
assignee, or transferee of the Lease or the Development, a certificate in
writing as to the then status of this Lease, including whether it is in full
force and effect, as modified or unmodified, confirming the Rent payable
hereunder, the state of accounts between the Landlord and the Tenant and the
existence or non-existence of defaults and any other matters pertaining to the
Lease which the Landlord shall request be included in such certificate.

13.04             Registration

                  The Tenant may, at the Tenant's cost with the consent of the
Landlord, such consent not to be unreasonably withheld, register a short form of
Lease against title to the Lands, the content of which shall be mutually agreed
upon and shall exclude any "business terms." The Tenant will, at the cost and
expense of the Tenant, cause this Lease to be registered in the appropriate Land
Title Office in the Province of British Columbia upon the request of the
Landlord in the event that the Landlord requires the same to be registered in
priority to any mortgage, trust deed or trust indenture which may now or at any
time hereafter affect in whole or in part the Leased Premises or the Development
and the Tenant shall execute promptly any certificate or other instrument which
may from time to time be requested by the Landlord to give effect to the
provisions of this Article 13.04.

                                   ARTICLE 14
                               Overholding Tenant

14.01             No Tacit Renewal

                  In the event the Tenant remains in possession of the Leased
Premises after the end of the Term and without the execution and delivery of a
new lease, there shall be no tacit renewal of this Lease and the Term hereby
granted and the Tenant shall be deemed to be occupying the Leased Premises as a
Tenant from month to month on the terms and conditions contained herein except
that the Basic Rent shall be one hundred and fifty percent (150%) of the monthly
instalment of Basic Rent required to be paid pursuant to this Lease in the
immediately preceding Year of the Term, but otherwise on the terms and
conditions of this Lease which shall be read with such changes as are
appropriate to a monthly tenancy; provided however that this provision shall not
authorize the Tenant to so overhold where the Landlord has objected to such over
holding or has required the Tenant to vacate the Leased Premises.

                                      -18-
<PAGE>

                                   ARTICLE 15
                                Quiet Possession

15.01             Quiet Possession

                  Upon the Tenant paying the Rent hereby reserved and all other
charges herein provided and observing, performing and keeping the covenants and
agreements herein contained, the Tenant shall and may peaceably possess and
enjoy the Leased Premises for the Term granted without any interruption or
disturbance from the Landlord or any person or persons lawfully claiming by,
from or under it.

                                   ARTICLE 16
                               Legal Relationships

16.01             No Partnership

                  Nothing contained in this Lease nor in any acts of the
Landlord and Tenant pursuant to this Lease shall be deemed to create any
relationship between the parties hereto other than the relationship of Landlord
and Tenant, it being expressly provided that there is no intention to create a
relationship of partners or a joint venture.

16.02             Joint and Several Liability

                  Should the Tenant comprise two (2) or more persons, each of
them, and not one for the other or others, shall be jointly and severally bound
with the other or others for the due performance of the obligations of the
Tenant hereunder. Where required by the context hereof the singular shall
include the plural and the masculine gender shall include either the feminine or
neuter genders, as the case may be and vice versa.

16.03             Successors and Assigns

                  This Lease and everything herein contained shall enure to the
benefit of and be binding upon the parties hereto, to successors and assigns of
the Landlord, and the approved successors and assigns of the Tenant.

                                   ARTICLE 17
                                    Notices

17.01             Notices

                  Any notices herein provided or permitted to be given by the
Tenant to the Landlord shall, except in the event of actual or threatened mail
strike during which time all notices must be delivered, be sufficiently given if
delivered or sent by registered mail, postage prepaid, posted within British
Columbia addressed to the Landlord at:

                          Bentall Property Management
                          3100 - Three Bentall Centre
                          595 Burrard Street
                          P.O. Box 49001
                          Vancouver, B.C.
                          V7X 1B1

or to such other address as might be designated in writing by the Landlord from
time to time, and any notice herein provided or permitted to be given by the
Landlord to the Tenant shall, except in the event of actual or threatened mail
strike during which time all notices must be delivered, be sufficiently given if
delivered or mailed, postage prepaid and posted within British Columbia,
addressed to the Tenant at the Leased Premises.

                  Notice given as aforesaid, posted in British Columbia, shall
be conclusively deemed to have been given on the third business day following
the day on which such notice was mailed, or if delivered, on the date of
delivery. The Landlord may at any time given in writing to the Tenant of a
change of address for the Landlord and from and after the giving of such notice
the address therein specified shall be deemed to be the address of the Landlord
for the giving of notice hereunder. The word "notice" in this Article 17.01
shall be deemed to include any request, statement, demand, or other writing in
this Lease provided or permitted to be given by the Landlord to the Tenant or by
the Tenant to the Landlord.

                                      -19-
<PAGE>

                                   ARTICLE 18
                                     General

18.01             Collateral Representations and Agreements

                  The Tenant acknowledges that the Leased Premises are taken
without representation of any kind on the part of the Landlord or its agent
other than as set forth herein, that the plans attached as Schedule "A" set
forth the general layout of the Building and shall not be deemed to be a
representation or agreement of the Landlord that the Building will be exactly as
indicated on such plans, and that nothing contained in the Lease shall be
construed so as to prevent the Landlord from varying or altering the location or
size of parking areas, driveways, sidewalks or from erecting additional
buildings or extending buildings after the Commencement Date and without
limiting the foregoing, the Landlord shall have the unrestricted right to add
additional lands to the Development, which upon such addition, these additional
lands will be included within the definition of the Lands and Development
provided such addition does not substantially increase the amount of Development
Operation and Maintenance Costs, Tax Cost, HVAC Costs and Building Operation and
Maintenance Costs to be borne by the Tenant, to construct additional buildings
from time to time on the Lands, add or change any building, or alter the ingress
and egress to the Development and to change the loading or unloading facilities
and service entrances from time to time without in any way being responsible to
the Tenant, provided only that the Landlord shall at all times provide
reasonable access to the Leased Premises across the Lands for the Tenant, its
employees, suppliers, agents, licencees and invitees. Subject to the foregoing
and to the obligations of the Landlord to maintain at all times adequate parking
facilities, the Landlord may transfer or dispose of portions of the Lands to the
owners of abutting property, or dedicate or transfer to the municipal
authorities portions of the Lands for roadwidening and other purposes, and when
and so often as the Landlord shall dispose or transfer or dedicate any portion
of the Lands, then the reference herein to the Lands shall mean and refer to the
portion of the Lands remaining after any such transfer, disposition or
dedication together with any adjacent land which may be acquired by the Landlord
on any such transfer, disposition or dedication. The Tenant further agrees that
no representative of or agent of the Landlord is or shall be authorized or
permitted to make any representation with reference to this Lease, or to vary or
modify this Lease in any way, and that this Lease contains all the agreements
and conditions made between the Landlord and the Tenant hereto respecting the
Leased Premises other than for any provisions of the Agreement, if any, on which
this Lease is based and which are specifically stated therein to survive the
execution and delivery of this Lease. Any addition to or alteration of or change
in this Lease or other agreements hereafter made or conditions created, to be
binding, must be made in writing and signed by the Landlord and the Tenant.

18.02             Management of Development

                  The Tenant acknowledges to the Landlord that the Development
may be managed by such party or parties as the Landlord may in writing designate
and to all intents and purposes the manager of the Development shall be the
party at the Development authorized to deal with the Tenant on behalf of the
Landlord.

18.03             Time of the Essence

                  Time shall be of the essence of this Lease.

18.04             Unavoidable Delays

                  In the event that either party shall be delayed, hindered or
prevented from the performance of any covenant hereunder by Force Majeure, the
performance of such covenant shall be excused for the period during which such
performance is rendered impossible and the time for performance thereof shall be
extended accordingly, but this shall not excuse the Tenant from the prompt
payment of Rent or any other amount required to be paid by the Tenant under the
provisions of this Lease.

18.05             Accord and Satisfaction

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

18.06             Competition Act

                  No provision of this Lease is intended to apply or to be
enforceable to the extent that it might give rise to any offence under the
Competition Act, RSC 1970 Chapter 23 or any statute that may be substituted
therefor, as from time to time amended.

                                      -20-
<PAGE>

18.07             Covenants

                  Each of the terms and conditions of this Lease to be performed
and observed by the Tenant or by the Landlord, as the case may be, is and shall
be construed as a covenant of the party so required to perform and observe the
same.

18.08             Consent or Approval of Landlord

                  Wherever and whenever the consent, approval or permission of
the Landlord is required by the Tenant pursuant to the terms of this Lease, and
unless otherwise specifically provided, the Landlord shall have the right to
withhold or grant such consent, approval or permission in its sole and arbitrary
discretion. Such consent, approval or permission must be in writing to be
effective, and such consent, approval or permissions must be obtained prior to
the taking of the action to which the same refers.

18.09             For Lease Signs

                  The Landlord shall have the right during the last six (6)
months of the Term to place upon the Leased Premises, a notice of reasonable
dimensions stating that the Leased Premises are for lease and the Tenant shall
not obscure or remove such notice or permit the same to be obscured or removed.

18.10             The Commercial Tenancy Act

                  Each of the Landlord and the Tenant waives any and all
provisions of the Commercial Tenancy Act (British Columbia) or any statute that
may be substituted therefore, as from time to time amended, to the extent that
the same are inconsistent with or conflict with the terms and conditions of this
Lease.

18.11             No Exclusivity

                  This Lease shall not in any way be construed as giving to or
conferring upon the Tenant any rights to carry on any business or undertaking in
or from the Leased Premises to the exclusion of third parties in the
Development.

18.12             Schedules

                  Any and all schedules attached hereto are deemed to be
incorporated into and form part hereof.

18.13             Applicable Law

                  This Lease shall be governed by and construed in accordance
with the laws in force in the Province of British Columbia.

18.14             Headings

                  The index and headings in this Lease are inserted for
convenience of reference only and shall not affect the construction of this
Lease or any provision hereof.

18.15             Tenant's Acceptance

                  The Tenant hereby accepts the Lease of the Leased Premises to
be held by the Tenant, subject to the conditions, restrictions and covenants set
forth herein.

18.16             Arbitration

                  If at any time the parties herein are unable within the time
specified, or if no time is specified, then within a reasonable time to reach
agreement on any matter which is to be settled by mutual agreement, then such
matter shall be submitted and referred to a single arbitrator pursuant to the
Commercial Arbitration Act of British Columbia, whose decision shall be final
and binding on the parties hereto.

18.17             Severability

                  Should any provision of this Lease be unenforceable it shall
be considered separate and severable from the remaining provision of this Lease,
which shall remain in force and be binding as though the said provision had not
been included.

                                      -21-
<PAGE>

                                   ARTICLE 19
                                   Definitions

                  In this Lease, the following words, phrases and expressions
are used with the meanings described as follows:

19.01             "Additional Rent" for a Lease Year or portion thereof means in
addition to the Basic Rent all other amounts which shall become due and payable
hereunder by the Tenant to the Landlord and includes the amounts which is the
aggregate of:

                  (i)      the Tenant's Proportionate Share of the HVAC Costs,

                  (ii)     the Tenant's Proportionate Share of the Building
                           Operation and Maintenance Costs,

                  (iii)    the Tenant's Proportionate Share of the Development
                           Operation and Maintenance Costs, and

                  (iv)     the Tenant's Proportionate Share of the Tax Cost.

In each case the items comprising or being deducted from the aforesaid Costs or
Cost are to be allocated to such Lease Year by the Landlord in accordance with
generally accepted accounting practice, provided that if the Term commences
other than at the beginning of a Lease Year or ends other than at the conclusion
of a Lease Year a prorate adjustment of the aforesaid costs for such Lease Year
shall be made based on the length of the Term falling within such Lease Year,
provided further that the Tax Cost shall, unless otherwise specifically stated
in the enabling legislation giving rise thereto, be deemed to accrue equally
from day to day in the calendar year to which the same related and shall, if
adjustment is required as aforesaid, be adjusted on that basis and not on a
straight pro rata basis as provided aforesaid.

19.02             "Area of Leased Premises" means the area of the Leased
Premises measured by the Landlord's Architect following completion of the
Tenant's Work or any subsequent construction by the Tenant predominately in
accordance with the then current standard for floor measurement as established
by the Building Owners and Managers Association (BOMA) modified in order to take
into account unique characteristics of the Building such as sharing of the main
floor showers and locker rooms and other Common Areas which benefit all other
tenants within the Building. The Landlord shall provide the Tenant with a
summary detailing calculations of the Area of Leased Premises. The Area of
Leased Premises when and if it is certified by the Landlord's Architect will
apply instead of the area set forth in Basic Term .O1 and Rent will be adjusted
in accordance with the revised Area of Leased Premises, which adjustment will be
retroactive if the certification does not occur until after the Commencement
Date.

19.03             "Basic Rent" means the annual rent payable by the Tenant
to the Landlord in accordance with Article 2.01 for each Year of the Term, being
the amount set forth in Basic Term .02.

19.04             "Basic Term" means each of those terms defined as such
at the commencement of this Lease.

19.05             "Building" means the building in which the Leased
Premises are located as shown on Schedule "A" hereto.

19.06             "Building Operation and Maintenance Costs" means all of
the Landlord's costs, charges and expenses for operating, maintaining, managing,
repairing (excluding repairs of a structural nature), rebuilding, inspecting,
insuring, supervising and administering the Building including the Common Areas
and Common Facilities of the Building, if any, and includes without limiting the
generality of the foregoing:

                  (a)      the cost of lighting, heating, ventilating,
                           air-conditioning and supplying water and other
                           utilities to the Common Facilities and Common Areas,
                           as aforesaid; cleaning and janitorial services
                           relating to the Building; repairs and replacements to
                           the Building other than structural repairs required
                           to be carried out by the Landlord pursuant to Article
                           5.06(a) but including any changes made to the
                           Building, unless structural in nature,
                           required by any governmental or other agencies which
                           regulate the operation of the Development, insurance
                           premiums for any insurance required or permitted to
                           be carried by the Landlord pursuant to the terms of
                           this Lease and related only to the Building;

                  (b)      and administration fee to the Landlord equal to
                           fifteen (15%) percent of the aggregate of the
                           aforesaid costs, charges and expenses; and

                  (c)      amortization, at rates determined by
                           the Landlord, but not to exceed the maximum permitted
                           to the Landlord under the provisions of the Income
                           Tax Act, Canada, from time to time or any legislation
                           substituted therefore on the equipment and

                                      -22-
<PAGE>

                           machinery employed in operating or maintaining
                           repairing or replacing the Common Areas or the Common
                           Facilities of the Building, if any, and a carrying
                           cost at the rate of two (2%) percent above prime,
                           from time to time, of the Canadian chartered bank
                           designated by the Landlord on the undepreciated
                           portion of the costs of such equipment and machinery;

and there shall be excluded from such costs the following:

                  (i)      payments of principal and interest under any mortgage
                           or mortgages on the Development;

                  (ii)     corporate, income, profits or excess profits taxes
                           assessed upon the income of the Landlord;

                  (iii)    legal fees and disbursements incurred in enforcing
                           the provisions of other leases of premises in the
                           Building against other tenants or occupants;

                  (iv)     cost of marketing and leasing out premises in the
                           building including tenant inducement packages; and

                  (v)      environmental remediation to the extent not caused by
                           the Tenant or those for whom it is in law liable;

and there shall be deducted from such costs the amount of proceeds actually
recovered by the Landlord from insurance and relating to damage, the cost of
repair of which was included in Building Operation and Maintenance Costs.

19.07             "Commencement Date" means November 1,1996.

19.08             "Common Areas" means those areas located either in the
Building or on the Lands but not in any Other Building, that are not intended
for lease and designated (which designation may be changed from time to time) by
the Landlord as Common Areas set aside by the Landlord for the common or joint
use and benefit of the Tenant, its employees, customers and other entities in
common with others entitled to the use and benefit of such areas in the manner
and for the purposes established or altered pursuant to the terms of this Lease.

19.09             "Common Facilities" means the electrical, heating,
ventilating, air conditioning, plumbing and drainage equipment, any music and
public address systems, installations and any enclosures constructed therefor,
fountains, service rooms, customer and service stairways, escalators, signs,
lamps, standards, public washroom facilities and all other facilities which are
provided and designated (and which designation may be changed from time to time)
by the Landlord for the common or joint use and benefit of the occupants of the
Development.

19.10             "Development" means the Lands, Buildings, Other
Buildings and all buildings and improvements existing on the Lands from time to
time.

19.11             "Development Operation and Maintenance Costs" means all
of the Landlord's costs, charges and expenses of operating, maintaining,
managing, repairing, rebuilding, inspecting, insuring, supervising and
administering the Development, other than the Building or any Other Building,
including the Common Areas and the Common Facilities and include without
limiting the generality of the foregoing:

                  (a)      the cost of lighting, heating, ventilating,
                           air-conditioning and supplying water and other
                           utilities to the Common Areas and Common Facilities;
                           cleaning, janitorial services, snow and ice removal,
                           striping or repairing parking areas; supervising,
                           policing and security; painting, planting or
                           landscaping; operating and maintaining the garbage
                           compaction equipment, if any; the cost of
                           maintaining, repairing, replacing or leasing the
                           pylon signs and public address, intercom, music, and
                           alarm systems; repairs and replacements to the
                           Development, business taxes, place of business taxes
                           and other taxes levied in respect thereof or fairly
                           attributable to the Common Areas or the Common
                           Facilities; insurance premiums for any insurance
                           required or permitted to be carried by the Landlord
                           pursuant to the terms of this Lease other than for
                           the Building or any Other Building; supplies,
                           personnel wages and payroll expenses:

                  (b)      an administration fee to the Landlord equal to
                           fifteen (15%) percent of the aggregate of the
                           aforesaid costs, charges and expenses; and

                  (c)      amortization, at rates determined by the Landlord,
                           but not to exceed the maximum permitted to the
                           Landlord under the provisions of the Income Tax Act
                           (Canada) from time to time or any legislation
                           substituted therefor, on the equipment and

                                      -23-
<PAGE>

                           machinery employed in operating, maintaining,
                           repairing or replacing the Common Areas or the Common
                           Facilities and a carrying cost at the rate of two
                           (2%) percent above prime, from time to time, of the
                           Canadian chartered bank designated by the Landlord,
                           on the undepreciated portion of the costs of such
                           equipment and machinery;

and there shall be excluded from such costs the following:

                  (i)      payments of principal and interest under any mortgage
                           or mortgages on the development;

                  (ii)     corporate, income, profits or excess profits taxes
                           assessed upon the income of the Landlord;

                  (iii)    Building Operation and Maintenance Costs;

                  (iv)     fines, penalties or like amounts payable by the
                           Landlord as a consequence of its breach of any of its
                           obligations under this Lease; and

                  (v)      costs of repairing damage to or destruction of
                           tangible property which results from a failure by the
                           Landlord to maintain the Development or any of its
                           equipment, facilities or systems in a reasonable
                           manner, consistent with quality management of similar
                           buildings of similar size;

and there shall be deducted from such costs the amount of proceeds actually
recovered by the Landlord from insurance and relating to damage, the cost of
repair of which was included in Development Operation and Maintenance costs.

19.12             "Force Majeure" means any cause beyond the control of
the either party delaying, hindering or preventing the Landlord from performing
any term, covenant or act required hereunder and, without limiting the
generality of the foregoing, includes lock-outs (including lock-outs decreed or
recommended for its members by a recognized contractors' association of which
the Landlord is a member or to which the Landlord is otherwise bound), strikes,
labour disputes, inability to procure materials or services, restrictive
governmental laws or regulations, fire, act of God, riots, insurrection,
sabotage, rebellion and war.

19.13             "Gross Leasable Area" means the aggregate floor area
(expressed in square meters or square feet), from time to time, determined by
the Landlord's Architect of all premises leased to or intended to be leased to
tenants and located within the area to which the measurement is being applied.

19.14             "HVAC Costs" includes with respect to the Building:

                  (a)      all of the Landlord's costs, charges and expenses of
                           operating, maintaining, managing, replacing,
                           repairing and supervising the apparatus for heating,
                           ventilating and air conditioning installed in the
                           Building, from time to time, other than those part of
                           such apparatus installed by or on behalf of the
                           Tenant or any other tenant (the "HVAC System"); and

                  (b)      an administrative fee equal to fifteen (15%) percent
                           of the total of the costs, charges and expenses
                           incurred by the Landlord under the preceding
                           provision of this definition;

19.15             "Landlord's Architect" means an architect or engineer
from time to time selected by the Landlord for the purpose of making any
certification or determination in accordance with the terms of this Lease.

19.16             "Landlord's Work" means the work specified in Schedule
"B" hereto.

19.17             "Lands" means those lands located in the City of
Richmond, in the Province of British Columbia legally described as:

                Lot 1 Parcel Identifier 012333433
                Lot 2 Parcel Identifier 012333476
                Lot 3 Parcel Identifier 012333506
                All of Section 5, Block 4 North Range 5 West and
                Section 32, Block 5 North Range 5 West
                New Westminster District Plan 79650

19.18             "Lease" means this agreement, including any and all
schedules attached hereto as the same may be amended from time to time.

19.19             "Lease Year" means each calendar year in which a portion
of the Term falls, provided that the Landlord, if it deems the same convenient
or necessary for its accounting purposes, may, from time to time, by notice to
the Tenant alter the Lease Year to any other twelve (12) month period in which a
portion of the Term

                                      -24-
<PAGE>
falls by specifying an annual date, being the first day of a calendar month,
upon which a subsequent Lease Year is to commence and in such event the current
Lease Year shall terminate on the day preceding the specified date.

19.20             "Lease Premises" means that portion of the Building outlined
in red on Schedule "A" hereto, subject to such minor variations as may occur in
the course of construction of the Building by the Landlord.

19.21             "Other Buildings" means any building or buildings existing on
the Lands from time to time containing premises that are leased or intended to
be leased to tenants, but excluding the Building.

19.22             "Permitted Use" means the use set forth in Basic Term .04.

19.23             "Prime rate" means the rate of interest expressed as an
annual rate, at the relevant time or times, determined by the Toronto-Dominion
Bank at its main branch in Vancouver, British Columbia, as a reference rate for
commercial demand loans to its major commercial borrowers determined in
Canadian dollars and made by such bank in Canada an adjusted from time to time.

19.24             "Real Property Taxes" means all general special, local
improvement, school and other taxes, levies, rates and charges levied, assessed
or imposed against the Development or any part thereof and all business taxes,
assessments, rates and levies, including any corporation capital tax, levied,
assessed or imposed on the Landlord in respect of the ownership or management
of the Development by municipal or other governmental authority having
jurisdiction, whether of a nature now or hereafter levied, assessed or imposed,
together with the cost to the Landlord of contesting, appealing or negotiating
the same in good faith but excluding those taxes and fees of the Tenant or
other tenants referred to in Article 10.01 hereof.

19.25             "Rent" means Basic Rent and Additional Rent.

19.26             "Tax Cost" means the cost of Real Property Taxes.

19.27             "Tenant's Proportionate Share" means:

                  (a)     in relation to each of Building Operation and
                          Maintenance Costs and HVAC Costs the proportion that
                          the Area of the Leased Premises is of the Gross
                          Leasable Area of the Building; and

                  (b)     in relation to Development Operation and Maintenance
                          Costs, and Tax Cost, the proportion that the Area of
                          the Leased Premises is of the Gross Leasable Area of
                          the Development.

19.28             "Tenant's Work" has the meaning set out in Article 3.01
hereof.

19.29             "Term" means the term of the Lease, as set out in Basic
Term .04.

19.30             "Year of the Term" means each successive twelve (12) month
period of the Term, the first of which commences on the Commencement Date.

                                   ARTICLE 20
                               Special Provisions

20.01             Deposit

                  The Landlord acknowledges receipt of $102,862.67 (the
"Deposit") to be held without interest for application by the Landlord firstly
against payment of first months' Rent, including Goods and Services Tax with
the balance to be held as security for the due and proper performance by the
Tenant of all of the terms, covenants and conditions of this Lease, including
the payment of all Rent due hereunder. At the expiration of the Term, any
portion of the Deposit that remains outstanding and unapplied by the Landlord
shall be repaid by the Landlord to the Tenant within 90 days of the expiration
of the Term. Notwithstanding the foregoing, if the Tenant fails to execute and
deliver this Lease within 90 days of receipt from the Landlord or fails to take
possession of the Leased Premises by December 1, 1996, the Landlord may, at its
sole option, terminate this Lease, whereupon the Deposit shall be retained by
the Landlord as liquidated damages on account of the Tenant's default and not
as a penalty.

20.02             Pre-Authorized Payment Plan

                  The Tenant authorizes the Landlord to withdraw monthly Rent
payments from the Tenant's account by of direct withdrawals, as may be arranged
from time to time between financial institutions administering the Tenant's
and the Landlord's accounts.

                  The Tenant further agrees to execute and provide whatever
further documentation, account information, cancelled cheques or otherwise,
which are reasonably requested by the Landlord in the administration of a
pre-authorized payment procedure for monies owing or accruing due as Rent under
this Lease.
<PAGE>

20.03             Rent Abatement

                  Notwithstanding anything to the contrary herein contained, but
subject to the Tenant being in occupancy and not in default, the Tenant shall
not be required to pay Rent with respect to a portion of the Leased Premises,
such portion being 10,000 square feet for the period commencing on the
Commencement Date and ending twelve (12) months thereafter. For greater
certainty, notwithstanding the partial Rent abatement set out above, the Tenant
acknowledges and agrees that it shall remain responsible for the payment of Rent
on the balance of the Area of Leased Premises.

20.04             Signage

                  The Landlord, at its expense, shall include the Tenant's name
on the main directory in the lobby of the Building as well as on the general
directory at the entrance to the Development.

                  The Tenant, at its expense, shall have the exclusive right to
install two (2) backlit sign upon the raised facia panel at the Building
parapet, location to be mutually agreed to by both parties, on either side of
the Building visible from Highway 91 and Commerce Parkway. The Tenant
acknowledges that any approved signage shall consist of individual letters or
logos and no illuminated sign boxes shall be permitted for installation.

20.05             Right of Second Refusal

                  The Tenant, when in occupancy and not then in default
hereunder, shall have an ongoing right of second refusal subject to Macdonald
Dettwiler and Associates Ltd. waiving its existing right of first refusal to
lease all of the space set out below (the "Additional Space") on the terms and
conditions and in the manner as follows:

                  (a)      The Landlord shall give notice in writing to the
                           Tenant if the Additional Space is available for
                           leasing, which notice shall set out:

                           (i)      the Additional Space;

                           (ii)     the Basic Rent payable;

                           (iii)    the Term;

                           (iv)     the inducements.

                  (b)      Upon such notice being given, the Tenant shall have
                           seven (7) calendar days within which to agree in
                           writing to lease the Additional Space upon terms set
                           out in the said notice and, failing such agreement,
                           the Landlord may lease the same to any third party at
                           an effective rent considering inducements equal to or
                           greater than that offered to the Tenant and this
                           right of second refusal shall cease.

                  (c)      Unless otherwise specified in the notice, the terms
                           of any lease entered into pursuant to this paragraph
                           shall be the same as herein contained, save for the
                           premises leased, Rent, any Landlord Work (or other
                           inducements) and any further rights of second
                           refusal.

                  (d)      The provisions hereof shall not apply to any portion
                           of the Additional Space occupied by an existing
                           tenant, whether pursuant to a lease renewal or
                           extension agreement, overholding, or otherwise, it
                           being understood and agreed that the Tenant shall
                           only have a right of refusal to lease those portions
                           of the Additional Space which have become vacant and
                           available for lease by the Landlord.

                  (e)      The Additional Space referred to herein shall be any
                           vacant space or space available for lease by the
                           Landlord on the main floor of the Building contiguous
                           to the Leased Premises.

20.06             Expansion Option

                  The Tenant shall be granted a one (1) time option to expand
into approximately five thousand (5,000) rentable square feet of space on the
second floor of the Building (the "Expansion Space"). This option is subordinate
to Hewlett-Packard (Canada) Ltd.'s option on the Expansion Space which option is
to be exercised on or before January 31,1997 and is also subordinate to the
existing and continuing rights of refusal to the Expansion Space by Macdonald,
Dettwiler and Associates Ltd.

                  In the event this option to expand is exercised, the Expansion
Space shall form part of the Leased Premises and terms of such Expansion
Space shall be on the same terms as are then applicable for

                                      -25-
<PAGE>
that portion of the Leased Premises being 10,000 square feet, including the
Allowance and timing of Basic Rent payable.

20.07    Tenant Improvement Allowance

         Provided the Tenant is not in default, the Landlord shall provide the
Tenant with an improvement allowance (the "Allowance") which shall be solely
applied to fixturing and modifying the Leased Premises. The Allowance is
payable in two (2) instalments as follows.

         The first instalment (the "First Instalment") is equal to the sum of
$25.00 per square foot of the Area of the Leased Premises being approximately
31,200 square feet plus applicable Goods and Services Tax. The First Instalment
is payable by the Landlord to the Tenant after provision of satisfactory
evidence of payment of all of the Tenant's contractors in full by the Tenant
including but not limited to a statutory declaration that all fees and payments
resulting from the modification and fixturing of the Leased Premises have been
made and provided this Lease has been fully executed and the Tenant has fully
occupied the Leased Premises and commenced business operations therein.

         The second instalment (the "Second Instalment") is equal to the sum of
$20.00 per square foot of the Area of the Leased Premises being 10,000 square
feet plus applicable Goods and Services Tax. The Second Instalment is payable
by the Landlord to the Tenant on or after September 1, 1997 and provided the
Landlord receives satisfactory evidence of payment of all of the Tenant's
contractors in full by the Tenant including but not limited to a statutory
declaration that all fees and payments resulting from the modification and
fixturing of the Leased Premises have been made and provided this Lease has
been fully executed and the Tenant has fully occupied the Leased Premises and
commenced business operations therein.

         All modifications to the Leased Premises are to the Tenant's account
and are subject to the Landlord's prior written approval. It is understood that
the Landlord's contractor shall be utilized for all changes to the mechanical,
electrical and life safety systems. All design and consultants' fees and permits
are to the Tenant's account.

         The Tenant shall spend a minimum of $17.00 per square foot of the Area
of Leased Premises of the Allowance on the fixturing and modifying of the Leased
Premises.

         It is understood and agreed that the Allowance shall not be applied
towards items such as office furnishings, system furniture, indoor plants, and
office and communications equipment.

20.8     Extension of Term

         (a)   If:

               (i)   the Tenant is not then in material default during the Term;
                     and

               (ii)  the Tenant gives the Landlord not less than six (6) months'
                     written notice and not more than eighteen (18) months'
                     prior to the expiry of the initial Term, of its intention
                     to extend the Term;

               then the Tenant will have the right to extend the Term upon the
               expiry of the initial Term for a further period of three (3)
               years (the "First Extended Term") upon the same terms and
               conditions as are set out in this Lease, except that:

               (iii) there will be no further right to extend the Term except as
                     provided in subparagraph (b) hereunder;

               (iv)  any Allowance, shall not apply to the First Extended Term;

               (v)   the Basic Rent payable by the Tenant during the First
                     Extended Term shall be negotiated and agreed upon between
                     the parties prior to the commencement of the First Extended
                     Term based on the prevailing fair market Basic Rent at the
                     commencement of the First Extended Term for similarly
                     improved premises of similar size, quality, use and
                     location in office buildings of a similar size, quality and
                     location in Richmond, British Columbia Failing such
                     agreement, then within two (2) months prior to the
                     commencement of the First Extended Term, Basic Rent shall
                     be determined by arbitration under the provisions of the
                     Commercial Arbitration Act (British Columbia) and in
                     accordance with this Article 20.08.

                                      -26-
<PAGE>
     (b)  Provided the Tenant has, pursuant to subparagraph (a) above, validly
          exercised its option to extend the Term for the First Extended Term,
          and if:

          (i)    the Tenant is not then in material default during the First
                 Extended Term; and

          (ii)   the Tenant gives the Landlord not less than six (6) months'
                 written notice and not more than eighteen (18) months' prior to
                 the expiry of the First Extended Term, of its intention to
                 further extend the Term;

          then the Tenant will have the right to extend the Term upon the expiry
          of the First Extended Term for a further period of three (3) years
          (the "Second Extended Term") upon the same terms and conditions as are
          set out in the Lease, except that:

          (iii)  there will be no further right to extend the Term;

          (iv)   any Allowance, shall not apply to the Second Extended Term;

          (v)    the Basic Rent payable by the Tenant during the Second Extended
                 Term shall be negotiated and agreed upon between the parties
                 prior to the commencement of the Second Extended Term based on
                 the prevailing fair market Basic Rent at the commencement of
                 the Second Extended Term for similarly improved premises of
                 similar size, quality, use and location in office buildings of
                 a similar size, quality and location in Richmond, British
                 Columbia Failing such agreement, then within two (2) months
                 prior to the commencement of the Second Extended Term, Basic
                 Rent shall be determined by arbitration under the provisions of
                 the Commercial Arbitration Act (British Columbia) and in
                 accordance with this Article 20.08.

          If the Tenant fails to exercise the forgoing options to extend the
Term in accordance with this Article 20.08, or if the other conditions set out
in this Article 20.08 are not satisfied, these options to extend shall be null
and void.

     IN WITNESS WHEREOF the parties hereto have executed this agreement by
their respective duly authorized officers in that behalf, as of the day and year
first above written.

BENTALL PROPERTIES LTD.

Per: /s/ [ILLEGIBLE]
-------------------------------------
Authorized Signatory

Per: /s/ [ILLEGIBLE]
-------------------------------------
Authorized Signatory

THE CORPORATE SEAL of
WESTMINSTER MANAGEMENT CORPORATION
was hereunto affixed in the presence of:

/s/ [ILLEGIBLE]
-------------------------------------
Authorized Signatory

/s/ M. Brightman
-------------------------------------
Authorized Signatory

THE CORPORATE SEAL of
BROOKS AUTOMATION (CANADA) CORP.
was hereunto affixed in the presence of:

/s/ [ILLEGIBLE]
-------------------------------------
Authorized Signatory

/s/ Rose M. Vallee
-------------------------------------
Authorized Signatory

                                      -27-<PAGE>
                                                                   EXHIBIT 10.28

                            ASSET PURCHASE AGREEMENT

                                  by and among

                            BROOKS AUTOMATION, INC.,

                              NEXSTAR CORPORATION,

                                       and

                                ZYGO CORPORATION

                                December 13, 2001
<PAGE>
                            ASSET PURCHASE AGREEMENT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                              PAGE
<S>                                                                                                                           <C>
ASSET PURCHASE AGREEMENT.........................................................................................                1

ARTICLE I. DEFINITIONS...........................................................................................                1
   1.1      Definitions..........................................................................................                1

ARTICLE II. PURCHASE AND SALE OF PURCHASED ASSETS................................................................                8
   2.1      Purchased Assets.....................................................................................                8
   2.2      Excluded Assets......................................................................................                9
   2.3      Assumption of Liabilities............................................................................               10
   2.4      Retained Liabilities.................................................................................               10
   2.5      Taxes; Documents of Assignment.......................................................................               11
   2.6      Other Documents; Further Assurances..................................................................               12

ARTICLE III. AGGREGATE CONSIDERATION.............................................................................               13
   3.1      Aggregate Consideration and Payment..................................................................               13
   3.2      Determination of Closing Working Capital Amount; Adjustment of the Aggregate Consideration...........               13
   3.3      Allocation of Aggregate Consideration................................................................               16
   3.4      Escrowed Consideration...............................................................................               16

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND ZYGO................................................               16
   4.1      Organization and Qualification of the Companies......................................................               16
   4.2      Authority; No Violation..............................................................................               16
   4.3      Capitalization.......................................................................................               17
   4.4      Subsidiaries; Other Investments......................................................................               17
   4.5      Financial Statements.................................................................................               18
   4.6      Absence of Undisclosed Liabilities...................................................................               18
   4.7      Conduct of Business; Absence of Certain Changes......................................................               18
   4.8      Payment of Taxes.....................................................................................               21
   4.9      Title to Properties; Encumbrances; Condition of Properties...........................................               22
   4.10     Collectibility of Receivables........................................................................               23
   4.11     Inventories..........................................................................................               23
   4.12     Intellectual Property Assets.........................................................................               23
   4.13     Contracts and Commitments............................................................................               26
   4.14     Employees............................................................................................               29
   4.15     Labor and Employee Relations.........................................................................               29
   4.16     Employee Benefits....................................................................................               30
   4.17     Environmental Matters................................................................................               31
   4.18     Government Authorizations/Compliance with Laws.......................................................               32
   4.19     Warranty or Other Claims.............................................................................               33
   4.20     Litigation...........................................................................................               33
   4.21     Insurance............................................................................................               34
   4.22     Corporate Books, Records and Accounts................................................................               34
   4.23     Finder's Fee.........................................................................................               34
   4.24     Transactions with Interested Persons.................................................................               34
   4.25     Absence of Sensitive Payments........................................................................               35
   4.26     Payables.............................................................................................               35
   4.27     Copies of Documents..................................................................................               35
</TABLE>

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<TABLE>
<S>                                                                                                                           <C>
   4.28     Sufficiency..........................................................................................               35
   4.29     Disclosure of Material Information...................................................................               35

ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER...............................................................               35
   5.1      Organization of Buyer................................................................................               36
   5.2      Authorization of Transaction.........................................................................               36
   5.3      No Conflict of Transaction With Obligations and Laws.................................................               36
   5.4      Brokers or Finders...................................................................................               37

ARTICLE VI. COVENANTS OF THE SELLER..............................................................................               37
   6.1      Access to Information................................................................................               37
   6.2      Governmental Authorizations; Consents................................................................               37
   6.3      Assignment of Contracts..............................................................................               37
   6.6      Certain Filings......................................................................................               37
   6.7      Product Warranty/Liability...........................................................................               37
   6.6      Tax Clearance........................................................................................               38
   6.7      Employee Benefits....................................................................................               38
   6.8      UMC Machine..........................................................................................               38
   6.9      Enforcement of Nondisclosure and NonViolation Agreement..............................................               39

ARTICLE VII. COVENANTS OF BUYER..................................................................................               39
   7.1      Notices and Consents.................................................................................               39
   7.2      Certain Filings......................................................................................               39
   7.3      Governmental Authorizations; Consents................................................................               39
   7.4      Employment Offers....................................................................................               39
   7.5      Warranty Service.....................................................................................               39
   7.6      Employee Benefits....................................................................................               39

ARTICLE VIII. CONDITIONS TO OBLIGATIONS OF BUYER.................................................................               40
   8.1      Representations; Warrantees; Covenants...............................................................               40
   8.2      Encumbrance Terminations.............................................................................               40
   8.3      Certain Ancillary Agreements.........................................................................               40
   8.4      Key Employees........................................................................................               41
   8.5      Noncompetition Agreements............................................................................               41
   8.6      Authorization from Others............................................................................               41
   8.7      Absence of Certain Litigation........................................................................               41
   8.8      No Bankruptcy........................................................................................               41
   8.9      Opinion of Counsel for the Seller....................................................................               42
   8.10     No Material Adverse Effect...........................................................................               42
   8.11     Approval of Buyer's Counsel..........................................................................               42
   8.12     Tax Status Letter....................................................................................               42

ARTICLE IX. CONDITIONS TO OBLIGATIONS OF THE SELLER..............................................................               43
   9.1      Representations; Warrantees; Covenants...............................................................               43
   9.2      Certain Ancillary Agreements.........................................................................               43
   9.3      Governmental Consents and Approvals..................................................................               43
   9.4      Absence of Certain Litigation........................................................................               43
   9.5      No Bankruptcy........................................................................................               43
   9.6      Opinion of Buyer's Counsel...........................................................................               44

ARTICLE X. INDEMNIFICATION.......................................................................................               44
   10.1     Indemnification by the Seller and Zygo...............................................................               44
   10.2     Indemnification by Buyer.............................................................................               46
   10.3     Defense of Third Party Actions.......................................................................               48
   10.4     Miscellaneous........................................................................................               48
   10.5     Payment of Indemnification...........................................................................               49
</TABLE>

                                                                         Page ii
<PAGE>
<TABLE>
<S>                                                                                                                           <C>
ARTICLE XI. MISCELLANEOUS........................................................................................               49
   11.1     Survival of Warranties...............................................................................               49
   11.2     Fees and Expenses....................................................................................               49
   11.3     Notices..............................................................................................               49
   11.4     Publicity and Disclosures............................................................................               51
   11.5     Entire Agreement.....................................................................................               51
   11.6     Severability.........................................................................................               51
   11.7     Assignability........................................................................................               51
   11.8     Amendment............................................................................................               52
   11.9     Governing Law; Venue.................................................................................               52
   11.10    Remedies.............................................................................................               52
   11.11    Counterparts.........................................................................................               52
   11.12    Effect of Table of Contents and Headings.............................................................               53
   11.13    Interpretation.......................................................................................               53
   List of Schedules and Exhibits................................................................................               55
</TABLE>

                                                                        Page iii
<PAGE>
                            ASSET PURCHASE AGREEMENT

         This Asset Purchase Agreement (the "AGREEMENT") dated as of December
13, 2001, is entered into by and among Brooks Automation, Inc., a Delaware
corporation (the "BUYER"), NexStar Corporation, a Colorado corporation (the
"Seller"), and Zygo Corporation ("Zygo"), a Delaware corporation and the sole
stockholder of Seller.

         This Agreement, including the exhibits and schedules hereto, sets forth
the terms and conditions upon which the Buyer or one or more Subsidiaries of the
Buyer will acquire substantially all of the assets of the Seller and assume
certain identified liabilities of the Seller in exchange for a total of
$13,000,000 in cash (subject to adjustment in accordance herewith).

         In consideration of the mutual representations, warranties and
covenants set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

         ARTICLE I. DEFINITIONS

                  1.1. Definitions. For the purposes of this Agreement and,
unless otherwise set forth therein, for the purposes of all schedules and
exhibits to this Agreement, all capitalized words or expressions used in this
Agreement (including the schedules and exhibits annexed thereto) shall have the
meanings specified in this Article I (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

         "AAA RULES" is defined in Section 11.9(b) hereof.

         "ACQUIRED CONTRACTS" is defined in Section 2.1(b) hereof.

         "AFFILIATE" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the other Person in question.

         "AGGREGATE CONSIDERATION" is defined in Section 3.1(a) hereof.

         "AGREEMENT" is defined in the preamble hereof.

         "ANCILLARY AGREEMENTS" means all of the documents, instruments and
agreements entered into or executed in conjunction with the execution, delivery
and performance of this Agreement, including, but not limited to, those
documents and agreements referenced in Sections 8.3 and 9.2 hereof.

         "ASSUMED LIABILITIES" is defined in Section 2.3 hereof.

         "BASE BALANCE SHEET" means Exhibit A, the unaudited balance sheet of
the Seller which reflects the book value of both the Purchased Assets and the
Assumed Liabilities as of the Base Balance Sheet Date.

         "BASE BALANCE SHEET DATE" means June 30, 2001.

                                                                          Page 1
<PAGE>
         "BASE WORKING CAPITAL AMOUNT" is $5,425,629, the working capital amount
derived from the Base Balance Sheet.

         "BUYER" is defined in the preamble hereof.

         "BUYER'S BASKET" is defined in Section 10.2(b) hereof.

         "BUYER'S INDEMNIFIED PERSONS" means the Buyer, its Subsidiaries, its
Affiliates and their respective present and former directors, officers,
employees and, stockholders, representatives and agents.

         "CLOSING" means the closing of the transactions contemplated herein,
which shall be held at the offices of Brown, Rudnick, Freed & Gesmer, One
Financial Center, Boston, MA 02111 at 10:00 a.m., on December 13, 2001 or at
such other place, date or time as may be fixed by mutual agreement of the
parties (the "CLOSING DATE").

         "CLOSING BALANCE SHEET" is defined in Section 3.2(b) hereof.

         "CLOSING DATE" is defined in the definition of "Closing."

         "CLOSING WORKING CAPITAL AMOUNT" is defined in Section 3.2(b) hereof.

         "CLOSING STATEMENT" is defined in Section 3.2(b) hereof.

         "CODE" means the Internal Revenue Code of 1986, as amended, or any
successor law.

         "CONSTITUENT DOCUMENTS" means the certificate of incorporation,
articles of organization, agreement of association, bylaws and/or equivalent
documents pursuant to which a corporation is organized and operates under its
governing law.

         "CONTRACT" means any agreement, contract, obligation, promise,
commitment or undertaking (whether written or oral), other than those that have
been terminated.

         "COPYRIGHTS" means all copyrights in both published works and
unpublished works, including training manuals, marketing and promotional
materials, internal reports, business plans mask works, software, programs and
related documentation, and videos and any other expressions, whether registered
or unregistered, and all registrations or applications in connection therewith
that are used in or material to the conduct of Seller's business as it is
currently conducted.

         "COURT ORDER" means court order, judgment, administrative or judicial
order, writ, decree, stipulation, arbitration award or injunction.

         "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA and any other material plan, policy, program, practice or
agreement (whether written or oral) providing compensation or other benefits
(other than ordinary cash compensation) to any current or former director,
officer, employee or consultant (or to any dependent or beneficiary

                                                                          Page 2
<PAGE>
thereof) of the Seller maintained by the Seller or Zygo, or under which the
Seller has or could have any obligation or liability, whether actual or
contingent, including, without limitation, all incentive, bonus, deferred
compensation, profit sharing, vacation, holiday, cafeteria, medical, disability,
stock purchase, stock option, stock appreciation, phantom stock, restricted
stock or other stock-based compensation plans, policies, programs, practices or
arrangements.

         "ENCUMBRANCE" means any mortgage, deed of trust, charge, claim, lease,
community property interest, equitable interest, lien, option, hypothecation,
pledge, covenant, condition, security interest, title defect, right of first
refusal, restriction of any kind (including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership),
any filing of any financing statement as debtor under the Uniform Commercial
Code or comparable law of any jurisdiction and any agreement to give or make any
of the foregoing; and the verb "Encumber" shall be construed accordingly.

         "ENVIRONMENTAL LAWS" means Laws, Court Orders and Government
Authorizations concerning the environment, or activities that might threaten or
result in damage to the environment or human health, or any Laws, Court Orders
and Government Authorizations that are concerned, in whole or in part, with: (1)
the environment and with protecting or improving the quality of the environment
and human and employee health and safety issues; or (2) the management of
pollution or Hazardous Materials, including, but not limited to, the: (a)
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA");
(b) Resource Conservation and Recovery Act ("RCRA"); (c) Clean Air Act; (d)
Clean Water Act; (e) Toxic Substances Control Act; (f) Emergency Planning and
Community Right-to-Know Act of 1986; (g) Hazardous Materials Transportation Act;
(h) Federal Water Pollution Control Act; and (i) the Federal Insecticide,
Fungicide and Rodenticide Act, as such laws have been amended or supplemented,
and the regulations promulgated pursuant thereto, and any and all analogous
state or local statutes, and the regulations promulgated pursuant thereto, or
any successor laws and any similar laws, rules, or regulations.

         "ENVIRONMENTAL SITE" means any properties or facilities currently or
formerly owned or leased by the Seller in connection with the operation of the
Purchased Assets.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor law.

         "ERISA AFFILIATE" is defined in Section 4.16(b) hereof.

         "ESCROW" is defined in Section 3.4 hereof.

         "ESCROW AGENT" is defined is Section 3.4 hereof.

         "ESCROWED CONSIDERATION" is defined in Section 3.1(b) hereof subject to
modification as provided in the Escrow Agreement.

         "ESTIMATED BALANCE SHEET" is defined in Section 3.2(a) hereof.

                                                                          Page 3
<PAGE>
         "ESTIMATED STATEMENT" is defined in Section 3.2(a) hereof.

         "ESTIMATED WORKING CAPITAL" is defined in Section 3.2(a) hereof.

         "ESTIMATED ADJUSTMENT AMOUNT" is defined in Section 3.2(a) hereof.

         "EXCLUDED ASSETS" is defined in Section 2.2 hereof.

         "EXPECTED ASSIGNED CONTRACTS" is defined in Section 2.2(g) hereof.

         "GAAP" means generally accepted accounting principles in the United
States of America, applied on a basis consistent with past practices.

         "GOVERNMENTAL AUTHORITY" means any court, tribunal, authority, agency,
commission, bureau, department, official or other instrumentality of the United
States, any foreign country or any domestic, foreign, state, local, county, city
or other political subdivision.

         "GOVERNMENT AUTHORIZATIONS" means any license, permit, order, franchise
agreement, concession, grant, authorization, consent or approval from a
Government Authority.

         "HAZARDOUS MATERIALS" means any substance, material or waste which is
regulated by an Environmental Law, including, without limitation, any material
or substance which is defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste" or "restricted hazardous
waste," "subject waste," "contaminant," "toxic waste" or "toxic substance" under
any provision of Environmental Law, including, but not limited to, petroleum
products, asbestos and polychlorinated biphenyls.

         "INDEMNIFIED PERSON" means any Buyer Indemnified Person or Seller
Indemnified Person entitled to be indemnified under Article X.

         "INDEMNIFYING PERSON" means (a) the Seller and Zygo, jointly and
severally or (b) Buyer, as applicable.

         "INDEPENDENT CPA" means Deloitte & Touche LLP.

         "INTELLECTUAL PROPERTY ASSETS" means Licensed Intellectual Property
Assets and Owned Intellectual Property Assets.

         "INVENTORIES" is defined in Section 4.11 hereof.

         "KEY EMPLOYEES" means those persons identified on Exhibit B.

         "LAWS" means statutes, laws, ordinances rules and regulations issued by
any Government Authority.

                                                                          Page 4
<PAGE>
         "LIABILITIES" means all the actual or contingent liabilities of the
Seller existing at the time of the Closing or any such liabilities incurred as a
direct result of the Closing.

         "LICENSED INTELLECTUAL PROPERTY ASSETS" means all intellectual property
rights including without limitation Marks, Patents, Copyrights and Trade Secrets
in every jurisdiction which are licensed to Seller.

         "LOSSES" means all losses, damages (including, without limitation,
punitive and consequential damages actually paid by the Indemnified Person to
third parties), fines, penalties, payments, obligations and all liabilities and
all expenses related thereto incurred by an Indemnified Person except, punitive
and consequential damages and lost profits, lost revenues and opportunity costs
of the Indemnified Person. Losses shall include any reasonable legal fees and
costs incurred by any of the Indemnified Persons subsequent to the Closing in
defense of or in connection with any alleged or asserted liability, payment or
obligation, whether or not any liability or payment, obligation or judgment is
ultimately imposed against the Indemnified Persons and whether or not the
Indemnified Persons are made or become parties to any such action.

         "MARKS" means all trademarks, service marks, trade names, common law
trademarks, business names, Internet domain names and addresses, trade dress,
slogans, and all registrations or applications therefor, and the goodwill
associated therewith that are used in or material to the conduct of Seller's
business as it is currently conducted.

         "MATERIAL ADVERSE EFFECT" means when used in connection with Seller,
Zygo or Buyer any change, circumstance or effect which, individually or in the
aggregate, has had or would reasonably be expected to have a material adverse
change in, or effect on the assets, liabilities, financial condition or results
of operations of such party or on the ability of such party to consummate the
transactions contemplated hereby or by the Ancillary Agreements; provided,
however, "Material Adverse Effect" shall not include any material adverse change
or effect occurring (i) to the extent that such change or effect is a result of
the execution and public announcement of this Agreement, the pendency of the
Agreement or the consummation of the transactions contemplated hereby, or (ii)
as a result of general economic, regulatory or political conditions, or changes
in the semiconductor industry generally except to the extent such change,
effect, event, occurrence or state of facts disproportionately affects such
party and its Subsidiaries.

         "MATERIAL PERSONAL PROPERTY" is defined in Section 4.9(b) hereof.

         "MATERIAL REAL PROPERTY" is defined in Section 4.9(a) hereof.

         "OWNED INTELLECTUAL PROPERTY ASSETS" means all intellectual property
rights including without limitation Marks, Patents, Copyrights and Trade Secrets
in every jurisdiction which are owned by Seller.

         "PATENTS" means all patents, patent applications and inventions and
discoveries that may be patentable, including any patents issuing therefrom, and
any reissues, reexaminations,

                                                                          Page 5
<PAGE>
divisions, continuations in whole or in part, extensions and foreign
counterparts thereof that are used in or material to the conduct of Seller's
business as it is currently conducted.

         "PERMITTED ENCUMBRANCES" means (i) Encumbrances for current taxes not
yet due, (ii) mechanics', materialmen's, warehousemen's, contractors',
workmens', repairmens', carriers' and similar Encumbrances attaching by
operation of law, incurred in the ordinary course of business and securing
payments not delinquent, (iii) the rights, if any, of third-party suppliers or
other vendors having possession of equipment of the Seller, (iv) encumbrances,
imperfection of title and easements and zoning restrictions, if any, which do
not materially impair the operations of the Seller or materially detract from
the value of the property subject thereto and purposes to which such property is
currently employed and (v) those items listed in Section 4.9 of the Disclosure
Schedule.

         "PERSON" means any individual, firm, partnership, association, trust,
corporation, limited liability company, governmental body or other entity.

         "PP&E ADJUSTMENT" means the difference of the property, plant and
equipment amount reflected on the Base Balance Sheet minus the property, plant
and equipment amount reflected on the Closing Balance Sheet excluding any
difference due to depreciation.

         "PROCEEDING" means any pending formal or informal claim, action,
investigation, arbitration, litigation or other judicial, regulatory or
administrative proceeding.

         "PURCHASED ASSETS" means the assets described in Section 2.1 hereof.

         "RECEIVABLES" means the assets described in Section 4.10 hereof.

         "RELATED PERSON" is defined in Section 4.25 hereof.

         "RESOLUTION PERIOD" is defined in Section 3.2(e) hereof.

         "RETAINED CONTRACTS" is defined in Section 2.2(h)

         "RETAINED LIABILITIES" is defined in Section 2.4 hereof.

         "RETURNS" is defined in Section 4.8(a) hereof.

         "REVIEW PERIOD" is defined in Section 3.2(c) hereof.

         "SEC" means the U.S. Securities and Exchange Commission.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SELLER" is defined in the Preamble hereof.

                                                                          Page 6
<PAGE>
         "SELLER INDEMNIFIED PERSONS" means Zygo and the Seller, and each of
their respective subsidiaries and affiliated corporations, their respective
present and former directors, officers, employees and controlling persons,
stockholders, representatives and agents.

         "SELLER'S BASKET" is defined in Section 10.1(b) hereof.

         "SELLER'S INSURANCE" is defined in Section 6.7 hereof.

         "SELLER'S UNAUDITED FINANCIAL STATEMENTS" is defined in Section 4.5
hereof.

         "SUBSIDIARY" means with respect to any Person, any corporation, joint
venture, limited liability company, partnership, association or other business
entity of which more than 50% of the total voting power of stock or other equity
entitled to vote generally in the election of directors or managers or
equivalent persons thereof is owned or controlled, directly or indirectly, by
such Person.

         "TAX CLEARANCE" is defined in Section 6.6 hereof.

         "TAXES" (including, with correlative meaning, the terms "Tax" and
"Taxable") means all income, profit, franchise, gross receipts, sales, use, real
property, personal property, ad valorem, excise, value added, alternative
minimum, employment, payroll, social security and withholding taxes, severance,
stamp, gains, transfer, license, documentary, customs, occupation,
environmental, windfall, and other taxes, duties, or assessments of any kind
whatsoever, and any interest or fines, and any and all penalties and additions
relating to such amounts, imposed by any Governmental Authority (a "TAX
AUTHORITY").

         "THIRD PARTY ACTION" means any written assertion of a claim, or the
commencement of any action, suit, or proceeding, by a third party as to which
any Person believes it may be an Indemnified Person hereunder.

         "TRADE SECRETS" means all trade secrets, know-how, confidential
information, customer lists, sales and marketing information, technical
information and documentation (which reproduce the types of information
otherwise listed in the definition of Trade Secrets herein), proprietary
information technologies, designs, procedures, processes and formulae, source
code, algorithms, architecture, structure, display screens and development
tools, data, patterns, plans, designs, drawings, models and blue prints,
specifications, flow sheets, equipment and parts lists, whether tangible or
intangible and whether stored, compiled, or memorialized physically,
electronically, photographically, or otherwise, and all descriptions and related
instructions, manuals, data, records and procedures related thereto that are
used in or material to the conduct of Seller's business as it is currently
conducted.

         "TRADING DAY" means any day on which the Nasdaq National Market is open
for business.

         "TRANSFERRED EMPLOYEE" means any former employee of Seller or Zygo
hired by Buyer in connection with the transactions contemplated by this
Agreement (including, without limitation, the Key Employees).

                                                                          Page 7
<PAGE>
         "TRANSFER TAX" is defined in Section 2.5(a) hereof.

         "TRANSFER TAX CONTRIBUTION" is $15,000.

         "TRANSFER TAX RETURNS" is defined in Section 2.5(a) hereof.

         "UMC MACHINE" means the machine manufactured for UMC pursuant to
Seller's quote #ZP-S00-636-B dated 11/09/00.

         "ZYGO" is defined in the Preamble hereof.

         ARTICLE II. PURCHASE AND SALE OF PURCHASED ASSETS

                  2.1. Purchased Assets. Subject to the provisions of this
Agreement and except as expressly excluded in Section 2.2 below, the Seller
agrees to sell and the Buyer agrees to purchase, at the Closing, all of the
properties, assets and business of the Seller of every kind and description,
tangible and intangible, real, personal or mixed, and wherever located,
including, without limitation, all assets shown or reflected on the Base Balance
Sheet and arising since the Base Balance Sheet Date in the ordinary course,
other than those assets listed and described in Section 2.2 below as Excluded
Assets. The assets, property and business of the Seller to be sold to and
purchased by the Buyer under this Agreement are hereinafter sometimes referred
to as the "PURCHASED ASSETS." The Purchased Assets include, but are not limited
to, the following assets and business of the Seller:

                           (a) all of the Receivables, Inventory, machinery and
equipment and other assets shown on the Base Balance Sheet plus any assets
listed on Schedule 2.1(a) hereto, with only such changes with respect to such
Receivables and Inventory as have occurred since the date of the Base Balance
Sheet and such changes to such machinery, equipment and other assets as have
occurred in the ordinary course of the Seller consistent with past practice
since the date of the Base Balance Sheet;

                           (b) all rights and interests of the Seller in and to
executory contracts, commitments, plans, agreements, understandings, licenses
and personal property leases, other than in respect of any Retained Liability,
any Expected Assigned Contracts or any Retained Contracts, including, without
limitation, those listed on Schedule 2.1(b) hereto (the "ACQUIRED CONTRACTS");

                           (c) all rights and interests of the Seller in and to
customer purchase orders except the Retained Contract;

                           (d) all of the Seller's books, records and accounts,
correspondence and any confidential information relevant to the operation of
their business which has been reduced to writing (which may be provided on
computer disks, tape or comparable media), including, but not limited to,
engineering records, purchase and sales records since July 1, 2000, production
flow chart records; credit records since July 1, 2000, copies of accounting
records, and customer and vendor lists and records since July 1, 2000; personnel
records, payroll records and employee benefit summaries but excluding items
identified in Section 2.2(b) hereof;

                                                                          Page 8
<PAGE>
                           (e) all of Seller's rights, title and interest in and
to the Intellectual Property Assets listed on Schedule 2.1(e);

                           (f) all of Seller's right, title and interest in, to
and under third-party manufacturers' warranties with respect to the Purchased
Assets other than in respect to any Retained Liabilities;

                           (g) any and all of the Seller's Governmental
Authorizations which relate to the Purchased Assets or are used in or material
to the Seller's business to the extent that the same are transferable;

                           (h) all of the Seller's cash and cash equivalents;
and

                           (i) all of Seller's customer lists and sales and
marketing information.

                  2.2. Excluded Assets. The following assets shall be excluded
from the Purchased Assets (collectively, the "EXCLUDED ASSETS"):

                           (a) assets and property disposed of since the date of
the Base Balance Sheet in the ordinary course of business and such other assets
as have been disposed of pursuant to this Agreement;

                           (b) the Seller's corporate franchise, stock record
books, corporate record books containing minutes of meetings of directors and
stockholders and such other records as have to do exclusively with the Seller's
organization or stock capitalization;

                           (c) any and all income, sales, use, corporation
excise and franchise tax refunds which the Seller may be entitled to receive
from Governmental Authorities which relate to its ownership of the Purchased
Assets prior to Closing or its operation of its business prior to the Closing
and any right of the Seller to claim refunds for any Taxes in respect of any
period prior to the Closing;

                           (d) any asset relating to or arising out of any
Employee Benefit Plan;

                           (e) any asset relating to or arising from any
transactions between the Seller and Zygo or between or among Zygo, the Seller
and any Affiliate of Zygo or the Seller;

                           (f) the goodwill of the Seller;

                           (g) any and all rights, interests and liabilities of
the Seller or Zygo in the contracts and agreements listed on Schedule 2.2(g)
hereof, which Seller wishes to assign but cannot assign without the consent of a
third party (the "EXPECTED ASSIGNED CONTRACTS"); and

                           (h) any and all rights, interests and liabilities of
the Seller or Zygo in the contracts and agreements listed on Schedule 2.2(h)
hereof (the "RETAINED CONTRACTS")

                                                                          Page 9
<PAGE>
                  2.3. Assumption of Liabilities. Upon the sale and purchase of
the Purchased Assets, the Buyer shall assume, pay, perform or discharge when due
those liabilities and obligations of the Seller set forth below to the extent
existing as of the Closing or subsequent thereto (the "ASSUMED LIABILITIES").
The Assumed Liabilities shall consist only of the following:

                           (a) all the liabilities of the Seller shown on the
Base Balance Sheet which are outstanding at the time of the Closing other than
the Retained Liabilities;

                           (b) all liabilities and obligations incurred by the
Seller in the ordinary course of business and consistent with the terms hereof
since the date of the Base Balance Sheet which are outstanding at the time of
the Closing other than in respect to the Retained Liabilities;

                           (c) any liability relating to the ownership, use or
operation of the Purchased Assets by Buyer after the Closing Date;

                           (d) any and all Taxes arising in respect of taxable
periods beginning after the Closing Date or, with respect to any taxable period
that begins before, but ends after the Closing Date, that portion of such
taxable period that begins after the Closing Date relating to Buyer's ownership
or operations of the Purchased Assets after the Closing; and

                           (e) any liabilities and obligations relating to the
employment or termination by Buyer of any former employees of Seller (including,
without limitation, the Key Employees).

The assumption of Assumed Liabilities by the Buyer hereunder shall be treated as
independent of the Buyer's existing business and shall not enlarge any rights of
third parties under contracts or arrangements with the Buyer or the Seller.
Nothing herein shall prevent the Buyer from contesting in good faith any of the
Assumed Liabilities.

                  2.4. Retained Liabilities. Except to the extent expressly
assumed pursuant to Section 2.3 above, the Buyer does not assume and shall not
be liable for any debt, obligation, responsibility or liability of the Seller,
or any Affiliate of the Seller, or any claim against any of the foregoing,
whether known or unknown, contingent absolute or otherwise (collectively, the
"RETAINED LIABILITIES"). Without limiting the foregoing sentence, the Buyer
shall have no responsibility with respect to the following, whether or not
disclosed in the Base Balance Sheet or a schedule hereto:

                           (a) any liabilities and obligations related to or
arising from any transactions between the Seller and Zygo or between or among
Zygo, the Seller and any Affiliate of Zygo or the Seller;

                           (b) any liabilities and obligations for Taxes of any
kind arising before the Closing (including, without limitation, sales tax), and
for any Transfer Taxes subject to the provisions of Section 2.5 hereto;

                                                                         Page 10
<PAGE>
                           (c) any liabilities, obligations and penalties for
damage or injury to person or property based upon events occurring prior to the
Closing Date;

                           (d) any liabilities and obligations of the Seller to
its current or former employees (including, without limitation, the Key
Employees and any other employee of Seller hired by Buyer);

                           (e) any workmen's liens on any of the Purchased
Assets;

                           (f) any liabilities and obligations of the Seller to
customers or third parties in connection with their business with respect to
shortages and defects in goods delivered to customers or in transit to customers
prior to the Closing, including but not limited to, liabilities and obligations
for product warranty and product liability claims;

                           (g) any liability relating to or arising from any
Employee Benefit Plan;

                           (h) any liability relating to government grants,
subsidiaries or other assistance including, without limitation, any liability
for reimbursement to a government for any research and development grants,
subsidies or assistance previously paid by the government relating to or arising
out of the Seller's business prior to Closing; and

                           (i) liabilities incurred by the Seller in connection
with this Agreement and the transactions provided for herein, including counsel
and accountant's fees, filing fees and expenses related to the Seller's
performance of their obligations hereunder.

                  2.5. Taxes; Documents of Assignment.

                           (a) Each of Buyer on the one hand and the Seller and
Zygo (jointly and severally) on the other hand shall be responsible for all
Taxes required by any Governmental Authority in any relevant jurisdiction which
arise out of or result from the sale of the Purchased Assets or the receipt of
the Aggregate Consideration ("TRANSFER TAX") except that Buyer's maximum
responsibility pursuant to this section shall not exceed an aggregate of
$50,000. Seller and Zygo shall be responsible for all Transfer Tax in excess of
$50,000. Transfer Tax shall not include any amounts required to be remitted to
any Governmental Authority for prior Tax deficiencies. In addition, the Buyer
shall upon consultation with Seller, at its expense, properly complete, sign,
and timely file any and all required Returns relating to Transfer Tax ("TRANSFER
TAX RETURNS") and, if required by applicable law, the Seller and Zygo will join
in the execution of any such Transfer Tax Returns.

                           (b) At the Closing, the Seller shall deliver or cause
to be delivered to the Buyer good and sufficient instruments of transfer
transferring to the Buyer or its designee title subject to Permitted
Encumbrances to all the Purchased Assets sold by the Seller. Such instruments of
transfer: (i) shall be in the form and will contain the warranties, covenants
and other provisions (not inconsistent with the provisions hereof) which are
usual and customary for transferring the type of property involved under the
laws of the jurisdictions applicable to such transfers; (ii) shall be in form
and substance reasonably satisfactory to counsel for the Buyer; and

                                                                         Page 11
<PAGE>
(iii) shall effectively vest in the Buyer good and valid title to all the
Purchased Assets, free and clear of all Liabilities or Encumbrances not
specifically assumed by the Buyer or its designee hereunder.

                           (c) At the Closing, the Seller shall deliver or cause
to be delivered to the Buyer or its designee all of the Acquired Contracts, with
such assignments thereof and consents to assignments as are necessary to assure
the Buyer of the full benefit of the same. The Seller shall also deliver to the
Buyer or its designee at the Closing copies of all of the Seller's business
records, tax returns, books and other data relating to the Purchased Assets, and
the business and operations (except the Excluded Assets) of the Seller and shall
use its best efforts to take all requisite steps to put the Buyer in actual
possession and operating control of the Purchased Assets. After the Closing, the
Buyer shall afford to the Seller and its accountants and attorneys reasonable
access to the books and records of the Seller delivered to the Buyer under this
Section 2.5 and shall permit the Seller to make extracts and copies therefrom
for the purpose of preparing such tax returns of the Seller as may be required
after the Closing and for other proper purposes reasonably approved by the
Buyer.

                  2.6. Other Documents; Further Assurances.

                           (a) At the Closing, the Seller and Zygo shall deliver
or cause to be delivered to the Buyer such other documents as may be required by
any Ancillary Agreement.

                           (b) The Seller and Zygo from time to time after the
Closing, but prior to twelve months after the Closing Date, at the request of
the Buyer and without further consideration shall execute and deliver further
instruments of transfer and assignment and take such other action as the Buyer
may reasonably require to more effectively transfer and assign to, and vest in,
the Buyer each of the Purchased Assets, including, without limitation, any
accounts receivable paid to Zygo or Seller after the Closing Date. To the extent
that the assignment of any lease, contract, commitment or right (including,
without limitation, the Expected Assigned Contracts) shall require the consent
of other parties thereto, this Agreement shall not constitute an assignment
thereof; however, the Seller and Zygo shall use their commercially reasonable
efforts after the Closing to obtain any necessary consents or waivers to assure
the Buyer of the benefits of such leases, contracts, commitments or rights. If
such consent is not obtained, the Seller and Zygo agree to cooperate with the
Buyer, to the extent practicable and permitted thereunder, in any reasonable
arrangement designed to provide for the Buyer the benefits thereunder,
including, but not limited to, having: (i) the Buyer act as agent for the Seller
and/or Zygo; and (ii) the Seller and/or Zygo shall enforce for the benefit of
the Buyer any and all rights of the Seller and/or Zygo against the other party
thereto arising out of the cancellation by such other party or otherwise.
Nothing herein shall be deemed a waiver by the Buyer of its right to receive at
the Closing an effective assignment of each of the leases, contracts,
commitments or rights of the Seller being sold hereunder.

                                                                         Page 12
<PAGE>
         ARTICLE III. AGGREGATE CONSIDERATION

                  3.1. Aggregate Consideration and Payment.

                           (a) Subject to the adjustment contained in Section
3.2 below, the aggregate consideration to be paid by the Buyer to the Seller
(the "AGGREGATE CONSIDERATION") in consideration of the sale of the Purchased
Assets shall be equal to:

                           (i)      the aggregate amount of the Assumed
                                    Liabilities as of the Closing; plus

                           (ii)     the difference of $13,000,000 minus the
                                    Estimated Adjustment Amount, in cash.

                           (b) The cash portion of the Aggregate Consideration
shall be paid by Buyer as follows:

                           (i)      the difference of $11,700,000 minus (1) the
                                    result of 0.9 times the Estimated Adjustment
                                    Amount and (2) the Transfer Tax Contribution
                                    shall be paid by wire transfer to the Seller
                                    at the Closing;

                           (ii)     the difference of $1,300,000 minus the
                                    result of 0.1 times the Estimated Adjustment
                                    Amount shall be delivered to the Escrow
                                    Agent at the Closing under the Escrow
                                    Agreement as provided by Section 3.4 below
                                    (the "ESCROWED CONSIDERATION"); and

                           (iii)    the Transfer Tax Contribution shall be held
                                    by Buyer until all of the Transfer Tax
                                    Returns have been filed and all of the
                                    Transfer Taxes required to be remitted by
                                    Buyer have been remitted at which time that
                                    portion of the Transfer Tax Contribution not
                                    required to be paid to a Governmental
                                    Authority pursuant to Section 2.5 hereof (if
                                    any) shall be paid by wire transfer to
                                    Seller within five (5) business days along
                                    with a certificate stating the amount of
                                    Transfer Tax paid.

                  3.2. Determination of Closing Working Capital Amount;
Adjustment of the Aggregate Consideration.

                           (a) Not less than five (5) days prior to the Closing
Date, the Seller shall prepare and deliver to the Buyer: (i) a balance sheet
(the "ESTIMATED BALANCE SHEET") which shall estimate the book value of both the
Purchased Assets and the Assumed Liabilities as of October 26, 2001; and (ii) a
statement (the "ESTIMATED STATEMENT") estimating the difference between the
aggregate value of the current assets included in the Purchased Assets and the
aggregate value of the current liabilities included in the Assumed Liabilities
as of October 26, 2001 as reflected on the Estimated Balance Sheet, including
without limitation all deferred revenue (the "ESTIMATED WORKING CAPITAL
AMOUNT"). If the Estimated Working Capital

                                                                         Page 13
<PAGE>
Amount is less than the Base Working Capital Amount, then the ESTIMATED
ADJUSTMENT AMOUNT shall equal the difference of the Base Working Capital Amount
minus the Estimated Working Capital Amount. If the Estimated Working Capital
Amount is greater than or equal to the Base Working Capital Amount, the
Estimated Adjustment Amount shall equal zero.

                           (b) Not later than forty-five (45) days after the
Closing Date, the Seller shall prepare and deliver to the Buyer with the
reasonable assistance of the Transferred Employees: (i) a balance sheet (the
"CLOSING BALANCE SHEET") which shall reflect the book value of both the
Purchased Assets and the Assumed Liabilities as of the Closing Date; and (ii) a
statement (the "CLOSING STATEMENT") indicating the difference between the
aggregate value of the current assets included in the Purchased Assets and the
aggregate value of the current liabilities included in the Assumed Liabilities
as of the Closing Date, including without limitation all deferred revenue (such
amount plus $75,000, the "CLOSING WORKING CAPITAL AMOUNT"). The Closing Balance
Sheet shall be reviewed by KPMG LLP, the accountants of the Seller on a basis
consistent with the preparation of the Base Balance Sheet and in accordance with
GAAP. The Closing Balance Sheet shall also be accompanied by all necessary and
appropriate supporting work papers and materials. Inventory shall be valued as
provided in Section 4.11 hereof as of the close of business on the Closing Date
based on a physical count undertaken on a mutually agreed upon date that is on
or near the Closing Date at which all parties or their representatives may be
present to observe. To the extent that the Closing Working Capital Amount
differs from the Estimated Working Capital Amount, then the Aggregate
Consideration shall be adjusted as hereinafter set forth. The Closing Balance
Sheet shall only be used by the Seller and the Buyer in connection with this
Agreement and the transactions contemplated hereby and will not be distributed
or used in any United States' Securities and Exchange Commission filings unless
otherwise required by Law.

                           (c) Following receipt of the Closing Balance Sheet,
the Buyer and the Buyer's accountants will have a period of sixty (60) calendar
days (the "REVIEW PERIOD") to review, at the Buyer's cost, the Closing Balance
Sheet. During such Review Period, the Buyer and the Buyer's accountant will be
given reasonable access to any of the Seller's or Zygo's employees involved in
the preparation of the Closing Balance Sheet and the records, work papers, trial
balances and similar materials prepared by the Seller or Zygo or their
accountants (provided the Buyer executes a customary accountant's indemnity
agreement) in connection with the preparation of the Closing Balance Sheet;
provided, however, that the Buyer shall provide reasonable prior notice of any
such investigation to the Seller or Zygo as applicable. At or before the end of
the Review Period, the Buyer will either: (i) accept the Closing Balance Sheet
and the Closing Statement in their entirety, in which case the Closing Working
Capital Amount will be deemed to be as set forth on the Closing Statement, and
the Closing Balance Sheet and the Closing Statement shall become final, binding
and conclusive on the Seller, Zygo and the Buyer; or (ii) deliver to the Seller
and the Seller's accountants a written notice in accordance with paragraph (e)
of this Section 3.2 disputing the Closing Balance Sheet or the Closing
Statement. If the Buyer fails to provide the notice set forth in (ii) above
within the Review Period, it shall be deemed acceptance of the Closing Balance
Sheet.

                                                                         Page 14
<PAGE>
                           (d) Within thirty (30) days following the later of:
(x) the date the Closing Balance Sheet and the Closing Statement is accepted by
Buyer; or (y) the final, binding and conclusive determination of any dispute
with respect to the Closing Balance Sheet or the Closing Statement as provided
in paragraph (e) of this Section 3.2, in either case:

                           (i)      if the difference of the Closing Working
                                    Capital Amount minus the PP&E Adjustment is
                                    less than the Estimated Working Capital
                                    Amount, then (x) the Seller shall pay to
                                    Buyer in cash an amount equal to 90% of the
                                    difference of (A) the Estimated Working
                                    Capital Amount minus (B) the Closing Working
                                    Capital Amount minus (C) the PP&E Adjustment
                                    and (y) the Buyer shall be paid from the
                                    Escrow Consideration an amount equal to 10%
                                    of the difference of (A) the Estimated
                                    Working Capital Amount minus (B) the Closing
                                    Working Capital Amount minus (C) the PP&E
                                    Adjustment; or

                           (ii)     if the Closing Working Capital Amount minus
                                    the PP&E Adjustment is greater than the
                                    Estimated Working Capital Amount, then (x)
                                    the Buyer shall pay to Seller in cash an
                                    amount equal to 90% of the difference of (A)
                                    the difference of the Closing Working
                                    Capital Amount minus the PP&E Adjustment,
                                    minus (B) the Estimated Working Capital
                                    Amount and (y) the Buyer shall deposit into
                                    escrow as additional Escrow Consideration an
                                    amount equal to 10% of the difference of (A)
                                    the difference of the Closing Working
                                    Capital Amount minus the PP&E Adjustment
                                    minus (B) the Estimated Working Capital
                                    Amount.

                           (e) In the event that any dispute shall arise as to
the manner of preparation or the accuracy of the Closing Balance Sheet or
Closing Statement prior to the expiration of the Review Period, the Buyer shall
provide the Seller with written notice of each disputed item. In the event of
such a dispute, the Buyer and the Seller shall attempt to reconcile in good
faith their differences as to such items within twenty (20) calendar days (the
"RESOLUTION PERIOD") of the Seller's receipt of such notice, and any resolution
by them as to any disputed items shall be final, binding and conclusive on the
Seller and the Buyer. If the Buyer and the Seller are unable to reach a
resolution within the Resolution Period, the Buyer and the Seller shall submit
the dispute to the Independent CPA. The determination of such dispute by the
Independent CPA shall be final, binding and conclusive on the parties. The fees
and expenses of the Independent CPA shall be assessed by the Independent CPA
fifty percent (50%) against the Seller and Zygo, jointly and severally, and
fifty percent (50%) against the Buyer, and shall be paid by each of them in
those proportions; provided, however, that the prevailing party shall not be
responsible for any portion of the fees and expenses of the Independent CPA if
the Independent CPA's decision causes the Closing Working Capital Amount
determined pursuant to this paragraph (e) to be less than 90% of the Closing
Working Capital Amount determined pursuant to paragraph (b) of this Section 3.2,
in the case of the Buyer, or not less than 90% of the Closing Working Capital
Amount determined pursuant to paragraph (b) of this Section 3.2, in the case of
the Seller.

                                                                         Page 15
<PAGE>
         3.3. Allocation of Aggregate Consideration. The parties will cooperate
with each other to prepare a schedule within sixty (60) days after the Closing
allocating the Aggregate Consideration among the Purchased Assets. The parties
hereto acknowledge and agree that such allocation will reflect the respective
fair market values of the Purchased Assets and that they will not take a
position inconsistent with such allocation for federal, state or local Tax
purposes.

         3.4. Escrowed Consideration. At the Closing, the Buyer shall deliver to
State Street Bank and Trust Company or any successor escrow agent (the "ESCROW
AGENT"), the Escrowed Consideration, such Escrowed Consideration to be held by
the Escrow Agent to secure the payment of indemnification payable to the Buyer
hereunder by reason of the breach of any of the representations and warranties
of the Seller or Zygo or failure of the Seller or Zygo to perform any of their
obligations hereunder (the "ESCROW"). Such Escrow shall terminate upon the one
year anniversary of the Closing Date. In order to set forth the terms and
conditions of the Escrow, the Buyer, the Seller and the Escrow Agent shall enter
into an Escrow Agreement, substantially in the form attached hereto as Exhibit
C.

         ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND ZYGO

         Except as set forth on the Schedules attached hereto specifically
identifying the relevant Section and paragraph hereof and as otherwise
specifically referenced in such Schedules, each of the Seller and Zygo hereby,
jointly and severally, represent and warrant to the Buyer as follows:

                  4.1. Organization and Qualification of the Seller.

                           (a) The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado,
with full power and authority to own, operate or lease its properties and to
conduct its business in the manner and in the places where such properties are
owned or leased or such business is conducted by it except where the failure of
which would not have a Material Adverse Effect. The copies of the Seller's
Constituent Documents which are attached as Schedule 4.1 hereto, are complete
and correct. The Seller is duly qualified to do business and in good standing as
a foreign corporation in each of the jurisdictions identified on Schedule 4.1
and it is not required to be licensed or qualified to conduct its business or
own its property in any other jurisdiction except where the failure of which
would not have a Material Adverse Effect.

                           (b) Zygo is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
power and authority to own, operate or lease its properties and to conduct its
business in the manner and in the places where such properties are owned or
leased or such business is conducted by it except where the failure of which
would not have a Material Adverse Effect. The copies of Zygo's Constituent
Documents, which are attached as Schedule 4.1 hereto, are complete and correct.

                  4.2. Authority; No Violation. The Seller and Zygo have all
requisite corporate power and authority to enter into and deliver this Agreement
and each Ancillary Document to which it is a party and to carry out the
transactions and perform its obligations contemplated

                                                                         Page 16
<PAGE>
hereby and thereby. The execution, delivery and performance of this Agreement
and each Ancillary Document to which the Seller and Zygo are a party by the
Seller and Zygo and all transactions contemplated herein and therein have been
duly and validly authorized and approved by all necessary corporate action of
the Seller and Zygo. Each such agreement constitutes the legal, valid and
binding obligation of the Seller and Zygo, enforceable in accordance with its
terms except: (a) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally; and (b) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
Assuming the accuracy of the representations and warranties of the Buyer
hereunder, the entering into of this Agreement and the Ancillary Agreements to
which it is a party by the Seller and Zygo does not, and the consummation by the
Seller of the transactions contemplated hereby and thereby will not: (i) violate
the provisions of any Law or Court Order; (ii) violate any provision of the
Seller's Constituent Documents or Zygo's Constituent Documents; (iii) breach,
result in a default or acceleration of any obligation under, or cause the loss
of any right under, any material contract, agreement, license, lease,
instrument, indenture, order, arbitration award, judgment, or decree to which
the Seller or Zygo are parties or by which the Seller or Zygo are bound, or to
which the Seller's properties (other than the Excluded Assets) are subject; (iv)
violate or conflict with any resolution adopted by the Board of Directors or the
stockholders of either Seller or Zygo; (v) violate any legal requirement or
Court Order to which the Seller or Zygo or any of the assets or properties owned
or used by the Seller is subject except, where such violation, individually or
in the aggregate, would not have a Material Adverse Effect; or (vi) violate any
Governmental Authorization which is held or used by the Seller except, where
such violation, individually or in the aggregate, would not have a Material
Adverse Effect. The execution, delivery and performance of this Agreement and
the Ancillary Agreements and the transactions contemplated hereby and thereby do
not require the consent, waiver, approval, authorization, exemption of or giving
of notice to any Governmental Authority except as otherwise provided for in this
Agreement or where failure to receive such consent, waiver, approval,
authorization or exemption or give such notice, individually or in the
aggregate, would not have a Material Adverse Effect.

                  4.3. Capitalization.

         Seller is a wholly-owned subsidiary of Zygo.

                  4.4. Subsidiaries; Other Investments. Seller does not own,
directly or indirectly, any capital stock or ownership interest of any
corporation or other business organization. The Seller is not a partner or
participant in any joint venture or partnership of any kind.

                                                                         Page 17
<PAGE>
                  4.5. Financial Statements.

                           (a) Attached as Schedule 4.5(a) hereto are the
Seller's unaudited Balance Sheets as of June 30, 2001, June 30, 2000 and October
26, 2001 and Statements of Operations and Cash Flows for the two years ending
June 30, 2001 and the four months ending October 26, 2001 (the "SELLER'S
UNAUDITED FINANCIAL STATEMENTS"), all of which statements (including any notes
thereto) are complete and correct in all material respects and present fairly
the assets, liabilities and financial position of the Seller on the date of such
statements, and the results of operations and changes in the financial condition
of the Seller for the periods covered thereby. The Seller's Unaudited Financial
Statements have been prepared in accordance with GAAP (except for the absence of
footnotes and subject to year-end adjustments), consistently applied throughout
the periods involved and prior periods.

                           (b) The books of account of the Seller for the
periods referenced in Section 4.5(a) are complete and correct in all material
respects and have been maintained on a consistent basis. Neither the Seller nor
Zygo has received any auditor's letters to management with comments specifically
relating to Seller for such periods except for those letters identified on
Schedule 4.5(b), complete and correct copies of any comments specifically
relating to Seller contained in any such letters have been provided to Buyer.

                  4.6. Absence of Undisclosed Liabilities. There are no material
liabilities of any nature, known or unknown, with respect to the Seller, whether
accrued, absolute, contingent or otherwise (including, without limitation,
liabilities as guarantor or otherwise with respect to obligations of others, or
liabilities for Taxes due or then accrued or to become due), except: (a)
liabilities stated or adequately reserved against on the Base Balance Sheet; (b)
liabilities incurred since the Base Balance Sheet Date in the ordinary course of
business consistent with past practices, which liabilities, to the extent
outstanding on the Closing Date, will be reflected on the Closing Balance Sheet;
and (c) liabilities disclosed on Schedule 4.6 hereto.

                  4.7. Conduct of Business; Absence of Certain Changes. Since
the Base Balance Sheet Date, the Seller has conducted its business only in the
ordinary course, consistent with prior practices and, whether or not in the
ordinary course of business, there has not been any change in the financial
condition (including working capital, earnings, reserves, properties, assets,
liabilities, business or operations), of the Seller which change, by itself or
in conjunction with all other such changes, whether or not arising in the
ordinary course of business, has had a Material Adverse Effect on the Seller.
Without limiting the generality of the foregoing, except as disclosed on
Schedule 4.7 hereto, since the Base Balance Sheet Date there has not been:

                  (a)      any amendment or other modification to the
                           Constituent Documents of the Seller or Zygo;

                  (b)      any contingent liability incurred by the Seller as
                           guarantor or otherwise, with respect to the
                           obligations of others;

                  (c)      any sale, lease or other disposition, or any
                           agreement or other arrangement for the sale, lease or
                           other disposition, of any of asset or property of the

                                                                         Page 18
<PAGE>
                           Seller with a value individually, or in the
                           aggregate, in excess of $25,000, other than in the
                           ordinary course of business consistent with past
                           practice;

                  (d)      any Encumbrance placed on any of the Purchased Assets
                           which remains in existence on the date hereof;

                  (e)      any obligation or liability incurred by the Seller,
                           other than obligations and liabilities incurred in
                           the ordinary course of business consistent with past
                           practice;

                  (f)      any entry into Contracts or agreements by the Seller,
                           except contracts made in the ordinary course of
                           business consistent with past practices;

                  (g)      any entry into, termination of, or receipt of notice
                           of termination of any Contract or transaction
                           involving a total remaining commitment by or to the
                           Seller of at least $25,000 including the entry into:
                           (i) any document evidencing any indebtedness; (ii)
                           any capital or other lease; or (iii) any guaranty;

                  (h)      cancellation, compromise, release or waiver of any
                           debt, claim or right with a value to the Seller in
                           excess of $25,000;

                  (i)      creation, incurrence or assumption of any
                           indebtedness for borrowed money or guarantee of any
                           obligation by the Seller in an aggregate amount in
                           excess of $25,000, except for endorsements of
                           negotiable instruments for collection in the ordinary
                           course of business;

                  (j)      payment, discharge or satisfaction of any material
                           obligation or liability, absolute, accrued,
                           contingent or otherwise, whether due or to become
                           due, except for any current liabilities, and the
                           current portion of any long-term liabilities, shown
                           on the Base Balance Sheet (or not required as of the
                           date thereof to be shown thereon in accordance with
                           GAAP) or incurred since the date of the Base Balance
                           Sheet in the ordinary course of business consistent
                           with past practice;

                  (k)      institution or settlement of any Proceeding before
                           any Governmental Authority relating to the Seller;

                  (l)      except in the ordinary course of business consistent
                           with past practice, commitment by the Seller to
                           provide services or goods for an indefinite period or
                           a period of more than six (6) months;

                  (m)      any capital investment, capital expenditure,
                           commitment or capital improvement, addition or
                           betterment in amounts which exceed $10,000 in the
                           aggregate or lease or agreement to lease assets with
                           an annual rental which exceeds $25,000 in the
                           aggregate;

                                                                         Page 19
<PAGE>
                  (n)      any damage to or destruction of any asset or property
                           of the Seller whether covered by insurance or not, or
                           loss of any customer, which would have a Material
                           Adverse Effect on Seller;

                  (o)      any declaration, setting aside or payment of any
                           dividend on, or the making of any other distribution
                           in respect of, the capital stock of the Seller,
                           direct or indirect redemption, purchase or other
                           acquisition by the Seller of their capital stock, or
                           any issuance of any securities of the Seller;

                  (p)      except with regards to officers and directors of the
                           Seller who are employees of Zygo and as otherwise
                           contemplated by this Agreement, Schedule 4.7(p) sets
                           forth any (i) increase in the rate of compensation or
                           bonus amounts payable or to become payable by the
                           Seller to any of its directors, officers, employees
                           or consultants; or (ii) any material increase in any
                           pension or profit sharing payment, entitlement or
                           arrangement made by the Seller to or with any of such
                           directors, officers, employees or consultants; or
                           (iii) any grant by the Seller of any loans (other
                           than under a tax qualified retirement plan), advances
                           or severance or termination pay; (iv) entry into or
                           amendment by the Seller of any material employment,
                           consultant, severance or similar contract with any
                           such director, officer, employee or consultant; (v)
                           payment of any bonuses, salaries (other than in the
                           ordinary course of business) or other compensation by
                           the Seller to any such officer, consultant or
                           employee; or (vi) material increase in the benefits
                           under, or adoption of, any Employee Benefit Plan for
                           the benefit of employees of the Seller;

                  (q)      any material change with respect to the management or
                           supervisory personnel of the Seller;

                  (r)      any payment or discharge of a material Encumbrance,
                           claim, obligation or liability of the Seller which
                           was not shown on the Base Balance Sheet or incurred
                           in the ordinary course of business thereafter;

                  (s)      any acquisition of any capital stock or other
                           securities of or any ownership interest in, or a
                           significant portion of the assets of, any other
                           business enterprise;

                  (t)      any write-downs of the value of any inventory
                           included in the Purchased Assets (including
                           write-downs by reason of shrinkage or mark-down) or
                           write-offs as uncollectible of any notes or accounts
                           receivable included in the Purchased Assets, except
                           for write-downs or write-offs that are in the
                           aggregate less than $25,000 incurred in the ordinary
                           course of business;

                  (u)      any disposal, sale, assignment, license or lapse of
                           any rights to the use of any material Intellectual
                           Property Asset, or the license or disposal, sale,
                           assignment, or disclosure to any person other than
                           the Buyer or any

                                                                         Page 20
<PAGE>
                           Affiliate of Buyer of any material trade secret,
                           technology, formula, process, know-how or other
                           confidential information not theretofore a matter of
                           public knowledge other than pursuant to
                           confidentiality agreements;

                  (v)      any change in any method of accounting or accounting
                           practice except as required by GAAP; or

                  (w)      any agreement, whether in writing or otherwise, to
                           take any action described in this Section 4.7.

                  4.8. Payment of Taxes.

                           (a) The Seller has filed or caused to be filed with
the appropriate Tax Authorities in a timely manner all Tax returns, reports and
forms, statements, declarations, claims for refund, and other documents and
information with respect to Taxes, including any schedule or attachment thereto,
and including any amendment thereof ("RETURNS") required to be filed by them
with a Tax Authority.

                           (b) The information reported on such Returns is
complete and accurate.

                           (c) The Seller has paid or has had paid on its
behalf, on a timely basis and in full all Taxes or made adequate provision in
the Seller's financial statements for all Taxes (whether or not shown on any
Return) required to be paid by it (including any Taxes of another Person for
which the Seller may have liability pursuant to Treasury Regulation Section
1.1502-6, or any similar provision of state, local, or foreign law, as a
transferee or successor, by contract or otherwise).

                           (d) There are no Encumbrances for Taxes upon the
assets or properties of the Seller other than for Taxes not yet due and payable.

                           (e) Except as disclosed on Schedule 4.8(e) hereto, no
deficiencies for Taxes have been claimed, proposed, or assessed in writing or
otherwise to the Seller's knowledge by any Tax Authority or other Governmental
Authority with respect to the Seller, and there are no pending or, to the
Seller's knowledge, threatened audits, investigations or claims for or relating
to any liability in respect of Taxes of the Seller.

                           (f) The Seller has no examination reports and
statements or notices of deficiency asserted, proposed, or assessed against or
agreed to by the Seller.

                           (g) There are no outstanding Contracts or written
waivers with respect to the Seller extending the statutory period of limitation
applicable to any Taxes, and the Seller has not requested any extension of time
within which to file any Return, which has not yet been filed.

                           (h) The Seller has withheld and timely paid to the
appropriate Tax Authority all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, shareholder or other third Person.

                                                                         Page 21
<PAGE>
                  4.9. Title to Properties; Encumbrances; Condition of
Properties.

                           (a) The Purchased Assets do not include any real
property. The Seller does not and has never owned real property. Set forth on
Schedule 4.9(a) hereto is a listing of all real property leased by the Seller,
including a description of the real estate and any Encumbrances on the property
(collectively, the "MATERIAL REAL PROPERTY").

                           (b) Set forth on Schedule 4.9(b) hereto is a listing
of: (i) all machinery, equipment and other tangible personal property with an
original cost in excess of $25,000 used or owned by the Seller; and (ii) a
listing of all leases under which the Seller leases any personal property
requiring annual rental payments in excess of $25,000, together with a
description of such property (collectively, the "MATERIAL PERSONAL PROPERTY").
Schedule 4.9(b) hereto lists all locations where Material Personal Property is
located.

                           (c) Except for assets or properties acquired since
the Base Balance Sheet Date and set forth on Schedule 4.9(c) hereto, all of the
assets and properties of the Seller are reflected on the Base Balance Sheet
(except to the extent not required to be so reflected by GAAP). The only
intangible assets and properties owned or used by the Seller are Intellectual
Property Assets described in Section 4.12. The Purchased Assets include all of
the assets owned or leased by the Seller that are useful in its business.

                           (d) The Seller is in material compliance with all
terms and conditions of each lease of Material Real Property or Material
Personal Property and to the Seller's Knowledge, no event has occurred nor does
any circumstance exist that (with or without notice or the passage of time or
both) would constitute a material violation or default under any such lease and
the Seller has not given or received notice of any alleged violation or of any
default under any such agreement.

                           (e) The Seller has good and marketable title to all
of its owned personal property included in the Purchased Assets. None of the
Material Real Property or Material Personal Property owned by the Seller is
subject to any Encumbrance (other than the Permitted Encumbrances) of any kind
against Seller's rights in such property.

                           (f) To the knowledge of the Seller to the extent the
Material Personal Property is used by the Seller but owned by a third party,
there are no Encumbrances (other than Permitted Encumbrances) of any kind
against such third party's rights in such property.

                           (g) All buildings, machinery and equipment included
in the Purchased Assets are in satisfactory condition, are presently in working
order and repair, normal wear and tear excepted, and are adequate for the uses
to which they are being put, and have been adequately maintained.

                           (h) There are no outstanding contracts, agreements or
understandings made by the Seller for the construction or repair of any
improvements to the Material Real Property that have not been fully paid for.

                                                                         Page 22
<PAGE>
                           (i) The Seller has not received any written notice
from any insurance carrier of any defects or inadequacies in the Material Real
Property, or in any portion thereof, that to their knowledge would adversely
affect the insurability thereof or the cost of such insurance, or that requires
corrective action. There are no pending insurance claims of the Seller related
to the Material Real Property.

                  4.10. Collectibility of Receivables. All of the accounts
receivable, trade accounts, notes receivable, contract receivables and other
receivables ("RECEIVABLES") of the Seller shown or reflected on the Base Balance
Sheet are, and those to be reflected on the Closing Balance Sheet will be: (a)
valid and enforceable claims which arose out of transactions with Persons who
are not affiliated with the Seller; (b) fully collectible net of reserves within
one hundred twenty (120) days of invoice date through normal means of
collection; and (c) subject to no set-off, defense or counterclaim.

                  4.11. Inventories.

                           (a) All inventories of finished goods and raw
materials of the Seller reflected on the Base Balance Sheet ("INVENTORIES") are,
and those to be reflected on the Closing Balance Sheet will be, of a quantity
and quality normally salable in the ordinary course of business at commercially
reasonable prices consistent with the Seller's prior experience, except to the
extent of the obsolete inventory reserve in the amount shown on the Base Balance
Sheet or to be shown on the Closing Balance Sheet. All Inventories are valued on
a lower of cost or market basis and in accordance with the Seller's normal
valuation methods and policies, consistently applied, which methods and policies
are in accordance with GAAP. Purchase commitments for raw materials and parts
are consistent with past practice and none are at prices in excess of current
market prices. The aggregate of all outstanding purchase commitments issued by
Seller with respect to its business (including all contracts or commitments for
the purchase by the Seller of materials or other supplies) is not more than
$1,500,000. Except as set forth on Schedule 4.11 hereto, since the date of the
Base Balance Sheet, no Inventories have been sold or disposed of except through
sales in the ordinary course of business at prices no less than prevailing
market prices and in no event less than cost.

                           (b) Except for the UMC Machine, all inventories of
finished goods existing on the Base Balance Sheet Date and on the Closing Date
and included in the Purchased Assets will be salable on or before the date 180
days after the Closing Date, in a manner consistent with the Seller's normal and
ordinary course of business and consistent with the past practices of the
Seller.

                  4.12. Intellectual Property Assets.

                           (a) The Seller: (i) owns all right, title and
interest in and to each of the Owned Intellectual Property Assets, free and
clear of all Encumbrances; and (ii) licenses or otherwise possesses legally
valid and enforceable rights to use each of the Licensed Intellectual Property
Assets for its business, and, in each case of clause (i) or (ii), the Seller may
transfer such rights to Buyer as contemplated by this Agreement. To the extent
that Seller has determined in the ordinary course of its operations that the
filing, recordation or maintaining of any right in the

                                    Page 23
<PAGE>
Intellectual Property Assets is useful or required by law, the Seller has made
all filings and recordations necessary to protect and maintain its interest in
such right.

                           (b) Schedule 4.12(b) hereto contains a true, correct
and complete list and summary description, including any royalties paid or
received by the Seller, of all contracts, agreements or understandings relating
to the Intellectual Property Assets to which Seller is a party or by which
Seller is bound. Other than as set forth on Schedule 4.12(b), Seller is not and
will not be as a result of the execution and delivery of this Agreement or the
performance of its obligations hereunder, in breach or violation of any
agreement described on Schedule 4.12(b). Each license of Intellectual Property
Assets listed in Schedule 4.12(b) is valid, subsisting, and enforceable, and
shall continue in effect on its current terms upon consummation of the
transactions contemplated by this Agreement.

                           (c) Schedule 4.12(c) hereto contains a true, correct
and complete list of all registrations and pending applications for Patents. All
such Patents are valid and subsisting and up to and including the Closing Date,
all maintenance fees, annuities and the like have been paid. To the knowledge of
the Seller, none of the Patents is infringed or has been challenged or
threatened in any way by any Person.

                           (d) (i) Schedule 4.12(d) hereto contains a true,
correct and complete list of all Marks; (ii) all Marks are valid and subsisting;
(iii) to the knowledge of the Seller, none of the Marks is infringed; (iv) none
of the Marks has been challenged or threatened in any way by any Person, and no
claims exist against the use by the Seller of any Marks in their business as
currently conducted or, to the knowledge of the Seller as proposed to be
conducted; (v) to the extent that Seller has determined in the ordinary course
of its operation that marking is useful, [all materials encompassed by the Marks
have been marked with appropriate trademark and registration notices;] and (vi)
to the knowledge of the Seller, all uses of registered Marks are in conformance
with applicable statutory and common law so as not to compromise the strength
and integrity of the Marks.

                           (e) (i) Schedule 4.12(e) hereto contains a true,
correct and complete list of all registered Copyrights; (ii) all the Copyrights
owned by the Seller, whether or not registered, are valid and enforceable; (iii)
to the knowledge of the Seller, none of the Copyrights is infringed or has been
challenged or threatened in any way; (iv) no claims exist against the use by the
Seller of any writings or other expressions used in their business as currently
conducted or as proposed to be conducted; and (v) to the extent that Seller has
determined in the ordinary course of its operation that marking is useful, all
works encompassed by the Copyrights have been marked with appropriate copyright
notices.

                           (f) Except as set forth on Schedule 4.12(f) hereto,
the Seller has taken reasonable precautions to protect the secrecy,
confidentiality and value of its Trade Secrets. To the knowledge of the Seller,
the Trade Secrets have not been used, divulged or appropriated either for the
benefit of any Person (other than the Seller) or to the detriment of the Seller.
None of the Trade Secrets is subject to any material adverse claim or, to the
knowledge of the Seller, has been challenged or threatened in any way.
Appropriate policies are in place to ensure the continued secrecy,
confidentiality and value of the Trade Secrets, including, but not limited to,

                                    Page 24
<PAGE>
appropriate marking of Trade Secrets as "proprietary" and/or "confidential";
appropriate limiting of access to Trade Secrets by employees on a "need-to-know"
basis; and appropriate confidentiality provisions in agreements executed by
employees, contractors, joint venturers and any and all Persons potentially or
actually having access to Trade Secrets.

                           (g) None of the products or technology used, sold,
offered for sale or licensed or to the knowledge of the Seller proposed for use,
sale, offer for sale or license by the Seller infringes or is alleged to
infringe any proprietary rights owned, possessed or used by any Person.

                           (h) To the knowledge of the Seller, no Intellectual
Property Asset is subject to any outstanding Court Order, Proceeding (other than
pending applications for patent, trademark registration or copyright
registration) or stipulation restricting in any manner the licensing thereof by
the Seller. Seller has not entered into any agreement to indemnify any other
person against any charge of infringement of any Intellectual Property Asset.

                           (i) All employees, contractors and consultants of the
Seller have executed a nondisclosure and agreement to assign inventions in the
form attached to Schedule 4.12(i) hereto to protect the confidentiality and to
vest in the Seller exclusive ownership of such Intellectual Property Assets. To
the knowledge of the Seller, no employee, contractor, agent or consultant of the
Seller has used any trade secrets or other confidential information of any other
person in the course of their work for the Seller. The Seller has written or
oral agreements with employees, contractors, agents or consultants with respect
to the ownership of the Intellectual Property Assets created by them as a result
of which any such employee, contractor, agent or consultant may have exclusive
or nonexclusive rights to the portions of the Intellectual Property Assets so
created by such individual.

                           (j) To the knowledge of the Seller, no officer,
employee, contractor, agent or consultant of the Seller is, or as a result of
this Agreement is expected to be, in violation of any term of any employment
contract, patent disclosure agreement, proprietary information agreement,
noncompetition agreement, nonsolicitation agreement, confidentiality agreement,
or any other similar contract or agreement or any restrictive covenant relating
to the right of any such officer, employee, contractor, agent or consultant to
be employed or engaged by the Seller because of the nature of the business
conducted or to be conducted by the Seller or relating to the use of trade
secrets or proprietary information of others, and to the Seller's knowledge and
belief, the continued employment or retention of its officers, employees,
contractors, agents or consultants does not subject the Seller to any liability
with respect to any of the foregoing matters.

                           (k) Except as set forth on Schedule 4.12(k), the
Seller has not deposited, and is not obligated to deposit, any source code
regarding its products into any source code escrows or similar arrangements and
the Seller is not under any contractual obligation to disclose the source code
or any other material proprietary information included in or relating to its
products.

                                                                         Page 25
<PAGE>
         4.13. Contracts and Commitments.

                  (a) Schedule 4.13(a) contains a complete and accurate list,
and the Seller has delivered to Buyer true, correct and complete copies, of:

                  (i)      each Contract involving payments of at least $50,000
                           that involves performance of services or delivery of
                           goods or materials by the Seller;

                  (ii)     each Contract involving payments of at least $50,000
                           that involves performance of services or delivery of
                           goods or materials to the Seller;

                  (iii)    each Contract providing for the purchase of all or
                           substantially all of its requirements of a particular
                           product from a supplier;

                  (iv)     each Contract for joint marketing, teaming or
                           development;

                  (v)      each Contract with any dealer, franchiser, original
                           equipment manufacturer, value-added reseller, or
                           manufacturer's representative;

                  (vi)     each Contract pertaining to the Seller's maintenance
                           or support of its products, services or supplies;

                  (vii)    each Contract for the sale of its products not made
                           in the ordinary course of business;

                  (viii)   each Contract with any sales agent or distributor of
                           products of the Seller;

                  (ix)     each Contract for a license (other than
                           off-the-shelf, fully paid up, shrink wrap software
                           licenses) or franchise (as licensor or licensee or
                           franchisor or franchisee);

                  (x)      each Contract involving any arrangement or obligation
                           with respect to the return of products other than on
                           account of a defect in condition, or failure to
                           conform to the applicable Contract;

                  (xi)     each Contract with the United States government;

                  (xii)    each Contract which is material to the assets or
                           business of the Seller considered as one enterprise;

                  (xiii)   each lease, license and other Contract affecting any
                           leasehold or other interest in any Material Real
                           Property or Material Personal Property to which the
                           Seller is a party;

                                                                         Page 26
<PAGE>
                  (xiv)    each licensing agreement or other Contract to which
                           the Seller is a party with respect to Intellectual
                           Property Assets, including agreements with current or
                           former employees, consultants or contractors
                           regarding the use or disclosure of any Intellectual
                           Property Assets;

                  (xv)     each joint venture, partnership and other Contract
                           involving a sharing of profits, losses, costs or
                           liabilities by the Seller with any other Person or
                           requiring the Seller to make a capital contribution;

                  (xvi)    each Contract to which the Seller is a party
                           containing covenants that in any way purport to
                           restrict the business activity of the Seller or any
                           of the employees of the Seller or limit the freedom
                           of the Seller or any of the employees to engage in
                           any line of business or to compete with any Person or
                           hire any Person;

                  (xvii)   each employment or consulting agreement between the
                           Seller and its employees and consultants (other than
                           agreements that are terminable on 30 days notice or
                           less without penalty);

                  (xviii)  each agreement (other than agreements entered into in
                           connection with any Employee Benefit Plan) between
                           the Seller and an officer or director of the Seller;

                  (xix)    each power of attorney granted by the Seller that is
                           currently effective and outstanding;

                  (xx)     each Contract for capital expenditures by the Seller
                           in excess of $25,000;

                  (xxi)    each stock purchase, merger or other similar
                           agreement pursuant to which the Seller acquired any
                           material amount of assets (other than capital
                           expenditures), and all relevant documents and
                           agreements delivered in connection therewith;

                  (xxii)   each material agreement to which the Seller is a
                           party containing a change of control provision
                           applicable to the transactions contemplated by this
                           Agreement;

                  (xxiii)  each other agreement to which the Seller is a party
                           having an indefinite term or a fixed term of more
                           than one (1) year (other than those that are
                           terminable at will or upon not more than thirty (30)
                           days' notice by the Seller without penalty) or
                           requiring payments by the Seller of more than $50,000
                           per year; and

                  (xxiv)   each standard form of agreement pursuant to which the
                           Seller provides services or goods to customers.

                                                                         Page 27
<PAGE>
                  (b) Each of the Acquired Contracts and Expected Assigned
Contracts to which the Seller is a party is valid, binding and enforceable
against the Seller and, to the knowledge of the Seller, against the other
parties thereto (except: (a) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally; and (b) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and
to the discretion of the court before which any proceeding therefor may be
brought). The Seller is in material compliance with all terms and conditions of
each Acquired Contract and Expected Assigned Contract. Except as set forth on
Schedule 4.13(b) hereto, no event has occurred or circumstance exists that (with
or without notice or the passage of time or both) would constitute a material
violation of or default under any Acquired Contract or any Expected Assigned
Contract by the Seller or, to the knowledge of the Seller, by the other party or
parties thereto, and the Seller has not given or received notice of any alleged
violation of or default under any such Acquired Contract and Expected Assigned
Contract. Except as listed on Schedule 4.13(b)(1) hereto, neither the execution
and delivery of this Agreement by the Seller nor the consummation or performance
by the Seller of the transactions contemplated hereby will, directly or
indirectly, with or without notice or lapse of time or both give rise to a right
of termination, cancellation or acceleration or require the consent,
authorization or approval of or any notice to or filing with any third Person
under any Acquired Contract or Expected Assigned Contract. Except as described
in Schedule 4.13(b)(2) hereto, the Seller has not received prepayments of any
kind on any Acquired Contract or Expected Assigned Contract.

                  (c) Except as set forth on Schedule 4.13(c) hereto, to the
knowledge of the Seller, the Seller is not a party to any Acquired Contract or
Expected Assigned Contract or order for the sale of goods or the performance of
services which, if performed by the Seller in accordance with its terms, could
only be performed with a negative gross profit margin or which has no reasonable
likelihood of being performed within the time limits therein provided.

                  (d) Except as set forth in Schedule 4.13(d) since June 30,
2001, the Seller has not experienced any termination, cancellation, limitation
or modification or change in any business relationship with any material
supplier or customer, and the Seller has not received notice nor otherwise has
knowledge that any material customer or supplier intends to cease, or materially
reduce or change the terms of, doing business with the Seller or to terminate
any agreement with the Seller where such action has had or would have a Material
Adverse Effect on the business of the Seller. Schedule 4.13(d) hereto lists
every material customer or supplier of the Seller and the amount of business
with that customer. To the knowledge of the Seller, there are no facts or
circumstances (except general economic, regulatory or political conditions,
including general economic conditions in the semiconductor industry except in
each case to the extent Seller is disproportionately affected), including the
consummation of the transactions contemplated by this Agreement, that are
reasonably likely to result in the loss of any material customer or material
supplier of the Seller or a material change in the relationship of the Seller
with such a material customer or a material supplier. For purposes hereof,
"material customers" mean the top 15 customers of the Seller based upon revenue
recognized since July 1, 2000. For purposes hereof, "material suppliers" mean
the top 15 suppliers to the Seller based upon expenses incurred or accrued since
July 1, 2000.

                                                                         Page 28
<PAGE>
                  (e) The backlog of the Seller (including all accepted and
unfulfilled sales orders) is not materially less than the backlog amount for the
Seller set forth on Schedule 4.13(e) hereto, the amount of backlog as of
November 15, 2001. All such sales and purchase commitments were made in the
ordinary course of business.

         4.14. Employees. Except with regard to officers and directors of the
Seller who are employees of Zygo, Schedule 4.14 hereto sets forth a true and
complete list of: (a) all current employees of the Seller; (b) all current
employees of the Parent and ZYGOLOT GmbH that materially support the Seller's
business at any time during the last two years and (c) all technical and
business consultants and independent contractors retained by the Seller
currently or since June 30, 2001. Also shown on Schedule 4.14 is the name, job
title, base salary or rate of base compensation (including any increase therein
since the Base Balance Sheet Date), bonus (including any increase therein since
the Base Balance Sheet Date), vacation accrued, and hire date for each persons
listed on Schedule 4.14 (the "EMPLOYEE SCHEDULE").

         4.15. Labor and Employee Relations.

                  (a) Complete and accurate copies of all written employment and
consulting agreements of the persons required to be listed on the Employee
Schedule to which the Seller is a party or of which the Seller is a beneficiary
have been made available to the Buyer.

                  (b) Except as shown on Schedule 4.15(b) hereto: (i) none of
the employees of the Seller are covered by any collective bargaining agreement
with any trade or labor union, employees' association or similar association or
any industry-wide labor agreement; (ii) no labor organization or group of
employees has made a pending demand for recognition; and (iii) there is no
organizing activity involving the Seller pending by any labor organization or
group of employees. There are no representation elections, arbitration
proceedings, labor strikes, slowdowns or stoppages, material grievances,
lockouts, or other labor troubles pending, or threatened, with respect to the
employees of the Seller, nor has the Seller experienced any work stoppage or
other material labor difficulty during the three (3) years immediately preceding
the date of this Agreement.

                  (c) Except as set forth on Schedule 4.15(c) hereto, the Seller
has complied in all material respects with all applicable Laws of each relevant
jurisdiction relating to the employment of labor, including, without limitation,
those relating to dismissal, redundancy, minimum notice, wages, hours, unfair
labor practices, discrimination, civil rights, plant closings, immigration and
the collection and payment of social security and similar taxes.

                  (d) Except as set forth on Schedule 4.15(d) hereto, there are
no complaints that have been served in writing to the Seller by or on behalf of
any employee or former employee of Seller and, to the Seller's knowledge, there
are no proceedings against the Seller pending or threatened before any
Governmental Authority, by or on behalf of any employee or former employee of
the Seller.

                  (e) Except as set forth on Schedule 4.15(e) hereto, the Seller
has paid in full (or made provisions for payment in full) to its employees,
agents and contractors all wages,

                                                                         Page 29
<PAGE>
salaries, commissions, bonuses and other direct compensation for all services
performed by them. The Seller has not and will not have on the Closing Date, any
contingent liability for sick leave, vacation time, holiday pay, severance pay
or similar items, whether arising as a matter of law, labor agreement, or
otherwise, other than as set forth on the Base Balance Sheet or arising after
the date thereof in the ordinary course of business consistent with past
practices and set forth on the Closing Balance Sheet.

                  (f) Except as set forth on Schedule 4.15(f) hereto, since
January 1, 2000 there has not been any fine or penalty imposed or asserted
against the Seller under any laws (whether national, regional or local) of any
applicable jurisdiction relating to employment, immigration or occupational
safety matters.

         4.16. Employee Benefits.

                  (a) Schedule 4.16(a) hereto sets forth a true and complete
list or brief description of each Employee Benefit Plan maintained or sponsored
by the Seller or Zygo applicable to any individual identified on the Employee
Schedule (other than pursuant to Section 4.14(b)).

                  (b) "ERISA AFFILIATE" means any entity (whether or not
incorporated) other than the Seller that, together with the Seller, is a member
of: (i) a controlled group of corporations within the meaning of Section 414(b)
of the Code; (ii) a group of trades or businesses under common control within
the meaning of Section 414(c) of the Code; or (iii) an affiliated service group
within the meaning of Section 414(m) of the Code.

                  (c) Neither the Seller nor any ERISA Affiliate maintains, nor
during the last six years has maintained or contributed to, an Employee Benefit
Plan subject to Title IV of ERISA (including a multiemployer plan) and no facts
exist under which the Seller could be expected to incur any liability under
Title IV of ERISA.

                  (d) The Seller has not received notice of and is not aware of
any Proceeding (other than routine claims for benefits) pending or threatened
with respect to any Employee Benefit Plan or against any fiduciary of any
Employee Benefit Plan, and, to the knowledge of the Seller, there are no facts
that could give rise to any such Proceeding. To the knowledge of the Seller,
there has not occurred any circumstances by reason of which the Seller may be
liable for an act, or a failure to act, by a fiduciary with respect to any
Employee Benefit Plan.

                  (e) To the knowledge of the Seller, there are no complaints,
charges or claims against the Seller pending or threatened to be brought by or
filed with any Governmental Authority in connection with or relating to the
classification of any individual by the Seller as an independent contractor or
"leased employee" (within the meaning of Section 414(n) of the Code) rather than
as an employee.

                  (f) Except as set forth on Schedule 4.16(f) or as otherwise
contemplated by this Agreement, the consummation of the transactions
contemplated by this Agreement will

                                                                         Page 30
<PAGE>
not, alone or together with any other event, (A) entitle any employee or former
employee of the Seller to any payment, (B) result in an increase in the amount
of compensation or benefits or accelerate the vesting or timing of payment of
any benefits or compensation payable in respect of any employee or former
employee of the Seller, or (C) result in any parachute payment under Section
280G of the Code, whether or not such payment is considered reasonable
compensation for services rendered.

                  (g) No Employee Benefit Plan is a "multiple employer plan" as
described in Section 3(40) of ERISA or Section 413(c) of the Code.

         4.17. Environmental Matters.

                  (a) Except as disclosed on Schedule 4.17(a) hereto, any
Hazardous Materials used or generated by the Seller in connection with the
operation of the Purchased Assets are being generated, used, stored, treated and
disposed on and at its Longmont, Colorado facility in compliance in all material
respects with all applicable Laws, Court Orders, Government Authorizations,
including Environmental Laws. The Seller is in compliance in all material
respects with all Environmental Laws with respect to the operation of the
Purchased Assets.

                  (b) Except as set forth on Schedule 4.17(b) hereto, the Seller
is not subject to any Court Order, or has not received, or, to the knowledge of
the Seller, become subject to any written claim, notice, complaint or request
for information from any Governmental Authority of the United States or other
relevant Governmental Authority or any private party with respect to the
operation of the Purchased Assets: (i) alleging a violation of or noncompliance
with any Environmental Law; (ii) asserting potential liability under any
Environmental Law; or (iii) requesting investigation or clean-up of any
Environmental Site under any Environmental Law.

                  (c) Except as disclosed in Schedule 4.17(c) hereto, no
Hazardous Materials used or generated by the Seller, have been, or are being
spilled, released, discharged, disposed, placed, leaked, or otherwise caused to
become located in the air, soil or water in, under or upon an Environmental Site
or any land adjacent thereto in material violation of any Environmental Law.

                  (d) Except as disclosed in Schedule 4.17(d) hereto, to the
knowledge of Seller, Seller has not received any notice that any sites or
facilities to which any Hazardous Materials generated by Seller in connection
with the operation of the Purchased Assets have been shipped or sent to are
subject to or threatened to become subject to any governmental response action
or clean up order. The Seller has made available for inspection by Buyer copies
of all manifests, bills of lading and other receipts or evidence documenting
disposal or recycling of Hazardous Materials and sales receipts of the process
by-products relating to operations of the Purchased Assets.

                  (e) Except as set forth on Schedule 4.17(e) hereto, the Seller
has not treated, stored for more than ninety (90) days, or disposed of any
hazardous materials (as that term is defined under RCRA) on any Environmental
Site.

                                                                         Page 31
<PAGE>
                  (f) Except as disclosed in Schedule 4.17(f) hereto, Hazardous
Materials have been collected, managed, recycled, shipped and disposed by the
Seller in material compliance with all Environmental Laws.

                  (g) All underground tanks and other waste storage facilities
for Hazardous Materials located at any Environmental Site are disclosed in
Schedule 4.17(g) hereto, and copies of all notifications made to federal, state
or local authorities pursuant to Environmental Laws relating to underground
storage tanks have been made available to the Buyer. As of the date hereof, none
of such tanks and other underground storage facilities are in violation of any
Environmental Law in any respect.

                  (h) Except as disclosed in Schedule 4.17(h) hereto, all wells,
water discharges and other water diversions and all air emission sources on any
Environmental Site are properly registered and/or permitted, and copies of such
permits have been made available to the Buyer and do not violate any applicable
law.

                  (i) To the knowledge of Seller the Seller does not produce or
use in their products, or purchase or use any material, part, component or
subassembly incorporated into their products, containing any chemical or other
material to which local packaging and/or disclosure laws apply except as set
forth on Schedule 4.17(i) hereto.

                  (j) There are no liens or restrictions under Environmental
Laws on any Environmental Site chargeable against the rights of the Seller with
respect to any Purchased Assets and, to the knowledge of the Seller, no
government actions have been taken or are in process which could subject any
such Purchased Assets to such encumbrances, and the Seller would not be required
to place any notice or restriction relating to Hazardous Materials at any
Environmental Site in any deed to such property except as set forth on Schedule
4.17(k) hereto.

                  (k) The Seller has made available to the Buyer all
environmental audits, assessments, questionnaires or studies within the
possession of the Seller with respect to the Seller's Longmont, Colorado
facility that relate to potential soil or groundwater contamination, or other
environmental liabilities, and the results of sampling and analysis of any
asbestos, air, soil, or groundwater, undertaken with respect to its Longmont,
Colorado facility.

                  (l) Except as disclosed on Schedule 4.17(m) hereto, the
Seller's operation of the Purchased Assets is in compliance in all material
respects with all federal and state worker safety laws and requirements,
including, but not limited to, applicable requirements under the Occupational
Safety and Health Act.

         4.18. Government Authorizations/Compliance with Laws.

                  (a) The Seller holds all Governmental Authorizations which are
required to own its properties and assets and to permit it to conduct its
businesses as presently conducted except where failure to hold such Government
Authorization would not have a Material Adverse Effect. All such Governmental
Authorizations are listed on Schedule 4.18 hereto, together with the applicable
expiration date. All such Governmental Authorizations are now, and, will be at

                                                                         Page 32
<PAGE>
the Closing, valid and in full force and effect. Except as described on Schedule
4.18 hereto, such Governmental Authorizations are transferable to the Buyer. No
proceeding is pending or, to the knowledge of the Seller, threatened seeking the
revocation or limitations of any Governmental Authorization.

                  (b) The Seller is in compliance in all material respects with
all applicable Laws, Court Orders and Governmental Authorizations affecting in
any material respect the assets or properties owned or used by the Seller or the
business or operations of the Seller. The Seller has not been charged with
violating, or to the knowledge of the Seller, threatened with a charge of
violating, nor, to the Seller's knowledge, is the Seller under investigation
with respect to a possible violation of, any applicable Law, Court Order or
Governmental Authorization relating to any of its or their assets or properties
or any aspect of its or their business.

         4.19. Warranty or Other Claims.

                  (a) Except as set forth on Schedule 4.19(a)(1) hereto, the
Seller does not know of any existing or threatened claims, or any facts upon
which a claim is likely to be asserted against it, for services or merchandise
which are defective or fail to meet any service or product warranties. No claim
has been asserted against the Seller for material renegotiation or price
redetermination of any business transaction, and the Seller has no knowledge of
any facts upon which any such claim is likely to be asserted. Schedule
4.19(a)(2) describes all of the outstanding product warranty obligations for
Seller's products, including product covered, start and end date of such
warranty, and a description of Seller's obligations under such warranty.

                  (b) All products that were designed, manufactured or sold and
all services that were rendered by the Seller complied with applicable
contracts, product specifications, Laws and standards (whether established by
the Seller, Governmental Authority or industry), and, to the Seller's knowledge,
there are no defects in such products. Schedule 4.19(b) hereto sets forth the
Seller's: (i) experience with returns of products sold by it for the preceding
fiscal year and for the portion of the current fiscal year (including claims or
notices that products may or will be returned, whether by reason of alleged
overshipments, defective merchandise or otherwise); and (ii) aggregate expenses
incurred by the Seller's customer support and service center in fulfilling its
obligations under its guaranty, warranty and right of return provisions during
the periods covered by the Seller Unaudited Financial Statements and the Seller
knows of no reason why such expenses should significantly increase as a
percentage of sales in the future.

         4.20. Litigation. Except for matters described in Schedule 4.20 hereto,
there is no Proceeding pending (or, to the knowledge of the Seller, threatened)
against or otherwise involving the Seller or Zygo or to their knowledge, any of
the officers, directors, former officers or directors, employees, shareholders
or agents of the Seller or Zygo (in their capacities as such), and there are no
outstanding Court Orders to which the Seller is a party or by which any of the
Purchased Assets are bound, any of which: (i) question this Agreement or any
Ancillary Agreements or any action to be taken hereby or thereby or affect the
transactions contemplated hereby or thereby; (ii) materially restrict the
present business properties, operations, prospects, assets or condition,
financial or otherwise, of the Seller; or (iii) will result in any Material
Adverse Effect to the Purchased Assets. The Seller has no reasonable basis to
believe that any

                                                                         Page 33
<PAGE>
such Proceeding is likely to be brought against the Seller or Zygo, or any of
the officers, directors, former officers or directors, employees, shareholders
or agents of the Seller.

         4.21. Insurance.

                  (a) The Seller maintains: (i) insurance on all of its property
(including leased or owned real or personal property) that insures against loss
or damage by fire or other casualty (including extended coverage); and (ii)
insurance against liabilities, claims and risks of a nature and in such amounts
as it believes are appropriate.

                  (b) Except as set forth on Schedule 4.21 hereto, there are no
claims pending under any of said policies, or disputes with insurers, and all
premiums due and payable thereunder have been paid, and all such policies are in
full force and effect in accordance with their respective terms. Schedule 4.21
hereto also sets forth the insurance claims expenses of the Seller for the last
two full fiscal years and the current fiscal year. No notice of cancellation or
termination has been received with respect to any such policy and there is no
basis upon which the insurance company would have the right to terminate any
such policy during the policy term and no notice relating to non-renewal,
reduction of coverage or increase in premium has been received by the Seller
with respect to any such policy. The Seller has not been refused any insurance,
nor has its coverage been limited by any insurance carrier with which it has
applied for any such insurance or with which it has carried insurance.

         4.22. Corporate Books, Records and Accounts.

         The books, records and accounts of the Seller fairly and accurately
reflect transactions and dispositions of assets by the Seller, and the system of
internal accounting controls of the Seller is sufficient to assure that: (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

         4.23. Finder's Fee. Except for fees payable to Bear Stearns & Co.,
Inc., none of the Seller, Zygo or their agents has incurred or become liable for
any broker's commission or finder's fee or agent's commissions or financial
advisory services or other similar payments relating to or in connection with
the transactions contemplated by this Agreement.

         4.24. Transactions with Interested Persons. Except as set forth on
Schedule 4.24 hereto, no shareholder, Affiliate, officer nor director of the
Seller or Zygo, nor to the knowledge of the Seller any spouse or child of any of
them or any Person associated with any of them ("RELATED PERSON"), has, in a
capacity other than as shareholder, Affiliate, officer or director or employee,
any interest in any assets or properties used in or pertaining to the business
of the Seller nor has any such Person. Except as set forth on Schedule 4.24
hereto, no Related Person has any claim or right against, or owes any amounts to
Seller. To the Seller's or Zygo's knowledge, none of the Affiliates, officers or
directors of the Seller or Zygo nor, any employee

                                                                         Page 34
<PAGE>
of the Seller or any Related Person has owned, directly or indirectly, and
whether on an individual, joint or other basis, any equity interest or any other
financial or profit interest in a Person (other than less than two percent (2%)
of the outstanding capital stock of a Person subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended) that (a) has
business dealings with the Seller; or (b) engages in competition with the
Seller.

         4.25. Absence of Sensitive Payments. The Seller has not, and to the
knowledge of the Seller none of the Seller's directors, officers, agents or
stockholders or any other person associated with or acting on behalf of any of
the Seller have:

                  (a) made or agreed to make any solicitations, contributions,
payments or gifts of funds or property to any governmental official, employee or
agent where either the payment or the purpose of such solicitation,
contribution, payment or gift was or is illegal under the Laws of any applicable
jurisdiction or prohibited by the policy of the Seller or of any of their
suppliers or customers;

                  (b) established or maintained any unrecorded fund or asset for
any purpose, or has made any false or artificial entries on any of its books or
records for any reason; or

                  (c) made or agreed to make any contribution or expenditure, or
reimbursed any political gift or contribution or expenditure made by any other
person to candidates for public office, whether national, regional or local
where such contributions were or would be a violation of applicable Law.

         4.26. Payables. There has been no Material Adverse Effect upon the
Seller since the date of the Base Balance Sheet in connection with the amount or
delinquency of accounts payable of the Seller (either individually or in the
aggregate).

         4.27. Copies of Documents. Complete and correct copies of any
underlying documents listed or described in this Article IV or any schedules
delivered pursuant to this Article IV, together with all amendments, renewals
and modifications related thereto, have been delivered to Buyer to the extent
requested by Buyer.

         4.28. Sufficiency. Following the Closing, by means of the transfer of
the Purchased Assets, Buyer will own, license or otherwise have use of all of
the assets reasonably necessary to operate the Seller's business in
substantially the same manner operated by Seller, except for the Excluded
Assets.

         4.29. Disclosure of Material Information. This Agreement does not
contain any untrue statement of a material fact, or omit to state a material
fact necessary to make the statements herein in light of the circumstances in
which they were made not misleading.

         ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer hereby represents and warrants to the Seller as follows:

                                                                         Page 35
<PAGE>
         5.1. Organization of Buyer. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
with full power and authority to own, operate or lease its properties and to
conduct its business in the manner and in the places where such properties are
owned or leased or such business is conducted by it except when the failure of
which would not have a Material Adverse Effect. The copies of Buyer's
Constituent Documents, which are attached as Schedule 5.1 hereto, are complete
and correct.

         5.2. Authorization of Transaction. The Buyer has all requisite
corporate power and authority to enter into and deliver this Agreement and each
Ancillary Document to which it is a party and to carry out the transactions and
perform its obligations contemplated hereby and thereby. The execution, delivery
and performance of this Agreement and each of the Ancillary Agreements to which
Buyer is a party by Buyer and all transactions contemplated herein and therein
have been duly and validly authorized and approved by all necessary corporate
action of Seller. Each such agreement constitutes the legal valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with its
terms, except: (a) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally; and (b) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.

         5.3. No Conflict of Transaction With Obligations and Laws.

                  (a) Assuming the accuracy of the representations and
warranties of the Seller and Zygo hereunder, neither the execution, delivery or
performance of this Agreement nor the Ancillary Agreements to which the Buyer is
a party, nor the performance of the transactions contemplated hereby and
thereby, will: (i) constitute a breach or violation of the Buyer's Constituent
Documents; (ii) require any consent, approval or authorization of or
declaration, filing or registration with any person other than a Governmental
Authority described in paragraph (b) below; (iii) conflict with or constitute
(with or without the passage of time or the giving of notice) a breach of, or
default under any debt instrument to which the Buyer is a party, or give any
person the right to accelerate any indebtedness or terminate, modify or cancel
any material right; (iv) constitute (with or without the passage of time or
giving of notice) a default under or breach of any other material agreement,
instrument or obligation to which the Buyer is a party or by which it or its
assets are bound; or (v) result in a violation of any Law or Court Order
applicable to the Buyer or its business or assets except, where such breach,
violation, default, failure to obtain any consent, approval, authorization or
declaration, or make any filing or registration would not individually or in the
aggregate, have a Material Adverse Effect.

                  (b) The execution, delivery and performance of this Agreement
and the Ancillary Agreements to which the Buyer is a party and the transactions
contemplated hereby and thereby by the Buyer do not require the consent, waiver,
approval, authorization, exemption of or giving of notice by the Buyer to any
Governmental Authority or any Person, except for those: (i) provided for in this
Agreement; and (ii) which would not, either individually or in the aggregate,
have a Material Adverse Effect upon the Buyer or materially impair or preclude
the Buyer's ability to consummate the transactions contemplated by this
Agreement.

                                                                         Page 36
<PAGE>
         5.4. Brokers or Finders. Neither Buyer nor any of its agents has
incurred any obligations or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or financial advisory services or other
similar payment in connection with this Agreement or the Ancillary Agreements or
the transactions contemplated hereby or thereby.

         ARTICLE VI. COVENANTS OF THE SELLER

         The Seller and Zygo, jointly and severally, covenant and agree with the
Buyer as follows:

         6.1. Access to Information. The Seller and Zygo shall permit
representatives of the Buyer to have access (at all reasonable times and in a
manner so as not to interfere with the normal business operations of the Seller)
to all premises, properties, financial and accounting records, contracts, other
records and documents, and personnel of or pertaining to the Seller. No
investigation or examination by the Buyer shall diminish, obviate or constitute
a waiver of the enforcement of any of the representations, warranties, covenants
or agreements of the Seller or Zygo under this Agreement or any of the Ancillary
Agreements.

         6.2. Governmental Authorizations; Consents. Each of the Seller and Zygo
shall use commercially reasonable efforts (with the reasonable assistance of the
Buyer to the extent required to obtain such approvals) to obtain promptly: (i)
all Governmental Authorizations required to be obtained for the lawful
consummation of the Closing; and (ii) the consents necessary to transfer all
Governmental Authorizations set forth or required to be set forth on Schedule
4.18 hereto.

         6.3. Assignment of Contracts. To the extent that the sale of the
Purchased Assets constitutes an assignment under the terms of any contract to
which the Seller is a party (including leases for real property) and which is an
Acquired Contract or Expected Assigned Contract, or any Governmental
Authorization which requires the consent of another party, each of the Seller
and Zygo agrees to use commercially reasonable efforts (with the reasonable
assistance of the Buyer to the extent necessary to obtain such consents) to
obtain the consent of such other party to an assignment in all cases in which
consent is required.

         6.4. Certain Filings. The Seller shall use its commercially reasonable
efforts to assist the Buyer in making all such filings, applications and notices
as may be necessary or desirable in order to obtain the authorization, approval
or consent of any Governmental Authority which may be reasonably required or
which the Buyer may reasonably request in connection with the consummation of
the transactions contemplated hereby.

         6.5. Product Warranty/Liability. Although the Buyer does not assume any
of Seller's product warranty obligations for products sold prior to the Closing
Date, the Buyer shall perform the Seller's obligations under the Seller's
product warranties described on Schedule 4.19(a)(2) in accordance with the
Seller's present policy. The performance by the Buyer of any of the Seller's
product warranty obligations for such products shall not give rise to any rights
in the Seller. Without limiting the foregoing, at its option after notice to
Zygo and ZYGOLOT GmbH, Buyer may perform any installation, warranty, support and
training required pursuant to agreements between Zygo and ZYGOLOT GmbH or
between ZYGOLOT and Altis (PO 96 -

                                                                         Page 37
<PAGE>
project number 640/1), Infineon or Schott relating to the tools sold by ZYGOLOT
to such entities, (the "ZYGOLOT TOOLS") The Seller agrees to reimburse the Buyer
upon demand for the Buyer's costs in performing Seller's product warranty
obligations or installation, warranty, support and training relating to the
ZYGOLOT Tools, including, but not limited to, reasonable out-of-pocket costs and
internal labor, material and overhead costs at the Buyer's fully loaded cost.
Seller may review and reasonably dispute Buyer's demand to ensure that it does
not include charges for services that materially exceed Seller's product
warranty obligations. In addition, Seller shall keep in force and shall name the
Buyer as an additional insured party under the product liability and commercial
general and excess liability insurance policies related to the Seller's business
("SELLER'S INSURANCE") as maintained prior to the Closing Date by the Seller for
a period continuing after the Closing Date until the second anniversary of the
Closing Date. The Seller shall provide the Buyer with evidence of such insurance
by delivering one copy of a Certificate of Insurance, completed by its insurance
carrier(s) or agents certifying that insurance coverage is in effect and will
not be canceled or materially changed until thirty (30) days after written
notice.

         6.6. Tax Clearance. Promptly upon receipt Zygo shall deliver a receipt
from the executive director of the Colorado Department of Revenue showing that
all Colorado state taxes relating to Seller have been paid, or a certificate
stating that no such taxes are due.

         6.7. Employee Benefits. Seller and Zygo shall (i) retain all
responsibility and liability for providing COBRA continuation coverage, in
accordance with Code Section 4980B and Sections 601 through 608 of ERISA, to
Qualified Beneficiaries (within the meaning of Code Section 4980(g)(1) and
Treasury Regulation 54.4980B-9) who incur a qualifying event on or prior to the
Closing Date as the result of, or in connection with, the transactions
contemplated herein; (ii) cause the Zygo Corp. Profit-Sharing Plan to afford
each participating Transferred Employee the opportunity to receive distribution
of his or her account balance in accordance with Code Section 401(k)(10)
(including the in-kind distribution of any promissory notes evidencing
participant loans thereunder) in the form of a direct rollover to an account
maintained for such Transferred Employee under a defined contribution plan of
Buyer which is qualified under Section 401(a) of the Code; and (iii) permit
Transferred Employees to exercise options granted under the Zygo Corporation
Amended and Restated Non-Qualified Stock Option Plan, which are otherwise vested
and exercisable as of the Closing Date, until the earlier of the (x) third
anniversary of the Closing Date, or (y) the expiration of the option term.

         6.8. UMC Machine. Zygo will not be permitted to actively market the UMC
Machine to any customer other than UMC; provided however, that if Zygo becomes
aware of a customer for the UMC Machine, Zygo may request that Buyer contact
such customer. At any time, Zygo may request Buyer to sell the UMC Machine to
another customer. Zygo shall pay the conversion cost associated with preparing
the UMC Machine to be sold to such customer provided Zygo and Buyer agree in
advance to the sales price and cost of conversion. Buyer will use commercially
reasonable efforts to sell the UMC Machine if requested by Zygo. If the UMC
Machine is not sold within 180 days from the Closing Date, Zygo will pay Buyer a
fee of $2,500 per month until the UMC Machine is sold. If the UMC Machine is
sold for less than $475,000,

                                                                         Page 38
<PAGE>
Zygo will reimburse Buyer for the difference. If the UMC Machine is sold for
greater than $490,000, Buyer shall pay the difference to Zygo to the extent that
Zygo has paid conversion costs pursuant to this Section 6.8 to Buyer.

         6.9. Enforcement of Nondisclosure and NonViolation Agreement. Zygo
shall promptly initiate proceedings to enforce that certain Nondisclosure and
NonViolation Agreement between Zygo and Craig Peterson dated March 10, 1997 and
that certain Nondisclosure and NonViolation Agreement between Zygo and Brian
Monti dated _____________ and certain NonCompetition Agreements with such
individuals each dated December 12, 2001 if Zygo becomes aware of any violation
of such agreements. Zygo acknowledges that the covenant provided in this Section
6.9 is integral to the transactions contemplated by this Agreement.

         ARTICLE VII. COVENANTS OF BUYER

         7.1. Notices and Consents. The Buyer shall use commercially reasonable
best efforts to obtain, at its reasonable expense, all such waivers, permits,
consents, approvals or other authorizations from third parties and governmental
entities or authorities, and to effect all such registrations, filings and
notices with or to third parties and governmental entities or authorities, as
may be necessary or desirable in connection with the transactions contemplated
by this Agreement.

         7.2. Certain Filings. The Buyer shall assist the Seller in making all
such filings, applications and notices as may be necessary or desirable in order
to obtain the authorization, approval or consent of any Governmental Authority
which may be reasonably required or which the Seller may reasonably request in
connection with the consummation of the transactions contemplated hereby.

         7.3. Governmental Authorizations; Consents. Buyer shall use
commercially reasonable efforts (with the reasonable assistance of the Seller to
the extent required to obtain such approvals) to obtain promptly all
Governmental Authorizations required to be obtained for the lawful consummation
of the Closing.

         7.4. Employment Offers. Buyers shall make employment offers to each of
the Key Employees substantially in the form of Exhibit D.

         7.5. Warranty Service. Buyer will provide the warranty services
referred to in Section 6.5 in the ordinary course of Buyer's business and
consistent with Seller's product warranty obligations.

         7.6. Employee Benefits. Buyer shall take such action as necessary to
provide all Transferred Employees with credit for employment service with Seller
or Zygo for purposes of determining eligibility and vesting under any employee
benefit plan or program sponsored or maintained by Buyer (except plans or
programs which are adopted after the Closing Date and which do not give credit
for past service to participants) and for determining the period of employment
under any vacation, sick pay, or other paid time off plan or program of Buyer
and for determining other entitlements and terms of employment affected by
seniority. Any pre-

                                                                         Page 39
<PAGE>
existing condition limitations, evidence of insurability provisions, waiting
periods or similar limitations under Buyer's group health plans will be waived
with respect to Transferred Employees (and covered dependents thereof) and, for
purposes of computing deductible amounts, co-pays and other maximums under such
plans, expenses and claims recognized prior to the termination of the Transition
Services Agreement for similar purposes under Seller's or Zygo's group health
plans shall be credited or recognized. Buyer shall be responsible for providing
COBRA continuation coverage, in accordance with Code Section 4980B and Sections
601 through 608 of ERISA, to each Transferred Employee and his or her Qualified
Beneficiaries (within the meaning of Code Section 4980B(g)(1) and Treasury
Regulation 54.4980B-9 thereof) who incurs a qualifying event after the Closing
Date. Upon the termination of the Transition Services Agreement, (i) Buyer shall
act as the successor employer, as defined in the alternate procedure under Rev.
Proc. 96-60, with respect to the Transferred Employees for purposes of FICA,
FUTA and federal income tax withholding and reporting, and (ii) such Transferred
Employee shall become eligible to participate in Buyer's group health plan.

         ARTICLE VIII. CONDITIONS TO OBLIGATIONS OF BUYER

         The obligations of the Buyer to consummate this Agreement and the
transactions contemplated hereby are subject to the condition that on or before
the Closing the actions required by this Article will have been accomplished any
and all of which may be waived by the Buyer.

         8.1. Representations; Warrantees; Covenants. Without giving effect to
any qualification of materiality (or any variation of such term) contained in
any representation or warranty, the representations and warranties of the Seller
and Zygo contained in Article IV hereof or contained in the Ancillary
Agreements, shall be true and correct in all material respects as though made on
and as of the Closing Date and the Seller and Zygo shall, on or before the
Closing have performed all of their respective obligations hereunder and under
the Ancillary Agreements which by the terms hereof and thereof are to be
performed by them on or before the Closing.

         8.2. Encumbrance Terminations. The Seller shall have delivered to the
Buyer evidence satisfactory to the Buyer and its counsel that the Seller is able
to deliver the Purchased Assets free and clear of all Encumbrances, except
Permitted Encumbrances.

         8.3. Certain Ancillary Agreements. The Seller and/or Zygo (as
applicable) shall have executed the following agreements and documents and
delivered them to the Buyer:

                  (a) a Corporate Noncompetition and Proprietary Agreement
substantially in the form attached hereto as Exhibit E;

                  (b) the Escrow Agreement;

                  (c) a sublease agreement for the property located at 1811 Pike
Road Longmont, Colorado with the Buyer substantially in the form attached hereto
as Exhibit F;

                                                                         Page 40
<PAGE>
                  (d) a Bill of Sale from the Seller transferring title to the
Purchased Assets to the Buyer, each substantially in the form attached hereto as
Exhibit G;

                  (e) Patent Assignment Agreement from the Seller, each
substantially in the form attached hereto as Exhibit H;

                  (f) Trademark Assignment Agreements from the Seller, each
substantially in the form attached hereto as Exhibit I;

                  (g) Transition Services Agreement substantially in the form
attached hereto as Exhibit J; and

                  (h) certificates of the President of both the Seller and Zygo
to the effect that each of the conditions specified in Section 8.1 above has
been satisfied.

         8.4. Key Employees. The Key Employees shall have agreed to accept
employment with the Buyer.

         8.5. Noncompetition Agreements. Each of the Key Employees shall have
executed and delivered to the Buyer a Nonsolicitation and Proprietary
Information Agreement substantially in the form attached hereto as Exhibit K.

         8.6. Authorization from Others. All consents and permits of others
required to permit the Seller to complete the transactions contemplated by this
Agreement and the Ancillary Agreements shall have been received by the Seller
and presented to the Buyer in a form acceptable to the Buyer, including without
limitation the consent of Etec Systems, an Applied Materials, Inc. company
("Etec") to the assignment to the Buyer of that certain Global Supply Agreement
dated June 15, 2001 by and between Etec and Zygo.

         8.7. Absence of Certain Litigation. There shall not be any: (a) Court
Order of any nature issued by any court of competent jurisdiction which directs
that this Agreement or any material transaction contemplated hereby shall not be
consummated as herein provided; (b) Proceeding by any federal, state, local or
foreign government (or any agency thereof) pending before any court or
governmental agency, or threatened to be filed or initiated, wherein such
complainant seeks the restraint or prohibition of the consummation of any
material transaction contemplated by this Agreement or asserts the illegality
thereof; or (c) Proceeding by a private party pending before any court or
governmental agency, or threatened to be filed or initiated, which in the
reasonable opinion of counsel for the Buyer is likely to result in the restraint
or prohibition of the consummation of any material transaction contemplated
hereby or the obtaining of an amount in payment (or indemnification) of material
damages from or other material relief against any of the parties or against any
directors or officers of the Buyer, in connection with the consummation of any
material transaction contemplated hereby.

         8.8. No Bankruptcy. The Seller shall not: (a) have commenced a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking

                                                                         Page 41
<PAGE>
the appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or substantially all of its property, or have consented to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or have made a
general assignment for the benefit of its creditors; or (b) have an involuntary
case or other proceeding commenced against it seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereinafter in effect or
seeking the appointing of a trustee, receiver, liquidator, custodian or similar
official of it or substantially all of its property; or (c) have an attachment
placed on all or a significant portion of its assets.

         8.9. Opinion of Counsel for the Seller.

                  (a) At the Closing, the Buyer shall have received from counsel
for the Seller, an opinion dated as of the Closing, substantially in the form
set forth as Exhibit L hereto.

                  (b) In rendering the foregoing opinion, such counsel for the
Seller may state their opinions on specific matters of fact to the best of their
knowledge and, to the extent they deem such reliance proper, may rely on: (i)
certificates of public officials; (ii) certificates, in form and substance
satisfactory to the Buyer and its counsel, of officers of the Seller; and (iii)
an opinion or opinions of other counsel, satisfactory to the Buyer and its
counsel, which opinions are in form and substance satisfactory to the Buyer and
its counsel. In the event such counsel rely upon any such certificate or
opinion, a counterpart of each thereof shall be delivered to the Buyer and its
counsel.

         8.10. No Material Adverse Effect. Except for changes which have been
disclosed to and accepted in writing by the Buyer prior to the Closing, there
shall have been no Material Adverse Effect upon the Seller or the Purchased
Assets taken as a whole since the date of this Agreement, including, but not
limited to, there being no material change in the net tangible asset value of
the Seller's business.

         8.11. Approval of Buyer's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement and all related
legal matters contemplated by this Agreement, including, without limitation,
opinions of counsel, shall have been approved by counsel for the Buyer, provided
that the approval of such counsel shall not be unreasonably withheld.

         8.12. Tax Status Letter. Seller shall have delivered to Buyer a tax
status letter (DR96) from the Colorado Department of Revenue or such other
evidence as is deemed acceptable by Buyer relating to the status of all business
taxes of Seller payable to the State of Colorado, including, without limitation,
sales tax payable to the Colorado Department of Revenue or other taxing
authority in Colorado and an affidavit that all delinquent sales tax has been
paid.

                                                                         Page 42
<PAGE>
         ARTICLE IX. CONDITIONS TO OBLIGATIONS OF THE SELLER

         The obligations of the Seller to consummate this Agreement and the
transactions contemplated hereby are subject to the condition that on or before
the Closing the actions required by this Article will have been accomplished
(any or all of which may be waived by Seller).

         9.1. Representations; Warrantees; Covenants. Without giving effect to
any qualification of materiality (or any variation of such term) contained in
any representation or warranty, the representations and warranties of the Buyer
contained in Article V, and contained in the Ancillary Agreements shall be true
and correct in all material respects as though made on and as of the Closing
Date and the Buyer shall, on or before the Closing have performed all of its
obligations hereunder and under the Ancillary Agreements which by the terms
hereof and thereof are to be performed by it on or before the Closing.

         9.2. Certain Ancillary Agreements. The Buyer shall have executed the
following agreements and documents and delivered them to the Seller:

                  (a) Assignment and Assumption of Liabilities agreements in
favor of the Seller substantially in the forms attached hereto as Exhibit M;

                  (b) the Escrow Agreement; and

                  (c) a certificate of the Senior Vice President, Finance &
Administration and Chief Financial Officer of the Buyer to the effect that each
of the conditions specified in Section 9.1 above has been satisfied.

         9.3. Governmental Consents and Approvals . All consents and permits of
others required to permit the Buyer to complete the transaction shall have been
received by the Buyer.

         9.4. Absence of Certain Litigation. There shall not be any: (a) Court
Order of any nature issued by any court of competent jurisdiction which directs
that this Agreement or any material transaction contemplated hereby shall not be
consummated as herein provided; (b) Proceeding by any federal, state, local or
foreign government (or any agency thereof) pending before any court or
governmental agency, or threatened to be filed or initiated, wherein such
complainant seeks the restraint or prohibition of the consummation of any
material transaction contemplated by this Agreement or asserts the illegality
thereof; or (c) Proceeding by a private party pending before any court or
governmental agency, or threatened to be filed or initiated, which in the
reasonable opinion of counsel for the Seller is likely to result in the
restraint or prohibition of the consummation of any material transaction
contemplated hereby or the obtaining of an amount in payment (or
indemnification) of material damages from or other material relief against any
of the parties or against any directors or officers of the Seller, in connection
with the consummation of any material transaction contemplated hereby.

         9.5. No Bankruptcy. The Buyer shall not: (a) have commenced a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its

                                                                         Page 43
<PAGE>
debts under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or substantially all of its property, or have
consented to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced against
it, or have made a general assignment for the benefit of its creditors; or (b)
have an involuntary case or other proceeding commenced against it seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereinafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or similar official of it or substantially all of its property; or (c) have an
attachment placed on all or a significant portion of its assets.

         9.6. Opinion of Buyer's Counsel.

                  (a) At the Closing, the Seller shall have received from Brown,
Rudnick, Freed & Gesmer, counsel for Buyer, an opinion dated as of the Closing,
substantially in the form of Exhibit N hereto.

                  (b) In rendering said opinion, such counsel may state their
opinions on specific matters of fact to the best of their knowledge and, to the
extent they deem such reliance proper, may rely on: (i) certificates of public
officials; (ii) certificates, in form and substance satisfactory to the Seller
and their counsel; (iii) certificates of officers of the Buyer; and (iv) an
opinion or opinions, in form and substance satisfactory to the Seller and its
counsel, of other counsel satisfactory to the Seller and their counsel. In the
event such counsel for the Buyer relies upon any such certificate or opinion, a
counterpart of each thereof shall be delivered to the Seller and their counsel.

         ARTICLE X. INDEMNIFICATION

         10.1. Indemnification by the Seller and Zygo.

                  (a) Subject to the limitations in paragraph (b) below, the
Seller and Zygo, jointly and severally, shall defend, indemnify and hold
harmless the Buyer's Indemnified Persons from and against all Losses directly or
indirectly incurred by or sought to be imposed upon any of them and whether or
not caused by negligence or willful act:

                  (i)      resulting from or arising out of any breach of any of
                           the representations or warranties (other than those
                           in Sections 4.8, 4.9(e), 4.10, 4.11, 4.12 and 4.17)
                           made by the Seller or Zygo in or pursuant to this
                           Agreement or any Ancillary Agreement;

                  (ii)     resulting from or arising out of any breach of any of
                           the representations or warranties made by the Seller
                           or Zygo pursuant to Sections 4.9(e) and 4.12;

                  (iii)    resulting from or arising out of any breach of any of
                           the representations and warranties made by the Seller
                           pursuant to Sections 4.10 and 4.11;

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<PAGE>
                  (iv)     resulting from or arising out of any breach of any
                           covenant or agreement made by the Seller or Zygo in
                           or pursuant to this Agreement or any Ancillary
                           Agreement;

                  (v)      in respect of any Retained Liabilities;

                  (vi)     resulting from or arising out of any breach of any of
                           the representations and warranties made by the Seller
                           pursuant to Section 4.8 or any liability, payment or
                           obligation in respect of any Taxes owing by any of
                           the Seller, by Zygo or the Buyer, as successor to the
                           Seller's businesses, of any kind or description
                           (including interest and penalties with respect
                           thereto) for all periods, or portions thereof, up to
                           and including the Closing Date;

                  (vii)    resulting from or arising out of (1) any breach of
                           any of the representations and warranties made by the
                           Seller pursuant to Section 4.17, or (2) any third
                           party action, whether by a Governmental Authority or
                           other third party for damages, including fines or
                           penalties, or clean-up costs or other compliance
                           costs under any Environmental Law or from the
                           violation of any Environmental Law arising out of the
                           acts or omissions of the Seller with respect to the
                           operation of the Purchased Assets on or before the
                           Closing Date; or

                  (b) The right to indemnification under paragraph (a) is
subject to the following limitations:

                                    (i) The Seller and Zygo shall have no
                           liability under paragraph (a) unless one or more of
                           the Buyer's Indemnified Persons gives written notice
                           to the Seller or Zygo asserting a claim for Losses,
                           including reasonably detailed facts and circumstances
                           pertaining thereto, before the expiration of the
                           period set forth below:

                           (1)      for claims under clauses (i) and (iii) of
                                    paragraph (a) above, a period of one (1)
                                    year from the Closing Date;

                           (2)      for claims under clauses (vi) and (vii) of
                                    paragraph (a) above, for so long as any
                                    claim may be made in respect of such matters
                                    under any applicable statute of limitations,
                                    as it may be extended; and

                           (3)      for claims under clauses (ii), (iv) and (v)
                                    of paragraph (a) above, without limitation
                                    as to time.

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<PAGE>
                                    (ii) Indemnification for claims under
                           clauses (a)(i) and (iii) above shall be payable by
                           the Seller and Zygo only if the aggregate amount of
                           all Losses hereunder by the Buyer's Indemnified
                           Persons shall exceed Two Hundred Thousand Dollars
                           ($200,000) (the "SELLER'S BASKET"), at which point
                           the Seller and Zygo shall be responsible for all
                           Losses, including the Seller's Basket. The Seller's
                           and Zygo's aggregate liability for indemnification
                           under clauses (a)(i), (iii) and (iv) above shall,
                           whether under a breach of contract claim or
                           otherwise, in no event exceed the Escrow Amount. The
                           Seller's and Zygo's aggregate liability for
                           indemnification under clauses (a)(ii), (v), (vi) and
                           (vii) shall not be limited.

                                    (iii) For the purpose of this Section 10.1,
                           any qualification of any representations and
                           warranties by reference to the materiality of matters
                           stated therein, and any limitations of any
                           representations and warranties as being "to the
                           knowledge of" or "known to" or words of similar
                           effect, shall be disregarded in determining any
                           breach thereof or any Losses.

                                    (iv) At their option, the Seller or Zygo may
                           repurchase from the Buyer, for an amount equal to the
                           value reflected in the Closing Balance Sheet, all or
                           any part of the Inventory included in the Purchased
                           Assets which is subject to any claims for Losses
                           under clause (iii) of paragraph (a) above. Upon
                           payment by the Seller or Zygo for any claim for
                           Losses with respect to any Inventory under clause
                           (iii) of paragraph (a) above, the Buyer shall
                           concurrently therewith assign such inventory to the
                           Seller or Zygo free and clear of any Encumbrances.

                  (c) Except as provided in Section 11.10 (with respect to
specific performance), the indemnification provided for in this Article X shall
be the exclusive remedy for breaches of representations, warranties and
covenants contained in this Agreement provided that no party hereto shall be
deemed to have waived any right of recourse (whether a claim under this Article
X or otherwise) arising from fraud of any other party hereto.

         10.2. Indemnification by Buyer.

                  (a) Subject to the limitations in paragraph (b) below, Buyer
agrees to defend, indemnify and hold harmless Seller's Indemnified Persons from
and against all Losses directly or indirectly incurred by or sought to be
imposed upon any of them whether or not caused by negligence or willful act,

                  (i) resulting from or arising out of any breach of any of the
                  representations, warranties or covenants made by Buyer in or
                  pursuant to this Agreement or any Ancillary Agreement;

                                                                         Page 46
<PAGE>
                  (ii) in respect of any Assumed Liability.

                  (b) The right to indemnification under paragraph (a) is
subject to the following limitations:

                           (i) Buyer shall have no liability under paragraph (a)
                  unless one or more of the Seller's Indemnified Persons gives
                  written notice to the Seller or Zygo asserting a claim for
                  Losses, including reasonably detailed facts and circumstances
                  pertaining thereto, before the expiration of the period set
                  forth below:

                  (1)      for claims under clause (i) of paragraph (a) above, a
                           period of one (1) year from the Closing Date; and

                  (2)      for claims under clause (ii) of paragraph (a) above,
                           without limitation as to time.

                           (ii) Indemnification for claims under clause (a)(i)
                  above shall be payable by the Buyer only if the aggregate
                  amount of all Losses hereunder by the Seller's Indemnified
                  Persons shall exceed Two Hundred Thousand Dollars ($200,000)
                  (the "BUYER'S BASKET"), at which point the Buyer shall be
                  responsible for all Losses, including the Buyer's Basket. The
                  Buyer's aggregate liability for indemnification under
                  paragraph (a)(i) above shall, whether under breach of contract
                  claim or otherwise, in no event exceed $1,300,000.

                           (iii) For the purpose of this Section 10.2, any
                  qualification of any representations and warranties by
                  reference to the materiality of matters stated therein, and
                  any limitations of any representations and warranties as being
                  "to the knowledge of" or "known to" or words of similar
                  effect, shall be disregarded in determining any breach thereof
                  or any Losses.

                  (c) Except as provided in Section 11.10 (with respect to
specific performance), the indemnification provided for in this Article X shall
be the exclusive remedy for breaches of representations, warranties and
covenants contained in this Agreement provided that no party hereto shall be
deemed to have waived any right of recourse (whether a claim under this Article
X or otherwise) arising from fraud or intentional misconduct of any other party
hereto.

                                                                         Page 47
<PAGE>
         10.3. Defense of Third Party Actions.

                  (a) Promptly after receipt of notice of any Third Party
Action, any person who believes he, she or it may be an Indemnified Person will
give notice to the potential Indemnifying Person of such action. The omission to
give such notice to the Indemnifying Person will not relieve the Indemnifying
Person of any liability hereunder unless it was materially prejudiced thereby,
nor will it relieve it of any liability which it may have other than under this
Article.

                  (b) Upon receipt of a notice of a Third Party Action, the
Indemnifying Person shall have the right, at its option and at its own expense,
to participate in and be present at the defense of such Third Party Action, but
not to control the defense, negotiation or settlement thereof, which control
shall remain with the Indemnified Person, unless the Indemnifying Person makes
the election provided in paragraph (c) below.

                  (c) By written notice, an Indemnifying Person may elect to
assume control of the defense, negotiation and settlement thereof, with counsel
reasonably satisfactory to the Indemnified Person; provided, however, that the
Indemnifying Person agrees: (i) to promptly indemnify the Indemnified Person for
its expenses to date; and (ii) to hold the Indemnified Person harmless from and
against any and all Losses caused by or arising out of any settlement of the
Third Party Action approved by the Indemnifying Person or any judgment in
connection with that Third Party Action. The Indemnifying Persons shall not in
the defense of the Third Party Action enter into any settlement which does not
include as a term thereof the giving by the third party claimant of an
unconditional release of the Indemnified Person, or consent to entry of any
judgment except with the consent of the Indemnified Person.

                  (d) Upon assumption of control of the defense of a Third Party
Action under paragraph (c) above, the Indemnifying Person will not be liable to
the Indemnified Person hereunder for any legal or other expenses subsequently
incurred in connection with the defense of the Third Party Action.

                  (e) If the Indemnifying Person does not elect to control the
defense of a Third Party Action under paragraph (c), the Indemnifying Person
(once a determination has been made that such person is an Indemnifying Person
with respect to the Third Party Action) shall promptly reimburse the Indemnified
Person for expenses incurred by the Indemnified Person in connection with
defense of such Third Party Action, as and when the same shall be incurred by
the Indemnified Person.

                  (f) Any person who had the right hereunder but did not assume
control of the defense of any Third Party Action shall have the duty to
cooperate with the party which assumed such defense.

         10.4. Miscellaneous.

                  (a) Buyer's Indemnified Persons shall be entitled to
indemnification under Section 10.1(a) regardless of whether the matter giving
rise to the applicable liability, payment,

                                                                         Page 48
<PAGE>
obligation or expense may have been previously disclosed to any such person,
unless expressly disclosed on the particular Schedule.

                  (b) If any Loss is recoverable under more than one provision
hereof, the Indemnified Person shall be entitled to assert a claim for such Loss
until the expiration of the longest period of time within which to assert a
claim for Loss under any of the provisions which are applicable.

                  (c) The Buyer may, at its option, recover any amount
rightfully owing by the Seller or Zygo for indemnification hereunder by setoff
against any amounts that may otherwise be due from the Buyer to the Seller or
Zygo, or any of them, whether hereunder or otherwise; provided that the Buyer
shall not be required to recover such claims in such manner and may proceed
against the Indemnified Party at any time or times for recovery of
indemnification claims.

         10.5. Payment of Indemnification. Claims for indemnification under this
Article X shall be paid or otherwise satisfied by Indemnifying Persons within
thirty (30) days after notice thereof is given by the Indemnified Person (once a
determination has been made that such person is an Indemnifying Person with
respect to the Third Party Action). Any amount which may become due and payable
to any of the Buyer's Indemnified Persons under Section 10.1(a) above shall
first be paid or otherwise satisfied out of the Escrow until the same has been
exhausted. Subject to the limitations of Section 10.1(b)(ii), any claims in
excess of the amount of the Escrow and any amounts of set off may be recovered
by whatever remedy is available at law or equity

         ARTICLE XI. MISCELLANEOUS

         11.1. Survival of Warranties. All representations, warranties,
agreements, covenants and obligations herein or in any schedule, certificate or
financial statement delivered by any party to another party incident to the
transactions contemplated hereby are material, shall be deemed to have been
relied upon by the other party and shall survive the Closing for the applicable
periods set forth in Article X and shall be further actionable subject to the
limitations set forth therein, regardless of any investigation and shall not
merge in the performance of any obligation by either party hereto.

         11.2. Fees and Expenses. Except as otherwise expressly provided in this
Agreement, the Seller and Zygo will pay their respective legal, accounting and
other expenses in connection with this Agreement and the transactions
contemplated herein and the Buyer will pay its legal, accounting and other
expenses in connection with this Agreement and the transactions contemplated
herein.

         11.3. Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder by any party hereto shall be in
writing and shall be deemed to have been duly given: (a) when received if
delivered personally; (b) one business day after delivered to a prepaid
domestically recognized overnight receipted courier if sent domestically; (c)
three business days after delivered to a prepaid internationally recognized
overnight receipted courier if sent internationally; (d) when receipt
telephonically acknowledged if sent by telecopier

                                                                         Page 49
<PAGE>
transmission on a business day or, if not a business day, on the next following
business day; or (e) when answered back if sent by telex, if on a business day,
or if not a business day, on the next following business day, to the parties at
the following addresses (or at such other addresses as shall be specified by the
parties by like notice):

         If to the Seller or Zygo:

         Zygo Corporation
         Laurel Brook Road
         Middlefield, CT  06455
         Tel: (860) 347-8506
         Fax: (860) 347-8372
         Attn:  President

         with a copy to:

         Fulbright & Jaworski L.L.P.
         666 Fifth Avenue
         New York, NY  10103
         Tel: (212) 318-3000
         Fax: (212) 318-3400
         Attn:  Sheldon G. Nussbaum, Esquire

         If to the Buyer, to:

         Brooks Automation, Inc.
         15 Elizabeth Drive
         Chelmsford, MA  01824
         Tel:  (978) 262-2400
         Fax:  (978) 262-2500
         Attn:  Ellen B. Richstone, Senior Vice President,
                Finance & Administration and Chief
         Financial Officer

         with a copy to:

         Brown, Rudnick, Freed & Gesmer
         One Financial Center

         Boston, MA  02111
         Tel:  (617) 856-8200
         Fax:  (617) 856-8201
         Attn: Paul J. Hartnett, Jr., Esquire

and in any case at such other address as the addressee shall have specified by
written notice. All periods of notice shall be measured from the date of
delivery thereof.

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<PAGE>
         11.4. Publicity and Disclosures. No Party shall issue any public
announcement or similar publicity with respect to this Agreement or the
transactions contemplated by this Agreement without giving prior written notice
of such announcement or similar publicity and giving the other the opportunity
to comment thereon, except as may be required by law or by obligations pursuant
to any listing agreement with an securities exchange or Nasdaq.

         11.5. Entire Agreement. This Agreement together with the Ancillary
Agreements (including all exhibits or schedules appended to this Agreement and
all documents delivered hereunder) constitutes the entire agreement between the
parties, and all promises, representations, understandings, warranties and
agreements with reference to the subject matter hereof and inducements to the
making of this Agreement relied upon by any party hereto, have been expressed
herein or in the documents incorporated herein by reference.

         11.6. Severability.

         If any provision of this Agreement or the application of any such
provision to any party or circumstances shall be determined by any court of
competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to such party
or circumstances other than those to which it is so determined to be invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
enforced to the fullest extent permitted by law. If the final judgment of a
court of competent jurisdiction declares that any item or provision hereof is
invalid or unenforceable, the parties hereto agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration or area of the term or provision, to delete specific words
or phrases and to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified.

         11.7. Assignability. This Agreement may not be assigned otherwise than
by operation of law by either party without the written consent of the other
parties, provided however, that any party may assign any of its rights under
this Agreement or in any agreement, document or instrument executed and
delivered pursuant hereto or in connection with the Closing (without the prior
written consent of the other parties): (i) to any successor to all or
substantially all of its business and assets relating to the subject matter of
this Agreement, to the extent that such entity agrees to assume all of the such
party's obligations hereunder; or (ii) to one or more Affiliates of such party,
to the extent that any such entity agrees to assume all of such party's
obligations hereunder. Furthermore, any or all rights of a party to receive
performance (but not the obligations of such party hereunder) and rights to
assert claims against the other parties in respect of breaches of
representations, warranties or covenants of the other parties hereunder, may be
assigned by such party to any Affiliate of such party, but any assignee of such
rights shall take such rights subject to any defenses, counterclaims and rights
of setoff to which the other parties might be entitled under this Agreement.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing expressed
or referred to in this Agreement will be construed to give any Person other than
the parties to this Agreement any legal or equitable right, remedy or claim
under or with respect to this Agreement or any provision of this Agreement.

                                                                         Page 51
<PAGE>
         11.8. Amendment. This Agreement may be amended only by a written
agreement executed by the Buyer and the Seller.

         11.9. Governing Law; Venue.

                  (a) This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts (other than the
choice of law principles thereof), except that any representations and
warranties with respect to real and tangible property shall be governed by and
construed in accordance with the laws of the jurisdiction where such property is
situated if other than in The Commonwealth of Massachusetts.

                  (b) If the Buyer and the Seller and Zygo are unable to reach
agreement with respect to any disputed matters within forty-five (45) days of
the delivery of the notice of such dispute (including any written notice of
objection to a claim for indemnity), the matter shall be settled by binding
arbitration in Boston, Massachusetts, as set forth below. All claims shall be
settled in accordance with the Commercial Arbitration Rules then in effect of
the American Arbitration Association (the "AAA RULES"). The Seller or Zygo and
the Buyer shall each designate one arbitrator within fifteen (15) days after the
termination of such forty-five (45) day period. The Seller or Zygo and the Buyer
shall cause such designated arbitrators mutually to agree upon and designate a
third arbitrator; provided, however, that (I) failing such agreement within 70
days of delivery of the notice of such dispute, the third arbitrator shall be
appointed in accordance with the AAA Rules and (ii) if either the Seller (or
Zygo) or the Buyer fails to timely designate an arbitrator, the dispute shall be
resolved by the one arbitrator timely designated. All of the fees and expenses
of the arbitrators shall be paid 50% by the Buyer and 50% by Seller or Zygo. The
Seller or Zygo and the Buyer shall cause the arbitrators to decide the matter to
be arbitrated pursuant hereto within 30 days after the appointment of the last
arbitrator. The final decision of the majority of the arbitrators shall be
furnished to Seller or Zygo and the Buyer in writing and shall constitute the
conclusive determination of the issue in question binding upon the Seller, Zygo
and the Buyer, and shall no be contested by any of them. Such decision may be
used in a court of law only for the purpose of seeking enforcement of the
arbitrators' decision.

         11.10. Remedies. The parties hereto acknowledge that the remedy at law
for any breach of the obligations undertaken by the parties hereto is and will
be insufficient and inadequate and that the parties hereto shall be entitled to
equitable relief, in addition to remedies at law. In the event of any action to
enforce the provisions of this Agreement, the parties shall waive the defense
that there is an adequate remedy at law. The Seller hereby acknowledges that the
Purchased Assets are unique and cannot be obtained on the open market. Without
limiting any remedies any party may otherwise have hereunder or under applicable
law, in the event any other party refuses to perform its obligations under this
Agreement, the first party shall have, in addition to any other rights at law or
equity, the right to specific performance.

         11.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

                                                                         Page 52
<PAGE>
         11.12. Effect of Table of Contents and Headings. Any table of contents,
title of an article or section heading herein contained is for convenience of
reference only and shall not affect the meaning of construction of any of the
provisions hereof.

         11.13. Interpretation. The parties hereto acknowledge and agree that:
(a) each party and its counsel reviewed and negotiated the terms and provisions
of this Agreement and have contributed to its revision; (b) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (c) the terms and provisions of this Agreement shall be construed fairly as
to all parties hereto and not in favor of or against any party, regardless of
which party was generally responsible for the preparation of this Agreement.

                                                                         Page 53
<PAGE>
            IN WITNESS WHEREOF the parties hereto have caused this Agreement to
be executed as an instrument under seal in multiple counterparts as of the date
set forth above by their duly authorized representatives.

                             BROOKS AUTOMATION, INC.

                             By:
                                ------------------------------------------------
                                Name:
                                Title:

                             NEXSTAR CORPORATION

                             By:
                                ------------------------------------------------

                             ZYGO CORPORATION

                             By:
                                ------------------------------------------------

                                                                         Page 54
<PAGE>
                            ASSET PURCHASE AGREEMENT

                         List of Schedules and Exhibits

<TABLE>
<CAPTION>
EXHIBIT            DOCUMENT
<S>                <C>
Exhibit A          Base Balance Sheet
Exhibit B          List of Key Employees
Exhibit C          Form of Escrow Agreement
Exhibit D          Form of Employment Offers
Exhibit E          Form of Corporate NonCompetition and Proprietary Information Agreement
Exhibit F          Form of Sublease
Exhibit G          Form of Bill of Sale
Exhibit H          Form of Patent Assignment
Exhibit I          Form of Trademark Assignment Agreement

Exhibit J          Form of Transition Services Agreement
Exhibit K          Nonsolicitation and Proprietary Information Agreement
Exhibit L          Form of Opinion of Counsel for Seller
Exhibit M          Assignment and Assumption of Liabilities Agreement
Exhibit N          Form of Opinion of Counsel for Buyer
</TABLE>

                                                                         Page 55
<PAGE>
                                                                      EXHIBIT __

                                  KEY EMPLOYEES

1)       Donald Davis

2)       John Kropewnicki

3)       Shavar Pirouznia

4)       Denna Suchy

5)       Tac Doran

6)       Xavier Girin

7)       Jerry Crisafulli

8)       Jeffrey Halmagyi

9)       Robert Dean

10)      Rich Amburn

11)      Barry Smith

                                                                         Page 56

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