Document:

AGREEMENT

Date:    08-Nov-00

PROPOSAL SUBMITTED TO:                         WORK TO BE PERFORMED AT:

NAME Mr. Bill Campbell
COMPANY  GISH BIOMEDICAL                   COMPANY GISH BIOMEDICAL
STREET   2681 Kelvin Avenue                STREET  22942 Arroyo Vista
City/State/Zip  "Irvine, CA 92614-5821     City/State Rancho Santa Magarita, CA
TELEPHONE (949) 553-7350                   DATE OF PLANS 11/2/00
                                           ESTIMATE #(E6452) DATED "Nov.03,2000"

We hereby propose to furnish
the materials and perform the labor necessary for the completion of:

"Design,  engineer,  coordinate  and construct  improvements  to new facility at
22942 Arroyo Vista,  Rancho Santa Margarita,  California to include,  in general
the following, as shown on drawing dated Nov. 01, 2000 version #6.

Build  facility  to  include  all  areas  shown  on print  and as  substantially
described on write up dated (Nov.  03, 2000).  Work is to be done in two phases;
Phase I to be all interior office work excluding  clean room.  Phase II is to be
all clean room  area(s).  Total job is to be  completed  at a budgetary  cost of
$1,500,000.00 as drawn and will be built to standard industry specs."

"All  material  is  guaranteed  to be as  specified,  and the  above  work to be
performed  in  accordance  with the  drawings  submitted  for the above work and
completed in a substantial workmanlike manner for the sum of:"

With payments to be made as follows:

         Phase I  "$200,000.00 "                 At contract signing

                  "$200,000.00 "                 Upon completion of phase I work

         Phase II "$330,000.00 "                 Upon approved plans

                  "$330,000.00 "                 Upon 50% completion of clean
                                                 room

                  "$330,000.00 "                 Upon completion and/or
                                               customer occupancy of clean room

                  "$110,000.00 "                 Balance due within 30 days
                                                 of occupancy

<PAGE>

"Any  alteration  or  deviation  from the above  involving  extra cost,  will be
executed only upon customer authorization,  and will become an extra charge over
and above the price quoted. All agreements are contingent to strikes,  accidents
or delays beyond IBC control.  Owner to carry fire,  tornado and other necessary
insurance upon above work. Workers'  compensation and public liability insurance
to be held by Image Builders.  Sellers acceptance of this agreement is expressly
conditioned  on the buyers assent to the terms and conditions as stated in Image
Builder's Standard Construction  Specifications,  General Conditions and General
Pricing  Schedule  which shall  become part and parcel of this  agreement  as if
written  herein.  Any  controversy  or claim  arising  out of or related to this
contract,  or the breach thereof,  shall be settled by arbitration in accordance
with the construction  industry  arbitration  rules of the American  Arbitration
Association,  and  judgement  upon award  rendered by the  arbitration(s)  maybe
entered in any court having jurisdiction thereof. "

                                            Respectfully submitted

                                            /s/ Richard Fasanella

                                            -------------------------------
                                            President

                                            -------------------------------
                                            Title

"The undersigned  acknowledges they have read Image Builders General Conditions,
Construction Specifications & General Pricing Schedule (Form No.'s CS397, GC1000
& GPS400) and accepted  them as part and parcel of this  agreement as if written
herein. "

ALL PAYMENTS ARE DUE WITHIN 10 DAYS OF RECEIPT OF BILLINGS.

Note: This proposal may be withdrawn if not accepted within 30 days.

<PAGE>

ACCEPTANCE OF PROPOSAL/CONTRACT

"The above described work, prices, specifications and conditions are accepted as
written herein or attached. Payment will be made as outlined above."

Signature  /s/ Kelly D. Scott

           -------------------------------
Title  President                            Date  November 3, 2000

MANAGEMENT  ACCEPTANCE:
This agreement constitutes a proposal only until signed below into acceptance by
an authorized Image Builder management personnel.

Signature /s/ Richard Fasanella, President           Date  November 3, 2000
          ---------------------------------

<PAGE>

"November 3, 2000"

PROPOSAL/DESCRIPTION OF WORK

Mr. Bill Campbell

GISH BIOMEDICAL
2681 Kelvin Avenue
"Irvine, CA 92614-5821"
(949) 553-7350

THIS PROPOSAL; No.                  (E6452)

RE:  BUILDING IMPROVEMENTS/COMPANY MOVE REVISION OF (E6399)

Dear Mr. Campbell:

"Designer / Builder  agrees to provide  labor,  materials  and  construction  in
accordance with plans,  specifications,  and  documentation  as may be added and
initialed by parties and attached hereto to complete the following work scope."

BASE PROJECT - BUILDING IMPROVEMENTS/COMPANY MOVE

Scope:
"Design,  engineer,  coordinate  and construct  improvements  to new facility at
22942 Arroyo Vista,  Rancho Santa Margarita,  California to include,  in general
the following, Building Improvements:  Construct within existing office area two
(2) each new private  offices,  one (1) each  conference  room, and one (1) each
lunch room.  Construct  one (1) each class  10,000  clean room of  approximately
8,125 square feet with  associated  staging room.  Convert  existing  rooms into
gowning and locker rooms.  Convert  existing lunch room to new Engineering  Lab.
Build new Quality Control Lab, wash room, degreaser room,  Decontamination room,
Hazardous Waste Storage room, and electronics  room.  Construct new fenced areas
for QC Hold and maintenance shop. Provide utilities for equipment  installation.
Pallet Racking: Relocate existing pallet racking within new building."

"Company  Move:  Disconnect  and  relocate  existing machinery from clean rooms,
equipment room, wash room and labs.  (Note: Bid does not include  disconnection,
re-connection,  programming  or re-start  of  telephone  or computer  systems or
data/telephone cabling)"

<PAGE>

GISH BIOMEDICAL                                             "November 3, 2000"
RE:      BUILDING IMPROVEMENTS/COMPANY MOVE REVISION OF (E6399)
(E6452)

DESIGN AND ENGINEERING:

"Upon  approval  of  conceptual   drawings,   a  set  of  working  drawings  and
specifications will be developed to obtain a city building permit to include: as
required."

Working Drawings

         Prepare a set of working drawings including as applicable:

           Site Plan
           Dimensioned floor plans
           Furniture system plan
           Equipment Plans
           Pallet Rack and Shelving Plan
           Dimensioned sections
           Reflected ceiling plan
           Finish and door schedule
           "Details of wall, ceiling and floor systems, window and door details"

           Electrical plan
           Lighting plan
           Plumbing plan
           Mechanical plan
           Structural plan
           Structural details
           Shop Drawings
           "Telephone and computer plan (locations only, wiring and equipment by
 others)"

Specifications

         Provide  as part  of  drawings  or  separate  as  necessary  a  written
specifications for project to include:

           General notes and conditions
           Construction type and materials
           Exterior / Interior finishes
           Doors and windows

<PAGE>

           Electrical

           HVAC

           Plumbing

Engineering

         Provide engineering as necessary to include:

           Structural calculation and details
           HVAC design
           Electrical
           Plumbing design
           Energy calculations

CONSTRUCTION

Demolition

         Remove existing walls at offices and corridor areas

         (Approximately    10       lineal feet)
         "Remove existing floor coverings at new lunch room,  gowning and locker
 room areas."

         (Approximately    "1,788"  square feet)
         "Saw-cut,break and remove existing concrete tilt-up wall for new access
door to fire riser/electrical room and new warehouse exit door."

         Two (    2        ) each
         "Saw-cut,  break and remove  existing  concrete  slab for new  plumbing
connection."

         (Approximately    100      lineal feet)

Excavation

         Excavate for new plumbing trenches.
         (Approximately    100      lineal feet)
         Back-fill and compact soil in new plumbing trenches.
         (Approximately    100      lineal feet)

Fencing

         Provide and install new 8' high chain-link  fencing at perimeter of new
QC Hold and maintenance shop areas.

         (Approximately    111      lineal feet)
         Fabricate and install new 8' wide double swing gates.
         Three (  3        ) each
Concrete (Interior)

         Drill  existing  slab edge and provide and install new rebar  dowels to
prevent shifting or settling of new slab.

         (Approximately    200      lineal feet)

<PAGE>

         "Provide  rebar,  form and pour  concrete  curb with  waterstop  at new
Hazardous Material Waste Storage Room."

         (Approximately    52       lineal feet)
         Pour-back  concrete  slab at plumbing  trench(es)  with  thickness  and
finish to match existing as closely as possible.

         (Approximately    100      square feet)

Framing

         "Build new 10' high wall(s) to create new  offices,  clean room and lab
area."

         (Approximately  853 lineal  feet) Build new 12' high  wall(s) to create
         new washer room.

         (Approximately    102      lineal feet)
         Build  new  wall(s)  on  top of  existing  floor  coverings  and to the
underside  of existing  suspended  ceiling to create new offices and  conference
room areas.

         (Approximately    73       lineal feet)
         "Build new fire walls to create new offices, lunch room, degreaser room
and corridors."

         (Approximately  198  lineal  feet)  Build  new  ceiling  system at fire
         corridors.

         (Approximately    385      lineal feet)
         Frame single door / passage opening(s) into new and existing wall(s).

         Twenty-one (      21       ) each
         Frame new double door opening(s) into new/existing wall(s).

         Five (   5        ) each
         Frame new HVAC platforms and supports for HVAC units and booster fans.

         Twelve ( 12       ) each

Cabinets

         Provide and install new plastic laminate finished cabinets at new lunch
room.

         (Approximately    20       lineal feet)

Insulation

         Provide and install new R-19  fiberglass  insulation  above new ceiling
area(s).

         (Approximately    "11,607" square feet)
         Provide and install new R-11 fiberglass insulation in new wall cavities
between conditioned and un-conditioned spaces.

         (Approximately    "5,380"  square feet)

<PAGE>

Doors

         "Provide  and  install  new 3' x 7'  solid-core  door(s) in  ""Timely""
frame(s) with lockset(s), and door stop(s)."

         Fifteen (         15       ) each
         "Provide  and  install  new 3' x 7'  solid-core  door(s) in  ""Timely""
frame(s) with panic bar(s), and door stop(s)."

         Two (    2        ) each
         Provide and install new 6' x 7' solid-core  double door(s) and frame(s)
with lockset(s) and door stop(s).

         Three (  3        ) each
         "Provide  and  install  new 3' x 7'  solid-core  fire-rated  door(s) in
""Timely"" frame(s) with lockset(s),  closer(s),  smoke-seals,  threshold(s) and
door stop(s)."

         Five (   5        ) each
         "Provide  and  install  new 3' x 7'  solid-core  fire-rated  door(s) in
""Timely"" frame(s) with panic bars,  closer(s),  smoke-seals,  threshold(s) and
door stop(s)."

         Two (    2        ) each
         "Provide and install new 8' x 8'  solid-core  double  door(s) in hollow
metal frame(s) with lockset,astragals, weather-seals, threshold and door stops."

         One (    1        ) each
         "Provide and install new 6' x 7' solid-core  fire-rated  double door(s)
in  ""Timely""  frame(s)  with  panic  bars,  closers,  astragals,  smoke-seals,
threshold and door stops."

         One (    1        ) each
         "Provide and install new 3' x 7'  hollow-metal  door and frame(s)  with
panic bar with outside lever,  weather-stripping,  threshold and door stop(s) at
new warehouse exit."

         One (    1        ) each
         "Provide and install new 3' x 7'  hollow-metal  door and frame(s)  with
lockset(s), weather-stripping,  threshold, knox box and door stop(s) at new fire
riser/electrical room."

         One (    1        ) each

Drywall

         "Hang, tape and texture new 5/8"" thick type ""X"" drywall with texture
to match existing as closely as possible."

         (Approximately    "26,850" square feet)

Ceilings

<PAGE>

     Provide  and install new 2' x 4'  suspended  ceiling  with lay-in tile with
seismic wires and compression struts to meet current earthquake requirements.

         (Approximately    3089     square feet)
         (Approximately    400      square feet)
         "Provide and install new 2' x 4' clean room quality  suspended  ceiling
with vinyl-faced tile,  aluminum grid,  seismic wires and compression  struts to
meet current earthquake requirements."

         (Approximately    9524     square feet)

Paint

         "Prepare  and  paint  all new plus  repaired  and  existing  walls  and
ceilings, as necessary or directed, with two-coats of latex-based paint over one
coat primer."

         (Approximately    "42,680" square feet)
         "Prepare and paint new clean room,  gowning room and clean staging room
walls with two coats of epoxy paint over one coat primer."

         (Approximately    "5,200"  square feet)
         Prepare and paint new door(s)  with two coats of  oil-based  paint over
one coat primer.

         Thirty-six (      36       ) each

Floor Coverings

         Provide and install new 28oz. commercial-grade glued-down carpet at new
offices.
         (Approximately    52       square yards)
         Note:  Bid  as  quoted includes an allowance for carpet materials to be
selected from IBC's stock commercial grade carpet samples.

         "Provide  and install  new 12"" x 12""  commercial  grade high  traffic
rated V.C.T.  flooring at new lunch room,  receiving office,  degreaser room, QC
room and electronics room."

         (Approximately    3625     square feet)
         "Provide  and  install  new 4""  high  cove  base at  wall(s)  to match
existing color and type as closely as possible."

         (Approximately    "2,785"  lineal feet)
         "Provide and install new  ""Medintech""  seamless  sheet vinyl flooring
with heat welded  seams and 4"" high  self-coved  base at clean room and gowning
room."

         (Approximately    "1,054"  square yards floor covering)
         (Approximately    575      lineal feet coved base)

Restroom Accessories

<PAGE>

         Provide and install new stainless steel restroom accessories at gowning
room including:

         Four (   4        ) each electric hand dryers
         Four (   4        ) each foot-pedal operated soap dispensers

Pallet Racking

         "Relocate  existing  pallet racks into new facility including new 1/2""
diameter wedge anchors ."
         (Approximately    144      each uprights)
         (Approximately    270      pairs load beams)
         "Provide  and  install new 5"" x 7""  seismic  plates as required  onto
bottoms of relocated pallet rack uprights, (as required)."

         (Approximately    288      each legs)
Note: Bid as quoted does not allow for high-piled storage and assumes the pallet
racks currently on site are to be relocated to new configuration  within the new
facility with the existing in-rack sprinklers removed.

Equipment Moving

         "Disconnect,  skid-mount, pack, load and transport existing clean room,
wash area, lab and warehouse  equipment from current building to new building on
Arroyo Vista including, but not limited"

                           ovens centrifuges wrapping machines heat sealers tube
                           cutter wash system  Urethane  system  Dionized  Water
                           System test chambers carts racks work tables

Plumbing

         Provide and install new rough and finish  plumbing at new restrooms and
gowning room including:

         One (    1        ) each  double-compartment   kitchenette   sink  with
faucet and garbage disposal

         Eight (  8        )  each  relocated  hand-wash  sinks  with foot pedal
operated faucet(s)
         Two (    2        ) each lab sink with faucet

<PAGE>

         One (    1        ) each new compressed air piping system

         One (    1        ) each new vacuum piping system
         Provide and install new water piping for relocated  Dionized  system to
wash system and clean room equipment.

         One (    1        ) each lump sum
         "Disconnect, transport and re-install existing Dionized system."

         One (    1        ) each
         Provide and install new 30 gallon electric water heater(s).

         One ( 1 ) each

Note: Bid as quoted assumes  existing water supply and drain piping is available
and of proper size  within 10' of new  location  unless  otherwise  stated.  Bid
assumes there is sufficient  depth to provide  proper fall for drainage  piping.
Any upgrades to water  supply or drainage  piping  required due to  insufficient
capacity  or  damage  to  existing  piping  will  incur  additional  costs to be
performed on a time and materials basis.

HVAC

     "Upon  engineering  and at design provide and install new HVAC unit(s) with
ductwork,  filters,  components  and booster fans at new class 10,000 clean room
including: (but not limited to - units described are approximate)"

         Four (   4        ) each 7 ton HVAC units
         Four (   4        ") each 15,000 cfm booster fans"

         One Hundred Four  104      ) each HEPA filters
         Twelve ( 12       ) each new low-wall return register(s)

         Four (   4        ) each new thermostat(s)
         Two (    2        ) each new Magnahelic
         Relocate existing or add new HVAC equipment and ductwork to service new
office areas.

         Four (   4        ) each 5 ton HVAC units
         Twenty-five (     25       ) each supply registers
         Eighteen (        18       ) each new return register(s)
         Four (   4        ) each new thermostat(s)

Fire Sprinklers/Fire Protection

     Provide and install  new fire  sprinkler  head(s)  with  related  piping as
necessary to proper coverage for new room layout.

         Seventy (         70       ) each

"Note: Bid as quoted assumes sufficient water flow and fire sprinkler pipe sizes
for main and branch piping are available  within 20' of new fire  sprinkler head
locations.  If water  flow or piping  sizes are found to be  insufficient,  then
upgrades to the existing systems will incur additional  costs,  upgrades will be
performed on a time and materials  basis.  Final design and pricing pending flow
analysis and acceptance by the City Fire Marshall."

<PAGE>

Electrical

         Provide new rough and finish electrical to area including:

         Forty (  40      ) each 2' x 4' drop-in fluorescent lighting fixture(s)

         One  hundred  nineteen  (     119     ) each 2' x 4' drop-in clean room
quality fluorescent lighting fixture(s)

         Three (  3        )  each 1' x 4' surface-mounted  fluorescent lighting
fixtures with wrap-around diffuser

         Seven (  7        ) each exit signs
         Forty-two (       42       ) each switch(es) for lighting control

         Sixty-nine (      69       ) each 110 volt duplex outlet(s)

         One (    1        ) each circuits to water heaters
         Twelve ( 12       ) each 480 volt circuits to HVAC equipment

         One (    1        ) each lump sum machinery connections/circuits
         Twenty-five (   25   ) each new telephone/ data outlet(s) location only

                           Telephone/data wiring to be performed by others

"Bid as quoted assumes  existing 1600 amp service  section is in good condition,
properly wired and sufficiently  sized for Gish Biomedical's load  requirements.
If farther or insufficient  then additional will become an extra to be performed
on a time and materials basis."

"Bid as  quoted  is  subject  to terms  and  conditions  as  expressed  in Image
Builder's Consortium's Standard Construction Specifications and General

Conditions (Form No.'s CS397, GC1000 and GPS400)."

"Our pricing always includes full management support, most architectural,  space
planning,  C.A.D., and minor engineering as required to complete your project in
a uniform and  seamless  manner to insure you  receive  the  highest  quality of
service, in the least amount of time at the lowest reasonable pricing."

<PAGE>

"Preliminary evaluation  of available job criteria has produced a budgetary cost
estimate of approximately:             ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
($1,500,000.00)"

"All  call-outs,  to include but not limited to, HVAC,  electrical  lighting and
plumbing   are  to  be   considered   approximate   until   completion   of  the
design-engineering process. At which time repricing to coincide with actual unit
count  may  be  required   reflecting  an  increase  or  decrease  in  cost,  as
applicable."

Approximate square footage overall work scope:

         "          Lunch room, locker room and office "

         "          construction 1,900 square feet "

                   Clean Room Areas including:

         "          New Clean Room 8,125 square feet"

                   Gowning Room 400 square feet

                   New Staging 800 square feet

         New Production/Lab Areas including:

                   New Maintenance Shop 972 square feet (fenced)

         "          New Haz-mat waste and decontamination
          rooms 150 square feet"

                   New Plant offices 1060 square feet

                   New Degreaser room 450 square feet

                   New Electronics room 360 square feet

         New Wash Room/Lab Areas including:

<PAGE>

                   New Laboratory 700 square feet

                   New Wash System Room 575 square feet

         Pallet racking approximately 135 each

         Equipment Move

Specific  decisions as to final engineering  specifications  design criteria and
material  selections  will  be  need  to  be  mutually  approved  prior  to  the
establishment of a firm fixed price.  Image Builders may provide such design and
engineering  FREE of charge.  See  enclosed  FREE  DESIGN  AGREEMENT.  (Required
outside engineering or consultants */ not applicable)

"The approximate cost quoted represents a realistic  budgetary number.  Although
it is  possible  that the  actual  project  budget may  produce a  significantly
different number than the budgetary  number,  past performance has traditionally
shown little variation between numbers (between proposed initial  assessment and
final working budget) pending customer choices, hidden engineering  discoveries,
unusual  government  requirements,  or fees.  In the  event  of such  variation,
significant savings are often experienced through value engineering. IBC pricing
includes contingency  allocation to prevent or diminish  anticipated  government
intervention, or owner forced changes."

"This project may move forward on the  revolutionary  Fastrack  system unique to
IBC, made available by IBC' in-house  capabilities  of integrated  architecture,
industrial  engineering and  construction.  Upon customer approval of block plan
and required  specifications  and/or  parameters,  the project  construction may
begin while the drawings and  engineering are in development and during the plan
review process.  This unique Fastrack performance system is provided as a result
of the IBC TOTAL  FACILITIES  SERVICE AND OUTSOURCE  performance  standard at no
additional or premium charge."

<PAGE>

Nov. 02, 2000

Mr. Bill Campbell

GISH BIOMEDICAL
2681 Kelvin Avenue
Irvine, CA 92614-5821
(949) 553-7350

ADDENDUM TO PROJECT DESCRIPTION.  PROPOSAL: No. (E6452) DATED: NOV. 03, 2000

I        Scope

         The written description,  although revised per the latest drawing dated
         Nov. 01, 2000  version # 6 is to be  subordinate  to the  architectural
         floor plans signed with this agreement which will take precedence as to
         the size and scope of project.  All construction will be of workmanship
         quality,  and unit call-outs will be appropriate  for usage as designed
         by  customer  for  this  plan  set & date  excluding  changes  in scope
         incurred as change order items.

II       Project will be worked in 2 phases
         ----------------------------------

         Phase 1 is to be all  non-cleanroom  work,  as  possible & prudent,  to
         include, but not limited to, receiving office, QC inspection, hazardous
         waste, electrical room, quality control lab,  decontamination room, and
         degreasing & freon dipping plus all modifications,  as possible, within
         the existing bottom floor space as now built.

         Fencing areas will be erected with phase 1 construction.

         Racking (existing) and sprinkler piping will be relocated at phase 1.

III      No work is to be done to the existing upstairs

IV       Moving  of  production  equipment  only  (No  personnel  or computer or
         electronics)

V        Any reusable components found applicable from existing site however not
         at the expense of serviceability or at risk of premature failure, is to
         be used at contractor discretion.

<PAGE>

VI       The following  approximate times are applicable as a best case scenario
         for this project.

                  10 - 12 weeks             Construction (best case)

                  1 week                    Equipment relocation and hook-up

                  3 - 4 weeks               Plans and Engineering

                  4 - 6 weeks               Time in City

                  2 weeks                   Contingency

                  6 weeks                   Approximate after permit

Scheduling on all short duration fast track progress is subject to  considerable
third party impact that may affect time line  considerably.  Although  estimated
time(s) will not be cumulative, the worst case should be planned for.

Image Builders will work several tasks simultaneously,  as prudent and possible,
to accomplish  the greatest  degree of completion in the least amount of overall
time. Third party  considerations,  although  influenced by Image Builders,  are
ultimately  out of its control and may influence  schedule.  Image Builders will
document your project fully. You will receive via fax, or e-mail, (as desired) a
comprehensive description of events virtually on a daily basis to assist in your
on-going assessment of project impact.

No time will be wasted.  No staff is more  prepared,  dedicated,  nor willing to
work the time needed to insure your  project is  completed  in the minimum  time
possible.

VII      Attorneys Fees

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

In the event  litigation  is required to enforce any terms of this  agreement or
action  arising from this  agreement  the  prevailing  party will be entitled to
collect all  attorneys  fees and costs  incurred in the course of pursuing  such
action.

<PAGE>

General Conditions  (GC-1000)

     Image Builders'  General  Conditions and Construction  Specifications  will
become part and parcel of any agreement or contract arising from any proposal or
portion  thereof  submitted by Image Builders  Consortium Inc. or Image Builders
Inc. in their entirely as if written within that agreement.

GENERAL CONDITIONS:

     "Designer/Builder"  as used in these  documents  refers to: Image  Builders
Consortium, Inc. (714) 998-8811, or Image Builders Inc.

     All work shall be  performed  in  accordance  with the 1995  edition of the
Uniform  Building Code; and all applicable  city and county codes,  regulations,
and ordinances having jurisdiction.

     All  work  noted  N.I.C  or  "not  in  contract"  is to be  performed  by a
contractor,  or person other than Image  Builders,  and is not to be part of the
construction agreement. Image Builders shall coordinate with "other" contractors
as required, per requirements established by owner, tenant, or both.

     Any and all work done as  specified  and  completed  at the  request of the
customer, not originally designed by Image Builders, found substandard or not to
meet code, shall be the sole responsibility of the customer. Image Builders will
exercise  extraordinary  care  to  protect  and  maintain  the  integrity  of an
existing/operating   facility,   however  no   responsibility   is  assumed  for
operational  interference,  shut down,  or  contamination.  Any and all costs to
product,   time,  or  process  shall  remain  the  sole  responsibility  of  the
owner/client.

     All  bidding  and  billing  documentation,   including  time  and  material
breakdowns  presented  previous to, or during, job performance may not represent
actual  cost to  contractor.  Actual  expenditures  may vary  either  upward  or
downward in conformance with  estimate(s)  presented to ensure project meets the
budgetary  expectations.  Any costs in excess of "agreed to" pricing incurred by
Image  Builders  and  warranted  for  reimbursement,  or as an  addition  to the
stipulated  sum,  shall be subject to the  margin(s)  for overhead and profit as
shown in, and submitted within, the budget breakdown provided. In the event such
budget is not  available  work will be  performed  on time and  materials  basis
(T&M).  All T&M work  shall be  billed  at the rates  shown on the  current  IBC
General Pricing Schedule unless otherwise stated in advance, in writing.

     Any drawing, illustration, or design created by Image Builders' graphics or
architectural  department  (or any Image  Builders'  personnel),  or provided to
Image   Builders  from  any  outside   source,   is  an   approximate   graphics
representation  only;  and not  presented as an accurate or specific  rendering.
Actual  design may vary.  All  call-outs,  to include but not limited to,  HVAC,
electrical,  lighting  and  plumbing  are  to be  considered  approximate  until
completion  of the  design-engineering  process.  At  which  time  repricing  to
coincide  with  actual  unit count may be  required  reflecting  an  increase or
decrease in cost, as applicable.

<PAGE>

     All work shall be done in  compliance  with Image  Builders'  ethics  code,
Image Builders' general conditions and construction  specifications  which shall
become  part and  parcel of any  proposal  and any  agreement  arising  from the
proposal  as if written  here  within.  Specifications  meet or exceed all known
Federal, State, City, trade group, or association requirements.

     Dig Alert: "As applicable" minor repairs to landscape  sprinkler system are
included in bid as quoted.  Any repairs to  underground  utilities  and services
which cannot be located by  Underground  Service  Alert,  and are not located by
customer  prior to  excavation,  are not  included;  and will be  performed on a
"time-and-materials"  basis,  if  necessary.  Image  Builders  shall install all
manufactured  items,  materials,  and  equipment in strict  accordance  with the
manufacturer's specifications.

     Unless otherwise stated, all equipment,  materials and components are to be
of the  standard  type,  number and style for normal  construction;  of standard
grade and quality,  and the most  available and readily used in the area for the
intended scope. All "call-outs" to include quantity,  type, style, finish, brand
or nomenclature are assumed preliminary for estimating purposes only, and may be
subject to change at final design. All special requirements,  devices,  requests
or deviations  from standard items must be specifically  stated.  Image Builders
reserves the right to substitute, specify, or modify as described, all equipment
and materials; unless otherwise specifically stated.

     Sizes,  lengths,  quantities  and  capacities  are  to  be  considered  "as
required" to construct any space as represented to meet all codes and within and
to normal standards for the stated usage. In the event of discrepancy as to size
upon field  verification,  coverage is  included  as  required at no  additional
charge unless such  discrepancy  is  significant  in size or quantity as created
from document provided to IBC.

     All utility and fire sprinkler amounts are based on preliminary  evaluation
of available  project criteria,  and are budgetary,  pending final design review
and  acceptance  by  customer,  city  planning  and city  building  departments.
Additional  utility  or  service  upgrades  are not  included,  and  will  incur
additional costs, if required.

     Not included unless specified; final connections of utilities to equipment;
structural improvements to existing building for additional loads imposed by any
utility   piping;   city   permit  or  plan   checks   fees;   or  any  and  all
government-imposed  costs;  including,  but not limited to school fees,  special
assessments,  A.D.A. compliance requirements,  outside engineering or consulting
as required, premiums for bid and/or performance bonds.

     Exclusions:  Temporary  power and  lighting  for work  locations;  removal,
installation,  or modification of existing  security;  fire/life  safety,  data,
communication,  paging or music systems; x-ray of slabs for core-drilling, wedge
anchors or saw-cutting,

     Computer(s)  and  telephone(s),  if  included,  is  to be  "location  only"
preparation  for wiring by others.  If included by Image  Builders,  such wiring
must  be  fully  specified  as  to  manufacturer,  location  and  type.  Special
requirements unique to individual manufacturer(s) is not included.

<PAGE>

     Any  structural  work  associated  with  equipment  moving or  installation
including,  but not limited to: concrete work, structural steel, wood framing or
reinforcement  to the  interior  or exterior  of the  building or any  component
thereof as necessary for machinery installation or access is not included unless
specifically stated and described within proposal.  Image Builders disclaims all
liability for equipment movement other than the exercising of proper methods and
workmanship.  In the event specific,  critical or specialized machinery requires
additional  work to return to working  condition such work shall become an extra
and  will  be  billed  on a  time  and  materials  basis.  Existing  conditions:
Assumption is made that  structural  integrity of the building is sufficient for
the types of modification  to be implemented  and that all required  services to
include,  but not limited to electrical,  HVAC,  plumbing are of sufficient size
and capacity for the intended modification.  Bid as quoted assumes all utilities
to be properly and sufficiently  sized and in proper operating  condition at the
time of quotation,  unless specifically  stated within the proposal;  including,
but not  limited  to:  HVAC  equipment,  duct work and  thermostats,  electrical
wiring,  conduits,  breakers and disconnect switches,  plumbing shut-off valves,
and supply and drainage piping. Any repairs or enlargement to existing utilities
is not included, and will incur additional costs over and above quoted price.

     Unseen conditions:  Bid as quoted is based on visual assessment of existing
conditions.  Any hidden  conditions  within  wall,  ceiling  or floor  cavities,
underground  (structures or utilities)  sub-standard  existing  construction and
required upgrades or repairs necessary to bring any of the above into compliance
with  current  codes or  safety  requirements  are not  included  and may  incur
additional charges to the above quoted price. Specific item locations,  as drawn
or  described,  may  change  at the  discretion  of the  job  foreman  or  trade
technician,  on any item not directly affecting design or function,  as dictated
by the  conditions  discovered at the job site. If such change  affects  obvious
design concerns, client approval will be obtained prior to any such change.

     Underground:  Bid as quoted assumes  existing soil  conditions to be stable
and  free  from   contaminants,   utilities,   structures,   organic   material,
oversaturation or underground water flow. Any removal,  recompaction,  import or
export  of soil  and/or  debris as  necessary  to bring  site into a stable  and
buildable  condition is not included and may incur addition charges to the above
quoted price.

     Estimates based upon visual  overview and evaluation  and/or Image Builders
Architectural   Department  conceptual  design  may  require  estimate  or  site
verification visit, customer approval or selection of specific items; as well as
acceptance of critical  design  criteria,  which can affect project  scope.  Any
deviations  or changes  from work scope as stated in the proposal may change the
quoted price.

     Bid as  quoted  assumes  project  location  to be  free  from  any  and all
hazardous  materials  to include,  but not limited  to,  asbestos,  carcinogens,
bio-hazard or petro-chemical  contaminants.  Bid does not include remediation or
removal of any hazardous materials discovered during course of project.

     Insurance:  A standard form proof of insurance  certificate standard to the
industry,  and  widely  and  commonly  acceptable  to all  government  and  most
corporations,  businesses and  organizations is available,  free of charge,  and
will be forwarded automatically to every new customer.

     If the customer  requires the Primary  Insurance  Clause  and/or  Waiver of
Subjugation  Provision  added to the  endorsement,  there will be an  additional
charge assessed to the contract price.

     Inspections:  On all work whereby a full time  presence is not required all
effort will be made to meet  inspection  personally.  Upon  smaller job scope or
conflicting  schedule  the client will be required to have a person  (working at
site) to meet inspector with all information to be provided by IBC personnel.

<PAGE>

Construction Specifications  (CS-397)

     Image Builders'  General  Conditions and Construction  Specifications  will
become part and parcel of any agreement or contract arising from any proposal or
portion  thereof  submitted by Image Builders  Consortium Inc. or Image Builders
Inc. in their entirely as if written within that agreement.

SITE PREPARATION & GENERAL CONDITION

     When applicable, temporary barricades or perimeter warning devices shall be
maintained during  operations which impact customers' normal work patterns.  For
operations  of longer  duration,  or  requiring  greater  personnel  protection,
panelized  barricades  walls will be  maintained  in place.  Where project scope
involves removal of asphalt or concrete,  existing asphalt or concrete  surfaces
shall be saw-cut prior to removal, to provide a clean transition between new and
old work. For all interior operations  creating dust or dirt,  temporary plastic
curtains will be erected to prevent contamination of non-construction areas.

EXCAVATION

     Excavations shall be as shown on plans.  Bottoms of excavations shall be to
firm natural or compacted  soil.  All loose dirt shall be removed from bottom of
trenches  prior to placing of  concrete.  All  back-filling  operations  will be
compacted to an approximate 90% compaction  ratio.  Equipment ingress and egress
if applicable  will be kept to a minimum.  Contractor  will remove any debris or
soil material free of charge.  Any and all damage caused shall not be deemed the
fault of Contractor.  However,when applicable,  if repair and replacement should
be required,  it shall become an additional charge as described elsewhere in the
agreement.

CONCRETE

     All concrete used shall be minimum 2000 P.S.I.  in rating unless  otherwise
specified,  and shall conform to the Code Commentary ACI318R as published by the
American  Concrete  Institute.  All exposed slab work shall be finished to match
surface  finish and texture of surrounding  areas as closely as possible.  Where
new concrete  work is to connect to existing  cured  concrete,  new rebar dowels
shall be placed to prevent shifting of joints.

FRAMING

     All  structural  framing  shall  conform  to  Section  2517 of the  Uniform
Building Code for spans, rating,  hardware  requirements,  spacing and sizing to
insure  the  required  structural  integrity.  All  lumber  used for  structural
purposes  shall be Douglas Fir or  equivalent,  with minimum  grading of stud or
better for all standard studs,  #2 and better for all horizontal  members and #1
and  better  for all  beams.Standard  studs and  tracks  used for  steel  framed
improvements  shall be 3-5/8" wide #25 gauge  galvanized  steel unless otherwise
noted.

<PAGE>

PLUMBING

     All plumbing shall be installed to meet the National  Plumbing  Association
Code in conformance with all local and national  requirements.  Unless otherwise
noted,  water supply piping will be copper and waste; drain and vent piping will
be cast-iron.  When a tie-in to a sewer line is included,  the standard distance
is five feet unless otherwise specified;  any distance over that will be charged
at the industry rate and become an addition to the original contract. Sewer user
fees and  assessments  to any and all governing  agencies  levied on the project
shall become an addition to the original contract.

PLUMBING FIXTURES

     Unless  specified,  all plumbing features will be basic white builder model
style standard to new construction and of the builders choosing. Faucets and all
hardware will be chrome in finish,  standard building models of a type and style
of Contractor's  choosing.  Unless otherwise  noted,  toilets will be tank-type,
with choice of closed or open front and with or without cover. Where applicable,
toilets and lavatory sinks will be provided to meet A.D.A requirements.

ELECTRICAL

     All electrical  installed  shall be of the three-wire  grounding  type, and
meet the  National  Electrical  Code  requirements  for  amps and  load-carrying
capacity.  Outside  receptacles  will be ground  fault  and have a  weatherproof
cover. Service wires of size #6 or above which are secured via a lug type device
may be aluminum.  All smaller  sizes shall be copper (e.g.  wiring to lights and
receptacles).

LIGHTING FIXTURES

     When lighting fixtures are provided by Contractor they shall be of standard
builder quality for new construction or better. Contractor shall install Owner's
fixtures,  if provided on job site a minimum of 24 hours  previous to  scheduled
installation time.

HVAC

     Where included, HVAC shall conform to the Uniform Mechanical Code. Standard
HVAC new or relocated work shall be installed using flexible  plastic duct where
allowed by code  requirements.  Plenums and HVAC drops from  roof-top  equipment
shall be fabricated of galvanized  sheet metal.  Standard  registers shall be of
the perforated-face  type for suspended ceiling  applications,  and louver-faced
for drywall wall or ceiling installations.

<PAGE>

STUCCO

     Stucco is to be three-layer  type applied over wire lath securely  fastened
to wall framing members. When applicable,  the finish coat shall contain colored
pigmentation matching the existing color as closely as possible.

FIRE SPRINKLERS

     Where  applicable,  fire  sprinklers  shall be  installed  or  relocated as
necessary,  to  provide  proper  coverage  for  planned  occupancy  use.  Unless
otherwise noted,  fire sprinkler heads shall be installed at 12'0" on center and
max 6'0" from walls with a minimum of one per enclosed area.  Occu-pancies shall
be assumed to be of the ordinary hazard level unless noted otherwise.

INSULATION OR AS PER PLAN

     Insulation   shall  be   fiberglass   or  type  2  foil  as  applicable  to
installation,  and shall be installed  full width and length of wall and ceiling
cavities adjacent to unconditioned areas. All wall bottom plates will be caulked
on conditioned side of wall prior to installation of gypsum wallboard.

DRYWALL

     Standard drywall (unless  otherwise  noted) is to be 5/8" thick,  type "X".
Drywall sheets shall be installed  vertically.  Joints will be taped, sanded and
texture  applied  to match  existing  texture as  closely  as  possible.  Unless
otherwise noted, standard texture is a medium "orange-peel".  Fasteners shall be
installed at 8" on center at perimeter and 12" on center in the field.

ROOFING

     All roofing shall be as designated  on the plans and  specifications,  or a
standard  three-ply  "hot-mopped"  asphalt system;  or it shall be of a type and
style now on the  existing  structure  designed to match as closely as possible.
All  roofing  shall be  installed  to meet  manufacturer's  specifications,  and
subsequent manufacturer's product warranty shall be forwarded to the customer.

<PAGE>

DOORS

     Standard  doors  shall  be 3' wide x 7' high  1-3/4"  thick  solid  core in
"Timely" (or equivalent)  pre-finished metal frames with three hinges,  lockset,
and  doorstop  for  each  door  opening.  Three  varieties  are  standard  at no
additional  cost:  smooth paint grade  hardboard,  Luan  mahogany,  and "Legacy"
pre-finished oak or walnut.  Unless otherwise specified all new doors and frames
shall be installed to match existing.

GLAZING

     When  included,  glazing shall be provided per one or more of the following
specifications  as applicable.  Interior  windows in standard wall  construction
shall  be  of  1/4"  thick  clear  plate  glass  in  "Timely"  (or   equivalent)
pre-finished  metal frames.  Windows installed in doors shall be 1/4" thick wire
glass in "Vision-Lite" pre-finished metal frames.

SUSPENDED CEILING OR AS PER PLAN

     Standard suspended T-bar style ceiling shall consist of white painted steel
2'x4' grid  components  with  random-fissured  tiles.  Clean Room tiles shall be
smooth vinyl or metallic  surface.  Standard  color is white,  with other colors
available  subject to pricing  and  availability.  Suspended  ceilings  shall be
installed with seismic wires and compression  struts in accordance with the most
current earthquake codes.

SITE USE AND CLEAN UP

     Contractor  shall keep work area  contained  to one area if  possible,  and
shall not leave a  scattered  or messy job site at any time.  A  dedicated  area
shall be used for material staging and trash accumulation. Owner shall make sure
area remains  off-limits  to site  personnel  and guests.  At the  completion of
operation,  and the end of each  day,  the  project  area  shall be left  "broom
clean",  wet-mopped or vacuumed thoroughly,  as applicable to area of operation;
and the area restored as close to pre-construction as possible. Contractor shall
not be responsible for landscaping repair and/or restoration.

GENERAL

     Unless otherwise stated,  all equipment,  materials and components shall be
the  standard  type and style for normal  construction  of type  stated;  and of
standard  grade and quality of the most  available  and readily made standard in
the area for the intended  scope.  All special  requirements  or deviations from
standard items must be specifically stated. Image Builders reserves the right to
substitute and specify all equipment and materials unless otherwise specifically
stated.

FINAL INSPECTION LIST

     Upon completion  customer shall be given a "final inspection list" and have
the opportunity to walk the project with an Image Builder's  representative.  At
this time customer may note anything  noticed which did not turn out exactly the
way expected.  These notations will be given immediate attention and resolved to
customer's satisfaction.

<PAGE>

GENERAL PRICING
SCHEDULE (GPS 400)

DESIGN & ENGINEERING SERVICES

Rates apply when specific duties  encompass total job scope.  These services may
be performed in part or total at no charge when incorporated into a design build
agreement or as a condition to a mutually committed relationship.

Industrial Engineer$75.00 p/hr
Architect$65.00 p/hr
Construction Detailer $35.00 p/hr
Draftsman$25.00 p/hr
Processing/Blueprinting $20.00 p/hr

CONTRACT SERVICES

All service related work to include Outsource, Modified Outsource or Service.

This rate is  inclusive of most major  equipment  and tools  normally  listed as
rented equipment (list available).

Inclusive of trucks, equipment and  material  pick-up  and  delivery  as prudent
or  desirable  to job scope and timeliness.$55.00 p/hr

SPECIAL ASSIGNMENT

To include agreements by contract or for work scope as found to be sufficient to
warrant continued and consistent activity.Rates may vary as dictated by required
level of personnel, size and scope of work.

Image Master Technician  (IMT)$65.00 p/hr  Leadman$59.00  p/hr Journeyman $55.00
p/hr Support  Personnel$45.00  p/hr  PlumberLead rate  ElectricianLead  rate Air
ConditioningLead  rate Other tradesLead rate Special Event Support (Labor)$39.00
p/hr (As low as)$30.00 p/hr

Note:  Overhead   and   profit  on   labor   is   included  in  rate  structure.
Mechanical trades may be charged at IMT rate if provided individually. All Image
crews are capable of working fully independent and unsupervised.

MOVING

Furniture and personnel  moves inclusive of drivers,  computer carts,  furniture
pads, packing material, desk movers and forklifts .

Equipment  moves to include  forklifts to 5 ton,  drivers,  rigging and trucking
including:

Truck / Equipment with Drivers$59.00 p/hr
Trained Support Personnel$55-$49 p/hr

<PAGE>

Low Complexity Support $39.00 p/hr
Special Event Support$35.00 p/hr
(As low as)$30.00 p/hr

Drivers / Operators$59.00 p/hr
Skilled Movers / Rigger$55-$49 p/hr
Trained Support$39.00 p/hr

MATERIAL

All  material  will be billed at invoice cost plus  standard  margin as shown on
provided proposal to originate work or as may be mutually  determined and agreed
to upon the  establishment  of a committed  relationship or individual job scope
demanding such a requirement.

GENERAL

Majority of  equipment  as  required  to include but not be limited to:  trucks,
lifts, earthmoving, sawcutting, welding, etc, (full list available), for the job
function is included at no  additional  cost unless such  function  dictates the
major portion of job scope.  Individual quotes for large equipment functions are
available on an as needed basis.

No charge is incurred for  purchasing,  office,  bookkeeping,  estimates,  light
engineering  or  preliminary  design  to  include  drafting  or CAD work on most
projects.

Image Builders  service is available 24 hours a day, should any emergency arise.
Our entire staff is radio equipped to insure you instant communication.

Image Builders  response is to work all service orders  normally within 24 hours
(or faster) as required. Image Builders works all projects to the fullest of our
ability regardless of hour or day to include evenings and weekends.

No premium pay is ever charged for this service.

This  schedule  reflects  Image  Builders  Consortium,  Inc. and Image Builders,
Inc. commonly  accepted trade pricing.  Special event or occurrences may dictate
deviations from the above pricing schedule.  Image Builders  maintains the right
to  amend,  modify or alter at its  discretion  the  rates as  published.  Rates
published  do not  guarantee  pricing  but  are to be  considered  as a  general
representation of standard policy.

This  schedule  published  on December  27,  1996 and shall be updated  upon any
significant  pricing or policy change.  Call (800) 445-8220 to confirm  validity
and status.Exhibit 10(a)

                                  AMENDMENT TO
                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     Amendment  ("Amendment")  dated as of August 31,  2000 to the  Amended  and
Restated  Employment  Agreement  ("Employment  Agreement"),  entered  into as of
January 1, 1998, by and between Merrimac Industries,  Inc. ("Company") and Mason
N. Carter ("Executive").

     WHEREAS,  the  Company  and  the  Executive  entered  into  the  Employment
Agreement; and

     WHEREAS,  the Board of Directors of the Company and the Executive  agree to
amend the Employment Agreement as set forth herein;

     NOW,  THEREFOR,  in  consideration  of the premises set forth  herein,  the
mutuality and sufficiency of which are hereby acknowledged, the parties agree as
follows:

     1. Section 2 of the Employment  Agreement is hereby amended and restated by
deleting the phrase "this  Agreement  will  commence on the date hereof and will
end on December 31, 2002 (the "Initial Term"), and will automatically  renew for
successive twelve month periods  commencing  January 1, 2003" and replacing with
the following:

     "this  Agreement  will commence on the date hereof and will end on December
31, 2007 (the  'Initial  Term'),  and will  automatically  renew for  successive
twelve month periods commencing January 1, 2008."

     2. Section 5 of the Employment  Agreement is hereby amended by adding a new
Section 5(g) to the end of existing Section 5(f) as follows:

     "5(g)  Provided  the  Executive's  employment  with  the  Company  has  not
terminated  for  Cause or by  resignation,  on the 31st day of August of each of
2001, 2002, 2003, 2004 and 2005 ('Bonus Date'),  the Executive shall be entitled
to receive, on each Bonus Date, a special bonus ('Special Bonus') which shall be
payable  in the form of  forgiveness  of a portion of the  principal  of and the
interest on the Promissory Note (the 'Note'), dated August 31, 2000, executed by
the Executive to the order of the Company,  the form of which is attached hereto
as Appendix A. Each annual Special Bonus shall be in the sum of (i) $56,000 plus
(ii) an amount  equal to the accrued and unpaid  interest on the Note during the
twelve month period ending on the Bonus Date.  Notwithstanding the foregoing, in
the event the Executive's  employment  shall  terminate by reason of death,  his
personal representative may elect to accelerate the forgiveness of the Note into
a single  lump sum and if by reason  of  disability  each  Special  Bonus  shall
continue to be payable on the dates set forth above.  It shall be a condition to
the  payment  of  each  Special   Bonus  that  the  Executive  or  his  personal
representative shall deliver a good check in the amount of any withholding taxes
due in respect thereof."

     3. Capitalized terms not otherwise defined in this Amendment shall have the
meanings indicated in the Employment Agreement.

     4. This Amendment may be executed in any number of counterparts and each of
such  counterparts  shall for all purposes be deemed to be an original,  and all
such counterparts shall together constitute but one and the same instrument.

     5. This Amendment shall be effective as of the date hereof,  and, except as
amended  hereby,  all of the terms and  provisions of the  Employment  Agreement
shall remain in full force and effect.

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

                                         MERRIMAC INDUSTRIES, INC.

                                         By:   /s/ Robert V. Condon
                                               --------------------
                                               Name: Robert V. Condon
                                               Title:  Vice President, Finance

                                               /s/ Mason N. Carter
                                               -------------------
                                                   Mason N. Carter
<PAGE>

                                                                   Appendix A

                                PROMISSORY NOTE

U.S. $280,000                                        West Caldwell, New Jersey
                                                               August 31, 2000

     FOR VALUE  RECEIVED,  MASON N.  CARTER  ("Payor"),  hereby  unconditionally
promises to pay, in accordance  with the terms of this  promissory  note (as the
same may be amended from time to time, this "Promissory  Note"), to the order of
MERRIMAC  INDUSTRIES,  INC., a New Jersey  corporation,  or its  successors  and
assigns  ("Note  Holder"),  in lawful  money of the United  States of America in
immediately  available  funds,  on August 31, 2005 and in such account,  at such
place,  or to such party as Note Holder may designate in writing,  the principal
amount of Two  Hundred  Eighty  Thousand  Dollars  (U.S.  $280,000).  Payor also
unconditionally  promises to pay  interest  annually  in arrears  (as  specified
below) on the unpaid  principal  amount of this Promissory Note outstanding from
time to time at a variable rate equal to the rate  announced  publicly from time
to time during such period by Note  Holder's  primary  lending bank  (currently,
Summit  Bancorp)  as its prime rate (with  changes in the  interest  rate hereon
being effective on the date of each announced change in such prime rate.

     Interest on the unpaid principal amount of this Promissory Note outstanding
from time to time shall  accrue from the date hereof and shall be paid  annually
in arrears on the 31st day of August of each of 2001, 2002, 2003, 2004 and 2005.

     Payor may, at his option, prepay all or, from time to time, any part of the
unpaid principal balance of this Promissory Note, together with interest accrued
thereon, without payment of any premium or penalty.

     Payor hereby  waives  presentment,  demand,  notice,  protest and all other
demands and notices in connection  with the delivery,  acceptance,  performance,
default or enforcement of this Promissory Note.

     If Payor's employment with Note Holder is terminated by reason of cause (as
defined in the Amended and Restated Employment Agreement, dated January 1, 1998,
between Payor and Note Holder) or resignation,  then Note Holder, at its option,
by  written  notice to Payor may  declare  the entire  principal  amount of this
Promissory Note to be due and payable,  together with accrued interest  thereon,
without other notice,  demand,  presentment or protest,  all of which are hereby
waived by Payor.

     Payor shall not assign this Promissory  Note or his  obligations  hereunder
without the prior written consent of Note Holder.  This Promissory Note shall be
binding upon Payor and his  permitted  assigns and shall inure to the benefit of
Note Holder and its successors and assigns.

     This  Promissory  Note has been  executed and delivered in the State of New
Jersey and shall be governed by, and  construed  and  interpreted  in accordance
with,  the internal laws of the State of New Jersey without giving effect to any
conflicts  of  laws  provisions  of  such  State.  Payor  hereby  expressly  and
irrevocably agrees and consents that any suit, action, or proceeding arising out
of or relating to this Promissory Note may be instituted in any State.

                                                          /s/ Mason N. Carter
                                                          -------------------
                                                              Mason N. Carter

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