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                                                                  Exhibit 10.12a

                    As Amended & Readopted 1/27/97 & 5/12/97
                        and as Further Amended on 4/11/02
              and as Further Amended & Readopted 1/21/03 & 4/17/03

                              CYTEC INDUSTRIES INC.

                       1993 STOCK AWARD AND INCENTIVE PLAN

     1.   PURPOSE; TYPES OF AWARDS; CONSTRUCTION.

     The purpose of the 1993 Stock Award and Incentive Plan of Cytec Industries
Inc., as amended (the "Plan"), is to afford an incentive to selected employees,
prospective employees, non-employee Directors and independent contractors of
Cytec Industries Inc., or any Subsidiary or Affiliate which now exists or
hereafter is organized or acquired, to acquire a proprietary interest in the
Company, to continue as, or become, employees, directors, or independent
contractors, as the case may be, to increase their efforts on behalf of the
Company and to promote the success of the Company's business. Pursuant to
Section 6 of the Plan, there may be granted Stock Options (including "incentive
stock options" and "nonqualified stock options"), stock appreciation rights and
limited stock appreciation rights (either in connection with options granted
under the Plan or independently of options), restricted stock, restricted stock
units, interest equivalents, dividend equivalents, deferred cash awards,
deferred stock awards, and other stock-based or cash-based awards.

     2.   DEFINITIONS.

     For purposes of the Plan, the following terms shall be defined as set forth
below:

          (a)  "Affiliate" means any entity if, at the time of granting of an
Award, (i) the Company, directly or indirectly, owns at least 20% of the
combined voting power of all classes of stock of such entity or at least 20% of
the ownership interests in such entity or (ii) such entity, directly or
indirectly, owns at least 20% of the combined voting power of all classes of
stock of the Company.

          (b)  "Award" means any Option, SAR (including a Limited SAR),
Restricted Stock, Restricted Stock Unit, Interest Equivalent, Dividend
Equivalent, Deferred Cash Award, Deferred Stock Award, Director's Restricted
Stock, or Other Stock-Based Award or other Cash-Based Award granted under the
Plan.

          (c)  "Award Agreement" means any written agreement, contract, grant
letter, resolution of the Committee, or other instrument, document or resolution
evidencing an Award.

          (d)  "Beneficiary" means the person, persons, trust or trusts which
have been designated by a Grantee in his or her most recent written beneficiary
designation filed with the Company to receive the benefits specified under the
Plan upon his or her death, or, if

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there is no designated Beneficiary or surviving designated Beneficiary, then the
person, persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

          (e)  "Board" means the Board of Directors of the Company.

          (f)  "Change in Control" means a change in control of the Company
which will be deemed to have occurred if:

               (i)    any "person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than (1) the Company, (2) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or
(3) any corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of Stock), is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company's then outstanding voting
securities; or

               (ii)   during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (i), (iii), or (iv)
of this Section 2(f)) whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof; or

               (iii)  the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving or parent entity) 50% or more of the combined voting power of the
voting securities of the Company or such surviving or parent entity outstanding
immediately after such merger or consolidation or (B) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no "person" (as hereinabove defined) acquired 50% or more of the
combined voting power of the Company's then outstanding securities; or

               (iv)   the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets (or any transaction
having a similar effect).

          (g)  "Change in Control Price" means the higher of (i) the highest
price per share paid in any transaction constituting a Change in Control or (ii)
the highest Fair Market Value per share at any time during the 60-day period
preceding or following a Change in Control.

          (h)  "Code" means the Internal Revenue Code of 1986, as amended from
time to time.

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          (i)  "Committee" means the committee consisting solely of directors
who qualify as "non-employee directors" within the meaning of Rule 16b-3 and as
"outside directors" within the meaning of Section 162(m) of the Code who are
appointed by the Board to administer the Plan.

          (j)  "Common Stock Account" means the common stock account established
in the name of an employee or independent contractor, as specified in Section
6(h).

          (k)  "Company" means Cytec Industries Inc., a corporation organized
under the laws of the State of Delaware, or any successor corporation.

          (l)  "Deferred Cash Account" means the deferred cash account
established in the name of an employee or independent contractor, as specified
in Section 6(h).

          (m)  "Deferred Cash Award" means any Award of cash made pursuant to
Section 6(h) which is to be credited to a Deferred Cash Account and paid in the
future.

          (n)  "Deferred Stock Award" means any Award of Stock made pursuant to
Section 6(h) which is to be credited to a Common Stock Account and paid in the
future.

          (o)  "Dividend Equivalent" means a right, granted to a Grantee under
Section 6(g), to receive cash, Stock, or other property equal in value to
dividends paid with respect to a specified number of shares of Stock. Dividend
Equivalents may be awarded on a free-standing basis or in connection with
another Award, and may be paid currently or on a deferred basis.

          (p)  "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and as now or hereafter construed, interpreted and
applied by regulations, rulings and cases.

          (q)  "Fair Market Value" means, with respect to Stock or other
property, the fair market value of such Stock or other property determined by
such methods or procedures as shall be established (except as provided below)
from time to time by the Committee in its sole discretion. Unless otherwise
determined by the Committee, the per share Fair Market Value of Stock as of a
particular date shall mean (i) the closing sales price per share of Stock on the
national securities exchange on which the Stock is principally traded, for the
last preceding date on which there was a sale of such Stock on such exchange
(or, if there is no such preceding date, on the first succeeding date), or (ii)
if the shares of Stock are then traded in an over-the-counter market, the
average of the closing bid and asked prices for the shares of Stock in such
over-the-counter market for the last preceding date on which there was a sale of
such Stock in such market, or (iii) if the shares of Stock are not then listed
on a national securities exchange or traded in an over-the counter market, such
value as the Committee, in its sole discretion, shall determine. For purposes of
Sections 8 and 9, only, of this Plan, the per share Fair Market Value of Stock
as of a particular date shall mean (i) the closing sales price per share of
Stock on the national securities exchange on which the Stock is principally
traded, for the last preceding date on which there was a sale of such Stock on
such exchange, or (ii) if the shares of Stock are then traded in an
over-the-counter market, the

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average of the closing bid and asked prices for the shares of Stock in such
over-the-counter market for the last preceding date on which there was a sale of
such Stock in such market.

          (r)  "Grantee" means a person who, (i) as an employee, prospective
employee or independent contractor of the Company, a Subsidiary or an Affiliate,
or (ii) as a Non-Employee Director of the Company, has been granted an Award
under the Plan.

          (s)  "Interest Equivalent" means a right granted to a Grantee under
Section 6(g) to receive cash, which may be deferred or paid currently, equal to
the interest which would be earned on a specified amount of money, including
money deferred in a Deferred Cash Account. Interest Equivalents may be awarded
on a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis. Unless the Committee otherwise provides to the
contrary or except as otherwise provided in the Plan, Interest Equivalents paid
on a deferred basis will be compounded on a quarterly basis.

          (t)  "ISO" means any Option intended to be, and designated as, an
incentive stock option within the meaning of Section 422 of the Code.

          (u)  "Limited SAR" means a right granted pursuant to Section 6(c)
which shall, in general, be automatically exercised for cash upon a Change in
Control.

          (v)  "Non-Employee Director" means a member of the Board who is
neither (i) an employee of the Company, a Subsidiary or Affiliate nor (ii)
unless the Board otherwise so determines, a person elected to the Board of
Directors by the holders of the Company's Series C Cumulative Preferred Stock.

          (w)  "NQSO" means any Option that is designated as a nonqualified
stock option.

          (x)  "Option" means a right, granted to a Grantee under Section 6(b)
or Section 8, to purchase shares of Stock.

          (y)  "Other Cash-Based Award" means cash awarded under Section 6(i),
including cash awarded as a bonus or upon the attainment of specified
performance criteria or otherwise as permitted under the Plan.

          (z)  "Other Stock-Based Award" means a right or other interest granted
to a Grantee under Section 6(i) that may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related to, Stock,
including, but not limited to (1) unrestricted Stock awarded as a bonus or upon
the attainment of specified performance criteria or otherwise as permitted under
the Plan and (2) a right granted to a Grantee to acquire Stock from the Company
for cash and/or a promissory note containing terms and conditions prescribed by
the Committee.

          (aa) "Performance Goals" shall have the meaning specified in Section
6A(c) of the Plan.

          (bb) "Performance Measures" means the performance measures set forth
as Exhibit A to the Plan, as provided in Section 6A(c) of the Plan.

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          (cc) "Plan" means this Cytec Industries Inc. 1993 Stock Award and
Incentive Plan, as amended from time to time.

          (dd) "Restricted Stock" means an Award of shares of Stock to a Grantee
under Section 6(d), including Stock that may be designated as performance stock,
that may be subject to certain restrictions and to a risk of forfeiture.

          (ee) "Restricted Stock Unit" means a right granted to a Grantee under
Section 6(e) to receive Stock or cash at the end of a specified deferral period,
which right may be conditioned on the satisfaction of specified performance or
other criteria.

          (ff) "Rule 16b-3" means Rule 16b-3, as from time to time in effect,
promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act, including any successor to such Rule.

          (gg) "Stock" means shares of the common stock, par value $.01 per
share, of the Company.

          (hh) "SAR" or "Stock Appreciation Right" means the right, granted to a
Grantee under Section 6(c), to be paid an amount measured by the appreciation in
the Fair Market Value of Stock from the date of grant to the date of exercise of
the right, with payment to be made in cash, Stock, or property as specified in
the Award or determined by the Committee.

          (ii) "Subsidiary" means any entity in an unbroken chain of entities
beginning with the Company if, at the time of granting of an Award, each of the
entities (other than the last entity in the unbroken chain) owns stock or other
indicia of ownership possessing 50% or more of the total combined voting power
of all classes of stock or other indicia of ownership in one of the other
entities in the chain.

     3.   ADMINISTRATION.

     The Plan shall be administered by the Committee; provided that such
administrative authority shall not extend to Section 8 ("Non-Employee Director
Options") or Section 9 ("Non-Employee Director Restricted Stock"), the intent
being that, as to the Awards made under those Sections, this Plan shall
constitute a formula plan. The Committee shall have the authority in its
discretion, subject to and not inconsistent with the express provisions of the
Plan (including the preceding sentence), to administer the Plan and to exercise
all the powers and authorities either specifically granted to it under the Plan
or necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Awards; to determine the persons to whom and
the time or times at which Awards shall be granted; to determine the type and
number of Awards to be granted, the number of shares of Stock to which an Award
may relate and the terms, conditions, restrictions and performance criteria
relating to any Award; to certify as to the extent to which any performance
criteria have been attained; and to determine whether, to what extent, and under
what circumstances an Award may be settled, canceled, forfeited, exchanged, or
surrendered; to make adjustments in the terms and conditions of, and the
criteria and performance objectives (if any) included in, Awards in recognition
of unusual or non-recurring events affecting the Company or any Subsidiary or
Affiliate or the financial statements of the Company or any Subsidiary or
Affiliate, or in response to changes in applicable laws, regulations, or
accounting principles;

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to designate Affiliates; to construe and interpret the Plan and any Award; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the Award Agreements (which need not be
identical for each Grantee); and to make all other determinations deemed
necessary or advisable for the administration of the Plan.

     The Committee may appoint a chairman and a secretary and may make such
rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings. All determinations of the
Committee shall be made by a majority of its members either present in person or
participating by conference telephone at a meeting or by written consent. All
decisions, determinations and interpretations of the Committee shall be final
and binding on all persons, including the Company, and any Subsidiary, Affiliate
or Grantee (or any person claiming any rights under the Plan from or through any
Grantee) and any stockholder. The Committee may delegate to one or more of its
members or to one or more agents such administrative duties as it may deem
advisable, and the Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. The
Committee may, upon such terms and conditions and with such limitations as it
deems appropriate, delegate to the Chief Executive Officer, any Committee of the
Board of Directors or the Executive Committee authority to make Awards (and
determine the terms of such Awards) to persons who are not officers of the
Company (assistant officers not being considered officers for such purpose);
provided that all such Awards shall be reported to the Committee and (except in
the case of such Awards made by a Committee of the Board) shall be revoked
unless ratified by the Committee.

     No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Award granted
hereunder.

     4.   ELIGIBILITY.

     Awards may be granted to selected employees and independent contractors of
the Company and its present or future Subsidiaries and Affiliates, in the
discretion of the Committee. In determining the persons to whom Awards shall be
granted and the type of any Award (including the number of shares to be covered
by such Award), the Committee shall take into account such factors as the
Committee shall deem relevant in connection with accomplishing the purposes of
the Plan. Awards to Non-Employee Directors shall be solely in the form of NQSOs
and Restricted Stock, which shall be subject to the provisions of Section 8 and
9 of the Plan, and in Deferred Stock Awards pursuant to Section 6(h)(v) of the
Plan.

     5.   STOCK SUBJECT TO THE PLAN.

     The maximum number of shares of Stock reserved for the grant of Awards
under the Plan shall be 14,700,000, subject to adjustment as provided herein.
Originally, 4,300,000 shares of Stock were reserved for the grant of Awards
under the Plan. After the July 1996 three-for-one stock split, this increased to
12,900,000 and was further increased to 14,700,000 after amendments to the Plan
were approved by the Board on January 21, 2003, subject to shareholder approval.
In order to determine the number of shares of Stock remaining available under
the Plan after said stock split, each of the following events occurring on or
prior to the July 2, 1996 record date of the stock split (or the July 23, 1996
distribution date in the case of Option exercises) shall be deemed to involve
three times the

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number of shares of Stock that were actually involved: (x) grants, exercises and
forfeitures of Options; (y) grants, vesting and forfeitures of Restricted Stock
(including performance stock and Director's Restricted Stock); and (z) grants
and forfeitures of Deferred Stock Awards.

     The shares reserved for Awards under the Plan may, in whole or in part, be
authorized but unissued shares or shares that shall have been or may be
reacquired by the Company in the open market, in private transactions or
otherwise. If any shares subject to an Award are forfeited, canceled, exchanged
or surrendered or if an Award otherwise terminates or expires without a
distribution of shares to the Grantee, the shares of stock with respect to such
Award shall, to the extent of any such forfeiture, cancellation, exchange,
surrender, termination or expiration, again be available for Awards under the
Plan; provided that, in the case of forfeiture, cancellation, exchange or
surrender of shares of Restricted Stock or Restricted Stock Units with respect
to which dividends or Dividend Equivalents have been paid or accrued, the number
of shares with respect to such Awards shall not be available for Awards
hereunder unless, in the case of shares with respect to which dividends or
Dividend Equivalents were accrued but unpaid, or in the case of shares with
respect to which a stock split in the form of a stock dividend was paid, such
dividends and Dividend Equivalents are also forfeited, canceled, exchanged or
surrendered. Upon the exercise of any Award granted in tandem with any other
Awards or Awards, such related Award or Awards shall be canceled to the extent
of the number of shares of Stock as to which the Award is exercised and,
notwithstanding the foregoing, such number of shares shall no longer be
available for Awards under the Plan.

     In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Stock, or other property),
recapitalization, Stock split, reverse split, reorganization, merger,
consolidation, spinoff, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Grantees under the Plan, then the Committee shall make such equitable
changes or adjustments as it deems necessary or appropriate to any or all of (i)
the number and kind of shares of Stock which may thereafter be issued in
connection with Awards, (ii) the number and kind of shares of Stock issued or
issuable in respect of outstanding Awards, and (iii) the exercise price, grant
price, or purchase price relating to any Award; provided that, with respect to
ISOs, such adjustment shall be made in accordance with Section 424(h) of the
Code and; provided , further, that in the case of Awards under Sections 8 and 9,
equitable changes or adjustments of the types specified in clauses (i), (ii) and
(iii) above shall be made.

     6.   SPECIFIC TERMS OF AWARDS.

               (a)  GENERAL. The term of each Award shall be for such period as
may be determined by the Committee. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a Subsidiary
or Affiliate upon the grant, maturation, or exercise of an Award may be made in
such forms as the Committee shall determine at the date of grant or thereafter,
including, without limitation, cash, Stock, or other property, and may be made
in a single payment or transfer, in installments, or on a deferred basis. The
Committee may make rules relating to installment or deferred payments with
respect to Awards, including the rate of interest to be credited with respect to
such payments. In addition to the foregoing, the Committee may impose on any
Award or the exercise thereof, at the date of grant or thereafter, such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine. The authority

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given to the Committee under this Section 6 is, however, subject to Section 6A
of this Plan in the case of Awards to Officers as defined in Section 6A.

               (b)  OPTIONS. The Committee is authorized to grant Options to
Grantees on the following terms and conditions:

                      (i)    Type of Award. The Award Agreement evidencing the
grant of an Option under the Plan shall designate the Option as an ISO or an
NQSO, provided that an ISO may not be granted to independent contractors or
Non-Employee Directors..

                      (ii)   EXERCISE PRICE. The exercise price per share of
Stock purchasable under an Option shall be not less than the Fair Market Value
of a share on the date of the grant of such Option; PROVIDED that in no event
shall the exercise price for the purchase of shares be less than par value.
Notwithstanding anything else in this Plan to the contrary, once the exercise
price of any outstanding Option or in any Option granted in the future has been
determined, it may not be reduced except (i) in connection with antidilution and
other similar equitable adjustments approved by the Committee pursuant to the
last paragraph of Section 5 or (ii) with the consent of a majority of a quorum
of the stockholders of the Company. The exercise price for Stock subject to an
Option may be paid in cash or (if so permitted by the Committee or if so
provided in the Award Agreement) by an exchange of Stock previously owned by the
Grantee, or a combination of both, in an amount having a combined value equal to
such exercise price. A Grantee may also elect to pay all or a portion of the
aggregate exercise price by having shares of Stock with a Fair Market Value on
the date of exercise equal to the aggregate exercise price (i) withheld by the
Company, if so permitted by the Committee or so provided in the Award Agreement,
or (ii) sold by a broker-dealer under circumstances meeting the requirements of
12 C.F.R. ss.220 or any successor thereof.

                      (iii)  TERM AND EXERCISABILITY OF OPTIONS. The date on
which the Committee adopts a resolution expressly granting an Option shall be
considered the day on which such Option is granted, unless the Committee shall
determine that the Option shall be granted effective as of a specified date in
the future, in which case such specified future date shall be considered the day
on which such Option is granted. Options shall be exercisable over the exercise
period (which shall not exceed ten years from the date of grant), at such times
and upon such conditions as the Committee may determine, as reflected in the
Award Agreement; PROVIDED THAT, the Committee shall have the authority to
accelerate the exercisability of any outstanding Option at such time and under
such circumstances as it, in its sole discretion, deems appropriate. An Option
may be exercised to the extent of any or all full shares of Stock as to which
the Option has become exercisable, by giving written notice of such exercise to
the Committee or its designated agent.

                      (iv)   TERMINATION OF EMPLOYMENT, ETC. An Option may not
be exercised unless the Grantee is then in the employ of, or then maintains an
independent contractor relationship with, the Company or a Subsidiary or an
Affiliate (or a company or a parent or subsidiary company of such company
issuing or assuming the Option in a transaction to which Section 424(a) of the
Code applies), and unless the Grantee has remained continuously so employed, or
continuously maintained such relationship, since the date of grant of the Option
(or, in the case of a Grantee who on the date of grant was a "prospective
employee," since the date of first becoming an employee); PROVIDED THAT, the
Award Agreement may contain provisions extending the exercisability of Options
to a date not later than the expiration date of such Option.

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                      (v)    MAXIMUM NUMBER OF SHARES. Options may not be
granted hereunder to any one person in any ten-year period in an amount greater
than fifteen (15%) percent of the total number of shares of Stock originally
available for grant of Awards under this Plan (i.e. not more than 15% of
12,900,000 after giving effect to the stock split; and for purposes of
calculating this 15% figure, Options granted to any Grantee prior to July 23,
1996 shall be deemed to have been tripled).

                      (vi)   OTHER PROVISIONS. Options may be subject to such
other conditions including, but not limited to, restrictions on transferability
of the shares acquired upon exercise of such Options, as the Committee may
prescribe in its discretion.

                      (vii)  LIMITATIONS ON ISOS. No ISOs may be awarded under
this Plan after January 21, 2013. ISOs may be awarded only from 1,800,000 shares
of Stock reserved for issuance pursuant to this Plan after shareholder approval
of the amendment to the Plan in April 2003.

               (c)  SARS AND LIMITED SARS. The Committee is authorized to grant
SARs and Limited SARs to Grantees on the following terms and conditions:

                      (i)    IN GENERAL. Unless the Committee determines
otherwise, an SAR or a Limited SAR (1) granted in tandem with an NQSO may be
granted at the time of grant of the related NQSO or at any time thereafter or
(2) granted in tandem with an ISO may only be granted at the time of grant of
the related ISO. An SAR or Limited SAR granted in tandem with an Option shall be
exercisable only to the extent the underlying Option is exercisable.

                      (ii)   SARS. An SAR shall confer on the Grantee a right to
receive with respect to each share subject thereto, upon exercise thereof, the
excess of (1) the Fair Market Value of one share of Stock on the date of
exercise over (2) the grant price of the SAR (which in the case of an SAR
granted in tandem with an Option shall be equal to the exercise price of the
underlying Option, and which in the case of any other SAR shall be such price as
the Committee may determine).

                      (iii)  LIMITED SARS. A Limited SAR shall confer on the
Grantee a right to receive with respect to each share subject thereto,
automatically upon the occurrence of a Change in Control, an amount equal to the
excess of (1) the Change in Control Price (or in the case of a Limited SAR
granted in tandem with an ISO, the Fair Market Value of one share on the date of
such Change in Control) over (2) the grant price of the Limited SAR (which in
the case of a Limited SAR granted in tandem with an Option shall be equal to the
exercise price of the underlying Option, and which in the case of any other
Limited SAR shall be such price as the Committee determines).

               (d)  RESTRICTED STOCK. The Committee is authorized to grant
Restricted Stock (which may be designated as "performance stock") to Grantees on
the following terms and conditions:

                      (i)    ISSUANCE AND RESTRICTIONS. Restricted Stock shall
be subject to such restrictions on transferability and other restrictions, if
any, as the Committee may

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impose at the date of grant or thereafter, which restrictions may lapse
separately or in combination at such times, under such circumstances, in such
installments, or otherwise, as the Committee may determine. Except to the extent
restricted under the Award Agreement relating to the Restricted Stock, a Grantee
granted Restricted Stock shall have all of the rights of a stockholder
including, without limitation, the right to vote Restricted Stock and the right
to receive dividends thereon.

                      (ii)   FORFEITURE. Upon termination of employment or
termination of the independent contractor relationship during the applicable
restriction period, Restricted Stock and any accrued but unpaid dividends or
Dividend Equivalents that are at that time subject to restrictions shall be
forfeited; provided that, the Committee may provide, by rule or regulation or in
any Award Agreement, or may determine in any individual case, that restrictions
or forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of
Restricted Stock.

                      (iii)  CERTIFICATES FOR STOCK. Restricted Stock granted
under the Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Stock are registered in the name of the
Grantee, such certificates shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Stock, and/or
the Company shall retain physical possession of the certificate.

                      (iv)   DIVIDENDS. Dividends paid on Restricted Stock shall
be either paid at the dividend payment date, or deferred for payment to such
date as determined by the Committee, in cash or in shares of unrestricted Stock
having a Fair Market Value equal to the amount of such dividends. Stock
distributed in connection with a stock split or stock dividend, and other
property distributed as a dividend, shall be subject to restrictions and a risk
of forfeiture to the same extent as the Restricted Stock with respect to which
such Stock or other property has been distributed.

                      (v)    MAXIMUM ISSUANCE. No more than an aggregate of
250,000 shares of Stock may be awarded under this Plan after February 1, 2003
under Sections 6(d), 6(e), 6(f) and 6(i) of this Plan.

               (e)  RESTRICTED STOCK UNITS. The Committee is authorized to grant
Restricted Stock Units to Grantees, subject to the following terms and
conditions:

                      (i)    AWARD AND RESTRICTIONS. Delivery of Stock or cash,
as determined by the Committee, will occur upon expiration of the deferral
period specified for Restricted Stock Units by the Committee. In addition,
Restricted Stock Units shall be subject to such restrictions as the Committee
may impose, at the date of grant or thereafter, which restrictions may lapse at
the expiration of the deferral period or at earlier or later specified times,
separately or in combination, in installments or otherwise, as the Committee may
determine.

                      (ii)   FORFEITURE. Upon termination of employment or
termination of the independent contractor relationship during the applicable
deferral period or portion thereof to which forfeiture conditions apply, or upon
failure to satisfy any other conditions precedent to the delivery of Stock or
cash to which such Restricted Stock Units relate, all Restricted Stock Units
that are then subject to deferral or restriction shall be forfeited;

                                       34
<PAGE>

PROVIDED THAT, the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Stock Units will be waived in whole
or in part in the event of termination resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of
Restricted Stock Units.

                      (iii)  MAXIMUM ISSUANCE. No more than an aggregate of
250,000 shares of Stock may be awarded under this Plan after February 1, 2003
under Sections 6(d), 6(e), 6(f) and 6(i) of this Plan.

               (f)  STOCK AWARDS IN LIEU OF CASH AWARDS. The Committee is
authorized to grant Stock as a bonus, or to grant other Awards, in lieu of
Company commitments to pay cash under other plans or compensatory arrangements.
Stock or Awards granted hereunder shall have such other terms as shall be
determined by the Committee. No more than an aggregate of 250,000 shares of
Stock may be awarded under this Plan after February 1, 2003 under Sections 6(d),
6(e), 6(f) and 6(i) of this Plan.

               (g)  DIVIDEND EQUIVALENTS AND INTEREST EQUIVALENTS. The Committee
is authorized to grant Dividend Equivalents and Interest Equivalents to
Grantees.

                      (i)    The Committee may provide, at the date of grant or
thereafter, that Dividend Equivalents and/or Interest Equivalents shall be paid
or distributed when accrued or shall be deemed to have been reinvested in
additional Stock or deferred cash, as the case may be, or other investment
vehicles as the Committee may specify, provided that Dividend Equivalents or
Interest Equivalents (other than freestanding Dividend Equivalents or Interest
Equivalents) shall be subject to all conditions and restrictions of the
underlying Awards to which they relate.

                      (ii)   Interest Equivalents shall be computed at a
market-based rate which, unless the Committee otherwise determines, shall be
compounded quarterly at an annual rate equal to the annual rate on the last day
of the calendar quarter of 10-year U.S. Treasury Notes plus 1% per annum.

               (h)  DEFERRED STOCK AWARDS AND DEFERRED CASH AWARDS. The
Committee is authorized to grant Deferred Stock Awards and Deferred Cash Awards,
including, but not limited to, Deferred Stock Awards in lieu of directors
retainer fees, subject to the following terms and conditions:

                      (i)    The Committee shall establish, in the name of each
Grantee receiving a Deferred Stock Award, a Common Stock Account to which the
Deferred Stock Award, and any Dividend Equivalents thereon (unless paid
currently in the discretion of the Committee), will be credited. The Company
shall not be under any obligation to acquire the Stock to pay a Deferred Stock
Award (or Dividend Equivalent) at any time prior to the date on which such
payment shall be due. The Committee shall establish, in the name of each Grantee
receiving a Deferred Cash Award, a Deferred Cash Account to which the Deferred
Cash Award, and any Interest Equivalents thereon (unless paid currently in the
discretion of the Committee), will be credited.

                                       35
<PAGE>

                      (ii)   The number of equivalent shares of Stock credited
to a Common Stock Account shall accrue Dividend Equivalents on such shares, as
if actual shares of Stock had been issued, from the date the Deferred Stock is
credited to the Common Stock Account to and including the date on which the
amount credited to the Common Stock Account is deemed to have been paid. Such
Dividend Equivalents will be credited to the Common Stock Account as additional
equivalent shares of Stock. In the case of a stock dividend, the number of
shares to be credited shall be the number of shares of stock that would have
been issued on the equivalent number of shares of Stock in the Common Stock
Account. In other cases, the number of equivalent shares (including fractional
shares) to be so credited will be determined by dividing the Dividend
Equivalents by the Fair Market Value of the Stock for the day on which the
related dividend is paid. If any dividend is paid on the Stock of the Company,
other than in cash or Stock, the Committee shall conclusively determine the Fair
Market Value in cash of such dividend.

                      (iii)  The amount of Deferred Cash credited to a Deferred
Cash Account shall accrue Interest Equivalents from the date the Deferred Cash
is credited to the Deferred Cash Account to and including the date on which the
amount credited to the Deferred Cash Account is deemed to have been paid. Such
Interest Equivalents will be credited to the Deferred Cash Account as additional
cash which shall, in turn, accrue further Interest Equivalents. Interest
Equivalents will be credited, as of the last day of each calendar quarter on the
average daily balance of deferred cash in said account during said quarter. If
any Deferred Cash is disbursed to a Grantee or a Beneficiary on a date other
than the last day of a calendar quarter, Interest Equivalents (properly prorated
for the partial quarter) shall be credited on the Deferred Cash so disbursed for
the partial calendar quarter, but shall be computed based on the interest rate
in effect on the business day next preceding the date of disbursement.

                      (iv)   PAYMENTS FROM COMMON STOCK AND DEFERRED CASH
ACCOUNTS.

                                 A.  Except as provided below, payment of the
total amount credited an employee's Common Stock Account or Deferred Cash
Account, as the case may be, shall be made to him, or, in case of his death
prior to the commencement of payments on account of such total amount, to his
Beneficiary, in sixty (60) quarterly installments commencing the first day of
the calendar quarter, or as soon thereafter as practicable, following the date
on which he ceases, by reason of death or otherwise, to be an employee. The
amount of each payment shall be the amount credited to such account multiplied
by a factor, the numerator of which is one (1) and the denominator of which is
the number of quarterly installments remaining to be paid. If the aggregate
number of shares credited to a Common Stock Account shall not be divisible into
whole shares by the applicable number of installments, each installment except
the last shall consist of the nearest number of whole shares into which such
aggregate number of shares shall be divisible by the applicable number of
installments. The last installment shall consist of the total amount of whole
shares of remaining Deferred Stock credited to such account and any fractional
share shall be paid in cash.

                                 B.  In case of the death of an employee after
the commencement of payments to him in respect of his Common Stock Account or
Deferred Cash Account, as the case may be, the then remaining unpaid portion
thereof shall continue to

                                       36
<PAGE>

be paid in installments, at such times and in such manner as if he were living,
to his Beneficiary.

                                 C.  With respect to the total amount in a
Common Stock Account or Deferred Cash Account, as the case may be, or the then
remaining unpaid portion thereof, which shall be payable to any person who shall
no longer be an employee of the Company or one of its Subsidiaries or Affiliates
or to the Beneficiary of any such person, the Committee shall possess absolute
discretion to accelerate the time of payment of such total amount or remaining
unpaid portion, in whole or in part, as the case may be. In addition, the
Committee shall possess absolute discretion to accelerate to any extent such
total amount or remaining unpaid portion, even while a person remains an
employee, if there occurs financial hardship or any other event which the
Committee deems, in its absolute discretion, to constitute an extraordinary
circumstance.

                      (v)    By notice to the Committee at least 15 days in
advance of the commencement of any semiannual period with respect to which
directors' retainer fees are paid, as long as the Committee approves such
election at its next regularly scheduled meeting, any Non-Employee Director of
the Company may elect to receive Deferred Stock Awards in lieu of retainer fees
for serving on the Board. The amount of each such Deferred Stock Award shall be
determined by dividing the amount of the fee that would have been paid but for
the election by such director to receive a Deferred Stock Award by the Fair
Market Value of a share of Stock on the last day of the period with respect to
which such retainer would have been paid and rounding the result to the nearest
whole share. Any election by a director pursuant to this provision shall remain
in place until the commencement of the first semiannual retainer period after
such director gives notice to the Committee that he or she elects to receive
future retainer fees in cash.

               (i)  OTHER STOCK- OR CASH-BASED AWARDS. The Committee is
authorized to grant to Grantees Other Stock-Based Awards or Other Cash-Based
Awards as an element of or supplement to any other Award under the Plan or in
addition to, or in lieu of, any other Award under the Plan, as deemed by the
Committee to be consistent with the purposes of the Plan. Such Awards may be
granted with value and payment contingent upon performance of the Company or any
other factors designated by the Committee, or valued by reference to the
performance of specified Subsidiaries or Affiliates. Without limiting the
generality of the foregoing, other Cash Based Awards may be granted as annual
bonus, as multi-year performance cash awards, or otherwise. The Committee shall
determine the terms and conditions of such Awards at the date of grant or
thereafter. No more than an aggregate of 250,000 shares of Stock may be awarded
under this Plan after February 1, 2003 under Sections 6(d), 6(e), 6(f) and 6(i)
of this Plan.

          6A.  SPECIAL RESTRICTIONS ON AWARDS TO OFFICERS.

Subject to Sections 6A(h) and 6A(j), this Section 6A applies to all Awards to
"Officers"; provided that this Section 6A applies to Options, SARs and Limited
SARs only to the extent specifically stated in this Section. For purposes of
this Section 6A, an "Officer" is any employee who would be treated at the time
an Award is granted as an officer of the Company pursuant to the executive
compensation disclosure rules under the Exchange Act. Notwithstanding the
foregoing, the provisions of the Plan disregarded under Section 6A(a) below
shall be reinstated and fully applicable to all Awards granted to Officers
pursuant to

                                       37
<PAGE>

this Section 6A to the extent that, as of the end of the calendar year following
the year in which the Award is granted, they are not "covered employees" within
the meaning of Section 162(m)(3) of the Code.

                      (a)  INTENT. Awards subject to this Section 6A are
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code and the regulations promulgated thereunder. This
Section 6A shall be interpreted consistently with such intent and any provisions
of the Plan inconsistent therewith shall not apply to any Awards subject to this
Section 6A. Without limiting the generality of the foregoing, the Committee
shall have no discretion to increase the value of any Awards subject to this
Section 6A. Notwithstanding the foregoing, Awards granted hereunder shall be
subject to such other provisions of the Plan (as modified by this Section 6A) as
may be determined by the Committee.

                      (b)  MAXIMUM AWARDS. The maximum Awards (other than
Options, SARs and Limited SARs) that may be granted to any Officer pursuant to
this Section 6A on account of any calendar year shall not exceed the greater of
(i) five hundred percent (500%) of the Officer's base salary for that year or
(ii) $5,000,000. Awards shall be considered to be on account of the calendar
year in which the relevant performance periods terminate. Awards granted
pursuant to Section 6A(h) shall not be taken into account in applying the
foregoing limit. The maximum number of shares of Stock subject to an Option, SAR
or Limited SAR that may be granted hereunder to an Officer during any ten-year
period is set forth in Section 6(b)(v).

                      (c)  DESIGNATION OF PERFORMANCE GOALS. The Committee shall
establish specific objective targets, schedules, thresholds or goals
("Performance Goals") for each Award subject to this Section 6A; provided that,
at the time of the grant of any Award, the achievement of the Performance Goal
shall be substantially uncertain. The Performance Goals designated by the
Committee shall be determined based upon one or more of the business criteria
set forth in Exhibit A hereto ("Performance Measures"). To the extent
applicable, the Committee may specify a Performance Measure in relation to total
Company performance or in relation to the performance of identifiable business
unit(s) of the Company. A Performance Goal may be expressed in any form as the
Committee may determine including, but not limited to: (1) percentage growth,
(2) absolute growth, (3) cumulative growth, (4) performance in relation to an
index, (5) performance in relation to peer company performance, (6) a designated
absolute amount and (7) per share of Stock outstanding. The Performance Goals so
established may exclude the effects of certain events or categories of events
specifically identified by the Committee. Nothing shall preclude the Committee
from designating different Performance Measures and Performance Goals for Awards
granted to different Officers in the same performance period.

                      (d)  DETERMINATION OF AWARDS. The Committee shall have
discretion to structure the types of Awards granted to Officers. Such Awards may
be either Awards having a performance period of one year or less (such as, for
example, an annual bonus plan providing for a cash or a Stock bonus) or Awards
which vest over longer periods (such as, for example, a Performance Stock Award
or Performance Cash Award which might vest after a period of two or more years).
No later than 90 days after the commencement of a performance period (but, in
any event, within the first 25% of such performance period, if earlier), the
Committee shall designate or approve as to the Awards relating to such period,
(i) the Officers who will be Grantees, if any, (ii) the types of Awards (which
will be selected

                                       38
<PAGE>

from the types of Awards permitted under Section 6), (iii) the Performance
Measures applicable to each Award, (iv) if there is more than one Performance
Measure applicable to a single Award, the weighting, or other role, of the
Performance Measures in determining the Award, (v) the Performance Goals and
payout matrix or formula for each Performance Measure, (vi) the performance
period or periods, (vii) the target Award or Awards for each Grantee, (viii) the
extent to which, and the circumstances under which, the Award may pay out at
greater than, or less than, target levels, and (ix) to the extent required under
Code Section 162(m), the maximum dollar amount a Grantee may earn with respect
to a performance period.

                      (e)  PAYMENT OF AWARDS. Subject to Section 7 of the Plan
("Change in Control Provisions"), an Award subject to this Section 6A shall vest
only to the extent that the applicable Performance Goal or Goals, if any, have
been attained. As a condition to the vesting of any Award, the Committee shall
first certify, by resolution of the Committee, that the applicable Performance
Goal or Goals have been attained and the other applicable Plan provisions have
been satisfied. Following the end of a performance period, the Committee shall
determine the amount of each Award that vests for each Grantee by:

                      (1) comparing actual performance for each Performance
               Measure against the payout matrix approved for such period,

                      (2) multiplying the payout percentage from the payout
               matrix for each Performance Measure by the appropriate weighting
               factor, if applicable, and

                      (3) summing the applicable weighted payout percentages and
               multiplying their overall payout percentage by the Grantee's
               Award

Notwithstanding anything contained in this Plan to the contrary (but provided
that the right to do so is specifically retained in the applicable Award
Agreement), the Committee in its sole discretion may reduce any Award to any
Grantee to any amount, including zero, prior to the certification by resolution
of the Committee of the amount of such Award. The amount of an Award that vests
for a calendar year or other performance period shall be determined as soon as
practicable after such period and shall be paid no later than 75 days following
the end of such year or other period.

                      (f)  GRANTS OF OPTIONS AND SARS.  The Committee may grant
Options, SARs and Limited SARs the vesting of which is not contingent upon the
attainment of any Performance Goal or Goals. Except as provided in Section
6A(h), but subject to Section 6(b)(ii), the exercise or grant price, as
applicable, of each share of Stock subject to such Options, SARs and Limited
SARs shall not be less than the Fair Market Value of one share of Stock on the
date of grant.

                      (g)  DEFERRED PAYMENTS. The Committee, in its discretion,
may elect to defer payment of any Award until such date before or after
retirement as a Grantee may request upon such terms and conditions as may be
approved or established by the Committee in its sole judgment. Such terms may
include the payment of Interest or Dividend Equivalents on deferred amounts.

                                       39
<PAGE>

                      (h)  NON-PERFORMANCE-BASED COMPENSATION. Notwithstanding
anything contained in this Section 6A, the Committee may grant Awards to
Officers that are not subject to this Section 6A. All Awards granted by the
Committee shall indicate whether or not they are subject to this Section 6A.

                      (i)  VALUATION. Whenever in this Section 6A there is a
reference to a maximum dollar value of a stock-based Award (including but not
limited to a Restricted Stock, Restricted Stock Unit, a Deferred Stock Award or
other Stock-Based Award), the dollar value is determined as of the date of the
grant of the Award and not as of the date of vesting. If one type of Award is
substituted for another (such as, for example, a Deferred Stock Award being
substituted for a Restricted Stock Award or for an Award of Restricted Stock
Units, where each Award is based upon the same number of shares of Common
Stock), the value of the substitute Award for this purpose is the same as the
Award for which it is substituted. Whenever in this Section 6A there is a
reference to a maximum dollar value of an Award, Dividend Equivalents and
Interest Equivalents (other than free-standing Dividend Equivalents and Interest
Equivalents) shall not be counted in determining such maximum amount.

                      (j)  GRANT-BY-GRANT DETERMINATION. The Committee may grant
Awards a portion of which satisfy the provisions of this Section 6A and a
portion of which do not. In such a case, the Award shall be deemed to be the
grant of two Awards, one subject to this Section 6A and the other granted
pursuant to Section 6A(h).

                      (k)  SUBSTITUTE AWARDS. The Committee may establish
procedures under which one Award is substituted for an equivalent Award of a
different type; such as a Deferred Stock Award being substituted for an Award of
an equivalent number of shares of Restricted Stock. Nothing contained in this
Section 6A requires the substitute Award to be subject to Performance Goals in
addition to the Performance Goals of the Award for which it was substituted.

          7.   CHANGE IN CONTROL PROVISIONS. In the event of a Change of
Control:

               (a) any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and vested; and

               (b) the restrictions, deferral limitations, payment conditions,
and forfeiture conditions applicable to any other Award granted under the Plan
shall lapse and such Awards shall be deemed fully vested, and any performance
conditions imposed with respect to Awards shall be deemed to be fully achieved.

          8.   NON-EMPLOYEE DIRECTOR OPTIONS. Notwithstanding any of the other
provisions of the Plan to the contrary, the provisions of this Section 8 shall
apply only to grants of Options to Non-Employee Directors. Except as set forth
in this Section 8, the other provisions of the Plan shall apply to grants of
Options to Non-Employee Directors to the extent not inconsistent with this
Section.

               (a)  GENERAL. Non-Employee Directors shall receive NQSOs in
accordance with this Section 8 and may not be granted Stock Appreciation Rights
or Incentive Stock Options under this Plan. The purchase price per share of
Stock purchasable under Options granted to Non-Employee Directors shall be the
Fair Market Value of a Share on the

                                       40
<PAGE>

date of grant. No Agreement with any Non-Employee Director may alter the
provisions of this Section and no Option granted to a Non-Employee Director may
be subject to a discretionary acceleration of exercisability.

               (b)  GRANTS TO NEW NON-EMPLOYEE DIRECTORS. Each Non- Employee
Director who is elected to the Board for the first time will, at the time such
director is elected and duly qualified, be granted automatically, without action
by the Committee, an Option to purchase (i) for Options granted prior to July
23, 1996, 1,500 shares of Stock and (ii) for Options granted on or after July
23, 1996, 4,500 shares of stock.

               (c)  GRANTS TO CONTINUING DIRECTORS. On the date of each annual
meeting of stockholders (in addition to any grant made under subsection (b) of
this Section on such date), each continuing Non-Employee Director will be
granted automatically, without action by the Committee, an Option to purchase
(i) for Options granted prior to July 23, 1996, 1,500 shares of Stock and (ii)
for Options granted on or after July 23, 1996, 4,500 shares of stock.

               (d)  VESTING. Each Option shall be exercisable as to 33-1/3
percent of the Stock covered by the Option on the first anniversary of the date
the Option is granted and as to an additional 33-1/3 percent of the Stock
covered by the Option on each of the following two anniversaries of such date of
grant; PROVIDED, HOWEVER, that each Option shall be immediately exercisable in
full upon a Change in Control. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, at any time after becoming
exercisable, but not later than the date the Option expires. Section 6(b) hereof
shall not apply to Options granted to Non-Employee Directors.

               (e)  DURATION. Subject to the three clauses below, each Option
granted to a Non-Employee Director shall be for a term of 10 years. The
Committee may not provide for an extended exercise period beyond the periods set
forth in this Section 8(e).

                      (i)    Options granted to any Non-Employee Director prior
to April 11, 2002 shall expire upon the cessation of such Non-Employee
Director's membership on the Board for any reason, except that, as to any
portion of such an Option which shall be exercisable upon the date of such
cessation, such Option may be exercised as to such portion until the earlier of
(i) three years from the date of such cessation of Board membership or (ii)
expiration of the term of such Option.

                      (ii)   Except as set forth in Section 8(e)(iii) below,
Options granted to any Non-Employee Director on or after April 11, 2002 shall
expire upon the cessation of such Non-Employee Director's membership on the
Board for any reason, except that, as to any portion of such an Option which
shall be exercisable upon the date of such cessation, such Option may be
exercised as to such portion until the earlier of (i) one year from the date of
such cessation of Board membership or (ii) expiration of the term of such
Option.

                      (iii)  Upon the cessation of a Non-Employee Director's
membership on the Board as a result of the Non-Employee Director's death or
disability or if such cessation occurs after the Non-Employee Director has
served on the Board for five

                                       41
<PAGE>

years or more, Options granted to such Non-Employee Director on or after April
11, 2002 and at least eight months prior to such cessation shall be exercisable
by such director (or by any person who acquires the right to exercise such
option as a result of such director's death) until the earlier of (i) five years
from the date of such cessation of Board membership (subject to the installment
vesting provisions of Section 8(d) above) or (ii) expiration of the term of such
Option, to the extent of the total number of shares subject to the grant.

     9.   NON-EMPLOYEE DIRECTOR RESTRICTED STOCK. Notwithstanding any of the
other provisions of the Plan to the contrary, the provisions of this Section 9
shall apply only to grants of Restricted Stock to Non-Employee Directors
("Director's Restricted Stock"). Except as set forth in this Section 9, the
other provisions of the Plan shall apply to grants of Director's Restricted
Stock, to the extent not inconsistent with this Section.

               (a)  GENERAL. Non-Employee Directors will receive Director's
Restricted Stock in accordance with this Section. No agreement with any
Non-Employee Director may alter the provisions of this Section and no Director's
Restricted Stock may be subject to a discretionary acceleration of vesting. Each
person who was a Non-Employee Director prior to the 1994 Annual Meeting of
Stockholders was granted 2,500 shares of Director's Restricted Stock (equivalent
to 7,500 shares on or after July 23, 1996).

               (b)  GRANTS TO NEW NON-EMPLOYEE DIRECTORS. Each Non-Employee
Director who, on or after the 1994 Annual Meeting of Stockholders, is elected to
the Board for the first time, will, at the time such Director is duly elected
and qualified, be granted automatically, without action by the Committee, a
number of shares of Director's Restricted Stock equal to the lesser of (i) 2,500
shares (7,500 shares on or after July 23, 1996) or (ii) the nearest number of
whole shares determined by multiplying 2,500 (7,500 on or after July 23, 1996)
by a fraction, the numerator of which is the initial Fair Market Value of the
Stock determined under the formula utilized for initial grants of NQSQs to
Non-Employee Directors in February 1994 (such initial Fair Market Value being
$15.375 per share or, on or after July 23, 1996, $5.125 per share), and the
denominator of which is the Fair Market Value of the Stock on the date on which
such Director is duly elected and qualified.

               (c)  VESTING. (i) Each Award of Director's Restricted Stock shall
become non-forfeitable as to twenty percent of the Stock covered by the Award on
the first anniversary date of the Award and as to an additional twenty percent
of the Stock on each of the following four anniversary dates of the Award;
provided that each Award shall be immediately non-forfeitable in full upon a
Change in Control. If a Non-Employee Director's service on the Board terminates
prior to the Award becoming entirely non-forfeitable, any portion of the Award
which then remains forfeitable shall revert to the Company, except that if the
Non-Employee Director's service terminates by reason of death or disability, any
20 percent installment with respect to which such Non-Employee Director shall
have begun (but not completed) the requisite annual service shall become, as to
such installment, also entirely nonforfeitable. As used in the prior sentence, a
"disability" shall exist if, because of sickness or injury, the ability of the
Non-Employee Director to perform the duties of a member of the Board of
Directors becomes significantly impaired.

          (ii) A Non-Employee Director may, on or prior to December 31, 1995 (or
in the case of a Non-Employee Director who first becomes a Director after
December 31,

                                       42
<PAGE>

1995, within thirty days after becoming a Director), as to his forfeitable
shares of Director's Restricted Stock elect that such shares shall become
nonforfeitable on January 1 following the year in which he attains his 70th
birthday, but not earlier than the date upon which such shares become
nonforfeitable under subparagraph (i) of this paragraph (c) or later than the
date of a Change in Control. During such additional period, if any, that such
shares are forfeitable under this subparagraph (ii), the shares shall be
forfeited if such Non-Employee Director resigns from the Board of Directors or
refuses to stand for re-election to the Board of Directors, unless:

     A.   Such resignation or refusal results from the disability (as defined in
subparagraph (i) above) or death of the Non-Employee Director; or

     B.   Such Non-Employee Director furnishes to the Board of Directors an
opinion of counsel, reasonably satisfactory to a majority of the remaining
members, to the effect that continued membership on the Board will result in
such Non-Employee Director having a conflict of interest or suffering some other
significant legal liability; or

     C.   Such resignation or refusal is approved or requested by a majority of
the remaining members of the Board of Directors or by stockholders owning a
majority of the voting stock of the Company.

     During such additional period, if any, that such shares are forfeitable
under this subparagraph (ii), if there occurs an event described in clause A.,
B. or C. of this subparagraph, the shares shall become nonforfeitable on the
date that the Non-Employee Director ceases to be a member of the Board of
Directors.

     Any such election to defer vesting shall be made in writing addressed to
the Secretary of the Committee, and shall be irrevocable when received.

               (d)  DIVIDENDS; VOTING. Except as set forth in this Section 9, a
Director granted Director's Restricted Stock shall have all of the rights of a
stockholder including, without limitation, the right to vote Restricted Stock
and the right to receive dividends thereon.

               (e)  The Director's Restricted Stock shall be subject to the
following provisions prior to becoming non-forfeitable:

                      (i)    The Stock may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of; and neither the right to receive
Stock nor any interest therein under the Plan may be assigned, and any attempted
assignment shall be void.

                      (ii)   The Stock certificates shall, at the option of the
Company, either (x) be held by the Company together with stock powers endorsed
by the Director in blank or (y) bear an appropriate restrictive legend and be
subject to appropriate "stop transfer" orders or (z) both.

                      (iii)  Any additional Stock or other securities or
property (other than cash dividends) that may be issued with respect to
Director's Stock as a result of any stock dividend, stock split, reorganization,
recapitalization, merger, consolidation, split-up,

                                       43
<PAGE>

combination of shares or other event, shall be subject to the restrictions and
other terms and conditions of the Plan.

     10.  GENERAL PROVISIONS.

               (a)  COMPLIANCE WITH LOCAL AND EXCHANGE REQUIREMENTS. The Plan,
the granting and exercising of Awards, and the other obligations of the Company
under the Plan and any Award Agreement, promissory note or other agreement shall
be subject to all applicable federal, state and foreign laws, rules and
regulations, and to such approvals by any regulatory or governmental agency as
may be required. The Company, in its discretion, may postpone the issuance or
delivery of Stock under any Award until completion of such stock exchange
listing or registration or qualification of such Stock or other required action
under any state, federal or foreign law, rule or regulation as the Company may
consider appropriate, and may require any Grantee to make such representations
and furnish such information as it may consider appropriate in connection with
the issuance or delivery of Stock in compliance with applicable laws, rules and
regulations.

               (b)  NONTRANSFERABILITY. Except as may be specifically provided
to the contrary in any Award Agreement, Awards shall not be transferable by a
Grantee except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined under the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and shall be exercisable during the lifetime of a Grantee only by
such Grantee or his guardian or legal representative.

               (c)  NO RIGHT TO CONTINUED EMPLOYMENT, ETC.. Nothing in the Plan
or in any Award granted or any Award Agreement, or other agreement entered into
pursuant hereto shall confer upon any Grantee the right to continue in the
employ of or to continue as an independent contractor, or director of the
Company, any subsidiary or any Affiliate or to be entitled to any remuneration
or benefits not set forth in the Plan or such Award Agreement, or other
agreement or to interfere with or limit in any way the right of the Company or
any such Subsidiary or Affiliate or the stockholders to terminate such Grantee's
employment, directorship or independent contractor relationship.

               (d)  TAXES. The Company or any Subsidiary or Affiliate is
authorized to withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of Stock, or any other payment to
a Grantee, amounts of withholding and other taxes due in connection with any
transaction involving an Award, and to take such other actions as the Committee
may deem advisable to enable the Company and Grantees to satisfy obligations for
the payment of withholding taxes and other tax obligations relating to any
Award. This authority shall include authority to withhold or receive Stock or
other property and to make cash payments in respect thereof in satisfaction of a
Grantee's tax obligations.

               (e)  AMENDMENT AND TERMINATION OF THE PLAN. The Board may at any
time and from time to time alter, amend, suspend, or terminate the Plan in whole
or in part; provided that, without stockholder approval, no amendment SHALL BE
MADE (I) TO CHANGE SECTION 4 OF THE PLAN WHICH DEFINES THE PERSONS ELIGIBLE TO
RECEIVE AWARDS, (II) TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE
PURSUANT TO THE PLAN (OTHER THAN PURSUANT TO THE ANTI-DILUTION PROVISIONS SET
FORTH IN SECTION 5 OF THE PLAN), (III) TO INCREASE THE NUMBER OF SHARES ISSUABLE
UNDER SECTIONS 6(d), 6(e), 6(f) AND 6(i) OF THE PLAN, (IV) TO CHANGE THE
PROVISIONS

                                       44
<PAGE>

LIMITING REPRICING OF OPTIONS IN SECTION 6(b)(II) OF THE PLAN, (V) TO EXTEND THE
10 YEAR MAXIMUM TERM OF OPTIONS ISSUED UNDER THE PLAN SET FORTH IN SECTION
6(b)(III) OF THE PLAN, (VI) TO CREATE ADDITIONAL KINDS OF AWARDS UNDER THE PLAN
NOT ALREADY CONTEMPLATED BY THE PLAN OR (VII) TO CHANGE THIS SECTION 10(E).
ADDITIONALLY, no amendment shall affect adversely any of the rights of any
Grantee, without such Grantee's consent, under any Award theretofore granted
under the Plan. Nothing in this Section 10(e) shall limit the provisions of
Section 10(i) of the Plan.

               (f)  NO RIGHTS TO AWARDS; NO STOCKHOLDER RIGHTS. No Grantee shall
have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Grantees. Except as provided
specifically herein, a Grantee or a transferee of an Award shall have no rights
as a stockholder with respect to any shares covered by the Award until the date
of the issuance of a stock certificate to him for such shares.

               (g)  UNFUNDED STATUS OF AWARDS. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Grantee pursuant to an Award, nothing
contained in the Plan or any Award shall give any such Grantee any rights that
are greater than those of a general creditor of the Company.

               (h)  NO FRACTIONAL SHARES. No fractional shares of Stock shall be
issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards, or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

               (i)  NOT EXCLUSIVE. The Awards granted under this Plan are not
intended to be exclusive and, accordingly, the Board may adopt, or permit the
adoption of, other compensation and/or benefit plans or arrangements of any type
whatsoever, including but not limited to plans or arrangements that provide for
compensation in the same form as, or in form similar or dissimilar to, types of
compensation available under this Plan.

               (j)  GOVERNING LAW. The Plan and all determinations made and
actions taken pursuant hereto shall be governed by the laws of the State of
Delaware without giving effect to the conflict of laws principles thereof.

               (k)  EFFECTIVE DATE; PLAN TERMINATION. The Plan has been approved
by stockholders. Amendments to the Plan effected at the January 21, 2003 meeting
of the Board shall take effect upon their adoption by the Board (the "Effective
Date"), but the amendments to this Plan (and any Awards made on or after such
date and prior to the stockholder approval mentioned herein), shall be subject
to the approval of such amendments by a majority of the votes cast on the
proposal seeking such approval, provided that the total vote cast on the
proposal represents over 50% in interest of all securities entitled to vote on
the proposal, which approval must occur within twelve months of the Effective
Date; PROVIDED THAT Awards which could have been made under the Plan as
previously in effect shall not be affected by the lack of stockholder approval
of the amendments. In the absence of such approval, except as so provided above,
such Awards shall be null and void.

                                       45
<PAGE>

                EXHIBIT A TO 1993 STOCK AWARD AND INCENTIVE PLAN,

                           AS AMENDED JANUARY 27, 1997

                              PERFORMANCE MEASURES

     (i)    "CASH FLOW" shall mean the consolidated increase (reduced by any
decrease) in cash, cash equivalents and related marketable securities of the
Company, as set forth in the Company's audited financial statements for a year
or other period, adjusted to offset the effects of financing activity, cash
dividends to common stockholders and purchases of treasury stock.

     (ii)   "DEBT TO CAPITAL RATIO" shall mean Debt divided by Capital. "Debt"
shall mean the sum of short term debt, the current portion of long term debt and
long term debt, all as reported in or determined from a balance sheet at the end
of a year or other period. "Capital" shall mean the sum of (i) short term debt,
(ii) long term debt, (iii) current portion of long term debt, (iv) total
minority interest and (v) stockholders' equity, all as reported in or determined
from a balance sheet at the end of a year or other period.

     (iii)  "EBIT" shall mean, (i) in the case of the Company, the consolidated
earnings before interest and taxes of the Company as set forth in Company's
audited financial statements for such year or other period or (ii) in the case
of a business unit of the Company, the earnings before interest and taxes of
such business unit, for such year or other period, determined on a basis
consistent with the accounting principles used in determining EBIT in the
Company's audited financial statements.

     (iv)   "EPS" shall mean the consolidated fully-diluted earnings per share
of the Company, as set forth in the Company's audited financial statements for
such year or other period.

     (v)    "EVA" shall mean economic value added, calculated as NOPAT less a
capital charge as follows: the weighted average cost per dollar of Capital for
the year or other period times the amount of Capital invested. "NOPAT" shall
mean net Operating Profit after tax plus equity in net earnings of associated
companies, as set forth in the Company's financial statements for such year or
other period.

     (vi)   "MARKET VALUE" shall mean the Fair Market Value of a share of Stock,
as determined under clause (i), (ii) or (iii) as applicable, of the second
sentence of Section 2(q) of the Plan.

     (vii)  "NET EARNINGS" shall mean the consolidated net earnings available to
common stockholders, as set forth in the Company's financial statements for such
year or other period.

     (viii) "OPERATING PROFIT" shall mean operating profit before any special
charges or gains as reported in a statement of income or statement of operations
for a year or other period.

     (ix)   "RETURN ON CAPITAL" shall mean NOPAT divided by average Capital for
the year or other period.

                                       46
<PAGE>

     (x)    "RETURN ON EQUITY" shall mean either Net Earnings or Cash Flow, as
designated by the Committee, divided by average Stockholders' Equity for the
year or other period.

     (xi)   "RONA" shall mean the return on net assets for a year or other
period, which is calculated as (i) Net Earnings minus financing charges divided
by (ii) net assets. Net assets means total assets minus nonfinancial
liabilities.

     (xii)   "SALES" shall mean net sales as reported in a statement of income
or statement of operations for a year or other period.

     (xiii)  "SG & A" shall mean selling, general and administrative costs as
reported in a statement of income or statement of operations for a year or other
period.

     (xiv)   "TAX RATE" shall mean the Company's effective tax rate, as set
forth in the Company's audited financial statements for such year or other
period.

     (xv)    "TOTAL RETURN" shall mean the percent increase over a year or other
period in the value of an investor's holdings in the Company's Stock assuming
reinvestment of dividends.

In computing the foregoing Performance Measure with respect to any Award, there
shall be disregarded the impact of any accounting change mandated by Generally
Accepted Accounting Principles which becomes mandated and is implemented after
the related Performance Goal is established.

                                       47<PAGE>
                                                                Exhibit 10.16

                             BASIC LEASE INFORMATION
                             -----------------------

Landlord:                     Victory Investment Group LLC, a Florida
                              limited liability company

Tenant:                       Perfumania, Inc., a Florida corporation

Address of Premises:          251 International Parkway
                              Sunrise, Florida 33325

Lease Term:                   Fifteen Years and Four Months

Commencement Date:            September 1, 2002

Expiration Date:              December 31, 2017

Rentable Square Feet:         178,791 Approx.

Renewal Options:              None

Base Rent:                    Variable- See Lease Agreement for specific terms

Notices to Landlord:          Victory Investment Group LLC
                              85 Newfield Avenue
                              Edison, New Jersey 08837
                              Attention: Mr. Anil Monga

Copies To:                    Stephen D. Pearson, Esq.
                              12401 South Dixie Highway
                              Miami, Florida 33156

Notices to Tenant:            Perfumania, Inc.
                              251 International Parkway
                              Sunrise, Florida  33325
                              Attn: Mr. Mark Young

In the event of any conflict between the Basic Lease Information described above
and the Lease, the Lease shall control.

<PAGE>

                                                     LEASE

                                                  TABLE OF CONTENTS
                                                  -----------------
<TABLE>
<CAPTION>

                                                                                                           Page No.

<S>          <C>                                                                                                 <C>
Section 1.   Description of Premises............................................................................  1

Section 2.   Term of Lease......................................................................................  1

Section 3.   Construction of Premises Improvements..............................................................  1

Section 4.   Rent...............................................................................................  2

Section 5.   Security Deposit ..................................................................................  3

Section 6.   Taxes and Operating Expenses.......................................................................  4

Section 7.   Use of Premises....................................................................................  5

Section 8.   Alterations, Waste, Improvements...................................................................  7

Section 9.   Quiet Enjoyment ...................................................................................  8

Section 10.  Entry by Landlord..................................................................................  8

Section 11.  Services...........................................................................................  9

Section 12.  Parking............................................................................................  9

Section 13.  Repairs and Replacements........................................................................... 10

Section 14.  Force Majeure...................................................................................... 10

Section 15.  Rules and Regulations.............................................................................. 11

Section 16.  Liability, Indemnity and Insurance................................................................. 11

Section 17.  Liens.............................................................................................. 13

Section 18.  Damage by Fire or Other Causes..................................................................... 14

Section 19.  Eminent Domain..................................................................................... 14

Section 20.  Subordination...................................................................................... 15

Section 21.  Assignment and Subletting.......................................................................... 15

Section 22.  Right of First Refusal ............................................................................ 16
</TABLE>

                                       ii
<PAGE>
<TABLE>
<CAPTION>

<S>          <C>                                                                                                <C>
Section 23.  Default and Remedies of Landlord................................................................... 16

Section 24.  Transfer of Landlord's Interest.................................................................... 19

Section 25.  Waiver ............................................................................................ 19

Section 26.  Notices............................................................................................ 19

Section 27.  Attorneys' Fees.................................................................................... 20

Section 28.  Severability....................................................................................... 20

Section 29.  Captions and Use of Certain Terms.................................................................. 20

Section 30.  Amendment or Modification.......................................................................... 20

Section 31.  Successors......................................................................................... 20

Section 32.  Holdover........................................................................................... 20

Section 33.  Signs.............................................................................................. 21

Section 34.  Real Estate Agent.................................................................................. 21

Section 35.  Exculpation........................................................................................ 21

Section 36   Time. ............................................................................................. 21

Section 37.  Recording.......................................................................................... 21

Section 38.  Tenant's Statement................................................................................. 21

Section 39.  Relationship of Landlord and Tenant................................................................ 22

Section 40.  Radon Gas.......................................................................................... 22

Section 41.  Authority.......................................................................................... 22

Section 42.  Entire Agreement................................................................................... 22

Section 43.  Agreement to Arbitrate ............................................................................ 22

Section 44.  Waiver of Jury Trial .............................................................................. 23
</TABLE>

                                      iii
<PAGE>

EXHIBITS:
---------

"A":  Legal Description

                                       iv
<PAGE>

                                 LEASE AGREEMENT

         THIS LEASE  AGREEMENT (this "Lease") is made and entered into as of the
first (1st ) day of September,  2002, by and between  VICTORY  INVESTMENT  GROUP
LLC, a Florida limited  liability  company,  whose office address is 85 Newfield
Avenue,  Edison, New Jersey 08837 (herein "Landlord"),  and PERFUMANIA,  INC., a
Florida corporation, whose office address is 251 International Parkway, Sunrise,
Florida 33325 (herein "Tenant").

                                   WITNESSETH:

         WHEREAS,  Tenant desires to lease from Landlord and Landlord desires to
lease to Tenant a certain office and warehouse building of approximately 178,791
square feet,  together with existing  parking areas and loading  docks,  and all
fixtures,   equipment,   appliances  and  furniture  presently  located  at  251
International Parkway, Sunrise, Florida 33325 (the "Improvements").

         NOW,  THEREFORE,  in consideration of the mutual covenants and promises
hereinafter set forth, Landlord and Tenant hereby agree as follows:

         SECTION 1.  DESCRIPTION  OF  PREMISES.  Landlord,  in exchange  for the
payment of Rent (as  hereinafter  defined) and the  performance of the covenants
made by Tenant in this Lease, leases to Tenant, and Tenant leases from Landlord,
that certain land of approximately  9.17 acres legally  described on EXHIBIT "A"
attached hereto and made a part hereof, together with the Improvements (the said
land and the Improvements are collectively  referred to herein as the "Premises"
or the "Property").

         SECTION 2. TERM OF LEASE.  The term of this  Lease  shall  commence  on
September 1, 2002 (the  "Commencement  Date"),  and shall  continue,  subject to
earlier  termination  pursuant  to the  terms  hereof,  for the  period  of time
expiring on December 31, 2017 (the "Expiration Date"). However, Tenant shall not
assume any liability for any physical injury or property damage occurring at the
Premises prior to the signing of this Lease.

         SECTION 3.   CONSTRUCTION OF IMPROVEMENTS.

         (a) Landlord and Tenant have agreed that Landlord shall not be required
to make any  improvements to the Premises,  and Tenant  acknowledges  and agrees
that it has  inspected  the  Premises  and  determined  that they are in working
order,  reasonably  fit and safe for their intended  purposes.  Tenant agrees to
return the Premises in working order,  except for reasonable and normal wear and
tear. However, and notwithstanding the foregoing,  Landlord agrees to provide an
improvement  allowance  to Tenant  of up to  $300,000.00  for  Tenant to build a
proper cooling area in the warehouse portion of the Improvements; to reconfigure
the office portion of the Improvements; and for any repairs or minor alterations

<PAGE>

that Tenant shall find necessary and that Tenant shall complete prior to July 1,
2003.  Such  improvement  allowance  shall  be paid by  offsetting  the  amounts
expended by Tenant for such items,  as  evidenced  by written  invoices and paid
receipts delivered to Landlord, against the initial Base Rent due from Tenant to
Landlord  under this Lease until such time as the properly  expended  portion of
such allowance shall be fully offset.  Excepting only minor alterations prior to
July 1, 2003,  all  structural  alterations  and  improvements  by Tenant to the
Premises  shall be subject to Landlord's  prior written  consent,  which consent
shall not be  unreasonably  withheld or delayed,  and Tenant shall  complete all
alterations,  improvements,  repairs and  replacements in a good and workmanlike
manner,  free of liens,  and in compliance with the requirements of Title III of
the ADA (as defined in Section 6(b), below),  all applicable  building codes and
regulations, and any requirements of Landlord. Any amounts expended in excess of
the said improvement allowance shall be at the sole cost of Tenant.

         (2) Tenant  shall have the general  right prior to July 1, 2003 to make
certain  alterations to the Premises (the  "Permitted  Alterations"),  including
without  limitation  (i)  changes  in the  dimensions  and  locations  of walls,
ceilings, doors, bays, windows, loading docks, mezzanines,  utility lead-ins and
outlets, air conditioning equipment, ducts and components, lighting fixtures and
electric panel boxes, and in general  interior layout,  and (ii) the addition of
certain  modifications,  options,  extras  and/or  substitution  of equipment or
materials  of equal or better  quality  as those  constituting  portions  of the
Premises at the  commencement  of this  Lease,  provided  that  Tenant  properly
completes  such  Permitted  Alterations  in a lien free manner and in accordance
with the other terms and conditions of this Lease.

         SECTION 4. RENT.

         (a) In exchange for Landlord  giving Tenant the right to use and occupy
the Premises,  Tenant promises to pay Landlord,  without prior notice or demand,
in advance,  on or before the first day of each month throughout the Lease Term,
commencing  September 1, 2002 at the office address of Landlord set forth above,
the monthly base rental  provided  herein (the "Base Rent"),  plus all taxes and
other assessments imposed on such rent by governmental authority, including, but
not limited to, Florida sales tax, and in addition  thereto  Tenant  promises to
pay Landlord at said address all Additional Rent (as hereinafter  defined) which
Tenant is required to pay to Landlord under this Lease,  as such Additional Rent
becomes due and payable,  plus all taxes and other  assessments  imposed on such
rent by  governmental  authority,  including,  but not limited to, Florida sales
tax, (the Base Rent and Additional Rent being herein collectively referred to as
the  "Rent").  The  Base  Rent  hereunder  shall  be as  follows:  (i)  from the
Commencement  Date through and including  March 31, 2003, the Base Rent shall be
$0.00 per month; (ii) from April 1, 2003 through and including October 31, 2003,

                                       2
<PAGE>

the Base Rent shall be  $73,006.33  per month,  plus sales tax; from November 1,
2003 through and including  December 31, 2005, the Base Rent shall be $81,945.78
per month,  plus sales tax; from January 1, 2006 through  December 31, 2008, the
Base Rent shall be  $89,395.50  per month,  plus sales tax; from January 1, 2009
through  December 31, 2010,  the Base Rent shall be $96,845.13  per month,  plus
sales tax;  and from January 1, 2011  through  December 31, 2017,  the Base Rent
shall be $104,294.75 per month,  plus sales tax. Rent payments should be paid to
Landlord  in lawful  money of the United  State of America  which shall be legal
tender at the time of payment.  Excepting  only for  offsets of the  improvement
allowance  described  above  against Base Rent due  hereunder,  Tenant shall not
setoff or for any reason  withhold  or deduct  from the  amount of any  required
payment of Rent or any other charge  required to be paid pursuant to this Lease,
it being expressly  understood and agreed that the payment of Rent is a covenant
of Tenant  that is  independent  of all of the other  covenants  of the  parties
hereunder. In addition, Landlord and Tenant agree that, notwithstanding anything
herein to the  contrary,  in the event that  Tenant  shall  sublease  all or any
portion of the Premises  between January 1, 2006 and December 31, 2008, then the
Base Rent payable from Tenant to Landlord  for the  Premises  shall  increase to
$93,120.31 per month, plus sales tax, for the period of any sublease during such
period.

         (b) If any payment of Additional Rent shall not be paid as and when due
and payable to Landlord, then interest on the amounts owing shall accrue thereon
and be due to Landlord  at the lesser of (i) the annual rate of fifteen  percent
(15%) or (ii) the highest rate permitted by applicable law.

         (c) If any  payment of Base Rent shall not be paid within ten (10) days
after same shall be due,  then Tenant  shall pay  Landlord a late charge of five
percent  (5%) of any such  installment,  but same  shall not be deemed to waive,
limit or otherwise impair any other right or remedy of Landlord hereunder.

         SECTION 5. SECURITY DEPOSIT.  Upon any third (3rd) failure of Tenant to
timely and  properly  pay any Rent due  hereunder  within any twelve  (12) month
period,  or upon any second (2nd) failure to fulfill each and every of its other
obligations  under this Lease within any twelve (12) month period,  then after a
thirty (30) day default notice has been issued to Tenant that remains uncured at
the end of such  period or, if  applicable,  any longer  grace  period  provided
herein,  Landlord shall have the right to demand from Tenant, and, if so, Tenant
shall,  within ten (10) days of  Landlord's  demand,  pay  Landlord,  the sum of
$146,012.66  as a security  deposit (the "Security  Deposit"),  the use of which
shall be  unrestricted  to  guarantee  the payment of the Rent  provided in this
Lease and the  performance of all of Tenant's  covenants  contained  herein.  If
Tenant shall breach any covenant or provision of this Lease, including,  but not
limited to the  covenants  relating  to the payment of Rent,  Landlord  may (but
shall  not be  required  to) use,  apply or  retain  all or any of the  Security
Deposit for the payment of any late Rent or portion thereof,  or for the payment
of any amount which Landlord may spend or become obligated to spend by reason of

                                       3
<PAGE>

any such  breach by  Tenant,  or to  compensate  Landlord  for any other loss or
damage  which  Landlord  may  suffer  by reason of such  breach by  Tenant,  any
subtenant or any third party. If any portion of the Security  Deposit is so used
or applied,  Tenant shall,  within ten (10) days after written demand therefore,
deposit  cash with  Landlord in an amount  sufficient  to restore  the  Security
Deposit  to its  original  amount,  and  Tenant's  failure  to do so  shall be a
material  breach of this Lease.  The Security  Deposit  shall be returned to the
Tenant thirty (30) days after the  Expiration  Date or the prior  termination of
the Lease through no fault of Tenant, provided all sums lawfully due to Landlord
under this Lease  have been paid and that the  Tenant  has fully  performed  its
obligations  under this Lease.  Landlord and Tenant agree that no interest shall
be payable to Tenant on such  Security  Deposit and that  Landlord  shall not be
required to hold the Security Deposit in a segregated account.  Tenant shall not
assign,  transfer or encumber its rights in the Security Deposit, and any act to
do so shall be without force and not binding on Landlord.  In the event Landlord
shall sell the  Property,  Landlord  shall  deliver the Security  Deposit to the
buyer and,  thereupon,  Landlord shall be discharged from any further  liability
with respect to the Security  Deposit and such buyer shall be liable as Landlord
under the Lease and under this section.

         SECTION 6.   TAXES AND OPERATING EXPENSES.

         (a) Tenant  shall be  responsible  for payment of all real and personal
property taxes and assessments, general and specific, levied by any governmental
agency  or  authority  against  the  Property  during  the  term of this  Lease,
including fire rescue,  drainage and other assessments (the "Taxes");  provided,
however,  that Tenant shall only be responsible  for payment of a  proportionate
share of 2002 taxes and  assessments  based on the amounts  attributable  to the
period after September 1, 2002.  Tenant shall make payment of all such taxes and
assessments to Landlord or directly to the taxing  authority,  as Landlord shall
direct.

         (b)  Tenant  shall  promptly  when  due pay all  expenses  required  to
maintain  the  Premises  in working  order  throughout  the term of this  Lease,
including  all  Operating  Expenses  for  the  Property.   The  term  "Operating
Expenses",  as used  herein,  means all of the expenses in  connection  with the
ownership,  operation,  management and  maintenance of the Property,  including,
without  limitation,  (i)  property  management;  (ii)  gardening,  landscaping,
maintenance,  fertilization  and  irrigation  of  all  lawns  and  trees;  (iii)
maintenance,  repair and  replacement  of  Improvements  during the term of this
Lease,  including,  without  limitation,  elevator  and HVAC system  repairs and

                                       4
<PAGE>

replacement,  painting,  plumbing and electrical systems repairs, and licensing,
testing,  certifying, and repairing or replacing of all fire alarm systems, back
flow devices,  fire pump and fire sprinkler  systems,  and all safety equipment,
including smoke detectors, fire extinguishers,  exit lights and emergency lights
; (iv) janitorial services, sanitary control, removal of trash, rubbish, garbage
and other refuse from the Premises; (v) burglar alarm system rental,  monitoring
and  maintenance;  (vi)  liability,  windstorm,  flood,  fire and general hazard
insurance premiums on or in respect to the Property;  (vii) assessments and fees
for  public  betterments  or  improvements  levied  or  assessed  by any  lawful
authority  against the Property and all other  improvements or betterments which
now or hereafter  become a part of the Property;  (viii)  assessments due to the
Sawgrass International  Corporate Park Association;  (ix) fire alarm maintenance
and monitoring contracts;  (x) utility charges for the Property;  (xi) water and
sewer charges; (xii) costs of supplies,  materials,  equipment and tools used in
connection  with any of the  foregoing;  and (xiii)  any and all other  charges,
costs  or  expenses  which  may be  associated  with the  ownership,  operation,
management or maintenance of the Premises,  including,  without limitation,  all
costs and expenses incurred in order to comply with applicable laws, ordinances,
and  regulations of local,  state and federal  governmental  authorities  having
jurisdiction  over the  Property  and any uses  thereof  during the term of this
Lease,  including,  without  limitation,  the  requirements  of Title III of the
Americans with Disabilities Act, 42 U.S.C. ss.12101, ET. SEQ. (the "ADA").

         (c) Tenant  shall also pay,  before same shall become  delinquent,  all
taxes and other  assessments  imposed  by  governmental  authority,  upon all of
Tenant's leasehold  improvements,  equipment,  furniture,  fixtures and personal
property located in the Premises.

         (4) Upon any failure of Tenant to timely and  directly pay any Taxes or
Operating  Expense within any applicable  grace period,  Landlord shall have the
right to pay same and  Tenant  shall  reimburse  Landlord  for such  expenditure
within ten (10) days of written demand for same from Landlord.  However, payment
of same by Landlord  shall not be a condition  to  Landlord  declaring  any such
failure of Tenant as a default hereunder.

         (e) All amounts in addition  to Base Rent  payable by Tenant  under the
Lease,  including such amounts as are payable  pursuant to this Section 6, shall
be deemed to be additional rent ("Additional Rent").

         SECTION 7.   USE OF PREMISES.

         (a) Tenant  shall use the  Premises  for general  office and  warehouse
purposes  only,  and for no other use  without  the  prior  written  consent  of
Landlord, which consent shall not be unreasonably withheld or delayed.

                                       5
<PAGE>

         (b)  Tenant  shall not use or permit  the  Premises  to be used for any
improper,  immoral,  objectionable or illegal purposes, and at Tenant's own cost
and expense,  Tenant shall  execute and comply with all rules,  regulations  and
requirements of applicable  property owners'  associations,  with all covenants,
requirements, restrictions and prohibitions of record, and with all laws, rules,
orders, ordinances, and regulations of all local, state and Federal governmental
authorities,  including without limitation each and every department, bureau and
official  thereof,  now or hereafter in force or effect  during the term of this
Lease (collectively, "Laws") applicable to Tenant, the Premises or any occupancy
or use thereof,  including,  without  limitation,  the ADA and all Environmental
Laws, and with any requirements of any fire underwriters'  bureau.  Tenant shall
pay  for  all  license  fees,   testing  fees,   occupational  taxes  and  other
governmental  charges  assessed by reason the use or  occupancy  of the Premises
during the term of this Lease.  The term  "Environmental  Laws," as used herein,
means  any and all laws  with  respect  to:  (i) any  biological  or  infectious
materials or wastes, (ii) any dangerous, toxic, explosive, corrosive, flammable,
radioactive,  carcinogenic,  mutagenic or other hazardous substances,  (iii) any
substances  the presence of which would cause or threaten to cause a nuisance in
the Premises or to any  neighboring  or adjacent  properties or pose a hazard to
the health or safety of persons on or about the Premises or any  neighboring  or
adjacent  properties,  (iv) any  substance,  the presence of which on properties
adjacent to the Property would constitute a trespass, and (v) urea-formaldehyde,
polychlorinated biphenyls, asbestos or asbestos containing materials,  petroleum
and  petroleum  by-products.  Such  Environmental  Laws shall  include,  without
limitation,  the following  laws, as modified or amended from time to time:  The
Comprehensive Environmental Response,  Compensation and Liability Act ("CERCLA")
as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"),
42 U.S.C. Sections 9601-9675; the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Sections 6901-6991;  the Clean Water Act, 33 U.S.C. Sections
1321 ET. SEQ.; the Clean Air Act, 42 U.S.C.  Sections 7401 ET. seq.; the Federal
Insecticide,  Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. Sections 136 ET.
SEQ.; The Toxic Substances Control Act ("TSCA"),  15 U.S.C.  Sections 2601-2671;
The Florida  Pollutant  Discharge  Prevention and Removal Act,  Florida Statutes
Section  376.303(1)(a)(1)  ET. SEQ.; the Florida Hazardous Waste Management Act,
Florida  Statutes  Sections  403.701 ET. SEQ.;  and the Florida  Pesticide  Act,
Florida Statutes Sections 487 ET. SEQ.

         (c) Tenant  agrees not to commit or allow to be committed  any nuisance
or other act against public policy,  or which may disturb the quiet enjoyment of
or otherwise  interfere with,  injure or annoy any owner or tenant of properties
adjacent to or in the vicinity of the  Property.  Tenant agrees not to commit or
suffer any waste of the Property, or to deface or damage the Improvements in any
manner, except for reasonable and normal wear and tear.

                                       6
<PAGE>

         (d)  Tenant  agrees  not to use or keep  any  flammable  substances  or
materials in or about the Premises except in strict compliance with all laws and
regulations  relating  thereto,  and in a safe and proper manner.  Except to the
extent  caused by the gross  negligence or willful  misconduct of Landlord,  its
members,  employees or agents,  Tenant agrees to be strictly  liable for, and to
indemnify and hold harmless Landlord against, any and all damages resulting from
the use,  storage or presence on the  Premises of any  flammable  substances  or
materials during the term of this Lease.

         SECTION 8.   ALTERATIONS, WASTE, IMPROVEMENTS.

         (a)  Excepting  only minor  alterations  prior to July 1, 2003,  Tenant
shall not make any  alterations,  additions,  or  improvements  to the Premises,
interior or  exterior,  without the prior  written  consent of  Landlord,  which
consent shall not be unreasonably withheld or delayed.

         (b) All partitions,  partitioned  walls,  alterations,  additions,  and
other  improvements  erected or made by Tenant and  installed  in the  Premises,
(except movable office furniture,  personal property and warehouse inventory not
attached  to the  Improvements  and  belonging  to Tenant),  including,  but not
limited to, wall covering,  paneling and built-in  cabinet work, shall be deemed
to be a part of the real estate and shall  remain upon and be  surrendered  with
the Premises upon the Expiration Date, or the earlier termination of this Lease,
provided,  however,  that if Landlord  shall so request,  Tenant  shall  remove,
within  fifteen  (15) days of  Landlord's  demand for same and at Tenant's  sole
expense,  any or all of such leasehold  improvements  erected or made by Tenant,
and Tenant shall immediately  repair damage of any kind or character  occasioned
by the removal of any such  fixtures,  equipment or  improvements.  Tenant shall
leave the Premises in a good, clean,  sanitary and tenantable condition with all
systems and Improvements in working order.

         (c) All  improvements  erected or made by Tenant and  installed  in the
Premises, and all repairs and replacements thereof or of the Improvements, shall
be performed by contractors or subcontractors  licensed in the State of Florida,
insured in accordance with the standards  applicable to the Tenant, as described
in Section  16, and, if the cost of such work shall  exceed  $15,000.00  for any
such  improvement,  repair or  replacement,  approved  in advance by Landlord in
writing. All such improvements, repairs and replacements shall be constructed at
the sole  expense  of Tenant,  except as may  otherwise  be herein  specifically
provided,  and Tenant shall  promptly  pay all  contractors  and  subcontractors
performing  such work or  furnishing  material  therefor  for such work.  Tenant
agrees to indemnify and hold harmless Landlord from all expenses,  liens, claims
and  damages  whether to persons or  property,  arising in any manner  from such
work.  If any  liens  shall be  filed  by  virtue  of the  construction  of such
improvements,  Tenant shall cause same to be  discharged  to record,  by bond or

                                       7
<PAGE>

otherwise,  within fifteen (15) days after recording thereof.  In the event that
Tenant  fails to satisfy or transfer any such claim within said fifteen (15) day
period or to  properly  complete  any  improvements,  repairs  or  replacements,
Landlord may do so and thereafter  charge Tenant  therefor,  as Additional Rent,
all costs incurred by Landlord in connection  with the  satisfaction or transfer
of said claim,  including,  without limitation,  reasonable  attorneys' fees and
costs.

         SECTION 9. QUIET ENJOYMENT.  Landlord hereby covenants with Tenant that
upon the performance by Tenant of the covenants set forth in this Lease,  Tenant
may  quietly  hold and occupy  the  Premises  for the Lease  Term,  without  any
interruption by Landlord or by persons claiming through or under Landlord.

         SECTION 10. ENTRY BY LANDLORD.  Upon reasonable  advance written notice
to Tenant,  Landlord reserves the right,  during  reasonable  business hours, to
enter the Premises to inspect the same;  to exercise any rights of Landlord;  to
perform  any  obligations  of Tenant  under this  Lease if Tenant  shall fail to
timely do or have done same  following any required  notice to Tenant under this
Lease;  to show the Premises to prospective  purchasers and, during the last one
hundred eighty (180) days of the term of this Lease, to prospective tenants, and
to conduct any inspections and tests related thereto;  and to alter,  improve or
repair the  Premises or any part thereof upon any failure of Tenant to timely do
so. No entry by Landlord  shall cause any abatement of Rent. In the event of any
alteration,  improvement or repair by Landlord,  Landlord may erect  scaffolding
and other  structures  reasonably  required by the  character  of the work to be
performed.  Any work of Landlord  that is the  Tenant's  obligation  shall be at
Tenant's sole cost and expense, and shall constitute Additional Rent that is due
from Tenant to Landlord within ten (10) days of Landlord's  demand for same from
Tenant.

         Except  to  the  extent  caused  by the  gross  negligence  or  willful
misconduct of Landlord,  its members,  employees or agents, Tenant hereby waives
any claim for damages for any injury or  inconvenience  to or interference  with
Tenant's  business or any loss of occupancy  or quiet  enjoyment of the Premises
based on Landlord's  actions as provided  herein,  or any other loss  occasioned
thereby.

         Notwithstanding  the  foregoing,  Landlord  shall  have the right in an
emergency  to use any and all means  which  Landlord  may deem  proper to obtain
entry to the  Premises  without  liability  to Tenant  except for any failure to
exercise  reasonable  care for  Tenant's  property.  Any entry into the Premises
obtained by Landlord by any of said  means,  or  otherwise,  shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into, or
detainer  of, the  Premises,  or an eviction of Tenant from the  Premises or any
portion  thereof.  Tenant shall not change or add any locks to the front door of

                                       8
<PAGE>

the Premises  without in each such  instance  supplying a copy of any new key to
Landlord simultaneously with such installation.

         SECTION 11.  SERVICES.

         (a) Landlord has furnished the Premises with electricity,  plumbing and
mechanical  systems suitable for their intended use and as permitted pursuant to
Section 7 above, and Tenant shall maintain and keep lighted the stairs, entries,
exits and restroom  facilities  in the  Improvements  and all parking  areas and
walks on the Premises.  Except to the extent  caused by the gross  negligence or
willful misconduct of Landlord,  its members,  employees or agents, Tenant shall
be liable for any injury to any person  while on the Premises and for loss of or
damage to any property,  however  occurring,  through or in  connection  with or
incidental  to the failure to perform any of the  foregoing or to otherwise  not
maintain at all times the Premises in a safe and sanitary manner during the term
of this Lease.  Whenever heat  generating  machines or equipment are used in the
Premises which affect the temperature  otherwise  maintained by the existing air
conditioning  systems,  Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof,  including acquisition,
installation,  operation  and  maintenance  costs,  shall be paid by  Tenant  to
Landlord  within ten (10) days of  Landlord's  demand  therefore,  as Additional
Rent.

         (b) Tenant will not use any  apparatus or device on the Premises  which
will in any way increase the amount of electricity usually furnished or supplied
for the use of the Premises as general  office and  warehouse  space,  nor shall
Tenant  connect with  electrical  current,  except through  existing  electrical
outlets in that  Premises,  any  apparatus  or device  for the  purpose of using
electric current. If Tenant shall require water or electric current in excess of
that  presently  furnished  or supplied  for the use of the  Premises as general
office and warehouse  space,  then Tenant shall first obtain the written consent
of Landlord, which consent shall not be unreasonably withheld or delayed.

         (c)  Except to the  extent  caused by the gross  negligence  or willful
misconduct of Landlord, its members,  employees or agents, Landlord shall not be
liable for any loss or damages on account  of any  disruption  of  heating,  air
conditioning,  elevator, electrical or water services, utilities or any of them,
and no such  disruption  shall cause an  abatement of Rent or operate to release
Tenant from any of its obligations under this Lease.

         SECTION  12.  PARKING.  Tenant  is  hereby  given  the right to use all
parking spaces on the Premises, provided that Tenant shall, at its sole cost and
expense,  comply  with all  rules  and  regulations  promulgated  by the City of
Sunrise or Landlord with respect to the use and maintenance thereof.

                                       9
<PAGE>

         SECTION 13.  REPAIRS AND REPLACEMENTS.

         (a) Throughout the term of this Lease,  Tenant shall,  at its sole cost
and  expense,  maintain the  Premises in a good state of repair,  including  all
plumbing,  electrical,  air conditioning,  fire alarm,  fire sprinkler,  burglar
alarm, fire sprinkler,  and irrigation  systems,  and all structural portions of
the  Improvements.  Tenant  shall  repair  or  replace  such  items  as shall be
reasonably  required from time to time during the term of this Lease to maintain
at all times the Premises,  including all additions thereto constructed by or on
behalf of Tenant,  in working  order.  Except to the extent  caused by the gross
negligence or willful misconduct of Landlord, its members,  employees or agents,
there shall be no  abatement of Rent and no liability to Tenant by reason of any
injury to or interference  with Tenant's business arising from the making of any
repairs,  alterations,  replacements or improvements in or to any portion of the
Premises,  or  in or to  the  fixtures,  appurtenances  and  equipment  thereof,
regardless of the cause for the need of any such repair, alteration, replacement
or improvement.

         (b)  Throughout  the Lease Term,  Tenant shall at its sole costs,  also
maintain in good order,  condition and repair all nonstructural  portions of the
Premises,  including,  without limitation, the exterior and interior portions of
all doors and door  hardware,  all windows and window  hardware,  all  fixtures,
electrical  equipment,  interior walls, floors, floor coverings and ceilings and
all other  property  furnished by Landlord to Tenant and comprising a portion of
the Premises.  Tenant shall,  upon the expiration or earlier  termination of the
Lease Term, quietly and peaceably  surrender the Premises to Landlord in working
condition.

         (c) By entering into this Lease,  Tenant  acknowledges  it has accepted
the Premises in "as is"  condition  and as being in working  condition,  without
relying on any representations, covenants or warranties of Landlord.

          SECTION 14. FORCE  MAJEURE.  The term "force  majeure" as used in this
Lease  shall  include  acts of  God,  strikes,  lockouts,  or  other  industrial
disturbances,  acts of  public  enemy,  wars,  blockades,  riots,  acts of armed
forces,  epidemics,  delays by carriers,  inability to obtain  materials,  after
reasonable effort to obtain said materials, acts of public authorities,  and any
other  causes,  whether or not  enumerated  in this Section 14, which causes are
beyond the  reasonable  control of the  parties.  Force  majeure will excuse the
timely  performance of any obligation  that is delayed  thereby to the extent of
the time delay  occasioned  by such event.  However,  no condition  constituting
force majeure  shall  operate to excuse  Tenant from prompt  payment of all Rent
required  to be paid  hereunder  and  Landlord  from  complying  with all of its
covenants under this Lease.

                                       10
<PAGE>

         SECTION 15. RULES AND  REGULATIONS.  Upon any promulgation by Landlord,
the rules and  regulations  for the use and  operation of the Premises  shall be
supplied in writing  from  Landlord to Tenant from time to time.  Any failure by
Tenant  to  thereafter  comply  with  such  rules  and  regulations  within  any
applicable cure periods shall be an Event of Default under this Lease.  Provided
reasonable  advance  written notice is given to Tenant,  Landlord shall have the
right to modify  the rules and  regulations  and to make  reasonable  additional
rules and  regulations for the Premises from time to time.  Tenant  covenants to
notify Landlord of any unreasonably  dangerous conditions observed to exist from
time  to  time  on any  portion  of the  Premises,  to  immediately  remove  its
employees,  agents and invitees from the area of the unreasonable danger, and to
take action as soon as reasonably possible to correct any dangerous condition.

         SECTION 16.  LIABILITY, INDEMNITY AND INSURANCE.

                                       11

<PAGE>

         (a)  Except to the  extent  caused by the gross  negligence  or willful
misconduct  of Landlord,  its members,  employees  or agents,  Tenant  agrees to
indemnify  and save  Landlord  harmless from any and all claims or liability for
any injury or damage to person or property arising,  in whole or in part, out of
the acts or  omissions  of  Tenant  or  Tenant's  officers,  employees,  agents,
invitees or subtenants (if any),  on, in, or about the Premises,  out of the use
of the  Premises  for the conduct of business  or out of any  activity,  work or
other thing done,  permitted or suffered by Tenant in or about the Premises,  or
out of any breach or default in the  performance  of any  obligation on Tenant's
part to be  performed  under the terms of the Lease;  Tenant  further  agrees to
indemnify and save Landlord  harmless  from any and all cost,  attorney's  fees,
expenses and liabilities  incurred in or about any such claim or any such action
or proceeding brought thereon. If any such action or proceeding shall be brought
against Landlord by reason of any such claim,  Tenant,  upon notice of Landlord,
shall  defend  the  same at  Tenant's  sole  expense,  with  counsel  reasonably
satisfactory to Landlord. Except to the extent caused by the gross negligence or
willful misconduct of Landlord, its members,  employees or agents, Tenant hereby
releases Landlord from any and all claims and damages arising from any defect in
the  condition  of the Premises or any part  thereof,  including  any  equipment
installed thereon, whether same shall belong to Landlord or otherwise.  Landlord
shall not be liable for, and Tenant hereby, for itself,  its agents,  employees,
invitees and subtenants, releases, discharges, covenants not to sue, and acquits
Landlord  from any and all  claims  for loss,  damage  or  injury of any  nature
whatsoever  to person or  property,  resulting in any way from or in any fashion
arising  from,  in connection  with or resulting  from  occupancy and use of the
Premises,  including,  without limitation, any such loss, damage or injury which
arises out of theft, fire, explosion, steam, plumbing,  mechanical or electrical
malfunction, the negligent acts or omissions of Landlord or any other person, or
by reason of the  breakage,  leakage  or  obstruction  of water,  sewer or other
pipes,  flooding or other water damage. Except to the extent caused by the gross
negligence or willful misconduct of Landlord, its members,  employees or agents,
Landlord shall not, under any  circumstances,  be liable for loss of business by
or other  consequential  damages  to Tenant,  nor for any  latent  defect in the
Premises or any portion thereof.  Tenant shall give prompt notice to Landlord in
the event of fire or accident in the  Premises  or any  portion  thereof,  or of
defects therein or in the fixtures or equipment located thereon,  and shall take
action as soon as reasonably  possible to correct and repair same.  The terms of
this Section shall survive the Term of this Lease.  The Rent due hereunder shall
not be  diminished  or  withheld  by reason or on account of any loss or damages
described above in this subsection(a).

         (b)  Throughout  the Term of this Lease,  Tenant,  at its sole cost and
expense, and for the mutual benefit of Landlord and Tenant, shall procure, carry
and maintain (i) general  public  liability  insurance  for personal  injury and

                                       12
<PAGE>

property damage to protect both Landlord and Tenant against damage,  costs,  and
attorneys'  fees arising out of accidents of any kind  occurring on or about the
Premises,  or otherwise arising out of the use,  occupancy or maintenance of the
Premises,  (ii)  windstorm  and fire  insurance in amounts  sufficient  to cover
Tenant's  obligation  to repair and  replace any damage to the  Premises,  (iii)
general  casualty  insurance with extended  coverage  endorsement  (including an
endorsement  against  vandalism  and  malicious  mischief),  to  cover  the full
replacement  value  (presently  estimated  at  $9,000,000.00)  of all  real  and
personal  property  within the  Premises,  (iv) flood  insurance  at the maximum
amount insurable under the National Flood Program, and (v) business interruption
insurance to cover  Tenant's  losses from any shutdown of the Premises  from any
cause.  Said insurance shall be written by a company or companies  acceptable to
Landlord,  and rated A or better in Best's  Insurance  Guide,  and the liability
insurance  shall have liability  limits of not less than  $1,000,000.00  for the
injury or death of one  person,  $3,000,000.00  for the  injury or death of more
than one person, and $1,000,000.00 for property damage or else a combined single
limit  liability  coverage  in the  amount of not less than  $3,000,000.00.  The
limits of said insurance stated above shall not, however, limit the liability of
Tenant  hereunder.  Tenant  may carry said  insurance  under  blanket  policies,
provided,  however,  said insurance shall have a Landlord's protective liability
endorsement  attached thereto.  If Tenant shall fail to procure and maintain any
such insurance,  Landlord may, but shall not be required to procure and maintain
same, at the sole expense of Tenant.  Except as Landlord and Tenant may agree to
prorate and retain the existing insurance of Landlord, prior to the commencement
of the Lease Term,  and annually (or prior to expiration if sooner)  thereafter,
Tenant shall in advance  furnish  certificates  of  insurance to Landlord  which
certificates  shall clearly indicate:  (i) that Tenant has obtained insurance in
the type,  amount and  classifications  required for strict compliance with this
section; (ii) that any material change or cancellation of the insurance coverage
shall not be  effective  without  thirty  (30)  days'  prior  written  notice to
Landlord;  and (iii)  that  Landlord  is named as an  additional  insured in all
liability  insurance and as loss payee in all fire,  windstorm flood and general
casualty insurance.  Landlord reserves the right to reasonably require Tenant to
provide  such  amended  or  additional  insurance  coverage  or  such  increased
liability  limits as Landlord  reasonably  deems  necessary or  desirable,  upon
issuance of notice in writing to Tenant,  which notice shall automatically amend
this Lease, effective thirty (30) days following such notice.

         (c) Tenant acknowledges that Tenant is also required hereunder to carry
fire and  casualty  insurance  with  extended  coverage  endorsement  (including
against  vandalism and  malicious  mischief) to cover  contents  situated in the
Premises.

         SECTION 17.  LIENS.

                                       13
<PAGE>

         (a)   Neither   Tenant   nor  any  of   Tenant's   agents,   employees,
representatives,  contractors  or  subcontractors  shall have any  authority  to
create  any liens for  labor or  material  against  Landlord's  interest  in the
Premises.  Landlord shall have no responsibility to Tenant or to any contractor,
subcontractor,  supplier,  materialman,  vendor, laborer, workman or other firm,
person  or  corporation  who or which  shall  engage  in or  participate  in any
alterations,  unless  Landlord  shall  expressly  undertake  such agreement in a
writing signed by Landlord made between Landlord and Tenant, or between Landlord
and such contractor,  subcontractor,  supplier,  materialman,  vendor,  laborer,
workman  or  other  person,  firm  or  corporation.  Landlord  may  require,  at
Landlord's sole option,  that Tenant provide to Landlord,  at Tenant's sole cost
and expense,  a lien and completion  bond in an amount equal to one and one half
(1 1/2) times the estimated costs of any improvements,  additions or alterations
to the  Premises  that are to be  constructed  by Tenant or for which  Tenant is
responsible under this Lease.

         (b) All materialmen, contractors,  subcontractors,  mechanics, workmen,
materialman,  vendors and laborers are hereby charged with notice that they must
look to Tenant and to Tenant's  interests  (as a Tenant only) in the Premises to
secure the  payment of any bill for work done or material  furnished  during the
term of this Lease.  Landlord  shall not be liable for nor shall the Premises be
subject to, any  mechanics,  materialmen or other type of lien, and Tenant shall
keep the Premises free from any such liens and shall indemnify, Landlord against
and shall cause to be fully  discharged and released within ten (10) days of any
such liens. Tenant further agrees to pay all liens of materialmen,  contractors,
mechanics,  laborers and other items of the like  character  and will  indemnify
Landlord  against all legal costs and charges and bond  premiums  for release of
liens,  including  counsel fees reasonably  incurred in and about the defense of
any  suit  discharging  the  Premises  or any  part  thereof,  from  any  liens,
judgments,  or encumbrances caused or suffered by Tenant, or from any failure of
Tenant to properly  complete all work required or undertaken  hereunder.  Tenant
covenants that it shall notify in writing all persons  contracting  with Tenant,
as aforesaid, of the provisions of this Section.

         SECTION 18.  DAMAGE BY FIRE OR OTHER CAUSES.

         (a) In the event any  portion of the  Premises is damaged by fire or by
other peril,  or by any other cause  whatsoever,  Tenant agrees to forthwith and
with  diligence  repair or replace  the same as  appropriate  in the  reasonable
discretion of Landlord; and this Lease shall remain in full force and effect and
Tenant  shall not be entitled to any  reduction  or  abatement of the Rent while
such repairs or replacements are being made.

         (b) Under no  circumstances  shall  Landlord  be required to repair any
injury or damage by fire or other cause or to make any repair or replacements of

                                       14
<PAGE>

the Premises.  However,  to the extent of any insurance  proceeds  available for
such repairs and  replacements  that are in fact received by Landlord,  Landlord
agrees to  reimburse  Tenant for amounts  expended by Tenant for such repairs or
replacements  upon delivery by Tenant to Landlord of invoices with paid receipts
and lien  waivers,  and any other  documentation  that  Landlord may  reasonably
require,  including proof that, based on the amounts already expended by Tenant,
the insurance  proceeds received by Landlord are sufficient to properly complete
the said repairs or replacements.

         SECTION 19.  EMINENT DOMAIN.

         (a) If  any  portion  of the  Property  is  taken  for  any  public  or
quasi-public  use by condemnation or by right of eminent domain,  or purchase in
avoidance or settlement of condemnation or eminent domain  proceeding,  Landlord
and Tenant agree as follows:

                  (1) If all of the Premises  are subject to such  taking,  then
this Lease shall be canceled as of the date of the taking.

                  (2) If more than twenty-five percent (25%) of the Improvements
is subject to such taking,  either  Landlord or Tenant may terminate this Lease,
by written  notice to the  other,  to be given no later  than  ninety  (90) days
following  delivery to Tenant by Landlord of final notice of such  taking,  such
termination  to be  effective  as of the  date  of  the  taking.  If  the  Lease
continues,  the Rent shall be abated  proportionately  for the percentage of the
Improvements  so taken and Tenant  shall make all repairs  required to place the
remaining Improvements in good condition and working order.

                  (3) If any  portion  of the  Property  is subject to a taking,
notwithstanding  whether such taking shall affect the Improvements,  Landlord in
any such case shall have the option to terminate  this Lease,  by written notice
to Tenant,  to be given no later than  thirty  (30) days  following  delivery to
Tenant by  Landlord  of final  notice of such  taking,  such  termination  to be
effective as of the date of the taking.

                  (4) Landlord shall be entitled to any and all awards which may
be paid or made in  connection  with such taking,  and Tenant  hereby waives any
right it may have to such awards and agrees to execute such  instruments  as may
be requested by Landlord to effectuate such waiver. However, in the event of any
partial  taking where this Lease shall  continue,  Landlord shall pay Tenant the
reasonably expended amount of the award received by Landlord as compensation for
required  repairs of the  Improvements  upon  Tenant's  completion  of same in a
proper and lien free  manner.  In no event  shall  Tenant have or make any claim
against Landlord for the value of the unexpired term of this Lease.

                                       15
<PAGE>

         SECTION  20.   SUBORDINATION.   This  Lease  shall   automatically   be
subordinate to any mortgage  presently existing or hereafter made by Landlord on
the Property, and to any renewal, modification, extension, or replacement of, or
future advance under,  any such mortgage.  Tenant  covenants to execute,  within
fifteen (15) days following any request to do so any agreement  requested by the
holder of any  mortgage  to  evidence  the  agreements  of this  Section.  It is
understood  and agreed that any mortgagee  shall not be liable to Tenant for any
funds  paid  by  Tenant  to  Landlord  unless  such  funds  actually  have  been
transferred to such mortgagee by Landlord.

         SECTION  21.  ASSIGNMENT  AND  SUBLETTING.  Tenant  shall  not,  either
voluntarily  or  by  operation  of  law,  assign,  transfer,  mortgage,  pledge,
hypothecate  or encumber  this Lease or any  interest  herein  without the prior
written  consent  of  Landlord,  which  consent  may be  withheld  at  the  sole
discretion of Landlord.  However, subject to the increase in Base Rent if all or
any portion of the Premises are sublet between  January 1, 2006 and December 31,
2008,  Tenant  shall  have the right  without  Landlord's  consent to sublet the
Premises or any part thereof, or any right or privilege appurtenant thereto, but
Tenant  shall  continue to be liable to Landlord for the  performance  of all of
Tenant's  obligations  under this Lease and any  subtenant  must comply with the
requirements  hereunder  respecting  the  use  and  operation  of the  Premises,
including all Laws and any rules and  regulations  promulgated  by Landlord from
time to time. Landlord's consent to any assignment,  transfer, mortgage, pledge,
hypothecation  or encumbrance of this Lease or any interest  herein shall not be
deemed to be a consent to any subsequent assignment, transfer, mortgage, pledge,
hypothecation or encumbrance.  If Landlord shall consent to any assignment,  the
assignee  shall  assume  all  obligations  of Tenant  hereunder  pursuant  to an
agreement  satisfactory  to  Landlord,  but Tenant  shall not be relieved of any
liability  hereunder.  In the  event  of any  default  by  the  assignee  in the
performance  of any of the terms hereof,  no notice of such default or demand of
any kind need be served on Tenant to hold it liable to Landlord.  If Tenant is a
corporation,  any transfer,  sale,  pledge or other disposition of a majority of
the capital  stock of Tenant or any change in the power to vote the  majority of
the outstanding capital stock of Tenant,  shall be deemed to be an assignment of
this  Lease.  Any  assignment  of the Lease by Tenant  without  the  consent  of
Landlord shall be, at the option of Landlord,  null and void, and shall,  at the
option of Landlord, constitute an Event of Default under this Lease.

         SECTION 22.    RIGHT OF FIRST REFUSAL.      If at any time
during the term of this Lease,  Landlord shall receive a bona fide written offer
to purchase the Premises on terms and  conditions  acceptable to Landlord,  then
Landlord  shall  send  Tenant a copy of the  offer  (except  for the name of the
buyer) and give Tenant notice of Landlord's  intention to accept the offer. Upon
receipt of the offer,  Tenant  shall have  thirty (30) days to agree to purchase

                                       16
<PAGE>

the Premises on the same terms as set forth in the offer, in which case Landlord
and Tenant shall execute and deliver a purchase  agreement  containing  the same
terms and  conditions  as the prior  offer  except  that the  contract  shall be
assignable by Tenant upon waiver or satisfaction  of any financing  contingency,
and the closing  shall occur within sixty (60) days  following  execution of the
contract.

         SECTION 23.  DEFAULT AND REMEDIES OF LANDLORD.  Upon the  occurrence of
any of the following events ("Events of Default"):

         (a) Tenant's failure to pay any Base Rent due hereunder for a period of
ten (10)  days  after  the due date  thereof,  or  Tenant's  failure  to pay any
Additional  Rent or other sum due  hereunder for a period of ten (10) days after
the due date thereof;

         (b) Tenant's  failure to cure any breach of any other  covenant of this
Lease within a period of ten (10) days after  delivery of written notice of such
breach by Landlord,  provided,  however, that if such breach reasonably requires
more than ten (10) days to cure,  then  there  shall be no Event of  Default  if
Tenant promptly  commences  corrective action within the ten (10) day period and
diligently  prosecutes same to completion within thirty (30) days following such
notice;

         (c)  The  making  by  Tenant  of  any  general  assignment  or  general
arrangement for the benefit of creditors;  or the filing by or against Tenant of
a petition to have Tenant adjudged bankrupt,  or a petition or reorganization or
arrangement  under any law  relating  to  bankruptcy,  unless,  in the case of a
petition filed against Tenant, the same is dismissed within thirty (30) days; or
the  appointment  of a  trustee  or a  receiver  to  take  possession  of all or
substantially  all of  Tenant's  assets  located at the  Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days,  or the  attachment,  execution or other  judicial  seizure of all or
substantially  all of  Tenant's  assets  located at the  Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30)  days,  or  the  attachment,   execution  or  other  judicial   seizure  of
substantially  all of  Tenant's  assets  located at the  Premises or of Tenant's
interest in this Lease,  where such seizure is not discharged within thirty (30)
days; or

         (d) Tenant's vacating or abandoning the Premises;

Landlord,  at its option,  shall have the right upon any third (3rd)  failure of
Tenant  within any twelve (12) month  period to timely and properly pay any Rent
due  hereunder  within any  applicable  grace  period,  or upon any second (2nd)
failure of Tenant  within any twelve (12) month period to fulfill each and every
of its other obligations under this Lease within any applicable grace period, to
exercise any one or more of the following  remedies,  with or without  notice or
demand, and without limiting Landlord in the exercise of a right or remedy which

                                       17
<PAGE>

Landlord  may have by  reason of such  Event of  Default,  and in such  order as
Landlord shall elect:

                  (1)  Advance  such  monies,  and take such other  action,  for
Tenant's  account as reasonably may be required to cure or mitigate any Event of
Default.  Any such  advance,  and any cost or  expense so  incurred,  shall bear
interest as provided in this Lease.

                  (2)  Terminate  Tenant's  right to possession of the Premises,
without  terminating  this  Lease or  Tenant's  liability  under  this Lease and
re-enter the Premises by lawful  procedure  for  Tenant's  account.  If Landlord
elects such re-entry,  Landlord will attempt in good faith to relet the Premises
for Tenant's account,  for such rent and upon such other terms and conditions as
Landlord  considers  appropriate  to  reduce  Tenant's  liability  and  minimize
Landlord's damage.  Landlord shall be entitled to make installations,  removals,
maintenance, redecorating, renovations, and restoration to the Premises for such
purpose.  None of the  foregoing  actions  shall be deemed to waive,  limit,  or
otherwise  impair any other right or remedy of Landlord,  unless Landlord elects
to terminate  this Lease in writing.  Tenant  instead will remain liable for any
Rent,  interest,  Actual Damages, and any difference between (i) the proceeds of
any  reletting,  and (ii) the amounts  Landlord  would have  received had Tenant
fully  performed  Tenant's  obligations  under this Lease through the Expiration
Date.  At any time during  such  re-entry or  reletting,  Landlord  may elect to
terminate this Lease by written notice, as provided in the following subsection.
Tenant has no claim to, and  Landlord is not  obligated to account to Tenant for
any surplus  proceeds  that may result from any  reletting.  Any proceeds of any
reletting shall reduce  Tenant's  liability only if, as, when, and to the extent
actually received by Landlord.  No notice to, or approval by, Tenant is required
for any action pursuant to this subsection, nor is Landlord obligated to account
to Tenant for any such action that is undertaken in good faith.

                  (3)  Terminate  this  Lease and  re-enter  and  repossess  the
Premises by lawful procedure and for Landlord's account.  The term and estate of
this Lease, together with any other right, title, or interest of Tenant in or to
the Premises,  and the proceeds of any reletting  then will  terminate.  No such
termination  shall be deemed to waive,  limit or  otherwise  impair any right or
remedy to collect from Tenant any Rent,  interest,  and Actual  Damages that are
accrued and unpaid at the  termination,  nor any Liquidated  Damages that may be
payable.

                  (4) Collect,  as "Liquidated  Damages" for the  termination of
this Lease, an amount equivalent to the difference  between (i) the total unpaid
Base Rent, and reasonably  determinable  Additional Rent, for the period between
the  termination of this Lease and the Expiration  Date and (ii) the fair rental
value of the Premises at termination for the same period.  The foregoing amounts
will be discounted to present worth at the annual rate of 6%.

                                       18
<PAGE>

                  (5)  Recover,  as  "Actual  Damages,"  any costs and  expenses
properly  incurred by Landlord in  terminating  this Lease or Tenant's  right to
possession,  as the case may be,  including  any leasing  commissions  remaining
payable in  connection  with this  Lease,  the  prorated  balance of any prepaid
leasing   commissions  with  respect  to  this  Lease,  and  other  professional
compensation,  costs,  and expenses,  as provided  below in this Lease.  Because
Landlord  agrees  to  minimize  Landlord's  damage  unless  Landlord  elects  to
terminate  this Lease,  such items,  together  with any other costs and expenses
actually  incurred by Landlord for repossessing  the Premises,  terminating this
Lease, and renovating,  redecorating,  protecting,  maintaining,  restoring, and
reletting the Premises, as the case may be, are damages, due on demand, and bear
interest as provided in this Lease.

                  (6)  Apply  any  Security  Deposit,  and  any  other  property
securing  Tenant's  obligations  under this Lease, to Landlord's  losses in such
order as Landlord elects. Landlord must account for such application only as and
when the  full  extent  of  Landlord's  damage  is  known,  or the  security  is
exhausted, whichever occurs first.

                  (7) Enforce in any lawful  manner the benefit of a  landlord's
lien upon, or a security interest in, any fixtures,  equipment,  inventory,  and
other tangible property of Tenant then situated upon or about the Premises.  The
foregoing  lien and  security  interests  are  subject  and  subordinate  to any
purchase  money  security  interest  properly  perfected in such  property at or
before its delivery or installation to the Premises; but Landlord has no duty to
the holder of any such prior security interest,  except to permit such holder to
remove such property from the Premises  within 15 days after written  demand and
upon payment of the costs of any  restoration  of the Property  required by such
removal.   This  subsection  does  not  apply  to  any  of  Tenant's   leasehold
improvements  or other  property that expressly may become  Landlord's  property
upon the expiration or earlier termination of this Lease, if Landlord so elects.

                  (8)  Exercise  any and all other  rights and  privileges  that
Landlord  may have  under the laws of the State of  Florida  and/or  the  United
States of America.

Landlord  shall  have the  right to  exercise  any one or more of the  preceding
remedies;  the  exercise  of one shall not  preclude  the  exercise of any other
remedy or all of such remedies.  Landlord and Tenant hereby acknowledge that the
purpose of Chapter  51,  Florida  Statutes,  is to afford the  Landlord a speedy
adjudication of its right to possession as to a delinquent tenant.  Jurisdiction
for any  possession  proceeding is vested by Florida Law in the County Courts of
Florida.

                                       19
<PAGE>

         SECTION 24. TRANSFER OF LANDLORD'S INTEREST.  If the interest or estate
of  Landlord in the  Property  shall be  transferred  by sale,  lease,  or other
voluntary transfer of the Property,  then, and in any such event, the transferee
of  Landlord's  interest  shall assume this Lease  whereupon  Landlord  shall be
released and relieved of all  liability  for  obligations,  both  expressed  and
implied,  to be performed  by Landlord  under this Lease,  and  Landlord  shall,
simultaneously  with  such  transfer,  convey  the  Security  Deposit,  if  any,
hereunder to the transferee of the Property.  Tenant shall,  in the event of the
sale, lease, or other voluntary transfer of Landlord's interest in the Property,
or in the event of any  proceedings  brought for the foreclosure of any mortgage
made by Landlord  covering the  Property,  attorn to the purchaser and recognize
the purchaser as "Landlord" under this Lease. Within ten (10) days of receipt of
written request by Landlord, Tenant shall execute and deliver to such persons as
Landlord shall request,  an instrument prepared by Landlord to evidence Tenant's
attornment to such purchaser,  as provided herein. If Tenant shall fail to do so
within the time required, Tenant shall be in breach hereof.

         SECTION  25.  WAIVER.  Waiver  by  Landlord  of any term,  covenant  or
condition  herein  contained shall be in writing and shall not be deemed to be a
waiver of such term,  covenant or condition on any subsequent breach of the same
or any other term,  covenant  or  condition  herein  contained.  The  subsequent
acceptance of Rent  hereunder by Landlord  shall not be deemed to be a waiver of
any preceding breach by Tenant of any term, covenant or condition of this Lease,
other  than the  failure  of  Tenant  to pay the  particular  Rent so  accepted,
regardless of Landlord's  acknowledgment of such proceeding,  breach of the time
of the acceptance of such installment of Rent.

         SECTION 26. NOTICES.  Any notice required or permitted under this Lease
shall be in writing, addressed to Landlord at the address hereinabove set forth,
or to Tenant at the address of the Premises,  or to such other address as either
party shall have given the other party written  notice of, shall be by Certified
Mail, return receipt  requested,  and shall be deemed given upon receipt or upon
three (3) business days after mailing, whichever is first.

         SECTION 27.  ATTORNEYS'  FEES. If a party to this Lease fails to comply
with and abide by any of the covenants,  terms and conditions of this Lease, and
the other party files suit to enforce the  performance  of any of the covenants,
terms and  conditions  hereof,  the  prevailing  party in any such suit shall be
awarded all of its costs,  charges and expenses,  including  reasonable attorney
fees (including  paralegals' fees),  whether incurred before trial, at trial, or
in appellate proceedings, and in any administrative or bankruptcy proceedings.

                                       20
<PAGE>

         SECTION  28.  SEVERABILITY.  If under  present or future laws in effect
during  the Lease  Term,  any  clause or  provision  of this Lease is invalid or
unenforceable,  it is the intent of the parties that the remaining provisions of
this Lease shall not be affected thereby.

         SECTION 29.  CAPTIONS  AND USE OF CERTAIN  TERMS.  The  captions of the
Sections of this Lease are added as a matter of  convenience  only and shall not
be considered in construing  any provision of this Lease.  The words  "Landlord"
and  "Tenant"  and the words "It" or "Its" used with  reference  to Landlord and
Tenant,  shall  apply to  individuals  (male or  female),  partnerships,  firms,
associations,  limited  liability  companies,  and  corporations,  whichever  is
appropriate.

         SECTION 30. AMENDMENT OR MODIFICATION.  Tenant  acknowledges and agrees
that it has not relied upon any statement,  representation, or agreement made by
Landlord or any of its agents or representatives except as are expressed in this
Lease and that no amendment,  modification,  or extension of this Lease shall be
valid or binding unless  expressed in writing and executed by the parties hereto
in the same manner as the execution of this Lease.

         SECTION 31. SUCCESSORS. All terms, covenants, and conditions to be kept
and  performed  by the parties  hereto shall be  applicable  to and binding upon
their respective heirs, personal representatives, successors, and assigns.

         SECTION  32.  HOLDOVER.  If  Tenant  or  any of  its  subtenants  holds
possession  of  the  Premises  after  the  termination  of  this  Lease  without
Landlord's  written  consent,  then Tenant shall  become a tenant at  sufferance
liable to Landlord  for an amount equal to double the amount of Rent payable for
the month immediately  preceding the termination of the Lease, for such holdover
period,  and Landlord  shall have all rights and remedies  afforded to landlords
under Florida law against holdover tenants. The provisions of this Section shall
not affect Landlord's right of re-entry or any other right or remedy of Landlord
hereunder, at law or in equity.

         SECTION 33. SIGNS. No sign, placard,  picture,  advertisement,  name or
notice shall be inscribed,  displayed or printed or affixed on or to any part of
the outside of the Improvements,  or which is visible from outside the Premises,
without  the prior  written  consent of  Landlord,  which  consent  shall not be
unreasonably  denied or delayed.  Provided  written  advance  notice is given to
Tenant, Landlord shall have the right to remove any such sign, placard, picture,
advertisement, name or notice in violation hereof at the expense of Tenant.

         SECTION 34.  REAL ESTATE  AGENT.  Each of the  parties  represents  and
warrants that no real estate agent or broker was involved in the  negotiation or

                                       21
<PAGE>

consummation  of this Lease.  Landlord shall hold Tenant  harmless from all fees
and  commissions  claimed by any broker  arising from the  consummation  of this
Lease,  excepting  any broker  claiming by or through  Tenant,  for which claims
Tenant shall hold Landlord harmless. The indemnifications contained herein shall
include court costs,  reasonable out of pocket costs and attorneys'  fees at the
trial and appellate levels.

         SECTION 35. EXCULPATION.  Tenant shall look solely and exclusively look
to the estate and property of the Landlord in the Property for collection of any
judgment requiring the payment of money by Landlord to Tenant.

         SECTION  36.  TIME.  Time  is of the  essence  of  this  Lease  and its
provisions.

         SECTION 37. RECORDING. This Lease may not be recorded without the prior
written  consent of the  Landlord,  which may be evidenced  solely by a separate
written consent to recording.  Upon request of Landlord, Tenant shall enter into
a "short-form" or memorandum of this Lease. Said document shall be in recordable
form and shall  describe the  parties,  Premises,  and terms of this Lease,  and
shall incorporate this Lease by reference.

         SECTION  38.  TENANT'S  STATEMENT.  Within ten (10) days after  request
therefor by Landlord,  Tenant agrees to deliver an  acknowledged  certificate to
any proposed mortgagee or purchaser, or to Landlord,  certifying (if such be the
case)  that  this  Lease is in full  force  and  effect  (or if there  have been
modifications,  that this  Lease is in full  force and  effect as  modified  and
stating the  modification);  that there are no  defenses or offsets  thereto (or
stating those claimed by Tenant), the dates to which all Rent hereunder has been
paid; the amounts of the Security  Deposit held  hereunder;  and containing such
other matters as may reasonably be requested by Landlord, it being intended that
any such statement by Tenant may be relied upon by any prospective  purchaser or
mortgagee of all or part of the  Improvements  and by  Landlord.  If Tenant does
not,  within ten (10) days of  Landlord's  request  as  aforesaid,  execute  and
deliver such instruments,  then Tenant hereby  irrevocably  appoints Landlord as
attorney-in-fact for Tenant with full power and authority to execute and deliver
the same in the name of the Tenant.

         SECTION  39.  RELATIONSHIP  OF  LANDLORD  AND  TENANT.  Notwithstanding
anything to the  contrary  herein,  this Lease is not  intended and shall not be
deemed  to  create  or to  reflect  any  joint  venture,  partnership  or  other
relationship  between  Landlord  and Tenant,  except that of landlord and tenant
with  respect to the Premises  that are the subject of this Lease.  Tenant shall
not use the name of the  Property  for any other  purpose than as an address for
the business to be conducted by Tenant in the Premises.

                                       22
<PAGE>

         SECTION 40. RADON GAS. Radon is a naturally  occurring  radioactive gas
that, when it has accumulated in a Improvements  in sufficient  quantities,  may
present health risks to persons who are exposed to it over time. Levels of Radon
that exceed Federal and State  guidelines are found in  Improvements in Florida.
Additional  information  regarding  Radon and Radon testing may be obtained from
your County Public Health Unit.

         SECTION 41.  AUTHORITY.  If Tenant is a  corporation,  each  individual
executing this Lease on behalf of said corporation  represents and warrants that
he or she is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with the articles and by laws of said  corporation and
in  accordance  with a duly adopted  resolution of the Board of Directors of the
said  corporation,  and that this  Lease is  binding  upon said  corporation  in
accordance with its terms.

         SECTION  42.  ENTIRE  AGREEMENT.  This  Lease  contains  the  complete,
exclusive  and entire  agreement  between  Landlord and Tenant as to the subject
matter hereof. Any prior letter of intent respecting this Lease is merged herein
and of no further  force or effect.  This Lease may be executed and delivered in
counterparts and by facsimile.

         SECTION 43. AGREEMENT TO ARBITRATE.  Any disagreements between Landlord
and Tenant concerning the  interpretation of any provision of this Lease,  other
than whether an Event of Default has occurred or has been cured,  shall,  except
as  otherwise  expressly  provided  in this  Section 43, or as shall be mutually
agreed in writing by Landlord and Tenant,  be arbitrated in accordance  with the
rules and regulations of the American  Arbitration  Association  then in effect.
Upon the written  demand of Landlord or Tenant  following any such  disagreement
that is subject to  arbitration,  Landlord  and Tenant shall either agree upon a
single arbitrator who is a disinterested person of recognized  competence in the
subject  of  the  disagreement  within  fifteen  (15)  days  of the  demand  for
arbitration  or, failing which,  each of Landlord and Tenant shall within thirty
(30)  days of the  demand  for  arbitration  appoint a  disinterested  person of
recognized  competence in the subject of the disagreement to act as arbitrators,
and such appointed  arbitrators  shall,  within,  fifteen (15) days  thereafter,
appoint  a  third  arbitrator  who  is  a  disinterested  person  of  recognized
competence in the subject of the disagreement.  The dispute will be submitted to
the  arbitrator(s) as soon as reasonably  possible and the arbitration  shall be
concluded  and the  determination  of the  arbitrator(s)  shall be  rendered  in
writing within thirty (30) days after the last arbitrator is appointed  pursuant
to this  section.  The  decision  of the  arbitrator  in the  case  of a  single
arbitrator,  or  of  a  majority  of  the  arbitrators  in  the  case  of  three
arbitrators,  shall be  conclusive  upon the parties and judgment  upon the same

                                       23
<PAGE>

shall be  entered in any court  having  jurisdiction  thereof at the  request of
either party. The expenses of arbitration shall be borne equally by Landlord and
Tenant.

         In addition, if in the opinion of either Landlord or Tenant, the matter
for  arbitration  must be  decided  on an  expedited  basis  in  order  to avoid
substantial  damages or harm to  either,  then upon a failure  of  Landlord  and
Tenant to agree upon a single  arbitrator within fifteen (15) days of the demand
for arbitration,  either Landlord or Tenant may request accelerated arbitration.
Accelerated arbitration,  for purposes of this section, shall be accomplished by
either party  notifying the American  Arbitration  Association  that it wishes a
single  arbitrator,  qualified  to decide  the  matter  for  arbitration,  to be
appointed by the American Arbitration Association within five (5) days after the
request  and to decide the matter  within ten (10) days after such  appointment.
Landlord and Tenant hereby agree to such an accelerated  procedure,  to use such
procedure only when  reasonably  necessary and to not contest the appointment of
the arbitrator or his decision.

         Any   disagreements   between   Landlord  and  Tenant   concerning  the
interpretation  of any  provision of this Lease,  other than whether an Event of
Default has occurred or has been cured,  must be submitted to arbitration  prior
to any  litigation on such matter unless the other party refuses to arbitrate in
accordance with the foregoing provisions on arbitration.

         SECTION 44. WAIVER OF JURY  TRIAL.TENANT AND LANDLORD HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY
IN  RESPECT  TO ANY  LITIGATION  BASED  HEREON OR  ARISING  OUT OF,  UNDER OR IN
CONNECTION  WITH THIS  LEASE,  OR ANY  COURSE  OF  CONDUCT,  COURSE OF  DEALING,
STATEMENTS  (WHETHER WRITTEN OR ORAL) OR ACTIONS OF EITHER PARTY. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE LANDLORD LEASING THE PREMISES TO TENANT.

         IN WITNESS WHEREOF,  the parties hereto have executed this Lease on the
day and year first above written.

                                           LANDLORD:

                                           VICTORY INVESTMENT GROUP LLC,
                                           a Florida limited liability
                                           company

                                       24
<PAGE>

---------------------------
Witness

___________________________               By: /s/ Rajni Monga
                                             --------------------------------
Witness                                      Rajni Monga, Managing Member

                                          Date Executed: October 21, 2002
                                                       ----------------------

                                          TENANT:

___________________________               PERFUMANIA, INC., a Florida
Witness                                   corporation

___________________________               By: /s/ Ilia Lekach
                                             --------------------------------
Witness                                   Ilia Lekach, Chairman and Chief
                                          Executive Officer

                                          (Corporate Seal)

                                          Date Executed: October 21, 2002
                                                        ---------------------

466-3.009

                                       25

<PAGE>

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