Document:

EXHIBIT 10.25

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                       AMENDED AND RESTATED LOAN AGREEMENT

                           dated as of March 26, 2002

                                      among

                             DEL LABORATORIES, INC.

                            DEL PHARMACEUTICALS, INC.

                           PARFUMS SCHIAPARELLI, INC.

                               ROYCE & RADER, INC.

                          565 BROAD HOLLOW REALTY CORP.

                                       and

                            THE LENDERS NAMED HEREIN

                                   $36,000,000

                       9.5% Senior Notes Due May 31, 2005

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<PAGE>

                                TABLE OF CONTENTS

                                                                          PAGE

SECTION 1.  Exhibits and Section References.................................1

SECTION 2.  Loans...........................................................2

SECTION 3.  Effectiveness of Amendment and Restatement......................2

SECTION 4.  Prepayment of Notes; Maturity...................................2

         SECTION 4.1.  Required Prepayments.................................2

         SECTION 4.2.  Optional Prepayments.................................3

         SECTION 4.3.  Special Prepayment Following Restricted Asset Sale...3

         SECTION 4.4.  Special Prepayment Upon Change of Control............4

         SECTION 4.5.  Manner of Making Special Prepayments.................4

         SECTION 4.6.  Obligation to Prepay after Notice....................5

         SECTION 4.7.  Application of Prepayments...........................5

         SECTION 4.8.  Presentation or Surrender of Notes...................5

         SECTION 4.9.  Note Purchase Prohibition............................5

SECTION 5.  Covenants.......................................................5

         SECTION 5.1.  Compliance with Laws, Etc............................5

         SECTION 5.2.  Reporting Requirements...............................5

         SECTION 5.3.  Taxes................................................8

         SECTION 5.4.  Corporate Existence..................................8

         SECTION 5.5.  Maintenance of Properties and Insurance..............8

         SECTION 5.6.  Books of Record and Account..........................8

         SECTION 5.7.  Visitation...........................................8

         SECTION 5.8.  Performance and Compliance with Other Agreements.....9

         SECTION 5.9.  [Intentionally Omitted.].............................9

         SECTION 5.10.  Pension Funding.....................................9

         SECTION 5.11.  Licenses; Trademarks................................9

         SECTION 5.12.  New Subsidiaries...................................10

         SECTION 5.13.  [Intentionally Omitted.]...........................10

         SECTION 5.14.  [Intentionally Omitted.]...........................10

         SECTION 5.15.  Liens, Etc.........................................10

         SECTION 5.16.  Debt...............................................11

                                      -i-

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                               TABLE OF CONTENTS
                                  (continued)
                                                                          PAGE

         SECTION 5.17.  Merger.............................................12

         SECTION 5.18.  Sale of Assets, Etc................................12

         SECTION 5.19.  Investments, Etc...................................12

         SECTION 5.20.  Transactions With Affiliates.......................12

         SECTION 5.21.  Prepayment of Outstanding Debt.....................12

         SECTION 5.22.  Guarantees.........................................13

         SECTION 5.23.  Change of Business.................................13

         SECTION 5.24.  Fiscal Year........................................13

         SECTION 5.25.  Maximum Losses.....................................13

         SECTION 5.26.  Accounting Policies................................13

         SECTION 5.27.  Dividends, Etc.....................................13

         SECTION 5.28.  Change in Control..................................13

         SECTION 5.29.  Hazardous Material.................................13

         SECTION 5.30.  Limitations on Consolidated Foreign Assets
                        and Revenues.......................................14

         SECTION 5.31.  Financial Requirements.............................14

SECTION 6.  Definitions....................................................15

         SECTION 6.1.  Accounting Terms....................................24

SECTION 7.  Remedies.......................................................24

         SECTION 7.1.  Events of Default; Acceleration.....................24

         SECTION 7.2.  Other Remedies......................................27

         SECTION 7.3.  Notice of Acceleration..............................27

SECTION 8.  Communications; Payment of Notes...............................27

SECTION 9.  First Offer Upon Transfer of Notes.............................28

SECTION 10.  Amendment and Waiver..........................................28

SECTION 11.  Registration, Transfer and Exchange of Notes..................29

SECTION 12.  Lost Notes....................................................29

SECTION 13.  Expenses......................................................29

SECTION 14.  Confidential Information......................................30

SECTION 15.  Successors and Assigns........................................31

SECTION 16.  Survival of Representations and Warranties....................31

                                      -ii-

<PAGE>

                               TABLE OF CONTENTS
                                   (continued)
                                                                          PAGE

SECTION 17.  Governing Law.................................................31

SECTION 18.  Reaffirmation, Restatement and Waivers........................31

SECTION 19.  [Intentionally Omitted].......................................32

EXHIBIT A        DEL LABORATORIES, INC.

EXHIBIT B        REPRESENTATIONS

EXHIBIT C        CLOSING CONDITIONS

EXHIBIT D        DOCUMENTS AND INFORMATION FURNISHED TO THE LENDERS

SCHEDULE D-1

SCHEDULE D-2

SCHEDULE D-3

SCHEDULE D-4

SCHEDULE D-5

SCHEDULE D-6

SCHEDULE D-7

SCHEDULE I

                                     -iii-

<PAGE>

                              AMENDED AND RESTATED
                                 LOAN AGREEMENT

                  THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of March
26, 2002, (the or this "Agreement") among DEL LABORATORIES, INC., a Delaware
corporation (as further defined in Section 6, the "Company"), Del
Pharmaceuticals, Inc., a Delaware corporation ("DPI"), Parfums Schiaparelli,
Inc., a New York corporation ("Parfums"), Royce & Rader, Inc., a Delaware
corporation ("Royce"), 565 Broad Hollow Realty Corp., a New York corporation
("Broad"), and the lender named in Schedule I hereto (and with such other
lenders as may become parties hereto in accordance with the terms hereof,
collectively, the "Lenders").

                  WHEREAS, Jackson National Life Insurance Company and Jackson
National Life Insurance Company of Michigan, as lenders (the "Original Lenders")
and the Company are parties to that certain Loan Agreement dated as of May 26,
1993, as amended by the First Amendment to Loan Agreement dated as of March 31,
1997, the Second Amendment to Loan Agreement dated as of December 30, 1998, and
the Third Amendment to Loan Agreement dated as of December 22, 1999 and as
restated and amended by the Amended and Restated Loan Agreement dated February
25, 2000 (as so amended and amended and restated, the "Existing Loan
Agreement"), pursuant to which the Original Lenders made certain loans to the
Company and the Company issued to the Original Lenders its Notes (as defined in
the Existing Loan Agreement) (the "Existing Notes");

                  WHEREAS, Jackson National Life Insurance Company, as the
successor in interest to Jackson National Life Insurance Company of Michigan, is
the holder of 100% of the issued and outstanding Existing Notes;

                  WHEREAS, the Company and the Lenders now desire to amend and
restate the Existing Loan Agreement to, among other things, (i) provide for the
release of the Collateral (as defined herein) securing the obligations
represented by the Notes, (ii) amend certain covenants and related definitions,
and (iii) make certain other changes to the Existing Loan Agreement.

                  NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the parties hereto
agree as follows:

         SECTION 1. EXHIBITS AND SECTION REFERENCES. This Agreement includes the
attached Schedule I and Exhibits A through D. Section numbers herein that are
preceded by a capital letter refer to sections in the Exhibit designated by that
letter.

<PAGE>

         SECTION 2. LOANS. Each Lender has made a loan to the Company in the
amount set forth opposite such Lender's name in Schedule I (reduced to give
effect to any mandatory prepayments required pursuant to Section 4.1 hereof). On
the Restatement Effective Date, as defined below, the Company will amend and
restate the Existing Notes in the form of Exhibit A to this Agreement to
evidence its promise to repay the current outstanding principal amount of the
loans with interest. Reference in this Agreement to the "Notes" shall be a
reference to the Existing Notes as amended and restated in the form of Exhibit
A, or any Note or Notes delivered in substitution or exchange therefor pursuant
to the provisions of this Agreement. The Company will issue such amended and
restated Notes to the Lenders upon surrender by them of the Existing Notes for
cancellation by the Company. The aggregate principal amount of loans originally
made pursuant to this Agreement was $40,000,000, but the loan by each Lender is
a separate and several loan. As of the Restatement Effective Date, the aggregate
principal amount of loans outstanding is $36,000,000. To induce each Lender to
enter into this Agreement and to amend and restate its Existing Notes, the
Company makes the representations and warranties set forth in Exhibit B, Part
One, and the covenants and agreements hereinafter stated. Each Lender makes the
representation set forth in Exhibit B, Part Two.

         SECTION 3. EFFECTIVENESS OF AMENDMENT AND RESTATEMENT. The terms and
provisions of this Agreement shall become effective (the "Restatement Effective
Date") on such date upon which (i) the Lenders shall have received an amendment
fee from the Company in the amount of $90,000, which amendment fee shall be
fully earned upon the execution of this Agreement, and (ii) each of the closing
conditions listed on Exhibit C hereto shall have been satisfied in form and
substance reasonably satisfactory to the Lenders.

         SECTION 4. PREPAYMENT OF NOTES; MATURITY. The Company will make
required, and may make optional, prepayments of the principal of the Notes as
hereinafter provided. The principal balance of the Notes not otherwise prepaid,
together with all accrued and unpaid interest thereon and other applicable fees
and charges, shall be due in full on May 31, 2005.

         SECTION 4.1. REQUIRED PREPAYMENTS. So long as any of the Notes shall be
outstanding, there shall become due and payable, and the Company will prepay,
the following aggregate principal amount of the Notes (or the unpaid balances
thereof) on the dates indicated (each, a "Mandatory Prepayment Date"):

                  May 31, 2002                       $4,000,000
                  May 31, 2003                       $8,000,000
                  May 31, 2004                       $8,000,000

without prepayment charge, whether or not any optional prepayment has been or is
being made pursuant to Section 4.2 (subject to the next proviso), 4.3 or 4.4;
provided that, in the event that any prepayment shall have been made pursuant to
Section 4.3 or 4.4 (a "Special Prepayment"), then with respect to all subsequent
prepayments pursuant to this Section 4.1 the aggregate principal amount of Notes
to be prepaid on each subsequent Mandatory Prepayment Date shall be an amount
equal to the product of (i) the aggregate principal amount of the Notes to be
prepaid on such Mandatory Prepayment Date (or the amount to which such number
shall have been theretofore reduced pursuant to this proviso by reason of a
prior Special Prepayment), times (ii) a fraction, the numerator of which shall
be the aggregate principal amount of the Notes outstanding immediately after
such Special Prepayment (before giving effect to any prepayment pursuant to
Section 4.2 or this Section 4.1 being made on the same day) and the denominator
of which shall be the aggregate principal amount of Notes outstanding
immediately prior to such Special Prepayment (before giving effect to any
prepayment pursuant to Section 4.2 or this Section 4.1 being made on the same
day).

                                      -2-
<PAGE>

         SECTION 4.2. OPTIONAL PREPAYMENTS. The Company, upon not less than 30
or more than 60 days' prior written notice of the date and amount of optional
prepayment to the holders of the Notes, may prepay at any time all or from time
to time any part (in a multiple of $100,000) of the principal of the Notes, upon
payment of a prepayment charge equal to the excess, if any, of (a) the sum of
the present values, discounted semi-annually in accordance with accepted
financial practice at a rate per annum equal to the Treasury Yield plus
seventy-five hundredths percent (.75%), of each of (i) all remaining scheduled
payments and prepayments (whether at maturity or pursuant to Section 4.1) of the
principal amount to be prepaid pursuant to this Section 4.2 (any partial
prepayment pursuant to this Section 4.2 being deemed applied in satisfaction of
such scheduled payments and prepayments in inverse chronological order of their
due dates) plus (ii) all remaining payments of interest payable on such
principal amount according to the terms of the Notes to and including maturity
or the dates of such scheduled prepayments, as the case may be (assuming each
payment referred to in clauses (i) and (ii) above is made when due), over (b)
the principal amount to be prepaid pursuant to this Section 4.2.

         SECTION 4.3. SPECIAL PREPAYMENT FOLLOWING RESTRICTED ASSET SALE. In the
event that the Company proposes to enter into a transaction or series of
transactions not permitted by Section 5.17 or 5.18 (a "Restricted Asset Sale"),
the Company shall, not less than 30 nor more than 90 days prior to such
Restricted Asset Sale, give each holder of any Notes written notice thereof by
telecopy confirmed by telephone in accordance with Section 8, such notice to
describe the proposed Restricted Asset Sale and the amount of the expected
proceeds thereof and request the consent of the holder or holders of the Notes
thereto. The Company may proceed with the Restricted Asset Sale only if the
holder or holders of at least 66-2/3% of the unpaid principal amount of the
Notes then outstanding consent in writing thereto.

         Not more than 190 days following the first day on which the Company or
any of its Subsidiaries receives any proceeds from an approved Restricted Asset
Sale (the "Asset Sale Closing Date"), the Company shall give each holder of any
Notes a written notice (the "Offer Notice") by telecopy confirmed by telephone
in accordance with Section 8 containing the Company's unconditional and
irrevocable offer to prepay, on a date specified therein (the "Special
Prepayment Date"), which date shall be not less than 45 nor more than 60 days
following the date on which such notice is given, a principal amount of the
Notes equal to the sum of (a) 100% of the proceeds received by the Company and
its Subsidiaries from all sales of assets which individually or in the aggregate
disposed of a Substantial Part of the assets of the Company or a Subsidiary,
less (b) the amount of such proceeds which were reinvested by the Company within
180 days following their receipt in assets substantially similar to those assets
sold, up to the entire unpaid principal amount of the Notes, at the Prepayment
Price (as defined in Section 4.5) plus interest accrued to and including the
Special Prepayment Date. If the Company shall not within 30 days of the giving
of such notice have received a written acceptance (which may be by telecopy or
other means of telecommunication) of such offer by such holder, such offer shall
be deemed to have been rejected by such holder, and the Company shall have no
further obligation to prepay the Notes of such holder as a consequence of such
Restricted Asset Sale.

                                      -3-
<PAGE>

         SECTION 4.4. SPECIAL PREPAYMENT UPON CHANGE OF CONTROL. In the event of
a Change of Control, the Company shall not less than 15 days prior to such event
(or, if prior notice is not possible, immediately following the Company's
becoming aware of such Change of Control) give to each holder of any Notes
written notice thereof by telecopy confirmed by telephone in accordance with
Section 8, such notice to contain the Company's unconditional and irrevocable
offer to prepay, on a date specified therein (the "Special Prepayment Date"),
which date shall be not less than 60 nor more than 90 days following the date on
which such notice is given, all but not less than all the Notes held by such
holder, at the Prepayment Price (as defined in Section 4.5) plus interest
accrued to and including the Special Prepayment Date. If the Company shall not
within 30 days of the giving of such notice have received a written acceptance
(which may be by telecopy or other means of telecommunication) of such offer by
such holder, such offer shall be deemed to have been rejected by such holder,
and the Company shall have no further obligation to prepay the Notes of such
holder and such holder shall be deemed to have consented to the Change of
Control, as the case may be.

         SECTION 4.5. MANNER OF MAKING SPECIAL PREPAYMENTS. In the case of any
acceptance of an offer to prepay Notes pursuant to Section 4.3 or Section 4.4,
the Company shall give a further written notice (a "Prepayment Notice") with
respect to such prepayment to each holder accepting the offer not more than 20
days nor less than 10 days prior to the Special Prepayment Date (as defined in
Section 4.3 or 4.4, as applicable) specifying (1) the Special Prepayment Date,
(2) the accrued interest to be paid to such holder, (3) the prepayment charge
component of the Prepayment Price (assuming, for purposes of such notice only,
that the applicable prepayment charge will be that which would be applicable if
the Notes were being prepaid on the date of such notice, it being understood,
however, that the actual prepayment charge to be paid may vary from the amount
specified in such notice), (4) the total amount of the Prepayment Price to be
paid to such holder (calculated using the same assumption set forth in the
foregoing clause (3)), and (5) the total aggregate principal amount of all Notes
(including those of such holder) to be prepaid by the Company. On the Special
Prepayment Date, the Company shall prepay the Notes held by such holder at the
Prepayment Price plus accrued interest to and including the Special Prepayment
Date.

         The term "Prepayment Price" shall mean, with respect to any Notes to be
prepaid pursuant to Section 4.3 or 4.4, an amount equal to the sum of (a) either
(i) in the case of a prepayment made pursuant to Section 4.3, the amount
specified in the Offer Notice, or (ii) in the case of a prepayment made pursuant
to Section 4.4, the entire unpaid principal amount of such Notes, plus (b) a
prepayment charge equal to 50% of the prepayment charge which would be payable
under Section 4.2, if such Notes were being prepaid on the Special Prepayment
Date pursuant to Section 4.2.

         For purposes of this Section 4, any prepayment pursuant to Section 4.3
shall be deemed to have preceded any prepayment pursuant to Section 4.1 or 4.2
occurring on the same day.

                                      -4-
<PAGE>

         SECTION 4.6. OBLIGATION TO PREPAY AFTER NOTICE. The principal amount of
the Notes designated for prepayment in any notice of optional prepayment given
pursuant to Section 4.2 or in any Prepayment Notice given pursuant to Section
4.3 or 4.4 shall become due and payable on the date fixed for prepayment,
together with accrued interest and the amount of any prepayment charge.

         SECTION 4.7. APPLICATION OF PREPAYMENTS. Each prepayment pursuant to
Section 4.1, 4.2 or 4.3 of less than the entire unpaid amount of all outstanding
Notes shall be applied (in multiples of $1,000) pro rata (as nearly as may be,
with adjustments to equalize for prior prepayments) to all outstanding Notes
according to the respective unpaid principal amounts thereof.

         SECTION 4.8. PRESENTATION OR SURRENDER OF NOTES. Subject to the second
paragraph of Section 8, the Company may, as a condition to making any prepayment
of a Note, require the holder thereof to present such Note, at the place
specified in the Note for payment of the principal thereof, for notation thereon
of the amount and date of such prepayment or, if such Note is prepaid in full,
to surrender the same at such price.

         SECTION 4.9. NOTE PURCHASE PROHIBITION. Except as permitted by Section
9, the Company will not, and will not permit any Subsidiary or Affiliate to,
directly or indirectly acquire any Note, by purchase or prepayment or otherwise,
except by way of payment or prepayment thereof by the Company or such Subsidiary
or Affiliate in accordance with the provisions of the Notes and of this
Agreement.

         SECTION 5. COVENANTS So long as any amount shall remain outstanding
under the Notes, the Company and each Guarantor will, unless the Required
Lenders shall otherwise consent in writing:

         SECTION 5.1. COMPLIANCE WITH LAWS, ETC. Comply, and cause each
Subsidiary of the Company or any Guarantor to comply, in all material respects
with all applicable laws, rules, regulations and orders, where the failure to so
comply would be reasonably likely to result in a Material Adverse Change.

         SECTION 5.2. REPORTING REQUIREMENTS. Furnish to the Lenders:

                  (A) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
                  any event within ninety (90) days after the end of each fiscal
                  year of the Company, a copy of the audited consolidated and
                  unaudited consolidating (such consolidating statements to be
                  prepared by management of the Company) financial statements of
                  the Company and its Consolidated Subsidiaries for such year,
                  including balance sheets with related statements of income and
                  retained earnings and statements of cash flows, all in
                  reasonable detail and setting forth in comparative form the
                  figures for the previous fiscal year, together with an
                  unqualified opinion, prepared by independent certified public
                  accountants selected by the Company and reasonably
                  satisfactory to the Required Lenders, all such financial
                  statements to be prepared in accordance with GAAP.

                                      -5-
<PAGE>

                  (B) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
                  in any event within forty-five (45) days after the end of each
                  of the first three fiscal quarters of each fiscal year of the
                  Company, a copy of the consolidated and consolidating
                  financial statements of the Company and its Consolidated
                  Subsidiaries for such quarter, including balance sheets with
                  related statements of income and retained earnings and
                  statements of cash flows, all in reasonable detail and setting
                  forth in comparative form the figures for the comparable
                  period for the previous fiscal year, all such financial
                  statements to be prepared by management of the Company in
                  accordance with GAAP.

                  (C) MANAGEMENT LETTERS. Promptly upon receipt thereof, copies
                  of any reports submitted to the Company or any Guarantor by
                  independent certified public accountants in connection with
                  the examination of the financial statements of the Company and
                  the Guarantor made by such accountants.

                  (D) CERTIFICATE OF NO DEFAULT. Simultaneously with the
                  delivery of the financial statements referred to in Section
                  5.2(A) and (B), a certificate of the President or the Chief
                  Financial Officer of the Company, (1) certifying that no
                  Default or Event of Default has occurred and is continuing, or
                  if a Default or Event of Default has occurred and is
                  continuing, a statement as to the nature thereof and the
                  action which is proposed to be taken with respect thereto; and
                  (2) with computations demonstrating compliance with the
                  covenants contained in Section 5.31.

                  (E) ACCOUNTANTS' REPORT. Simultaneously with the delivery of
                  the annual financial statements referred to in Section 5.2(A),
                  a certificate of the independent certified public accountants
                  who audited such statements to the effect that, in making the
                  examination necessary for the audit of such statements, they
                  have obtained no knowledge of any condition or event which
                  constitutes a Default or Event of Default, or if such
                  accountants shall have obtained knowledge of any such
                  condition or event, specify in such certificate each such
                  condition or event of which they have knowledge and the nature
                  and status thereof.

                  (F) NOTICE OF LITIGATION. Promptly after the commencement
                  thereof, notice of all actions, suits and proceedings before
                  any court or governmental department, commission, board,
                  bureau, agency, or instrumentality, domestic or foreign,
                  affecting the Company, any Guarantor or any Subsidiary of the
                  Company or any Guarantor which, if determined adversely to the
                  Company, such Guarantor or any such Subsidiary would be
                  reasonably likely to result in a Material Adverse Change.

                  (G) NOTICE OF DEFAULTS AND EVENTS OF DEFAULT. As soon as
                  possible and in any event within five (5) days after the
                  occurrence of each Default or Event of Default, a written
                  notice setting forth the details of such Default or Event of
                  Default and the action which is proposed to be taken by the
                  Company with respect thereto.

                                      -6-
<PAGE>

                  (H) ERISA REPORTS. Promptly after the filing or receiving
                  thereof, copies of all reports, including annual reports, and
                  notices which the Company, any Guarantor or any Subsidiary of
                  the Company or any Guarantor, files with or receives from the
                  PBGC, the Internal Revenue Service or the U.S. Department of
                  Labor under ERISA; and as soon as possible after the Company,
                  any Guarantor or any such Subsidiary knows or has reason to
                  know that any Reportable Event or Prohibited Transaction has
                  occurred with respect to any Plan or that the PBGC or the
                  Company, any Guarantor or any such Subsidiary has instituted
                  or will institute proceedings under Title IV of ERISA to
                  terminate any Plan, the Company or such Guarantor will deliver
                  to the Lenders a certificate of the President or the Chief
                  Financial Officer of the Company or such Guarantor setting
                  forth details as to such Reportable Event or Prohibited
                  Transaction or Plan termination and the action the Company or
                  such Guarantor proposes to take with respect thereto.

                  (I) ENVIRONMENTAL NOTICES. Promptly after the receipt thereof,
                  a copy of any written claim, summons, charge or other notice
                  to the Company, any Guarantor or any Subsidiary of the Company
                  or any Guarantor alleging failure to comply with any federal,
                  state or local laws governing Hazardous Materials.

                  (J) MATERIAL ADVERSE CHANGE. Promptly, upon the occurrence
                  thereof, notice of a Material Adverse Change.

                  (K) REPORTS TO OTHER CREDITORS. Promptly after the furnishing
                  thereof, copies of any statement or report furnished to any
                  other party pursuant to the terms of any indenture, loan, or
                  credit or similar agreement and not otherwise required to be
                  furnished to the Lenders pursuant to any other clause of this
                  Section 5.2.

                  (L) PROXY STATEMENTS, ETC. Promptly after the sending or
                  filing thereof, copies of all proxy statements, financial
                  statements and reports which the Company, any Guarantor or any
                  Subsidiary of the Company or any Guarantor sends to its
                  stockholders, and copies of all regular, periodic, and special
                  reports, and all registration statements which the Company or
                  such Guarantor or any such Subsidiary files with the SEC or
                  any governmental authority which may be substituted therefor,
                  or with any national securities exchange.

                  (M) NOTICE OF AFFILIATES. Promptly after any Person becomes an
                  Affiliate of the Company or any Guarantor (other than if such
                  Person becomes an Affiliate solely by virtue of a member of
                  management of the Company making an investment in such
                  Person), notice to the Lenders of such Affiliate, provided
                  that this clause (M) shall not require the Company or any
                  Guarantor to advise the Lenders of any changes in officers
                  other than executive officers.

                  (N) NORTH CAROLINA EXPANSION. Promptly after any information
                  previously delivered to the Lenders in connection with the
                  North Carolina Expansion changes in a material manner as
                  determined in good faith by the Company, information regarding
                  such changes in reasonable detail.

                                      -7-
<PAGE>

                  (O) GENERAL INFORMATION. Such other information respecting the
                  condition or operations, financial or otherwise, of the
                  Company, any Guarantor or any Subsidiary of the Company or any
                  Guarantor as any Lender may from time to time reasonably
                  request.

         SECTION 5.3. TAXES. Pay and discharge, and cause each Subsidiary of the
Company or any Guarantor to pay and discharge, all taxes, assessments and
governmental charges upon it or them, its or their income and its or their
properties prior to the dates on which penalties are attached thereto, unless
and only to the extent that (i) such taxes shall be contested in good faith and
by appropriate proceedings by the Company, such Guarantor or any such
Subsidiary, as the case may be; (ii) there be adequate reserves therefor in
accordance with GAAP entered on the books of the Company, such Guarantor or any
such Subsidiary; and (iii) no enforcement proceedings for the collection of such
taxes against the Company, such Guarantor or any such Subsidiary have been
commenced.

         SECTION 5.4. CORPORATE EXISTENCE. Except as permitted by Section 5.17
of this Agreement, preserve and maintain, and cause each Subsidiary of the
Company or any Guarantor to preserve and maintain, their corporate existence and
good standing in the jurisdiction of their incorporation and the rights,
privileges and franchises of the Company, each Guarantor and each such
Subsidiary in each case where failure to so preserve or maintain would be
reasonably likely to result in a Material Adverse Change, except that any
inactive Subsidiary (that has no assets) may wind up, liquidate or dissolve with
at least thirty (30) days prior written notice to the Lenders.

         SECTION 5.5. MAINTENANCE OF PROPERTIES AND INSURANCE. (i) Keep, and
cause each Subsidiary of the Company and any Guarantor to keep, the respective
properties and assets (tangible or intangible) that are useful and necessary in
its business, in good working order and condition, reasonable wear and tear
excepted; and (ii) maintain, and cause any such Subsidiary to maintain,
insurance with financially sound and reputable insurance companies or
associations in such amounts and covering such risks as are usually carried by
companies engaged in similar businesses and owning properties and doing business
in the same general areas in which the Company, any Guarantor and any such
Subsidiary may operate.

         SECTION 5.6. BOOKS OF RECORD AND ACCOUNT. Keep, and cause each
Subsidiary of the Company and any Guarantor to keep, adequate records and proper
books of record and account in which complete entries will be made in a manner
to enable the preparation of financial statements in accordance with GAAP,
reflecting all financial transactions of the Company, such Guarantor, and any
such Subsidiary.

         SECTION 5.7. VISITATION. At any reasonable time, and from time to time,
and upon prior notice, and, provided no Default or Event of Default then exists,
not more often than once during any calendar year, permit any Lenders or
representatives thereof, to examine and make copies of (except if such copies
would result in the loss of any attorney-client or other privilege) and
abstracts from the financial and accounting books and records of, and visit the
properties of, the Company, any Guarantor or any Subsidiary of the Company or
any Guarantor to discuss the affairs, finances and accounts of the Company, any
Guarantor or any such Subsidiary with any of the respective officers of the
Company, any Guarantor or any such Subsidiary or the Company's, any Guarantor's
or such Subsidiary's independent accountants.

                                      -8-
<PAGE>

         SECTION 5.8. PERFORMANCE AND COMPLIANCE WITH OTHER AGREEMENTS. Perform
and comply in all material respects, and cause each Subsidiary of the Company or
any Guarantor to perform and comply in all material respects, with each of the
provisions of each and every agreement the failure to perform or comply with
which would be reasonably likely to result in a Material Adverse Change.

         SECTION 5.9. [Intentionally Omitted.]

         SECTION 5.10. PENSION FUNDING. Comply in all material respects, and
cause each Subsidiary of the Company or any Guarantor to comply in all material
respects, with the following and cause each ERISA Affiliate of the Company, any
Guarantor or any such Subsidiary to comply with the following:

         (i) engage solely in transactions which would not subject any of such
entities to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Internal Revenue Code in either case in
an amount in excess of $25,000.00;

         (ii) make full payment when due of all amounts which, under the
provisions of any Plan or ERISA, the Company, any Guarantor, any such Subsidiary
or any ERISA Affiliate of any of same is required to pay as contributions
thereto;

         (iii) all applicable provisions of the Internal Revenue Code and the
regulations promulgated thereunder, including but not limited to Section 412
thereof, and all applicable rules, regulations and interpretations of the
Accounting Principles Board and the Financial Accounting Standards Board;

         (iv) not fail to make any payments in an aggregate amount greater than
$25,000.00 to any Multiemployer Plan that the Company, any Guarantor, any such
Subsidiary or any ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining thereto; or

         (v) not take any action regarding any Plan which could result in the
occurrence of a Prohibited Transaction.

         SECTION 5.11. LICENSES; TRADEMARKS. Maintain at all times, and cause
each Subsidiary of the Company or any Guarantor to maintain at all times, all
licenses or permits necessary to the conduct of its business or as may be
required by any governmental agency or instrumentality thereof, except for such
licenses or permits where the failure to so maintain would not be reasonably
likely to result in a Material Adverse Change, and take all steps necessary to
maintain the exclusive ownership of, and the rights to, all trademarks and
tradenames material to the business of the Company or a Subsidiary; provided,
however, that the Company and the Guarantors shall not be required to take such
steps, including, without limitation the renewal or continuation of trademark or
tradename registrations in the United States Trademark Office, if the Company or
the applicable Guarantor has provided the Lenders with a written statement
giving the reasons why such steps are not necessary and why such failure to
maintain such trademark or tradename would not result in a Material Adverse
Change.

                                      -9-
<PAGE>

         SECTION 5.12. NEW SUBSIDIARIES. (i) Cause any Subsidiary (other than a
Foreign Subsidiary) of the Company or any Guarantor formed after the date of
this Agreement to become a Guarantor and to become a party to this Agreement and
the Guaranty as a Guarantor.

         (ii) Cause any Foreign Subsidiary which, in the reasonable
determination of the Company and its professional advisors, if it became a
Guaranteeing Foreign Subsidiary would not result in adverse tax consequences to
the Company, to become a Guarantor and to become a party to this Agreement as a
Guarantor.

         SECTION 5.13. [Intentionally Omitted.]

         SECTION 5.14. [Intentionally Omitted.]

         SECTION 5.15. LIENS, ETC. Not create, incur, assume or suffer to exist,
any Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:

                  (A) [Intentionally Omitted];

                  (B) Liens for taxes or assessments or other government charges
or levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;

                  (C) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established;

                  (D) Liens under workers' compensation, unemployment insurance,
Social Security, or similar legislation;

                  (E) Liens, deposits, or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;

                  (F) Liens described in Exhibit D-2, which Liens may be
renewed, extended or refinanced, without securing any additional Debt and on
terms no less favorable to the Company or applicable Guarantor than the original
terms;

                  (G) Judgment and other similar Liens arising in connection
with court proceedings (other than any judgment or order or combination of
judgments or orders for the payment of money, in excess of $500,000.00 in the
aggregate, which sum shall not be subject to full, complete and effective
insurance coverage (subject to deductibles), shall be rendered against the
Company, any Guarantor or any Subsidiary of the Company or any Guarantor and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect), provided the execution
or other enforcement of such Liens is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings;

                                      -10-
<PAGE>

                  (H) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
Company's or a Guarantor's occupation, use and enjoyment of the property or
assets encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto;

                  (I) [Intentionally Omitted];

                  (J) [Intentionally Omitted];

                  (K) The North Carolina Mortgage; and

                  (L) Purchase money Liens on any property hereafter acquired or
the assumption of any Lien on property existing at the time of such acquisition,
or a Lien incurred in connection with any conditional sale or other title
retention agreement or a Capital Lease, provided that:

                           (i) Any property subject to any of the foregoing is
                           acquired by the Company or a Guarantor in the
                           ordinary course of its respective business and the
                           Lien on any such property is created
                           contemporaneously with such acquisition;

                           (ii) The obligation secured by any Lien so created,
                           assumed, or existing shall not exceed one hundred
                           (100%) percent of lesser of cost or fair market value
                           of the property acquired as of the time of the
                           Company or the Guarantor acquiring the same;

                           (iii) Each such Lien shall attach only to the
                           property so acquired and fixed improvements thereon;
                           and

                           (iv) The obligation secured by such Lien is permitted
                           by the provisions of Section 5.16 and the related
                           expenditure is permitted by the provisions of Section
                           5.31 (B).

         SECTION 5.16. DEBT. Not create, incur, assume, or suffer to exist, any
Debt, except:

                  (A) Debt of the Company under this Agreement or the Notes;

                  (B) Debt described in Exhibit D-2, which Debt may be renewed,
                  extended or refinanced on terms no less favorable to the
                  Company or applicable Guarantor than the current terms of such
                  Debt;

                  (C) Subordinated Debt;

                  (D) Accounts payable to trade creditors for goods or services
                  and current operating liabilities (other than for borrowed
                  money), in each case incurred and paid in the ordinary course
                  of business;

                                      -11-
<PAGE>

                  (E) Debt of the Company or any Guarantor secured by purchase
                  money Liens permitted by Section 5.15(L);

                  (F) Debt incurred under the Bank Credit Agreement in an
                  aggregate amount at any time outstanding not in excess of
                  $45,000,000;

                  (G) Intercompany Debt;

                  (H) [Intentionally Omitted];

                  (I) [Intentionally Omitted]; and

                  (J) Debt secured by the North Carolina Mortgage.

         SECTION 5.17. MERGER. Not merge into, or consolidate with or into, or
have merged into it, any Person; and, for the purpose of this Section 5.17, the
acquisition or sale by the Company or any Guarantor by lease, purchase or
otherwise, of all, or substantially all, of the common stock or the assets of
any Person or of it shall be deemed a merger of such Person with the Company or
any Guarantor, provided that (i) the Company may merge with any Guarantor,
provided the Company is the surviving entity and (iii) any Guarantor may merge
with any other Guarantor.

         SECTION 5.18. SALE OF ASSETS, ETC. Not sell, assign, transfer, lease or
otherwise dispose of any of its assets, (including a sale leaseback transaction)
with or without recourse, except for (i) inventory disposed of in the ordinary
course of business; (ii) the sale or other disposition of assets no longer used
or useful in the conduct of its business; (iii) Permitted Equipment Sales, (iv)
a Permitted Real Estate Sale and (v) sales of assets between the Company and a
Guarantor or between Guarantors, or sale of assets by an inactive Subsidiary of
the Company or a Guarantor to the Company or a Guarantor.

         SECTION 5.19. INVESTMENTS, ETC. Not make any Investment other than
Permitted Investments.

         SECTION 5.20. TRANSACTIONS WITH AFFILIATES. Except as otherwise
expressly permitted by this Agreement or except in the ordinary course of
business and pursuant to the reasonable requirements of the Company's, a
Guarantor's or a Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or a Guarantor or a Subsidiary than would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate, not enter into any transaction, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service, with
any Affiliate, provided however, in no event shall the Company or any Guarantor
engage in any transaction with a Subsidiary of the Company or a Guarantor which
Subsidiary is not a Guarantor.

         SECTION 5.21. PREPAYMENT OF OUTSTANDING DEBT. Not pay, in whole or in
part, any outstanding Debt of the Company or a Guarantor, which by its terms is
not then due and payable other than (i) Debt owing to the Lenders, (ii)
Intercompany Debt, (iii) accounts payable and other trade payables, and (iv)
prepayment of loans under the Bank Credit Agreement.

                                      -12-
<PAGE>

         SECTION 5.22. GUARANTEES. Not guaranty, or in any other way become
directly or contingently obligated for any Debt of any other Person (including
any agreements relating to working capital maintenance, take or pay contracts or
similar arrangements) other than (i) the endorsement of negotiable instruments
for deposit in the ordinary course of business; (ii) guarantees existing on the
date hereof and set forth in Exhibit D-2 annexed hereto; or (iii) guarantees of
any Debt permitted under Section 5.16 of this Agreement.

         SECTION 5.23. CHANGE OF BUSINESS. Not materially alter the nature of
its business.

         SECTION 5.24. FISCAL YEAR. Not Change the ending date of its fiscal
year from December 31.

         SECTION 5.25. MAXIMUM LOSSES. Not incur a consolidated net loss
(calculated exclusive of extraordinary gains but inclusive of extraordinary
losses, as calculated in accordance with GAAP) for any fiscal quarter or any
fiscal year.

         SECTION 5.26. ACCOUNTING POLICIES. Not Change any accounting policies,
except as permitted by GAAP.

         SECTION 5.27. DIVIDENDS, ETC. Not declare or pay any dividends,
purchase, redeem, retire or otherwise acquire for value any of its capital stock
now or hereafter outstanding, or make any distribution of assets to its
stockholders as such, whether in cash, assets, or in obligations of the Company
or a Guarantor; or allocate or otherwise set apart any sum for the payment of
any dividend or distribution on, or for the purchase, redemption or retirement
of any shares of its capital stock; or make any other distribution by reduction
of capital or otherwise in respect of any share of its capital stock, except,
(i) any Subsidiary may pay dividends to its shareholder(s), (ii) the Company may
pay Permitted Dividends, and (iii) the Company may make Permitted Stock
Repurchases.

         SECTION 5.28. CHANGE IN CONTROL. (i) Not permit any Person or "group"
(within the meaning of Section 13(d)-3 under the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission as in effect on the date
hereof), other than the members of management of the Company and the directors
of the Company, each as in office on the date of this Agreement, to own more
than fifty (50%) percent of the outstanding voting securities of the Company.
(ii) Not permit any nominees other than nominees nominated by the existing board
of directors of the Company to hold a majority of the seats on the board of
directors of the Company.

         SECTION 5.29. HAZARDOUS MATERIAL. The Company, each Guarantor and each
Subsidiary of the Company or a Guarantor shall not cause or permit any property
owned or occupied by the Company, a Guarantor or any such Subsidiary to be used
to generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance with all
applicable federal, state and local laws or regulations; nor shall the Company,
a Guarantor or any such Subsidiary cause or permit, as a result of any
intentional or unintentional act or omission on the part of the Company, such
Guarantor or any such Subsidiary or any tenant or subtenant, a release of
Hazardous Materials onto any property owned or occupied by the Company, such
Guarantor or any such Subsidiary or onto any other property other than in
compliance with all applicable federal, state and local laws or regulations; nor
shall the Company, the Guarantors and each such Subsidiary fail to comply in all
material respects with all applicable federal, state and local laws, ordinances,
rules and regulations, whenever and by whomever triggered, nor fail to obtain
and comply in all material respects with, any and all approvals, registrations
or permits required thereunder. The Company and the Guarantors shall execute any
documentation reasonably required by the Lenders in connection with the
representations, warranties and covenants contained in this paragraph and
Exhibit B to this Agreement.

                                      -13-
<PAGE>

         SECTION 5.30. LIMITATIONS ON CONSOLIDATED FOREIGN ASSETS AND REVENUES.
(i) Not have more than fifteen (15%) percent of the consolidated assets or
revenues of the Company and its Consolidated Subsidiaries be located in, or
derived from, locations other than the United States.

         (ii) Not have more than ten (10%) percent of the consolidated assets or
revenues of the Company and its Consolidated Subsidiaries be held by, or
produced by, any Foreign Subsidiary.

         SECTION 5.31. FINANCIAL REQUIREMENTS. So long as any amount shall
remain outstanding under the Notes:

                  (A) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Company will
maintain Consolidated Tangible Net Worth ("CTNW") of not less than the amounts
set forth below for the periods set forth below (to be tested quarterly):

PERIOD                                     MINIMUM CTNW
------                                     ------------

Closing Date to 12/30/02                   $48,000,000.00

12/31/02 to 12/30/03                       The actual CTNW as of the  preceding
and for each succeeding period             December 31 PLUS 50% of the
beginning on each December 31              Company's  Consolidated  Net Income
and ending on the next                     for the fiscal year ending on such
December 30                                December 31.

                  (B) CONSOLIDATED CAPITAL EXPENDITURES. The Company will not
make Consolidated Capital Expenditures in excess of: (i) $9,000,000.00
(excluding Consolidated Capital Expenditures permitted by clause (ii) below) in
the aggregate during any fiscal year of the Company; and (ii) $17,400,000.00 in
the aggregate during the term of this Agreement in connection with the North
Carolina Expansion.

                  (C) CONSOLIDATED FIXED CHARGE RATIO. The Company will maintain
at all times a Consolidated Fixed Charge Ratio of not less than the ratios set
forth below for the periods set forth below (to be tested quarterly):

                                      -14-
<PAGE>

                 PERIOD                               RATIO
                 ------                               -----

         Closing Date to 3/30/02                      1.50 to 1.00
         3/31/02 to 12/30/03                          1.15 to 1.00
         12/31/03 and thereafter                      1.25 to 1.00

                  (D) FUNDED DEBT TO EBITDA RATIO. The Company will maintain at
all times a Funded Debt to EBITDA Ratio of not greater than 2.75 to 1.00 (to be
tested quarterly).

                  (E) CONSOLIDATED INTEREST COVERAGE RATIO. The Company will
maintain at all times a Consolidated Interest Coverage Ratio of not less than
3.50 to 1.00 (to be tested quarterly).

         SECTION 6. DEFINITIONS. The following defined terms have the indicated
meanings in this Agreement, unless the context otherwise requires:

         "AFFILIATE" means, as to any Person (i) a Person which directly or
indirectly controls, or is controlled by, or is under common control with, such
Person; (ii) a Person which directly or indirectly beneficially owns or holds
twenty (20%) percent or more of any class of voting stock of, or twenty (20%)
percent or more of the equity interest in, such Person; or (iii) a Person twenty
(20%) percent or more of the voting stock of which, or twenty (20%) percent or
more of the equity interest of which, is directly or indirectly beneficially
owned or held by such Person, provided, however, that with respect to the
Company or any Guarantor, no natural Person, and no trust, estate or other
entity which may hold assets of such natural Person for estate planning purposes
or upon such natural Person's death, shall be deemed an Affiliate of the Company
or a Guarantor. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract, or
otherwise.

         "AGREEMENT" means this Loan Agreement, as amended, supplemented or
modified from time to time.

         "BANK CREDIT AGREEMENT" means that certain amendment to and restatement
of loan agreement dated as of March 26, 2002 among the Company, DPI, Parfums,
Royce, Broad, JPMorgan Chase Bank, as Administrative Agent and as a lender,
Fleet National Bank, as Documentation Agent and lender and Citibank, N.A., as a
lender, as such agreement may be amended, supplemented or otherwise modified
from time to time in accordance with the terms thereof.

         "BANK LENDERS" means the lenders from time to time party to the Bank
Credit Agreement.

         "BROAD" means 565 Broad Hollow Realty Corp., a New York corporation.

         "BUSINESS DAY" means a day of the year on which banks are not required
or authorized to close in New York City.

                                      -15-
<PAGE>

         "CAPITAL EXPENDITURES" means as to any Person, the aggregate amount of
any expenditures (including purchase money debt and purchase money liens) by
such Person for assets (including fixed assets acquired under Capital Leases)
which it is contemplated will be used or usable in fiscal years subsequent to
the year of acquisition and that are required to be capitalized in accordance
with GAAP.

         "CAPITAL LEASE" means a lease which has been, or should be, in
accordance with GAAP, capitalized on the books of the lessee.

         "CHANGE OF CONTROL" means the acquisition by any Person, other than a
member of the present management of the Company, and the Affiliates of such
Person of the right to vote, in the aggregate, more than 50% of the Company's
common stock or to elect more than 50% of the Board.

         "CLOSING DATE" means the Restatement Effective Date (as defined in
Section C-3 on Exhibit C).

         "COMPANY" means the corporation that originally executed this Agreement
as Company and any successor or transferee corporation.

         "COMPETITOR" means any Person which is principally engaged in the
business of manufacturing cosmetics or pharmaceuticals and whose business
substantially competes with the business of the Company.

         "CONFIRMATION OF GUARANTY" means a confirmation and reaffirmation by
each Guarantor of its obligations under the Guaranty.

         "CONSOLIDATED CAPITAL EXPENDITURES" means, as to any Person, the
aggregate amount of the Capital Expenditures by such Person and its Consolidated
Subsidiaries, computed and consolidated in accordance with GAAP.

         "CONSOLIDATED EBITDA" means, as to any Person, for any period, the
EBITDA of such Person and its Consolidated Subsidiaries, computed and
consolidated in accordance with GAAP.

         "CONSOLIDATED FIXED CHARGE RATIO" means, as to the Company and its
Consolidated Subsidiaries, the ratio of (i) the sum of net income PLUS gross
interest expense PLUS income tax expense for the period measured plus
depreciation expense PLUS amortization of intangible assets MINUS Consolidated
Unfunded Capital Expenditures made during such period MINUS Permitted Dividends
paid in cash during such period MINUS Permitted Stock Repurchases made during
such period to (ii) the sum of the current portion of Consolidated Funded Debt,
computed and consolidated in accordance with GAAP (excluding Debt described in
clauses (ii), (v) and (vii) of the definition of "Consolidated Funded Debt")
PLUS gross interest expense for such period. The Consolidated Fixed Charge
Coverage Ratio shall be measured for the four (4) fiscal quarters then ended,
except for the current portion of Consolidated Funded Debt, which shall be
measured for the next succeeding four (4) fiscal quarters.

                                      -16-
<PAGE>

         "CONSOLIDATED FUNDED DEBT" means, as to any Person, at any date, any
Debt of such Person and its Consolidated Subsidiaries which is (i) indebtedness
or liability for borrowed money having an original maturity of one (1) year or
more (including the current portion thereof) or which is extendable at the
option of the obligor to a date more than one year from the date of such
extension, including, in any event, all of the outstanding Revolving Credit
Loans as defined in and incurred under the Bank Credit Agreement; (ii)
indebtedness or liability for borrowed money under lines of credit extended to
such Person or any of its Consolidated Subsidiaries; (iii) the deferred purchase
price of property (excluding trade obligations); (iv) obligations as a lessee
under Capital Leases; (v) obligations to reimburse a letter of credit issuer for
draws under letters of credit; and (vi) obligations under B/As (as defined in
the Bank Credit Agreement); and (vii) all liabilities under any preferred stock
which, at the option of the holder or upon the occurrence or one or more certain
events, is redeemable by such holder, or which, at the option of such holder is
convertible into Debt.

         "CONSOLIDATED INTEREST COVERAGE RATIO" means, as to any Person, for any
period, the ratio of (i) Consolidated EBITDA to (ii) consolidated gross interest
expense. The Consolidated Interest Coverage Ratio shall be measured for the four
(4) fiscal quarters then ended.

         "CONSOLIDATED NET INCOME" means, with respect to the Company and its
Consolidated Subsidiaries, net income for a fiscal period, computed and
consolidated in accordance with GAAP.

         "CONSOLIDATED SUBORDINATED DEBT" means, as to any Person, all of the
Subordinated Debt of such Person and its Consolidated Subsidiaries, computed and
consolidated in accordance with GAAP.

         "CONSOLIDATED SUBSIDIARIES" means, as to any Person, those Subsidiaries
of such Person which are consolidated with such Person in the financial
statements delivered pursuant to Section 5.2.

         "CONSOLIDATED TANGIBLE NET WORTH" means, as to any Person, the excess
of (i) such Person's Consolidated Total Assets, less all intangible assets
properly classified as such in accordance with GAAP, including, but without
limitation, patents, patent rights, trademarks, trade names, franchises,
copyrights, licenses, permits and goodwill, over (ii) such Person's Consolidated
Total Liabilities.

         "CONSOLIDATED TOTAL ASSETS" means, as to any Person, at any date, the
aggregate net book value of the assets of such Person and its Consolidated
Subsidiaries at such date, after all appropriate adjustments in accordance with
GAAP (including without limitation, reserves for doubtful receivables,
obsolescence, depreciation and amortization and excluding the amount of any
write-up or revaluation of any asset, other than those permitted under standard
cost accounting procedures), computed and consolidated in accordance with GAAP.

         "CONSOLIDATED TOTAL LIABILITIES" means, as to any Person, at any date,
all of the liabilities of such Person and its Consolidated Subsidiaries at such
date, including all items which, in accordance with GAAP would be included on
the liability side of the balance sheet (other than capital stock, treasury
stock, capital surplus and retained earnings) computed and consolidated in
accordance with GAAP.

                                      -17-
<PAGE>

         "CONSOLIDATED UNFUNDED CAPITAL EXPENDITURES" means, as to any Person,
the aggregate amount of the Unfunded Capital Expenditures by such Person and its
Consolidated Subsidiaries, computed and consolidated in accordance with GAAP.

         "DPI" means Del Pharmaceuticals, Inc., a Delaware corporation.

         "DEBT" means, as to any Person, all (i) indebtedness or liability of
such Person for borrowed money; (ii) indebtedness of such Person for the
deferred purchase price of property or services (including trade obligations);
(iii) obligations of such Person as a lessee under Capital Leases; (iv) current
liabilities of such Person in respect of unfunded vested benefits under any
Plan; (v) reimbursement obligations of such Person under letters of credit
issued for the account of such Person; (vi) reimbursement obligations of such
Person arising under acceptance facilities; (vii) guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any other Person, or otherwise to assure a creditor
against loss; (viii) obligations secured by any Lien on property owned by such
Person whether or not the obligations have been assumed; (ix) liabilities of
such Person under any preferred stock or other preferred equity instrument
which, at the option of the holder or upon the occurrence of one or more events,
is redeemable by such holder, or which, at the option of such holder is
convertible into Debt; and (x) all other liabilities recorded as such, or which
should be recorded as such, on such Person's financial statements in accordance
with GAAP.

         "DEFAULT" means any of the events specified in Section 7 of this
Agreement, whether or not any requirement for notice or lapse of time or any
other condition has been satisfied.

         "DOLLARS" AND THE SIGN "$" mean lawful money of the United States of
America.

         "EBITDA" means, as to any Person, for any period, the sum of (i) net
income PLUS (ii) gross interest expense PLUS (iii) income tax expense PLUS (iv)
depreciation expenses PLUS (v) amortization of intangible assets, all measured
and/or calculated for the four (4) fiscal quarters then ended.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, the regulations promulgated thereunder and the
published interpretations thereof as in effect from time to time.

         "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which together with any other Person would be treated, with such
Person, as a single employer under Section 4001 of ERISA.

         "EVENT OF DEFAULT" means any of the events specified in Section 7 of
this Agreement, provided that any requirement for notice or lapse of time or any
other condition has been satisfied.

                                      -18-
<PAGE>

         "EXISTING COLLATERAL DOCUMENTS" shall have the meaning set forth in the
Bank Credit Agreement.

         "EXISTING LOAN AGREEMENT" shall have the meaning assigned thereto in
the introductory paragraphs of this Agreement.

         "EXISTING NOTES" shall have the meaning assigned thereto in the
introductory paragraphs of this Agreement.

         "FOREIGN SUBSIDIARIES" means, with respect to the Company, those
Subsidiaries of the Company which are incorporated, formed or organized outside
of the United States.

         "FUNDED DEBT TO EBITDA RATIO" means, as to the Company and its
Consolidated Subsidiaries for any period, the ratio of (i) Consolidated Funded
Debt (as of the last day of such period) to (ii) Consolidated EBITDA for such
period. The Funded Debt to EBITDA Ratio shall be measured for a period covering
the four (4) fiscal quarters then ended.

         "GAAP" means Generally Accepted Accounting Principles.

         "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means those generally
accepted accounting principles and practices which are recognized as such by the
American Institute of Certified Public Accountants acting through the Financial
Accounting Standards Board ("FASB") or through other appropriate boards or
committees thereof and which are consistently applied for all periods so as to
properly reflect the financial condition, operations and cash flows of a Person,
except that any accounting principle or practice required to be changed by the
FASB (or other appropriate board or committee of the FASB) in order to continue
as a generally accepted accounting principle or practice may be so changed. Any
dispute or disagreement between the Company and the Required Lenders relating to
the determination of Generally Accepted Accounting Principles shall, in the
absence of manifest error, be conclusively resolved for all purposes hereof by
the written opinion with respect thereto, delivered to the Lenders, of the
independent accountants selected by the Company and reasonably satisfactory to
the Required Lenders for the purpose of auditing the periodic financial
statements of the Company.

         "GUARANTEEING FOREIGN SUBSIDIARIES" means those Foreign Subsidiaries of
the Company required to become a Guarantor pursuant to Section 5.12 of this
Agreement.

         "GUARANTOR" OR GUARANTORS" means DPI, Parfums, Royce, and Broad, and
any other Person required to guarantee the obligations of the Company in
accordance with Section 5.12 of this Agreement.

         "GUARANTY" OR "GUARANTIES" means the Joint Guaranty dated December 22,
1999 in favor of the Lender made by DPI, Parfums, Royce, and Broad, ratified and
confirmed pursuant to the Confirmation of Guaranty as of the Restatement
Effective Date, as such Joint Guaranty may be amended to include or be affirmed
by additional Guarantors, and any and all other guaranties executed and
delivered by one or more Guarantors pursuant to Exhibit C or Section 5.12 of
this Agreement.

                                      -19-
<PAGE>

         "HAZARDOUS MATERIALS" means any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic substances,
or related materials regulated pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901 et. seq.), and in the regulations adopted and
publications promulgated pursuant thereto, or any other federal, state or local
environmental law, ordinance, rule or regulation related to the pollution or
protection of the environment.

         "INTERCOMPANY DEBT" means Debt owing by the Company to any Guarantor or
from any Guarantor to the Company or from any Guarantor to any other Guarantor.

         "INVESTMENT" means any stock, evidence of Debt or other security of any
Person, any loan, advance, contribution of capital, extension of credit or
commitment therefor, including without limitation the guaranty of loans made to
others (except for current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms in the ordinary course of business) and any purchase of
(i) any security of another Person or (ii) any business or undertaking of any
Person or any commitment or option to make any such purchase, or any other
investment.

         "LENDER OR LENDERS" shall have the meaning assigned thereto in the
introductory paragraphs hereof.

         "LIEN" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing.

         "LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranties and
any other document executed or delivered pursuant to this Agreement other than
any documents or agreements delivered in connection with the Existing Collateral
Documents.

         "MATERIAL ADVERSE CHANGE" means, as to the Company alone, DPI alone,
any other Guarantor which has revenues or assets representing more than ten
(10%) percent of the Company's consolidated revenues or assets (a "Material
Guarantor") or the Company and its Consolidated Subsidiaries taken as a whole,
(i) a material adverse change in the financial condition, business, operations,
properties, prospects or results of operations of the Company alone, DPI alone,
a Material Guarantor alone, or the Company and its Consolidated Subsidiaries
taken as a whole (provided that the elimination of the inter-company payable
between the Company and DPI shall not, by virtue of such elimination alone, be
deemed a Material Adverse Change in either the Company or DPI) or (ii) any event
or occurrence which could have a material adverse effect on the ability of the
Company alone, DPI alone, a Material Guarantor alone, or the Company and its
Consolidated Subsidiaries taken as a whole to perform its or their obligations
under the Loan Documents.

                                      -20-
<PAGE>

         "MULTIEMPLOYER PLAN" means a Plan described in Section 4001(a)(3) of
ERISA which covers employees of the Company or any ERISA Affiliate.

         "NORTH CAROLINA EXPANSION" means expansion by the Company of its
existing manufacturing facility located in Rocky Point, North Carolina.

         "NORTH CAROLINA MORTGAGE" means the mortgage Lien existing on the date
of this Agreement, or refinanced hereafter, on the Company's real property and
the improvements thereon at 1830 Carver Drive, Rocky Point, North Carolina,
provided that any refinance of the existing mortgage (i) shall secure a
principal amount of not more than $20,000,000.00, (ii) if it is a construction
or building loan mortgage, shall be from a lender which has also issued to the
Company a permanent loan take out commitment meeting the requirements of clauses
(iii) and (iv) below, (iii) shall be for a term (including any construction and
permanent loan terms) of not less than five (5) years, (iv) shall have an
amortization schedule requiring annual payments of not more than one-fifth
(1/5th) of the original principal amount of the loan or, if it is a construction
or building loan, of the maximum amount available under such loan, and (v) no
Event of Default shall have occurred and be continuing at the time of such
refinance or shall result from such refinance and the Company shall have
provided the Lenders reasonable evidence that after giving effect to such
refinance, it will remain in compliance with the terms and conditions of this
Agreement, including, without limitation, Sections 5.31.

         "NOTES" shall have the meaning assigned thereto in Section 2.1 of this
Agreement.

         "OFFICER'S CERTIFICATE" means a certificate signed by the chief
executive officer or the chief financial officer of the Company, provided that
the Officer's Certificates delivered pursuant to Exhibit C must be signed by the
chief executive officer.

         "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

         "PARFUMS" means Parfums Schiaparelli, Inc., a New York corporation.

         "PERMITTED DIVIDENDS" means, with respect to the Company, the payment
of (i) any dividend payable in stock of the Company or (ii) subject to the
proviso at the end of this definition, cash dividends which in any fiscal year
of the Company, when combined with the amount of Permitted Open Market Stock
Repurchases during such fiscal year do not exceed, in the aggregate, $4,000,000;
provided, however, (x) no Default or Event of Default shall have occurred and be
continuing or shall result from the payment of such cash dividend and (y) the
Company shall have provided to the Lenders evidence that, after giving effect to
the paying of such cash dividend, it will remain in compliance with the terms
and covenants of this Agreement, including, without limitation, Section 5.31.

                                      -21-
<PAGE>

         "PERMITTED EQUIPMENT SALES" means sales by the Company or its
Consolidated Subsidiaries of equipment in an aggregate principal amount not
exceeding $500,000.00 during any fiscal year.

         "PERMITTED INVESTMENTS" means, (i) direct obligations of the United
States of America or any governmental agency thereof, or obligations guaranteed
by the United States of America, provided that such obligations mature within
one year from the date of acquisition thereof; (ii) time certificates of deposit
having a maturity of one year or less issued by any commercial bank organized
and existing under the laws of the United States or any state thereof and having
aggregate capital and surplus in excess of $500,000,000.00; (iii) money market
mutual funds having assets in excess of $2,500,000,000; (iv) commercial paper
rated not less than P-1 or A-1 or their equivalent by Moody's Investor Services,
Inc. or Standard & Poor's Corporation, respectively; (v) tax exempt securities
rated not less than Prime 2 or its equivalent by Moody's Investor Services, Inc.
or not less than A-1 or its equivalent by Standard & Poor's Corporation; (vi)
loans or advances between the Company and a Guarantor or between Guarantors;
(vii) deposits whether in Dollars or eurodollars, commercial paper, cash reserve
deposits, repurchase agreements or any similar short term investments made
available by any Lender or any Affiliate of any Lender; (viii) investments in,
or loans or advances to, wholly owned domestic Subsidiaries, provided that any
such investment, loan or advance made after the date of this Agreement shall be
made only in a domestic Subsidiary which is a Guarantor; (ix) investments in, or
loans or advances to, Foreign Subsidiaries, provided any such single investment
(valued at cost), loan or advance shall not exceed $10,000,000.00 and all such
investments (valued at cost), loans and advances shall not exceed
$12,500,000.00; (x) loans or advances to employees of the Company or a Guarantor
which do not exceed $2,000,000.00 in the aggregate at any time; and (xi) bonds
issued by the State of Israel in an aggregate amount not exceeding $250,000.00
(valued at cost) at any time.

         "PERMITTED OPEN MARKET STOCK REPURCHASE" means the purchase of common
stock of the Company in open market purchases, provided, however, such
purchases, when combined with the amount of Permitted Dividends paid in cash
during a fiscal year, shall not exceed $4,000,000.00 in the aggregate during
such fiscal year of the Company, provided, however, (x) no Default or Event of
Default shall have occurred and be continuing or shall result from such open
market purchase and (y) the Company shall have provided to the Lenders
reasonable evidence that, after giving effect to such purchase, it will remain
in compliance with the terms and covenants of this Agreement, including, without
limitation, Section 5.31.

         "PERMITTED REAL ESTATE SALE" means the sale by the each of the Company
and Broad of (i) its real property and the improvements thereon located at 565
Broad Hollow Road, Farmingdale, New York or (ii) the sale by the Company of its
real property and the improvements thereon located at 682 South 17th Street,
Newark, New Jersey provided that, in the case of either of such properties, such
sale shall (x) be for cash and (y) be in an arms length transaction with a
Person who or which is not an Affiliate of the Company.

                                      -22-
<PAGE>

         "PERMITTED STOCK REPURCHASES" means, with respect to the Company, (i)
transactions in which (x) the Company's common stock is transferred to the
Company by a current or former employee of the Company or any of its
Subsidiaries in an amount equal to the consideration payable to such employee
upon the exercise of stock options held by such employee or (y) the Company's
common stock is transferred to the Company by an employee in an amount equal to
the withholding tax liability for such employee resulting from the exercise of
such stock option rights by such employee, provided that the amount paid by the
Company for transactions described in clause (y) (net of the related tax benefit
received by the Company for such transaction) shall not exceed $500,000.00 in
the aggregate during any fiscal year of the Company, (ii) the repurchase of
common stock of the Company from participants in the Del Laboratories, Inc.
Employee Stock Ownership Trust (the "ESOT") and from the ESOT and (iii)
Permitted Open Market Stock Repurchases.

         "PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity or a federal, state or
local government, or a political subdivision thereof or any agency of such
government or subdivision.

         "PLAN" means any employee benefit plan established or maintained by the
Company or any ERISA Affiliate.

         "PROHIBITED TRANSACTION" means any non-exempt transaction set forth in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time.

         "REGULATION T" means Regulation T of the Board of Governors, as the
same may be amended and in effect from time to time.

         "REGULATION U" means Regulation U of the Board of Governors, as the
same may be amended and in effect from time to time.

         "REGULATION X" means Regulation X of the Board of Governors, as the
same may be amended and in effect from time to time.

         "RELEASE AND TERMINATION AGREEMENT" means the agreement in
substantially the form of Exhibit C to the Bank Credit Agreement executed and
delivered by parties thereto and Lenders, pursuant to which the parties thereto
consent to (i) the release of the Liens granted to the Collateral Agent pursuant
to the Existing Collateral Documents and (ii) the termination of the Existing
Collateral Documents.

         "REPORTABLE EVENT" means any of the events set forth in Section 4043 of
ERISA, other than an event for which the reporting requirements have been
waived..

         "REQUIRED LENDERS" means Lenders holding at least 51% of the aggregate
unpaid principal amount of all Notes at the time outstanding. For the purpose of
determining whether the holders of outstanding Notes of the requisite unpaid
principal amount at any time have taken any action authorized by this Agreement,
any Notes owned by the Company or any Affiliate of the Company shall not be
deemed outstanding.

         "ROYCE"  means Royce & Rader, Inc., a Delaware corporation.

                                      -23-
<PAGE>

         "SEC" means the Securities and Exchange Commission or any governmental
body succeeding to such of its authority as may from time to time be relevant to
this Agreement and the transactions contemplated hereby.

         "SUBORDINATED DEBT" means Debt of any Person, the repayment of which
the obligee has agreed in writing, on terms which have been approved by the
Required Lenders in advance in writing, shall be subordinate and junior to the
rights of the Lenders with respect to Debt owing from such Person to the
Lenders.

         "SUBSIDIARY" means, as to any Person, any corporation, partnership,
limited liability company or joint venture whether now existing or hereafter
organized or acquired (i) in the case of a corporation, of which a majority of
the securities having ordinary voting power for the election of directors (other
than securities having such power only by reason of the happening of a
contingency) are at the time owned by such Person and/or one or more
Subsidiaries of such Person or (ii) in the case of a partnership, limited
liability company or joint venture or similar entity, of which a majority of the
partnership, membership or other ownership interests are at the time owned by
such Person and/or one or more Subsidiaries of such Person.

         "TREASURY YIELD" means, with respect to any Note to be prepaid pursuant
to Section 4.2, 4.3 or 4.4, or which shall have been declared to be or become
immediately due and payable pursuant to Section 7.1, the yield to maturity
reported (for the latest day for which such yields shall have been so reported
as of 10:00 a.m. (New York City time) on the business day next preceding the
scheduled date of prepayment or the date of acceleration of such Note (such
scheduled date or date of acceleration being called the "Settlement Date")) by
Telerate Systems (or any successor or comparable service selected by the holders
of the Notes which are being prepaid or which have been accelerated, if such
report by Telerate Systems is unavailable) for actively traded U.S. Treasury
securities having a maturity closest to the remaining weighted average life to
final maturity (calculated in accordance with accepted financial practice) as of
such Settlement Date (A) of such Note, in the case of a prepayment in full or
acceleration of such Note, or (B) of the principal of such Note that is to be
prepaid (any partial prepayment being deemed applied in satisfaction of required
payments and prepayments of principal in inverse chronological order of their
due dates), in the case of a partial prepayment pursuant to Section 4.2.

         "UNFUNDED CAPITAL EXPENDITURES" means Capital Expenditures financed
other than by the incurrence of Debt, provided, however that any Capital
Expenditures financed by Revolving Credit Loans (as defined in the Bank Credit
Agreement) shall be considered Unfunded Capital Expenditures.

         SECTION 6.1. ACCOUNTING TERMS. Except as otherwise herein specifically
provided, each accounting term used herein shall have the meaning given to it
under GAAP.

         SECTION 7. REMEDIES.

                                      -24-
<PAGE>

         SECTION 7.1. EVENTS OF DEFAULT; ACCELERATION. If any of the following
events ("Events of Default") shall occur and be continuing for any reason
whatsoever (and whether it shall be voluntary or involuntary or occur or be
effected by operation of law or otherwise):

                  (A) the Company defaults in the payment or prepayment when due
                  of any principal of, or prepayment charge on, any Note,

                  (B) the Company defaults for at least five business days in
                  the payment when due of any interest on any Note,

                  (C) the Company defaults in the observance of any agreement
                  contained in Sections 5.15, 5.16, 5.17, 5.18, 5.22, 5.25,
                  5.27, 5.30, and 5.31.

                  (D) the Company defaults in the observance of any other
                  agreement or covenant in this Agreement and shall not have
                  remedied the default within 30 days after written demand to
                  remedy the same has been given to the Company by the holder of
                  any Note,

(E)               the Company, any Guarantor or any Subsidiary shall not pay (or
                  otherwise satisfy on terms consistent with the terms of this
                  Agreement) any other Debt in an aggregated principal amount
                  exceeding $500,000 when due, or any condition shall exist
                  permitting other Debt of the Company, any Guarantor or any
                  Subsidiary in an aggregate principal amount exceeding $500,000
                  to become or be declared due prior to its stated maturity,
                  except, however, a condition in respect of a Guarantee of the
                  Company, any Guarantor or any Subsidiary if the Company, such
                  Guarantor or such Subsidiary shall duly perform its
                  obligations under such Guarantee,

                  (F) the Company, any Guarantor or any Subsidiary shall (1) be
                  generally not paying its debts as they become due, (2) file,
                  or consent by answer or otherwise to the filing against it of,
                  a petition for relief or reorganization or arrangement or any
                  other petition in bankruptcy, for liquidation or to take
                  advantage of any bankruptcy or insolvency law of any
                  jurisdiction, (3) make any assignment for the benefit of its
                  creditors, (4) consent to the appointment of a custodian,
                  receiver, trustee or other officer with similar powers of
                  itself or of any substantial part of its property, (5) be
                  adjudicated insolvent or be liquidated, or (6) take corporate
                  action for the purpose of any of the foregoing,

                  (G) a court or governmental authority of competent
                  jurisdiction shall enter an order appointing, without consent
                  by the Company, any Guarantor or any Subsidiary, a custodian,
                  receiver, trustee or other officer with similar powers with
                  respect to it or with respect to any substantial part of its
                  property, or if an order for relief shall be entered in any
                  case or proceeding for liquidation or reorganization or
                  otherwise, to take advantage of any bankruptcy or insolvency
                  law of any jurisdiction, or ordering the dissolution,
                  winding-up or liquidation of the Company, any Guarantor or any
                  Subsidiary, or if any petition for any such relief shall be
                  filed against the Company, any Guarantor or any Subsidiary and
                  such petition shall not be dismissed within 60 days,

                                      -25-
<PAGE>

                  (H) final judgment shall be rendered against the Company, any
                  Guarantor or any Subsidiary for the payment of money in excess
                  of $500,000, and such judgment shall not be discharged or
                  execution thereon stayed pending appeal, within 30 days after
                  entry thereof, or, in the event of such a stay, such judgment
                  shall not be discharged within 30 days after such stay
                  expires,

                  (I) any material representation or warranty heretofore or
                  hereafter made by or on behalf of the Company herein or in any
                  certificate or other writing delivered under or pursuant to
                  this Agreement or in connection with any provision hereof or
                  related to the transactions contemplated hereby shall prove to
                  have been false or incorrect or breached in any material
                  respect on the date as of which made, or

                  (J) any Guaranty shall cease, other than in accordance with
                  its terms, to be in full force and effect or shall be declared
                  by a court or governmental authority of competent jurisdiction
                  to be void, voidable or unenforceable against any Guarantor,
                  or any Guarantor or the Company asserts any of the foregoing
                  in writing or before any court or governmental authority,

then (i) upon the occurrence of any Event of Default described in subsection (F)
or (G) with respect to the Company (other than such an Event of Default
described in subsection (F)(1) or described in subsection (F)(6) by virtue of
the reference in such clause (6) to such clause (1)), the unpaid principal
amount of the Notes, together with the accrued interest thereon and, to the
extent permitted by law, an amount equal to 50% of the prepayment charge that
would be payable if the Company were prepaying the Notes at the time pursuant to
Section 4.2, shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by the Company, or (ii) upon occurrence of any other
Event of Default, the holder or holders of at least 66-2/3% of the unpaid
principal amount of the Notes at the time outstanding (subject to the last
paragraph of Section 9) may, by written notice to the Company, declare all of
the Notes to be, and the same shall forthwith become due and payable, together
with accrued interest thereon which shall be deemed matured and, to the extent
permitted by law, an amount equal to 50% of the prepayment charge that would be
payable if the Company were prepaying the Notes at the time pursuant to Section
4.2, provided that, during the existence of an Event of Default described in
Subsection (A) or (B) with respect to any Note, the holder of such Note may, by
written notice to the Company, declare such Note to be, and the same shall
forthwith become, due and payable, together with accrued interest thereon which
shall be deemed matured and, to the extent permitted by law, an amount equal to
50% of the prepayment charges that would be payable if the Company were
prepaying such Note at the time pursuant to Section 4.2. If any holder of any
Note shall exercise the option specified in the proviso to the preceding
sentence, each other holder of any Note may, by written notice to the Company,
declare the principal of all Notes held by it to be, and the same shall
forthwith become, due and payable, together with accrued interest thereon which
shall be deemed matured and, to the extent permitted by law, an amount equal to
50% of the prepayment charge that would be payable if the Company were prepaying
the Notes at the time pursuant to Section 4.2. Nevertheless, if at any time
after acceleration of the maturity of any Note or Notes, the Company shall pay
all arrears of interest and all payments on account of the principal and
prepayment charge which shall have become due otherwise than by acceleration
(with interest on principal and prepayment charge and, to the extent permitted
by law, on overdue interest, at the rate specified in the Notes) and all Events
of Default (other than non-payment of principal of and accrued interest on the
Notes, an amount equal to prepayment charges as aforesaid, due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
Section 9, then the holder or holders of at least 66-2/3% of the unpaid
principal amount of the Notes at the time outstanding (subject to the last
paragraph of Section 9) by written notice to the Company, may rescind and annul
the acceleration and its consequences; but such action shall not affect any
subsequent Default or Event of Default or impair any right consequent thereon.

                                      -26-
<PAGE>

         SECTION 7.2. OTHER REMEDIES. If any Default or Event of Default shall
have occurred and be continuing, the holder of any Note may proceed to protect
and enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for specific
performance of any agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy is intended to be
exclusive and each remedy shall be cumulative.

         If the Company shall default in the payment of principal of, or
interest or prepayment charge on, any Note, or shall default in the performance
or observance of any agreement contained in this Agreement, it will pay to the
holder of any Note such amounts, to the extent lawful, as shall be sufficient to
pay the costs and expenses of collection or of otherwise enforcing any of such
holder's rights, including reasonable counsel fees.

         SECTION 7.3. NOTICE OF ACCELERATION. If the maturity of any Note shall
be accelerated as provided in Section 7.1, the Company will give written notice
thereof to the holders of all outstanding Notes within one business day.

         SECTION 8. COMMUNICATIONS; PAYMENT OF NOTES. All communications
provided for hereunder shall (except as otherwise provided by Section 4.3 and
4.4) be delivered, or mailed (by first-class mail, postage prepaid), addressed
(A) if to the Lender, at the Lender's address for the purpose thereof provided
in Schedule I, (B) if to any other Person who is the holder of a Note, at the
address of such Person for the purpose thereof as it appears on the register of
the Company maintained under Section 10, (C) if to the Company or any Guarantor,
c/o Del Laboratories, Inc., at 565 Broad Hollow Road, Farmingdale, NY 11735,
Attention: Chief Financial Officer, with a copy to Del Laboratories, Inc. at 178
EAB Plaza, 8th Floor, Uniondale, NY 11556, Attention: General Counsel. Any
address may be changed from time to time and shall be the most recent address
furnished in writing (1) if by any Lender or any other holder of a Note, to the
Company, or (2) if by the Company, to each Lender and to each holder of a Note.
Any communication shall be deemed to have been given when delivered or mailed,
as the case may be.

                                      -27-
<PAGE>

         The Company agrees that, so long as any Lender or its nominee holds any
Note and notwithstanding any provision hereof or of the Notes to the contrary,
it will pay all sums becoming due thereon for principal, prepayment charge and
interest to such Lender in the manner provided for the Lender in Schedule I or
in such other manner as such Lender may designate to the Company in writing,
without presentation of the Notes. Each Lender agrees that if it sells or
transfers any Note held by it, (i) such sale shall be made in compliance with
all applicable Federal and state securities laws, (ii) prior to such disposition
it will make a notation thereon of all principal payments previously made, and
(iii) it will not sell or transfer a Note to any Competitor. The Company agrees
that the provisions of this paragraph shall inure to the benefit of any other
institutional holder of any such Note which shall have agreed to comply with the
requirements of this paragraph.

         SECTION 9. FIRST OFFER UPON TRANSFER OF NOTES. In the event that any
holder of a Note (a "Proposed Transferor") should wish to transfer its Note, or
any portion thereof, to another Person in a transaction which would result in
there being more than four holders of the Notes, the Proposed Transferor shall,
before making such transfer, deliver to the Company an offer (the "Offer") to
sell to the Company the Proposed Transferor's Note, or such portion of the Note
as the Proposed Transferor wishes to transfer. The Offer shall state the
purchase price upon which the Proposed Transferor will sell the Note, or portion
thereof, to the Company and shall remain open and irrevocable for a period of 30
days from the date of its delivery (the "Offer Period"). The Company may accept
the Offer by delivering to the Proposed Transferor within the Offer Period a
written notice of acceptance together with the purchase price specified in the
Offer in immediately available funds. In the event that the Company does not
accept the offer within the Offer Period, the Proposed Transferor shall be free
to sell or transfer its Note, or the portion thereof specified in the Offer, to
any Person for a purchase price not less than nine-five percent (95%) of the
purchase price specified in the Offer for a period of 90 days following the
expiration of the Offer Period subject to the restrictions contained in Section
8 hereof. Any portion of the Note not sold or transferred by the Proposed
Transferor during the 90 day period shall, at the expiration thereof, become
subject again to the transfer restrictions specified in this Section.

         Any Note, or portion thereof, acquired by the Company pursuant to this
Section shall be immediately canceled. Neither the Company nor any of its
affiliates shall ever be deemed to be a holder of any Notes and no Notes
acquired or held by the Company or its affiliates shall be considered in
calculating the ownership of the Notes.

         SECTION 10. AMENDMENT AND WAIVER. Except as otherwise expressly
provided herein, any provision of this Agreement or of the Notes may be amended
or waived if the Company shall obtain the written agreement thereto of the
holder or holders of at least 66-2/3% of the unpaid principal amount of the
Notes at the time outstanding, except that, without the written agreement of the
holder or holders of all the Notes at the time outstanding, no such amendment or
waiver shall extend the maturity of any Note or reduce the principal of, or the
rate of interest or any prepayment charge payable with respect to, any Note, or
affect the time or amount of any required prepayment or interest payment or
reduce the percentage of the unpaid principal amount of the Notes required with
respect to any amendment or waiver. Each holder of the Notes at the time or
thereafter outstanding shall be bound by any such amendment or waiver, whether
or not a notation thereof shall have been placed on the Note.

                                      -28-
<PAGE>

         No course of dealing between the Company and any Lender or the holder
of any Note, and no delay in exercising any rights hereunder or under any Note,
shall imply or otherwise operate as a waiver of any rights of any Lender or the
holder of any Note.

         SECTION 11. REGISTRATION, TRANSFER AND EXCHANGE OF NOTES. The Company
will keep at its principal office a register in which it will provide for the
registration and registration of transfer of Notes, at its own expense
(excluding transfer taxes). If any Note is surrendered at said office or at the
place of payment named in the Note for registration of transfer or exchange
(accompanied in the case of registration of transfer by a written instrument of
transfer in form satisfactory to the Company duly executed by or on behalf of
the holder), the Company, at its expense, will deliver in exchange one or more
new Notes in any denominations (multiples of $1,000), as requested by the
holder, for the aggregate unpaid principal amount. Any Note or Notes issued in a
transfer or exchange shall carry the same rights to interest (unpaid and to
accrue) carried by the Note or Notes so transferred or exchanged so that there
will not be any loss or gain of interest on the Note or Notes surrendered. Each
holder of a Note shall promptly inform the Company of the transfer or assignment
of such Note, or any portion thereof.

         SECTION 12. LOST NOTES. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction of any Note, and (in case of
loss, theft or destruction) of indemnity satisfactory to it (any Lender's or any
other institutional holder's undertaking to be satisfactory indemnity in case of
loss, theft or destruction of any Note owned by such Lender or by such other
institutional holder), and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such Note,
if mutilated, the Company will pay any unpaid principal, interest and prepayment
charge then or theretofore due and payable on such Note and will deliver in lieu
of such Note a new Note for the remaining unpaid principal amount thereof and
carrying the same rights to interest (unpaid and to accrue).

         SECTION 13. EXPENSES. The Company agrees, whether or not the
transactions hereby contemplated are consummated, to pay all expenses incident
to the loans and related transactions and also in connection with any future
amendment of, or waiver under or with respect to (whether or not given), this
Agreement or any of the Notes, including in each case, without limitation, any
printing costs, and fees and expenses of Lenders' special counsel and of
Lender's local counsel, if any, for services to the Lenders in connection with
the loans and such other matters, and to reimburse each Lender for any
out-of-pocket disbursements for payment of the expenses mentioned.

         The Company will also pay all taxes (including interest and penalties)
which may be payable in respect of the execution and delivery of this Agreement
or of any of the Notes (but not their transfer) or of any amendment of, or
waiver under or with respect to, this Agreement or of any of the Notes and will
save each Lender and all subsequent holders of the Notes harmless from any loss
or liability resulting from nonpayment or delay in payment of any such tax.

         The obligations of the Company under this Section shall survive the
payment of the Notes.

                                      -29-
<PAGE>

         SECTION 14. CONFIDENTIAL INFORMATION. The Company acknowledges that the
holder of any Note may deliver copies of any financial statements and other
documents delivered to such holder, and disclose any other information disclosed
to such holder, by or on behalf of the Company or any Subsidiary in connection
with or pursuant to this Agreement to

                  (i) such holder's directors, officers, employees, agent and
professional consultants (other than a Competitor),

                  (ii) any other holder of any Note (other than a Competitor),

                  (iii) any Person (other than a Competitor) to which such
holder offers to sell such Note or any part thereof,

                  (iv) any Person (other than a Competitor) to which such holder
sells or offers to sell a participation in all or any part of such Note,

                  (v) any federal or state regulatory authority having
jurisdiction over such holder,

                  (vi) the National Association of Insurance Commissioners or
any similar organization, or

                  (vii) any other Person to which such delivery or disclosure
may be necessary or appropriate

                           (1) in compliance with any law, rule, regulation or
                           order applicable to such holder,

                           (2) in response to any subpoena or other legal
                           process,

                           (3) in connection with any litigation to which such
                           holder is a party, or

                           (4) in order to protect such holder's investment in
                           such Note.

; provided that to the extent such information is confidential, non-public
information of the Company, Lenders will instruct such persons to keep such
information as confidential in accordance with this Section 14.

         The Lenders agree that any information concerning the Company or any
Subsidiary that has been supplied to them by the Company and conspicuously
identified in writing by the Company as confidential or the Company has
otherwise advised that such information is confidential, and which is not
information available to or obtainable by the public, shall be treated as
confidential by the Lenders in accordance with the procedures and standards that
the Lenders generally apply to information of a confidential nature. Any Lender
who discloses confidential information to any Person described in subsections
(iii), (iv), or (vii) shall promptly advise the Company of such disclosure. In
the event that any Lender receives a request or demand to disclose any
confidential information pursuant to any subpoena or court order, such Lender
agrees to the extent permitted by applicable law or if permitted by applicable
law, statute, rule or regulation to the extent such Lender determines in good
faith that it will not create any risk of liability to such Lender, that such
Lender will use its best efforts to promptly notify the Company of such request
so that the Company may seek a protective order or other appropriate relief or
remedy.

                                      -30-
<PAGE>

         The Company's sole remedy for any breach by a Lender of its obligation
under this Section shall be limited to obtaining injunctive relief against
further disclosures of confidential information. The Company may not raise any
Lender's breach of its obligations under this Section as a defense, counterclaim
or basis for setoff in any action brought against the Company to enforce a
holder's rights under its Note or under this Agreement.

         SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and inure to the benefit of, and be enforceable by, the Company and each
Lender, and their respective successors and assigns, whether or not so
expressed; provided, however, that the benefits of Sections 8 (the second
paragraph thereof), 12 (as to satisfactory indemnity) and 13 shall be limited as
specifically provided therein, except that any other institutional investor
which is a holder of any of the Notes shall be entitled to the rights and
benefits thereunder as if it were a Lender.

         SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement or made in writing by
or on behalf of the Company in connection with the transactions contemplated
hereby shall survive the execution and delivery of this Agreement and of the
Notes, regardless of any investigation at any time made by any Lender or on its
behalf. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company hereunder or in connection with the
transactions contemplated hereby shall be deemed representations and warranties
of the Company hereunder.

         SECTION 17. GOVERNING LAW; WAIVER OF JURY TRIAL. The Note, this
Agreement and (unless otherwise provided) all amendments, supplements, waivers
and consents relating thereto or hereto shall be governed by the laws of the
State of New York (without regard to the conflict of law provisions thereof).

         THE COMPANY, EACH GUARANTOR, AND THE LENDERS WAIVE ALL RIGHTS TO TRIAL
BY JURY ON ANY CAUSE OF ACTION DIRECTLY OR INDIRECTLY INVOLVING THE TERMS,
COVENANTS OR CONDITIONS OF THIS AGREEMENT OR ANY LOAN DOCUMENT.

         SECTION 18. REAFFIRMATION, RESTATEMENT AND WAIVERS. This Agreement
constitutes an amendment and restatement of the Existing Loan Agreement and the
current outstanding indebtedness evidenced by the Existing Loan Agreement is
continuing indebtedness, and nothing herein shall be deemed to constitute a
payment, settlement or novation of such indebtedness evidenced by the Existing
Loan Agreement except to the extent provided herein, or to release or otherwise
adversely affect any lien, mortgage or security interest securing such
indebtedness or any rights of any Lender against any guarantor, surety or other
party primarily or secondarily liable for such indebtedness.

                                      -31-
<PAGE>

         SECTION 19. [INTENTIONALLY OMITTED].

                                      -32-
<PAGE>

         IN WITNESS WHEREOF, the Company, each Guarantor and each Lender have
executed this Agreement as of the day and year first above written.

                                           DEL LABORATORIES, INC.

                                           By /s/ Enzo Vialardi
                                           --------------------
                                           Executive Vice President and
                                           Chief Executive Officer

                                           DEL PHARMACEUTICALS, INC.

                                           By /s/ Enzo Vialardi
                                           --------------------
                                           Executive Vice President and
                                           Chief Executive Officer

                                           PARFUMS SCHIAPARELLI, INC.

                                           By /s/ Enzo Vialardi
                                           --------------------
                                           Executive Vice President and
                                           Chief Executive Officer

                                           ROYCE & RADER, INC.

                                           By /s/ Enzo Vialardi
                                           --------------------
                                           Executive Vice President and
                                           Chief Executive Officer

                                           565 BROAD HOLLOW REALTY CORP.

                                           By /s/ Enzo Vialardi
                                           --------------------
                                           Executive Vice President and
                                           Chief Executive Officer

                                      -33-
<PAGE>

             JACKSON NATIONAL LIFE INSURANCE COMPANY

             BY:  PPM AMERICA, INC., AS ATTORNEY IN FACT,
             ON BEHALF OF JACKSON NATIONAL LIFE INSURANCE COMPANY

             BY:         /s/  Chris Raub
                         ---------------
             TITLE:      Managing Director

                                      -34-
<PAGE>

                                    EXHIBIT A

                             DEL LABORATORIES, INC.

                              Amended and Restated

                        9.5% Senior Note Due May 31, 2005

                                                              March 26, 2002
No. R-   _                                                    New York, New York
                                                              PPN___________

         DEL LABORATORIES, INC., a Delaware corporation (the "Company"), for
value received, hereby promises to pay to the order of Jackson National Life
Insurance Company or its registered assigns, on or before May 31, 2005, the
principal sum of THIRTY-SIX MILLION DOLLARS ($36,000,000) (or so much thereof as
shall not have been prepaid) and to pay interest (computed on the basis of a
360-day year of twelve 30-day months) on the unpaid principal hereof from the
date hereof at the rate of 9.5% per annum, semiannually on November 30 and May
31 in each year, until such principal sum shall have become due and payable
(whether at maturity, at a required prepayment date, or otherwise) and to pay on
demand interest at the rate of 11.5% per annum on any overdue principal and on
any overdue prepayment charge and, to the extent permitted by applicable law, on
any overdue interest, from the due date thereof, until the obligation of the
Company with respect to the payment thereof shall be discharged. Payments of
principal, prepayment charges, and interest shall be made in lawful money of the
United States of America upon presentation hereof at the office of the Company
at 565 Broad Hollow Road, Farmingdale, New York 11735, or at such other place as
the holder hereof shall have designated to the Company in writing.

         This Note is one of the Notes of the Company, aggregating $36,000,000
in original authorized principal amount, arising out of the Amended and Restated
Loan Agreement dated as of March 26, 2002 (the "Loan Agreement"), entered into
by the Company with the lenders named therein. This Note amends and restates the
promissory notes having an original aggregate principal amount of $40,000,000
issued under and pursuant to the Loan Agreement dated May 26, 1993, as amended
(the "Existing Notes") and replaces such Existing Notes in their entirety. The
indebtedness evidenced by the Existing Notes is continuing indebtedness
evidenced by this Note, and nothing herein shall be deemed to constitute a
payment, settlement or novation of the indebtedness evidenced by the Existing
Notes. The holder of this Note is entitled to enforce the provisions of such
Loan Agreement and to enjoy the benefits thereof.

         The Company is required by such Loan Agreement to prepay this Note on
May 31, 2002, and on each May 31 thereafter to and including May 31, 2004, as
long as this Note is outstanding. The Company may, at its election, prepay this
Note, in whole or in part, and may under certain circumstances be required to
prepay this Note in whole, and the maturity hereof may be accelerated by the
holder of this Note or by holders of a percentage of the Notes outstanding
following an Event of Default, all as provided in such Loan Agreement, to which
reference is made for the terms and conditions of such provisions as to
prepayment and acceleration.

                                       -1-
<PAGE>

         Transfer of this Note is registrable on the note register of the
Company upon presentation at the principal office of the Company, accompanied by
a written instrument of transfer in form satisfactory to the Company duly
executed by, or on behalf of, the holder hereof. This Note may also be exchanged
at such offices for one or more Notes in any denominations (multiples of
$1,000), as requested by the holder, of a like aggregate unpaid principal
amount.

         The transfer of this Note is subject to certain restrictions set forth
in Sections 8 and 9 of the Loan Agreement.

         THE COMPANY HEREBY EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A TRIAL BY
JURY IN ANY ACTION ON OR RELATED TO THIS NOTE, THE LIABILITIES HEREUNDER OR THE
ENFORCEMENT OF EITHER OR ALL OF THE SAME.

         Prior to due presentment for registration of transfer, the Company and
any agent of the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment of principal
and prepayment charges and interest as herein provided and for all other
purposes.

                                                     DEL LABORATORIES, INC.

                                                     --------------------------
                                                     By:
                                                     Its:

                                      -2-

<PAGE>

                                    EXHIBIT B

                                 REPRESENTATIONS

PART ONE - REPRESENTATIONS BY THE COMPANY

         SECTION B-1. GOOD STANDING OF THE COMPANY, GUARANTORS AND SUBSIDIARIES;
AUTHORIZATION; VALIDITY AND ENFORCEABILITY. The Company, each Guarantor and each
Subsidiary of the Company or any Guarantor are each a corporation duly
incorporated, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation and each has the corporate power to
own its assets and to transact the business in which it is presently engaged and
is duly qualified and is in good standing in all other jurisdictions where the
failure to so qualify would be reasonably likely to result in a Material Adverse
Change. The execution, delivery and performance of this Agreement and the Notes
have been duly authorized by all necessary proceedings on the part of the
Company. The Loan Documents have been duly executed and delivered on behalf of
the Company and each Guarantor, as the case may be, and are the legal, valid and
binding obligations of the Company and each Guarantor, as the case may be,
enforceable against the Company or such Guarantor in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limited creditors' rights generally.

         SECTION B-2. COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery
and performance of this Agreement and the Notes will not result in any breach
of, constitute a default under or result in the creation of any Lien in respect
of any property of the Company, any Guarantor or any Subsidiary pursuant to, the
charter or by-laws of the Company, any Guarantor or any Subsidiary, or any
agreement, instrument, judgment, decree, order, statute, rule or regulation
applicable to the Company, any Guarantor or any Subsidiary, other than the Liens
created pursuant to the Loan Documents. Neither the Company, any Guarantor nor
any Subsidiary is in violation of any term of its charter or by-laws, or of any
term of any agreement, instrument, judgment, decree, order, statute, rule or
regulation applicable to it, the violation of which might materially adversely
affect the business, operations, properties or financial position of the
Company, the Guarantors and Subsidiaries, taken as a whole. Neither the nature
of the Company, any Guarantor nor any Subsidiary, nor of any of their respective
businesses or properties, nor any relationship between the Company, any
Guarantor or any Subsidiary and any other Person is such as to require any
consent, approval or other action by, or any notice to, or filing with, any
Person in connection with the execution and delivery of this Agreement or
fulfillment of, or compliance with, the terms and provisions hereof or thereof,
other than such consents, approvals, actions, notices or filings which have been
duly obtained or made on or prior to the Restatement Effective Date and are set
forth in an Officer's Certificate delivered to you on the Restatement Effective
Date.

         SECTION B-3. BUSINESS, PROPERTIES, FINANCIAL AND OTHER INFORMATION
REGARDING THE COMPANY. The Company has delivered to each Lender copies of the
documents listed in Exhibit D and makes the representations that follow:

                                      -1-
<PAGE>

                  (A) Section D-1 lists all reports and proxy statements
                  required to be filed by the Company with the SEC since
                  February 25, 2000.

                  (B) Section D-2 sets forth a correct and complete list and
                  description of all Debt of the Company, any Guarantor and each
                  Subsidiary, any Liens securing such Debt, and any Guaranties
                  outstanding or existing on the date there stated.

                  (C) Section D-3 contains a correct and complete list of the
                  Company's Subsidiaries.

         SECTION B-4. SHARES OF SUBSIDIARIES. All the outstanding shares of the
Subsidiaries shown in Section D-3 as being owned by the Company or by any of its
Subsidiaries have been validly issued, are fully paid and nonassessable and are
free and clear of any Liens. No Subsidiary of the Company owns any shares of the
Company.

         SECTION B-5. TAXES. The Company, each Guarantor and each Subsidiary of
the Company or any Guarantor have filed all federal, state and local tax returns
required to be filed and have paid all taxes, assessments and governmental
charges and levies thereon to be due, including interest and penalties, unless
and only to the extent that (i) such taxes are being contested in good faith and
by appropriate proceedings by the Company, such Guarantor or any such
Subsidiary, as the case may be; (ii) there are adequate reserves therefor in
accordance with GAAP entered on the books of the Company, such Guarantor or any
such Subsidiary; and (iii) no enforcement proceedings for the collection of such
taxes against the Company, such Guarantor or any such Subsidiary have been
commenced.

         SECTION B-6. ENCUMBRANCES. The Company, each Guarantor and each
Subsidiary has good and marketable title to its real properties and good and
merchantable title to each of its other properties as are reflected in the
audited balance sheet contained in the Company's Form 10-K for the fiscal year
ended December 31, 2000 (except as sold or otherwise disposed of in the ordinary
course of business) and, except as permitted by Section 5.15, all properties of
the Company, the Guarantors and Subsidiaries are free and clear of all Liens.

         SECTION B-7. MATERIAL ADVERSE CHANGES. The consolidated financial
statements of the Company and its Consolidated Subsidiaries for the fiscal year
ended December 31, 2000, and for the nine (9) month period ended September 30,
2001 copies of each of which have been furnished to the Lenders, (i) fairly
present in all material respects the financial condition of the Company and its
Consolidated Subsidiaries as at such dates and the results of operations of the
Company and its Consolidated Subsidiaries for the periods ended on such dates,
all in accordance with GAAP, subject, in the case of the interim financial
statements, to year end adjustments and the absence of footnotes, (ii) between
December 31, 2000 and the date of this Agreement there has been no Material
Adverse Change and (iii) except as disclosed on such financial statements or the
notes thereto, there are no undisclosed liabilities of the Company or any of its
Consolidated Subsidiaries, contingent or otherwise required to be disclosed
therein.

         SECTION B-8. OFFERING OF NOTES. Neither the Company nor anyone acting
on its behalf has offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any person other than the Lenders and three
other institutional investors. Neither the Company nor anyone acting on its
behalf has taken, or will take, any action which would subject the issuance or
sale of the Notes to Section 5 of the Securities Act of 1933, as amended.

                                      -2-
<PAGE>

         SECTION B-9. COMPLIANCE WITH FEDERAL RESERVE BOARD REGULATIONS. No part
of the proceeds of the loans made hereunder were used, and no part of the
proceeds of any loan repaid with the proceeds of the loans made hereunder were
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation T, U or X (other than the
repurchase of shares of Common Stock of the Company). The assets of the Company
and its Subsidiaries do not include any margin stock (other than shares of the
Company's common stock presently held in its treasury), and neither the Company
nor any of its Subsidiaries has any present intention of acquiring any margin
stock.

         SECTION B-10. ERISA. No employee benefit plan established or maintained
by the Company or by any of its Subsidiaries or to which either the Company or
any of its Subsidiaries has made contributions, which is subject to Part 3 of
Subtitled B of Title I of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), has any material accumulated funding deficiency (as
defined in such Act), and neither the Company nor any of its Subsidiaries has
incurred any material liability to the Pension Benefit Guaranty Corporation (the
"PBGC") or any other governmental entity or agency with respect to any such
plan. The Company and each of its Subsidiaries are in compliance in all material
respects with ERISA to the extent applicable to them and have received no notice
to the contrary from the PBGC or from any other governmental agency or entity.
The consummation of the transaction provided for in this Agreement and the
compliance by the Company with the provisions hereof and the Notes issued
hereunder will not involve any prohibited transaction within the meaning of
ERISA or Section 4975 of the Internal Revenue Code of 1986.

         SECTION B-11. INVESTMENT COMPANY ACT. The Company is not, and is not
directly or indirectly controlled by or acting on behalf of any person which is,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.

         SECTION B-12. FOREIGN ASSETS CONTROL REGULATIONS. Neither the borrowing
by the Company hereunder nor its use of the proceeds thereof will violate the
Foreign Assets Control Regulations, the Foreign Funds Control Regulations, the
Transaction Control Regulations, the Cuban Assets Control Regulations, the
Iranian Transactions Regulations, the Iranian Assets Control Regulations or the
Libyan Sanctions Regulations of the United States Treasury Department (31
C.F.R., Subtitle B, Charter V, as amended) or any regulation or ruling issued
under Executive Order Nos. 12543, 12722, 12724, 12775, 12779, 12708 or 12810.

         SECTION B-13. PENDING LITIGATION. Schedule D-5 lists all actions,
suits, proceedings or investigations pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any of its Subsidiaries
before any court, arbitrator or administrative or governmental body. None of
such actions, suits, proceedings or investigations will materially adversely
affect the enforceability of this Agreement or the Notes. None of such actions,
suits, proceedings or investigations, individually or in the aggregate, could
reasonably be expected to materially adversely affect the business, operations,
properties or financial position of the Company and its Subsidiaries, taken as a
whole.

                                      -3-
<PAGE>

         SECTION B-14. SOLVENCY. After giving effect to the execution of this
Agreement, the Bank Credit Agreement and availability of the Total Commitment
(as defined in the Bank Credit Agreement), (i) The fair value of the assets of
(x) the Company and its Consolidated Subsidiaries, on a consolidated basis and
(y) the Company and DPI, each singularly, exceeds, in each case, their debts and
liabilities (subordinated, contingent or otherwise); (ii) the present fair
saleable value of the property of (x) the Company and its Consolidated
Subsidiaries, on a consolidated basis and (y) the Company and DPI, each
singularly, is, in each case, greater than the amount required to pay the
probable liability of their debts and other liabilities (subordinated,
contingent or otherwise) as such debts and other liabilities mature; (iii) (x)
the Company and its Consolidated Subsidiaries, on a consolidated basis and (y)
the Company and each Guarantor singularly, is, in each case, able to pay their
debts and liabilities (subordinated, contingent or otherwise) as such debts and
liabilities mature; and (iv) (x) the Company and its Consolidated Subsidiaries,
on a consolidated basis and (y) the Company and each Guarantor singularly, do
not have, in each case, unreasonably small capital to conduct the businesses in
which they are engaged; and (v) the Company and DPI each has a positive net
worth.

         SECTION B-15. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company complies
with all applicable Federal, state and local laws, statues, rules, regulations
and ordinances relating to public health, safety or the environment including,
without limitation, relating to releases, discharges, emissions or disposals to
air, water, land or ground water, to the withdrawal or use of ground water, to
the use, handling or disposal of polychlorinated biphenyls (PCB's), asbestos or
urea formaldehyde, to the treatment, storage, disposal or management or
hazardous substances (including, without limitation, petroleum, its derivatives,
by-products or other hydrocarbons), to exposure to toxic, hazardous or other
controlled, prohibited or regulated substances, to the transportation, storage,
disposal, management or release of gases or liquid substances, the failure to
comply with which could reasonably be expected to have a materially adverse
effect on the Company, its Subsidiaries, and their businesses and properties,
taken as a whole. Except as disclosed in Schedule D-6 hereto, the Company does
not know of any claim against, and has not received notice that it is a
potentially responsible party, and is not aware of any response action or
clean-up where it may be a potentially responsible party, under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.
Section 9601 ET SEQ.) or any state or local laws, regulations or orders
concerning similar subject matter.

         SECTION B-16. COMPLIANCE WITH APPLICABLE LAWS. The Company and each of
its Subsidiaries is in compliance, in all material respects, with all applicable
statutes, rules, regulations, ordinances, codes, orders, licenses, franchises,
permits, authorizations and concessions, as such apply to the Company and its
Subsidiaries, including, without limitation, any applicable building, zoning,
anti-pollution, occupational safety, health or other law, ordinance or
regulation in respect of any of the Company's plants, warehouses, offices,
structures, or operations. Neither the Company nor any of its Subsidiaries have
received any notification alleging any violation of any of the foregoing which
might reasonably be expected to have a material adverse effect on the Company
and its Subsidiaries and with respect to which adequate corrective action has
not been taken. Schedule D-7 contains a list and brief description of all
notices from and related reports to governmental authorities (other than notices
listed in Schedule D-6), including, without limitation, citations received and
corrective action related thereto taken, by the Company or any of its
Subsidiaries from the Food and Drug Administration, the United States
Environmental Protection Agency, the Equal Employment Opportunity Commission, or
the Occupational Safety and Health Administration (or, in each case, any state
agency performing a similar function) with respect to potential claims which
might reasonably be expected to have a material adverse effect on the Company
and its Subsidiaries.

                                      -4-
<PAGE>

         SECTION B-17. INTELLECTUAL PROPERTY. The Company and each Subsidiary
owns or has the right to use all patents, trademarks, service marks, trade
names, copyrights, licenses, trade secrets and other rights, free from
burdensome restrictions, which are necessary for the operation of their
respective businesses as presently conducted and the lack of which might
reasonably be expected to have a material adverse effect on the Company and its
Subsidiaries (taken as a whole). To the best knowledge of the Company, none of
the present or contemplated operations of the Company or any of its Subsidiaries
infringes any patent, trademark, service mark, trade name, copyright, license or
other right owned by any other Person which infringement would reasonably be
expected to have a material and adverse effect upon the Company or any of its
Subsidiaries. To the best knowledge of the Company, no Person is presently
infringing or threatening to infringe upon any patent, trademark, service mark,
trade name, copy rights or trade secret which is proprietary to or licensed by
the Company or any of its Subsidiaries.

         SECTION B-18. REPRESENTATIONS AND WARRANTIES INCORPORATED FROM BANK
CREDIT AGREEMENT. As of the Restatement Effective Date, each of the
representations and warranties made in the Bank Credit Agreement by each of the
Company and the Guarantors is true and correct in all material respects, and
such representations and warranties are hereby incorporated herein by reference
with the same force and effect as though set forth in their entirety herein, as
qualified therein.

                                      -5-
<PAGE>

PART TWO - REPRESENTATION BY THE LENDERS

         SECTION B-19. ACQUISITION OF NOTES FOR INVESTMENT. Each Lender will
acquire the Notes for its own general account and/or for one or more separate
accounts maintained by it, for investment and not with a view to any
distribution of the Notes or with any present intention of distributing or
selling any of the Notes, but subject, nevertheless, to the disposition of the
Notes being at all times within its control.

                                      -6-
<PAGE>

                                    EXHIBIT C

                               CLOSING CONDITIONS

         SECTION C-1. REPRESENTATIONS AND WARRANTIES TRUE. After giving effect
to the execution and delivery of this Agreement and the Bank Credit Agreement,
all representations and warranties of the Company made in Exhibit B or otherwise
under or pursuant to this Agreement shall be true in all material respects as
though made on the Restatement Effective Date, excepting representations and
warranties specifically referring to an earlier date, and provided that with
respect to the representations and warranties set forth in Sections B-13, B-15
and B-16 of Exhibit B, such representations and warranties shall be true in all
material respects as though made on the Restatement Effective Date.

         SECTION C-2. NO MERGER, ETC. The Company shall not have consolidated or
merged with, or sold, leased or otherwise disposed of its properties as an
entirety or substantially as an entirety to, any Person.

         SECTION C-3. RESTATEMENT EFFECTIVE DATE. The Restatement Effective Date
shall occur on or prior to March 26, 2002 (the date upon which such date occurs
being the "Restatement Effective Date").

         SECTION C-4. NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing, after giving effect to this
Agreement and the Bank Credit Agreement.

         SECTION C-5. INSTRUMENTS AND PROCEEDINGS TO BE SATISFACTORY. All
instruments relating to the amendment and restatement of the Existing Notes and
of the Existing Loan Agreement, including, but not limited to, the delivery of
the Notes and the Loan Documents, shall be satisfactory to each Lender and its
special counsel.

         SECTION C-6. COMPLIANCE CERTIFICATE. The Company shall have delivered
to each Lender an Officer's Certificate, dated the Restatement Effective Date,
certifying to the effect set forth in Sections C-1, C-2 and C-4.

         SECTION C-7. OPINION OF COMPANY'S COUNSEL. Each Lender shall have
received from Proskauer Rose, LLP, and Gene L. Wexler, Esq., counsel for the
Company, opinions, dated as of the Restatement Effective Date, in scope and
substance satisfactory to each Lender, as to:

                  (A) the due incorporation, existence and good standing of the
                  Company and each Subsidiary and its power to own or hold under
                  lease the properties it purports so to own or hold and to
                  carry on the business in which it is engaged,

                  (B) the due authorization by all requisite corporate action
                  (including any required shareholder approval), and the
                  execution, delivery, validity, binding effect and
                  enforceability of this Agreement and the Notes, except to the
                  extent enforceability is limited by applicable bankruptcy,
                  insolvency or other similar laws affecting creditors' rights
                  generally,

                                      -1-
<PAGE>

                  (C) the due qualification and good standing of the Company and
                  each Subsidiary as a foreign corporation in each jurisdiction
                  wherein, in the opinion of such counsel, the failure to so
                  qualify might have a material adverse effect on the business,
                  operations or properties of the Company and its Subsidiaries,
                  taken as a whole,

                  (D) the due authorization of, and good and valid title of the
                  Company and each Subsidiary to, full payment for, and
                  nonassessability of, all then-outstanding shares and other
                  securities which the Company or any such Subsidiary purports
                  to own of each Subsidiary free of any Liens (of which such
                  counsel, after due inquiry, shall have knowledge),

                  (E) the execution, delivery and performance of this Agreement
                  and the Notes not resulting in breach of, constituting a
                  default under or resulting in the creation of any Lien in
                  respect of the property of the Company or any Subsidiary
                  pursuant to the charter or by-laws of the Company or any
                  Subsidiary, or any agreement, instrument, judgment, decree,
                  order, statute, rule or regulation known to such counsel which
                  is applicable to the Company or any Subsidiary,

                  (F) the absence or satisfaction of any requirements for any
                  consent, approval or authorization of, or registration, filing
                  or declaration with, any governmental authority or other
                  regulatory agency for the valid execution, delivery and
                  performance by the Company of this Agreement or the Notes,

                  (G) except as disclosed in the Company's letter delivered to
                  each Lender prior to its execution hereof, no proceedings
                  being, to the knowledge of such counsel after due inquiry,
                  pending or threatened against or affecting the Company or any
                  of its Subsidiaries before any court, arbitrator or
                  administrative or governmental body which, in the aggregate,
                  would adversely affect any action taken or to be taken by the
                  Company under this Agreement or the Notes or which, in the
                  aggregate, would materially adversely affect the business,
                  operations, properties or financial position of the Company
                  and its Subsidiaries, taken as a whole, and

                  (H) such other matters, including the use of the proceeds of
                  the loans in accordance with the terms of this Agreement being
                  in compliance with Federal Reserve Board Regulations T, U and
                  X, and the due perfection of all security interests granted
                  under the Loan Documents incident to the transactions
                  contemplated hereby as any Lender may reasonably request.

         SECTION C-8. CONSENTS, APPROVALS, ETC. The Company shall have delivered
to the Lenders the Officer's Certificate referred to in the last sentence of
Section B-2.

         SECTION C-9. NECESSARY CORPORATE ACTION. The Lenders shall have
received:

                  (A) certified (as of the date of this Agreement) copies of the
                  resolutions of the Board of Directors of the Company
                  authorizing the loans evidenced by the Notes and authorizing
                  and approving this Agreement and the other Loan Documents and
                  the execution, delivery and performance thereof and certified
                  copies of all documents evidencing other necessary corporate
                  action and governmental approvals, if any, with respect to
                  this Agreement and the other Loan Documents,

                                      -2-
<PAGE>

                  (B) certified (as of the date of this Agreement) copies of the
                  resolutions of the Board of Directors and the shareholders of
                  each of the Guarantors, authorizing and approving this
                  Agreement, the Confirmation of Guaranty and any other Loan
                  Document applicable to such Guarantors, and the execution,
                  delivery and performance thereof and certified copies of all
                  documents evidencing other necessary corporate action and
                  governmental approvals, if any, with respect to this
                  Agreement, the Confirmation of Guaranty and the other Loan
                  Documents,

                  (D) a certificate of the Secretary or an Assistant Secretary
                  (attested to by another officer) of the Company certifying:
                  (i) the names and true signatures of the officer or officers
                  of the Company authorized to sign this Agreement, the Notes
                  and the other Loan Documents to be delivered hereunder on
                  behalf of the Company; and (ii) there have been no amendments
                  or other modifications to the Company's by-laws or certificate
                  of incorporation since February 25, 2000,

                  (E) a certificate of the Secretary or an Assistant Secretary
                  (attested to by another officer) of each of the Guarantors
                  certifying (i) the names and true signatures of the officer or
                  officers of such Guarantor authorized to sign this Agreement,
                  its Guaranty and any other Loan Documents to be delivered
                  hereunder on behalf of such Guarantor; (ii) there have been no
                  amendments or other modifications to such Guarantor's by-laws
                  or certificate of incorporation since February 25, 2000; and
                  (iii) the stock ownership of such Guarantor,

                   (F) a copy of the certificate of incorporation and all
                  amendments thereto of the Company and each Guarantor,
                  certified in each case by the Secretary of State (or
                  equivalent officer) of the state of incorporation of the
                  Company and each Guarantor and a certificate of existence and
                  good standing with respect to the Company and each Guarantor
                  from the Secretary of State (or equivalent officer) of the
                  state of incorporation of the Company and each Guarantor and
                  from the Secretary of State (or equivalent officer) of any
                  state in which the Company or each Guarantor is authorized to
                  do business.

         SECTION C-10. NO MATERIAL ADVERSE CHANGE. There has been no Material
Adverse Change since the date of the most recent financial statements of the
Company delivered pursuant to Section 5.1(b) of the Existing Loan Agreement.

         SECTION C-11. [INTENTIONALLY OMITTED].

         SECTION C-12. BANK CREDIT AGREEMENT; RELEASE AND TERMINATION AGREEMENT.
The Lenders shall have received and satisfactorily reviewed the Bank Credit
Agreement. The Lenders and each of the other parties thereto shall have entered
into the Release and Termination Agreement.

         SECTION C-13. NORTH CAROLINA EXPANSION. The Lenders shall have received
and satisfactorily reviewed a copy of the Company's "Capital Appropriations
Request" for the North Carolina Expansion, approved by senior management of the
Company, which shall include the costs to be incurred, the timing of
expenditures and the cash flows resulting from the North Carolina Expansion.

                                      -3-
<PAGE>

         SECTION C-14. RELEASE OF LIENS. All requisite duly executed Uniform
Commercial Code termination statements, termination statements suitable for
filing in the United States Trademark Office and all other documentation
necessary to terminate the Liens granted under the Existing Collateral Documents
shall have been delivered as requested by the Company.

         SECTION C-15. OFFICER'S CERTIFICATE. The following statements shall be
true and the Lenders shall have received a certificate signed by the President
or the Chief Financial Officer of the Company dated the date hereof, stating
that:

                  (A) after giving effect to the execution and delivery of this
                  Agreement and the Bank Credit Agreement, the representations
                  and warranties contained in Exhibit B of this Agreement and in
                  the Loan Documents are true and correct in all material
                  respects on and as of such date, except for those relating to
                  an earlier date, which shall remain true and correct as of
                  such earlier date; and

                  (B) no Default or Event of Default has occurred and is
                  continuing.

         SECTION C-16. GUARANTIES. The Joint Guaranty dated December 22, 1999
delivered to the Lenders by DPI, Parfums, Royce and Broad shall have been
ratified and confirmed pursuant to the Confirmation of Guaranty.

         SECTION C-17. MISCELLANEOUS. The following additional requirements
shall be satisfied:

                  (A) all schedules, documents, certificates and other
                  information provided to the Lenders or any Lender pursuant to
                  or in connection with this Agreement shall be reasonably
                  satisfactory to the Lenders and its counsel in all respects,

                  (B) all legal matters incident to this Agreement and the
                  transactions contemplated hereby shall be satisfactory to
                  McDermott, Will & Emery, counsel to the Lenders, and

                  (C) the Lenders shall have received such other approvals,
                  opinions or documents as the Lenders or its counsel may
                  reasonably request.

         SECTION C-18. FEES PAYABLE. (i) The Lenders' special counsel and local
counsel, if any, shall have received the legal fees and expenses required to be
paid or reimbursed by the Company as provided in Section 13 in connection with
their representation of the Lenders in connection with the amendment and
restatement of the Existing Notes and the other transactions contemplated by the
Agreement. (ii) The Lenders shall have received the amendment fee in the amount
equal to $90,000.

                                      -4-
<PAGE>

                                    EXHIBIT D

               DOCUMENTS AND INFORMATION FURNISHED TO THE LENDERS

                  ss. D-1. Company's reports and proxy statements required to be
                  filed with SEC since February 25, 2000.

                  ss. D-2. List and description of all Debt of the Company or
                  its Subsidiaries, any Liens securing such Debt, and any
                  Guaranties of the Company or its Subsidiaries outstanding or
                  existing on or after March 26, 2002.

                  ss. D-3.   Subsidiaries of the Company.

                  ss. D-4.   [Omitted]

                  ss. D-5.   Litigation.

                  ss. D-6.   Environmental Matters.

                  ss. D-7.   Other Government Notices.

<PAGE><PAGE>

                                                                   Exhibit 10.13

                             OFFICE LEASE AGREEMENT

STATE OF TEXAS
COUNTY OF DALLAS

     THIS LEASE AGREEMENT, made and entered into as of the 4th day of April,
1997, by and between the Landlord and Tenant herein after named.

                              W I T N E S S E T H:

     1. Definitions and Basic Provisions. The following definitions and
basic provisions shall be used in conjunction with and limited by the reference
thereto in the provisions of this lease:

     (a)   "Landlord":   Collins Campbell Joint Venture

     (b)    "Tenant":    Telecom Technologies, Inc.
     (c)   "Premises":   The Atrium on Collins Phase II
                           1701 N. Collins, Suite 3000
                           Richardson, Texas 75080

as generally outlined on the plan attached hereto as Exhibit "A." The term
"rentable area" as used herein, shall refer to all floor areas within the
outside surface of the outer walls and the common area side of walls separating
lease space from common areas and measured to the midpoint of walls separating
areas leased by or held for lease to other tenants, enclosing the
tenant-occupied portion of the Building. Common areas are areas devoted to
corridors, elevators, foyers, rest rooms (but only on multi-tenant floors),
mechanical rooms, janitor closets, vending areas, atrium planting areas, and
other similar facilities for the use of all tenants. No deductions from
rentable area are made for columns or projections necessary to the Building.
The rentable area in the leased Premises has been calculated on the basis of
the foregoing definition and is hereby stipulated for all purposes hereof to be
20,153 square feet of rentable area, whether the same should be more or less as
a result of a minor variation resulting from actual construction and completion
of the leased Premises for occupancy so long as such work is done in accordance
with the terms and provisions hereof. The Premises are divided into two
portions, approximately 11,000 square feet of rentable area (the "First
Portion") outlined on the plan attached hereto as Exhibit "A", and
approximately 9,153 square feet of rentable area (the "Second Portion") also
outlined on the plan attached hereto as Exhibit "A". Landlord and Tenant both
agree to the following occupancy and takedown schedule: On October 1, 1997,
Tenant will occupy the First Portion; on April 1, 1998, Tenant will occupy the
Second Portion. The total rentable area of the Building is stipulated for all
purposes herein to be 57,575 square feet. Landlord and Tenant will have the
option to increase the size of the First Portion, thereby decreasing the size
of the Second Portion, during the space planning process. Such a change in the
sizes of the First and Second Portions will result in proportionate increases
and decreases in the monthly rental installments described below.

     (d)   "Lease term":   A period of 60 months, commencing on October 1,
                             1997 (the "Commencement Date") and ending on
                             September 30, 2002.

     (e)   "Basic rental":   $ 1,827,581.68

     (f)   "Monthly rental installment":  Monthly from October 1, 1997
                                          through March 31, 1998     $17,416.67

                                          Monthly from April 1, 1998 through
                                          September 30, 2002         $31,908.92

     (g)   "Security Deposit":   $ 17,416.67.

     (h)   "Permitted use":   Office

     (i)   "Land":   The real property upon which the Project is located,
                       described more particularly on Exhibit "E" attached
                       hereto and made a part hereof.

     (j)   "Building":  The Atrium on Collins Phase II located at 1701
                          N. Collins, Richardson, Texas 75080.

     (k)   "Project":   The Atrium on Collins Phase I and Phase II located at
                          1701 N. Collins, Richardson, Texas 75080.

<PAGE>

     2. Lease Grant. Before the Commencement Date. Landlord shall construct the
Building and install in the First Portion of the Premises the items to be
constructed or installed by Landlord pursuant to the provisions of the Work
Letter Agreement attached as Exhibit "C" hereto. On or before April 1, 1998,
Landlord shall construct and install in the Second Portion of the Premises the
items to be constructed or installed by Landlord pursuant to the provisions of
the Work Letter Agreement. If for any reason Landlord cannot deliver the First
Portion of the Premises to Tenant by the Commencement Date, this lease shall
not be void or voidable, and Landlord shall not be liable for any loss or
damage resulting therefrom, except that the rent payable under Paragraph 1(f)
hereof shall be waived for the period between the Commencement Date and the
date on which Landlord can deliver possession. If for any reason Landlord
cannot deliver the Second Portion of the Premises to Tenant on or before April
1, 1998, this lease shall not be void or voidable, and Landlord shall not be
liable for any loss or damage resulting therefrom, except that the rent payable
under Paragraph 1(f) hereof shall be reduced to $17,416.67 for the period
between April 1, 1998, and the date on which Landlord can deliver the Second
Portion of the Premises. No delay in the delivery of possession shall extend
the lease term. If for any reason the First Portion of the Premises are not
ready for occupancy on or before October 1, 1998, Tenant may at its option
cancel and terminate this Lease by written notice to Landlord delivered on or
before November 1, 1998, in which event neither party shall have any further
liabilities or obligations hereunder, except that Landlord will repay to Tenant
any prepaid rent or security deposit. Tenant may not enter or occupy the
pertinent portion of the Premises until such portion is tendered by Landlord,
unless Tenant's entry relates to construction or other pre-occupancy work
therein. Any entry of a pertinent portion of the Premises before the date
specified in this Paragraph 2 may be made only with Landlord's written consent.
The pertinent portion of the Premises shall be deemed completed and possession
delivered upon completion of the items to be constructed and installed by
Landlord pursuant to the provisions of the Work Letter Agreement attached as
Exhibit "C", other than completion of minor finish items, if any, which do
not materially interfere with Tenant's occupancy. Upon taking of possession of
a pertinent portion of the Premises, Tenant shall be deemed to have accepted
such portion as suitable for its purposes and shall be deemed to have waived
any defects in the such portion of the Premises and in the Building, except for
latent defects or the completion of any minor finish items which do not
materially interfere with Tenant's occupancy.

     3. Rent. In consideration of this lease, Tenant promises and agrees to
pay Landlord the basic rental (as defined in Paragraph 1(e) hereof) in two lump
sum payments and thereafter in monthly installments as set forth in Paragraph
1(f) hereof, and the additional rent as determined in accordance with Exhibit
"B", without deduction, set off, notice or demand.

     Sixteen and 79/100 months of basic rental, to be applied to the first
seventeen monthly basic rental installments accruing hereunder, totaling $
448,927.50 ("Prepaid Rent"), together with the security deposit (as defined
in Paragraph 1(g) hereof), shall be payable by Tenant to Landlord in two lump
sum payments.  $241,880.42 will be due contemporaneously with the execution
hereof.  $224,463.75 will be due upon the later of June 1, 1997, or
commencement of construction by Landlord of the work described in the Work
Letter Agreement.  Landlord will deposit the Prepaid Rent in an escrow account
with Plano Bank & Trust to be held until occupancy of the First Portion of the
Premises by Tenant, at which time the Prepaid Rent will become the property of
Landlord remaining in the escrow account, which escrow account shall be debited
monthly as basic rental accrues. On the first day of the seventeenth month
following the date on which basic rent begins to accrue under this lease,
Tenant shall pay $6,570.64. On the first day of the eighteenth month following
the date on which basic rental begins to accrue under this lease. Tenant shall
begin paying the scheduled monthly rental installment without demand and shall
continue paying such monthly rental installments on or before the first day of
each succeeding calendar month during the term hereof. The monthly rental
installment for any fractional month at the beginning of the lease term shall
be prorated at the nineteenth month when the payment of regularly scheduled
installments commences, and for any fractional month at the end of the lease
term shall be prorated at the end of the lease term.

                                        1

<PAGE>

     If the monthly rental installment is not received by the Landlord on or
before the 5th day of the month for which such monthly rental installment is
due, a service charge of 2% of the monthly rental installment owed shall become
due and payable in addition to the monthly rental installment owed. Such
service charge is for the purpose of reimbursing Landlord for the extra costs
and expenses incurred in connection with the handling and processing of late
monthly rental installment payments.

     The security deposit shall be held by Landlord without liability for
interest and as security for the performance by Tenant of Tenant's covenants
and obligations under this lease, it being expressly understood that such
deposit shall not be considered an advance payment of rental or a measure of
Landlord's damages in case of default by Tenant. Upon the occurrence of any
event of default by Tenant, Landlord may, from time to time, without prejudice
to any other remedy, use such deposit to the extent necessary to make good any
arrearages of rent and other damage, injury expense of liability caused to
Landlord by such event of default. Following any such application of the
security deposit, Tenant shall pay to Landlord on demand the amount so applied
in order to restore the security deposit to this original amount. If Tenant is
not then in default hereunder, any remaining balance of such deposit shall be
returned by Landlord to Tenant upon termination of this lease. If Landlord
transfers its interest in the Premises during the lease term, Landlord will
assign the security deposit to the transferee and thereafter shall have no
further liability for the return of such security deposit. The obligation of
Tenant to pay rent is an independent covenant, and no act or circumstance
whatsoever, whether such act or circumstance constitutes a breach of covenant
by Landlord or not shall release Tenant of the obligation to pay rent.

     4. Rental Escalation. See Exhibit "B" attached hereto and incorporated
as a part hereof.

     5. Services.

          (a)  Landlord agrees to furnish Tenant while occupying the Premises,
     at Landlord's sole cost and expense: (i) hot and cold water at those
     points of supply provided for general use of tenantry; (ii) electrical
     current for Tenant's use and occupancy of the Premises to the extent
     reasonably deemed to be standard in comparable suburban "Class A" low
     rise office buildings in Richardson, Texas, provided however, that all
     costs for extraordinary or unusual demand for electrical service shall be
     borne by Tenant; (iii) heating and air conditioning at such times as
     Landlord normally furnishes such services to all tenants of the Project
     and at such temperatures and in such amounts as are reasonably provided
     in comparable suburban "Class A" low rise office buildings in
     Richardson, Texas; (iv) janitor service on a daily basis excluding
     holidays and weekends and elevator service; (v) replacement of Building
     standard light bulbs and tubes.

          (b)  Landlord does not warrant that any of such specified services
     will be free from interruption or stoppage, but nevertheless Landlord
     shall use reasonable diligence to resume any such interrupted or stopped
     service. Anything to the contrary notwithstanding, no failure, to any
     extent, to furnish such services or any stoppage or interruption of these
     defined services shall render Landlord liable in any respect for damages
     to either person, property or business, nor shall any such failure,
     interruption or stoppage of such services be deemed or construed as an
     eviction, actual or constructive, of Tenant nor work an abatement of rent
     nor relieve Tenant from the obligation to fulfill any covenant or
     agreement contained in this lease.

     6. Leasehold Improvements. Landlord agrees to install at Landlord's cost
and expense, except as otherwise stated therein, the improvements described in
Exhibit "C" attached hereto. Landlord has made no representations as to the
condition of the Premises or the Building, or Landlord's undertaking to
remodel, repair or decorate, except as expressly set forth herein and in
Exhibit "C".

     7. Use. Tenant shall use the Premises only for the permitted use (as
defined in Paragraph 1(h) hereof). Tenant will not occupy or use the Premises,
or permit any portion of the Premises to be occupied or used for any business
or purpose other than the permitted use or for any use or purpose which is
unlawful in part or in whole or deemed to be disreputable in any manner or
extrahazardous on account of fire, nor permit anything to be done which will in
any way increase the rate of fire insurance on the Building or contents; and in
the event that, by reason of acts of Tenant, there shall be any increase in the
rate of Insurance on the Building or contents created by Tenant's acts or
conduct of business than Tenant hereby agrees to pay to Landlord the amount of
such increase promptly. Tenant will conduct its business and control its
agents, employees and invitees in such a manner as not to create any nuisance,
nor interfere with, annoy or disturb other tenants or Landlord in management of
the Building. Tenant will maintain the Premises in a clean, healthful and safe
condition and will comply with all laws, ordinances, orders, rules and
regulations (state, federal, municipal and other agencies or bodies having any
jurisdiction thereof) with reference to use, condition or occupancy of
Premises. Tenant's obligation to comply with all laws specifically includes any
and all laws applicable to Tenant and relating to environmental hazards and to
accessibility by persons with disabilities. Tenant will not, without the prior
written consent of Landlord, such consent not to be unreasonably withheld,
paint, install lighting, window coverings or decoration, or install any signs,
window or door lettering or advertising media of any type on or about the
Premises or any part thereof. Should Landlord agree in writing to any of the
foregoing items in the preceding sentence, Tenant will maintain such permitted
items in good condition and repair at all times.

<PAGE>

     8. Repairs and Maintenance And Compliance with Accessibility Laws

          (a)  By Landlord: Landlord shall maintain only the roof, foundation,
     heating and air conditioning systems, common areas, plumbing, elevators,
     fire protection sprinkler system, the structural soundness and appearance
     of the exterior walls, the paving outside the Building, and the
     landscaping in good repair and condition, except for reasonable wear and
     tear. Landlord shall be responsible for pest eradication. If such pests
     result from Tenant's use and occupancy of the Premises, Tenant shall pay
     to Landlord on demand the cost for such eradication. Tenant shall give
     written notice to Landlord of the need for repairs or corrections and
     Landlord shall proceed promptly to make such repairs or corrections.
     Landlord's liability hereunder shall be limited to the cost of such
     repairs or corrections.

          (b)  By Tenant: Tenant shall at its expense and risk maintain the
     Premises and related facilities in good repair and condition. Tenant
     will not in any manner deface or injure the Building, the Premises or
     related facilities and will pay the cost of repairing any damage or
     injury done by Tenant or Tenant's agents, employees or invitees. Tenant
     shall throughout the term of this lease take good care of the Building,
     the Premises and related facilities and keep them free from waste and
     nuisance of any kind. If Tenant shall fall to make any repair required
     hereunder (including all necessary replacements) within fifteen (15) days
     after written notification to do so, Landlord may at its option make such
     repair and Tenant shall, upon demand therefor, pay Landlord for the cost
     thereof together with interest on any such cost which remains unpaid
     following such demand at the rate of 10% per annum until paid.

          (c)  By Landlord and Tenant: Tenant shall at its expense and risk
     cause the Premises and related facilities to be in compliance with the
     requirements of the Americans With Disabilities Act and all other
     pertinent laws relating to public access ("Accessibility Laws").
     Landlord shall at its expense and risk cause the common areas of the
     Building to comply with Accessibility Laws. Any extraordinary or atypical
     requirements imposed by Accessibility Laws relating to the nature of
     Tenant's business shall be Tenant's responsibility and Tenant shall bear
     the risk and expense of compliance with such extraordinary or atypical
     requirements. Tenant acknowledges that Landlord's responsibility is to
     insure that common areas of the Building comply with Accessibility Laws
     assuming the imposition of requirements typical for a suburban office
     building.

     9. Alterations and improvements. Tenant will not make or allow to be made
any alterations or physical additions in or to the Premises without the prior
written consent of Landlord, which consent shall not be unreasonably withheld
as to nonstructural alterations. Landlord may require, as a condition to
granting its consent to any such alterations or physical additions, that Tenant
agree to remove such alterations or physical additions at the end of the lease
term and restore the Premises to the condition in which the same existed before
such alterations or physical additions were made. At the end or other
termination of this lease, Tenant shall deliver up the Premises with all
improvements located thereon (except as otherwise herein provided) in good
repair and condition, reasonable wear and tear excepted, and shall deliver to
Landlord all keys to the Premises. The cost and expense of any repairs
necessary to restore the condition of the Premises to such condition in which
they are to be delivered to Landlord shall be borne by Tenant. All permanent
alterations, additions or Improvements made in or upon the Premises, either by
Landlord or Tenant, shall be Landlord's property on termination of this lease
and shall remain on the Premises without compensation to Tenant. All temporary
alterations, furniture, movable trade fixtures and equipment installed and paid
for by Tenant may be removed by Tenant at the termination of this lease if
Tenant so elects, and shall be so removed if required by Landlord, or if not so
removed shall at the option of Landlord, become the property of Landlord. All
such installations, removals and restoration shall be accomplished in good
workmanlike manner so as not to damage the Premises or the primary structure or
structural qualities of the Building or the plumbing, electrical lines or other
utilities.

                                        2

<PAGE>

     10. Common Areas. The use and occupation by Tenant of the Premises shall
include the use in common with others entitled thereto of the common areas,
parking areas, service roads, loading facilities, sidewalks, and other
facilities as may be designated from time to time by Landlord, subject,
however, to the terms and conditions of this agreement and to reasonable rules
and regulations for the use thereof as prescribed from time to time by Landlord.

     All common areas described above shall at all times be subject to the
exclusive control and management of Landlord, and Landlord shall have the right
from time to time to establish, modify and enforce reasonable rules and
regulations with respect to all facilities and areas mentioned in this Article.
Landlord shall have the right to construct, maintain, and operate lighting
facilities on all such areas and improvements; to police same; from time to
time to change the area, level, location and arrangement of parking areas and
other facilities hereinabove referred to; and to restrict parking by tenants,
their officers, agents, and employees to employee parking areas. If Landlord
ever assigns non-covered parking spaces to other tenants, Tenant will be
assigned a fair number of parking spaces at no charge. The number of parking
spaces assigned to Tenant will be determined by looking at the rentable area of
the Premises versus the rentable area let by the other tenants.

     All common areas and facilities not within the Premises, which Tenant may
be permitted to use and occupy, are to be used and occupied under a revocable
license, and if the amount of such areas be diminished, Landlord shall not be
subject to liability nor shall Tenant be entitled to any compensation or
diminution or abatement of rent, nor shall such diminution of such areas be
deemed constructive or actual eviction.

     11. Assignment and Subletting. If Tenant desires to assign this lease or
sublet the Premises or any part thereof, Tenant shall give Landlord written
notice of such desire together with the name of the proposed assignee or
sublessee, a detailed description of its business, and current financial
information about it in sufficient detail to allow Landlord to assess the
financial condition of such proposed assignee or sublessee. Tenant shall give
such notice and information to Landlord at least 60 days prior to the date on
which Tenant desires to make such assignment or sublease. For the purposes
hereof, transfer of more than half of the stock or other voting control of
Tenant shall be deemed to constitute an assignment of this Lease. Landlord
shall, within 30 days following receipt of such notice, notify Tenant in
writing that Landlord elects either (i) to terminate this lease as to the space
so affected as of the date so specified by Tenant, in which event Tenant will
be relieved of all further obligation hereunder as to such space, (ii) to
permit Tenant to assign this lease or sublet such space, or (iii) refuse to
permit Tenant to assign this lease or sublet such space. If Landlord should
fail to notify Tenant in writing of such election within such thirty-day
period, Landlord shall be deemed to have elected (iii) above. Consent by
Landlord to one or more assignments or sublettings shall not operate as a
waiver of Landlord's rights as to any subsequent assignments and sublettings.
Tenant shall pay all costs incurred by Landlord in connection with the
foregoing provisions including without limitation legal fees, construction
costs to reconfigure the Premises, and credit checks. Notwithstanding any
assignment or subletting, Tenant and any guarantor of Tenant's obligations
under this lease shall at all times remain fully responsible and liable for the
payment of the rent herein specified and for compliance with all of Tenant's
other obligations under this lease.  Moreover, if the rental or other
consideration (or a combination of the rental and any bonus or other
consideration therefor or incident thereto) due and payable to Tenant by an
assignee or sublessee exceeds the rental payable under this lease
(appropriately prorated in the case of a sublease of less than all of the
Premises), then Tenant shall be bound and obligated to pay Landlord fifty
percent (50%) of all such excess rental and other excess consideration within
ten (10) days after receipt thereof by Tenant. Notwithstanding the f
immediately preceeding sentence, in the event that Tenant fails to occupy or
vacates the Premises prior to consummating an approved sublease or assignment,
Tenant shall be bound and obligated to pay to Landlord one hundred percent
(100%) of all excess rental and other excess consideration. Finally, upon any
assignment or subletting all rentals paid to Tenant by an assignee or sublessee
shall be received by Tenant in trust for Landlord, to be forwarded immediately
to Landlord. If Landlord transfers and assigns its interest in this lease and
the Building containing the Premises, Landlord shall thereby be released from
any further obligations hereunder, and Tenant agrees to look solely to such
successor in interest of the Landlord for performance of such obligations.
Tenant shall not mortgage, pledge or otherwise encumber its interest in this
lease or in the Premises.

     Landlord's permission to assign this lease or sublet Tenant's space will
not be denied in the event the proposed assignee or sublesse is at the time of
the proposed assignment or subletting a "Fortune 1000" company and the
proposed assignee or sublesse will use the Premises for purely office purposes.

     12. Indemnity. Landlord shall not be liable for and Tenant will indemnify
and save harmless Landlord of and from all fines, suits, claims, demands,
losses and actions (including attorney's fees) for any injury to person or
damage to or loss of property on or about the Premises caused by the negligence
or misconduct or breach of this lease by Tenant, its agents, employees,
sublessees, invitees or by any other person entering the Building, the
Premises, or related facilities under express or implied invitation of Tenant,
or arising out of Tenant's use of the Building, the Premises, or related
facilities. Landlord shall not be liable or responsible for any loss or damage
to any property or death or injury to any person occasioned by theft, fire, Act
of God, public enemy, injunction, riot, strike, insurrection, war, court order,
requisition of any governmental body or authority, by other tenants of the
Building or related facilities or any other matter beyond control of Landlord,
or for any injury or damage or inconvenience which may arise through repair or
alteration of any part of the Building, the Premises or related facilities, or
failure to make repairs or from any cause whatsoever except Landlord's gross
negligence. Tenant shall, at all times during the term of this lease, maintain
a policy or policies of insurance with the premiums thereon fully paid in
advance, in amounts and with insurance companies approved by Landlord Insuring
Tenant's obligations to Landlord under Paragraph 12 of this lease.

     Tenant shall not be liable for and Landlord will indemnify and save
harmless Tenant of and from all fines, suits, claims, demands, losses and
actions (including attorney's fees) for any injury to person or damage to or
loss of property on or about the common areas of the Building caused by the
gross negligence or willfull misconduct or breach of this lease by Landlord,
its agents or employees.

     13. Mortgages. Tenant accepts this lease subject to any deeds of trust,
security interests or mortgages which might now or hereafter constitute a lien
upon the Building or improvements therein, the Premises, or related facilities,
and to zoning ordinances and other building and fire ordinances and
governmental regulations relating to the use of the property Tenant shall at
any time hereafter, on demand, execute any instruments, releases or other
documents that may be required by any mortgagee for the purpose of subjecting
and subordinating this lease to the lien of any such deed of trust, security
interest or mortgage. With respect to any deed of trust, security interest or
mortgage hereafter constituting a lien on the Building or improvements therein,
the Premises, or related facilities. Landlord, at its sole options, shall have
the right to waive the applicability of this Paragraph 13 so that this lease
will not be subject and subordinate to any such deed of trust, security
interest or mortgage.

     14. Insurance. Landlord shall, at all times during the term of this lease
maintain a policy or policies of insurance with the premiums thereon fully paid
in advance, issued by and binding upon some solvent insurance company, insuring
the Building against loss or damage by fire, explosion, or other hazards and
contingencies for the full insurable value thereof; provided that Landlord
shall not be obligated to insure any furniture, equipment, machinery, goods or
supplies not covered by this lease which Tenant may bring or obtain upon the
Premises, or any additional improvements which Tenant may construct thereon.

     Tenant shall, at all times during the term of this lease, maintain a
policy or policies of insurance, with the premiums thereon fully paid in
advance, issued by and binding upon insurance companies approved by Landlord,
such approval not to be unreasonably withheld, insuring any furniture,
equipment, machinery, goods or supplies which Tenant may bring or obtain upon
the Premises, and any additional improvements which Tenant may construct on the
Premises against loss or damage by fire, explosion or other hazards and
contingencies for the full insurable value thereof. Tenant shall also, at all
times during the term of this lease, maintain a policy or policies of
insurance, with the premiums thereon fully paid in advance, for comprehensive
general and contractual liability insurance against claims for personal injury,
death and property damage occurring in or about the Premises, such insurance to
afford protection to the limits of (i) not less than $1,000,000.00 in respect
of injury to or death of any number of persons arising out of any one
occurrence and (ii) $1,000,000.00 in respect of any instance of property
damage. Such policy or policies shall be issued by and binding upon insurance
companies approved by Landlord, such approval not to be unreasonably withheld.

     Tenant shall deliver to Landlord, prior to the Commencement Date,
certificates of such insurance and shall, at all times during the term of this
lease, deliver to Landlord upon request true and correct copies of such
insurance policies. The comprehensive general and contractual liability policy
described above shall (i) name Landlord as an additional Insured, (ii) insure
performance of the indemnities of Tenant contained in this lease, and (iii) be
primary coverage, so that any insurance coverage obtained by Landlord shall be
in excess thereof. Each insurance policy obtained by Tenant shall provide that
it will not be canceled or reduced in coverage without 30 days' prior written
notice to Landlord. Tenant shall deliver to Landlord certificates of renewal at
least 30 days prior to the expiration date of each such policy and copies of
new policies at least 5 days prior to terminating any such policies.

                                        3

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     15.  Inspection. Landlord or representatives shall have the right to enter
into and upon any and all parts of the Premises at any time I and without
notice in the event of an emergency and with prior notice at reasonable hours to
(i) inspect same or clean or make repairs or alterations or additions as
Landlord may deem necessary (but without any obligation to do so, except as
expressly provided for herein), or (ii) show the Premises to prospective
tenants, purchasers or lenders; and Tenant shall not be entitled to any
abatement or reduction of rent by reason thereof, nor shall such be deemed to
be an actual or constructive eviction.

     16.  Condemnation. If, during the term of this lease, or any extension or
renewal thereof, all of the Premises should be taken for any public or
quasi-public use under any governmental law, ordinance or regulation or by
right of eminent domain or by private purchase in lieu thereof, this lease
shall terminate and the rent shall be abated during the unexpired portion of
this lease, effective on the date physical possession is taken by the
condemning authority, and Tenant shall have no claim against Landlord for the
value of any unexpired term of this lease.

     In the event a portion but not all of the Premises shall be taken for any
public or quasi-public use under any governmental law, ordinance or regulation,
or by right of eminent domain or by private sale in lieu thereof and the
partial taking or condemnation shall render the Premises unsuitable for
Tenant's business, then Landlord shall have the option, in its sole discretion,
of terminating this lease, or, at Landlord's sole risk and expense, restoring
and reconstructing the Premises to the extent necessary to make same reasonably
tenantable. Should Landlord elect to restore, the lease shall continue in full
force and effect with the rent payable during the unexpired portion of this
lease adjusted to such an extent as may be fair and reasonable under the
circumstances, and Tenant shall have no claim against Landlord for the value of
any interrupted portion of this lease.

      In the event of any condemnation or taking, total or partial, Tenant
shall not be entitled to any part of the award or price paid in lieu thereof,
and Landlord shall receive the full amount of such award or price, Tenant
hereby expressly waiving any right or claim to any part thereof.

     17.  Fire or Other Casualty. In the event that the Premises should be
totally destroyed by fire, tornado or other casualty or in the event the
Premises or the Building should be so damaged that rebuilding or repairs cannot
be completed within 180 days after the date of such damage, either Landlord or
Tenant may at its option terminate this lease by delivering written notice
thereof to the other party within twenty (20) days following such damage, in
which event the rent shall be abated during the unexpired portion of this lease
effective with the date of such damage. In the event the Premises should be
damaged by fire, tornado or other casualty covered by Landlord's insurance, but
only to such extent that rebuilding or repairs can be completed within 180 days
after the date of such damage, or if the damage should be more serious but
neither Landlord nor Tenant elects to terminate this lease, in either such
event Landlord shall within thirty (30) days after the date of such damage
commence to rebuild or repair the Premises and shall proceed with reasonable
diligence to restore the Premises to substantially the same condition in which
they were immediately prior to the happening of the casualty, except that
Landlord shall not be required to rebuild, repair or replace any part of the
furniture, equipment, fixtures and other improvements which may have been
placed by Tenant or other tenants within the Building or the Premises, or
related facilities. In the event that the Premises are totally untenantable,
Landlord shall abate the rent during the time Premises are unfit for occupancy.
If the Premises are not totally untenantable, Landlord shall allow Tenant a
fair diminution of rent during the time the Premises are partially unfit for
occupancy. In the event any mortgagee under a deed of trust, security agreement
or insurance proceeds be used to retire the mortgage debt, Landlord shall have
no obligation to rebuild and this lease shall terminate upon notice to Tenant.
Any insurance which may be carried by Landlord or Tenant against loss or damage
to the Project or to the Premises shall be for the sole benefit of the party
carrying such insurance and under its sole control.

     Notwithstanding anything to the contrary contained herein in the event
that either Landlord or Tenant terminates this lease, pursuant to a right
granted in this Paragraph 17, any unapplied Prepaid Rent shall be refunded to
Tenant.

     18.  Holding Over. Should Tenant, or any of its successors in interest,
hold over the Premises, or any part thereof, after the expiration of the term
of this lease, unless otherwise agreed in writing, such holding over shall
constitute and be construed as tenancy at sufferance only. Such tenancy shall
be at a daily rental equal to 1/30th of the higher of (i) 150% of the sum of
the monthly rental installment plus the most current rental adjustment which
may have been made thereto pursuant to Paragraph 4 hereof, or (ii) 150% of the
current rate for the Premises being quoted by Landlord to prospective tenants.
The inclusion of the preceding sentence shall not be construed as Landlord's
consent for the Tenant to hold over. In the event of any unauthorized holding
over, Tenant shall also indemnify Landlord against all claims for damages by
any other tenant to whom Landlord may have leased all or any part of the Leased
Premises effective upon the termination of this lease Notwithstanding the
foregoing during the first month of any holdover, and only during that first
month, the daily rental rate shall be equal to 1/30 th of 110% of the sum of
the monthly rental installment plus the most current rental adjustment which
may have been made thereto pursuant to Paragraph 4 hereof.

     19.  Taxes on Tenant's Property. Tenant shall be liable for all taxes
levied or assessed against personal property, furniture or fixtures placed by
Tenant in the Premises. If any such taxes for which Tenant is liable are levied
or assessed against Landlord or Landlord's property and if Landlord elects to
pay the same or if the assessed value of Landlord's property is increased by
inclusion of personal property, furniture or fixtures placed by Tenant in the
Premises, and Landlord elects to pay the taxes based on such increase, Tenant
shall pay to Landlord promptly that part of such taxes for which Tenant is
primarily liable hereunder.

      20.  Events of Default. The following events shall be deemed to be events
of default by Tenant under this lease:

          (a)  Tenant shall fail to pay any monthly rental installment or any
     portion of the basic rental hereby reserved when due and such failure
     shall continue for more than 10 days after I Landlord notifiles Tenant in
     writing of such failure to pay;

          (b)  Tenant shall fail to comply with any term, provision or covenant
     of this lease, other than the payment of rent or shall fail to comply with
     any term, provision or covenant in any other agreement with Landlord
     affecting the Premises, and shall not cure such failure within t thirty
     (30) days after written notice there of to tenant;

          (c)  Tenant shall make an assignment for the benefit of creditors;

          (d)  Tenant shall file a petition under any section or chapter of the
     Federal Bankruptcy Code, as amended, or under any similar law or statute
     of the United States or any State thereof, or Tenant shall be adjudged
     bankrupt or insolvent in any proceeding filed against Tenant thereunder
     and such adjudication shall not be vacated or set aside within thirty (30)
     days;

          (e)  A receiver or Trustee shall be appointed for all or substantially
     all of the assets of Tenant and such receivership shall not be terminated
     or stayed within thirty (30) days;

          (f)  Intentionally deleted;

          (g)  Intentionally deleted.; or

          (h)  Tenant shall assign this lease or sublet the Premises without
     Landlord's consent, where Landlord's consent is required under Section 11.

     21.  Remedies. Upon the occurrence of any event of default specified in
Paragraph 20 hereof, Landlord shall have the option to pursue any one or more
of the following remedies without any notice or demand whatsoever;

          (a)  Terminate this lease in which event Tenant shall immediately
     surrender the Premises to Landlord, and if Tenant fails to do so, Landlord
     may, without prejudice to any other remedy which it may have for
     possession or arrearages in rent, enter upon and take possession and expel
     or remove Tenant and any other person who may be occupying such Premises
     or any part thereof, without being liable for prosecution or any claim of
     damages therefor. Tenant agrees to pay to Landlord on demand the amount of
     all loss and damage which Landlord may suffer by reason of such
     termination, including (i) the cost of recovering the Premises (including
     attorneys' fees and costs of suit), (ii) the cost of removing and storing
     any personal property, (iii) the unpaid rent earned at the time of
     termination, plus interest thereon at the rate described in Paragraph 35,
     (iv) the present value (discounted at the rate of six percent (6%) per
     annum) of the balance of the basic rental and additional rental

                                      4

<PAGE>

     for the remainder of the lease term less the present value (discounted at
     the same rate) of the fair market rental value of the Premises for such
     period, taking into account the period of time the Premises will remain
     vacant until a new tenant is obtained, and the cost to prepare the
     Premises for occupancy and the other costs (such as costs of repairs or
     remodeling, leasing commissions and attorneys' fees) to be incurred by
     Landlord in connection therewith, and (v) any other sum of money and
     damages owed by Tenant to Landlord under this lease;

          (b)  Enter upon and take possession of the Premises and expel or
     remove Tenant and any other person who may be occupying the Premises or
     any part thereof, without being liable for prosecution or any claim for
     damages therefor, and if Landlord so elects, relet the Premises on such
     terms as Landlord shall deem advisable and receive the rent thereof.
     Tenant agrees to pay to Landlord on demand any deficiency in basic rental
     that may arise by reason of such reletting;

          (c)  Enter upon the Premises, without being liable for prosecution or
     any claim for damages therefor, and do whatever Tenant is obligated to do
     under the terms of this lease, and tenant agrees to reimburse Landlord on
     demand for any expenses which Landlord may incur in thus effecting
     compliance with Tenant's obligations under this lease, and Tenant further
     agrees that Landlord shall not be liable for any damages resulting to the
     Tenant from such action; and

          (d)  Landlord may, and is hereby entitled and authorized, without any
     notice to Tenant whatsoever, to enter upon the Premises by use of a master
     key, a duplicate key, or other peaceable means, and to change, alter,
     and/or modify the door locks on all entry doors of the Premises, thereby
     permanently excluding Tenant, and its officers, principals, agents,
     employees, and representatives therefrom. If Landlord has either
     permanently repossessed the Premises pursuant to the foregoing provisions
     of this Lease, or has terminated this lease by reason of Tenant's default,
     Landlord shall not thereafter be obligated to provide Tenant with a key to
     the Premises at any time; provided, however, that in any such instance,
     during Landlord's regular business hours and at the convenience of
     Landlord, and upon the written request of Tenant accompanied by such
     written waivers and releases as Landlord may require, Landlord will escort
     Tenant or its authorized personnel to the Premises to retrieve any
     personal belongings or other property of Tenant not subject to the lien or
     security interest described herein. If Landlord elects to exclude Tenant
     from the Premises without permanently repossessing or terminating pursuant
     to the foregoing provisions of this lease, then Landlord (at any time
     prior to actual repossession or termination) shall not be obligated to
     provide Tenant a key to re-enter the Premises until such time as all
     delinquent rental and other amounts due under this lease have been paid in
     full (and all other defaults, if any, have been completely cured to
     Landlord's satisfaction), and Landlord has been given assurance reasonably
     satisfactory to Landlord evidencing Tenant's ability to satisfy its
     remaining obligations under this lease. During any such temporary period
     of exclusion, Landlord will, during Landlord's regular business hours and
     at Landlord's convenience, upon written request by Tenant, escort Tenant
     or its authorized personnel to the Premises to retrieve personal
     belongings of Tenant or its employees, and such other property of Tenant
     as is not subject to the Landlord's lien and security interest described
     herein. This remedy of Landlord shall override and control any conflicting
     provisions of the Texas Property Code.

     No re-entry or taxing possession of the Premises by Landlord shall be
construed as an election on its part to terminate this lease, unless a written
notice of such intention be given to Tenant. Notwithstanding any such reletting
or re-entry or taking possession, Landlord may at any time thereafter elect to
terminate this lease for a previous default. Pursuit of any of the foregoing
remedies shall not preclude pursuit of any of the other remedies herein
provided or any other remedies provided by law, nor shall pursuit of any remedy
herein provided constitute a forfeiture or waiver of any rent due to Landlord
hereunder or of any damages accruing to Landlord by reason of the violation of
any of the terms, provisions and covenants herein contained. Landlord's
acceptance of rent following an event of default hereunder shall not be
construed as Landlord's waiver of such event of default. No waiver by Landlord
of any violation or breach of any of the terms, provisions, and covenants
herein contained shall be deemed or construed to constitute a waiver of any
other violation or breach of any of the terms, provisions, and covenants herein
contained. Forbearance by Landlord to enforce one or more of the remedies
herein provided upon an event of default shall not be deemed or construed to
constitute a wavier of any other violation or default.

     22.  Surrender of Premises. No act or thing done by the Landlord or its
agents during the term hereby granted shall be deemed as acceptance of a
surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless the same be made in writing and subscribed by
the Landlord.

     23.  Attorneys' Fees. In case it should be necessary or proper for
Landlord or Tenant to bring any action under this lease or to consult or place
such lease, or any amount payable by Landlord or Tenant thereunder, with an
attorney concerning or for the enforcement of any of Landlord's or Tenant's
rights hereunder, then the non-prevailing party agrees in each and any such
case to pay the prevailing party on demand a reasonable attorney's fee.

      24.  Landlord's Lien. In addition to the statutory Landlord's lien,
Landlord shall have, at all times, a valid security interest to secure payment
of all rentals and other sums of money becoming due hereunder from Tenant, and
to secure payment of any damages or loss which Landlord may suffer by reason of
the breach by Tenant of any covenant, agreement or condition contained herein,
upon all goods, wares, equipment, fixtures, furniture, improvements and other
personal property of Tenant presently or which may hereafter be situated on the
Premises and all proceeds therefrom, and such property shall not be removed
therefrom without the consent of Landlord until all arrearages in rent as well
as any and all other sums of money then due to Landlord hereunder shall first
have been paid and discharged and all the covenants, agreements and conditions
hereof have been fully complied with and performed by Tenant, upon the
occurrence of an event of default by Tenant, Landlord may, in addition to any
other remedies provided herein, enter upon the Premises and take possession of
any and all goods, wares, equipment, fixtures, furniture, improvements and
other personal property of Tenant situated on the Premises without liability
for trespass or conversion, and sell the same at public or private sale, with
or without having such property at the sale, after giving Tenant reasonable
notice of the time and place of any public sale or of the time after which any
private sale is to be made, at which sales the Landlord or its assigns may
purchase unless otherwise prohibited by law. Unless otherwise provided by law,
and without intending to exclude any other manner of giving Tenant reasonable
notice, the requirement of reasonable notice shall be met if such notice is
given in the manner prescribed in Paragraph 27 of this lease at least five (5)
days before the time of sale. The proceeds from any such disposition, less any
and all expenses connected with the taking of possession, holding and selling
of the property (including reasonable attorneys' fees and other expenses),
shall be applied as a credit against the indebtedness secured by the security
interest granted in this Paragraph 24. Any surplus shall be paid to Tenant or
as otherwise required by law; and the Tenant shall pay any deficiencies
forthwith. The statutory lien for rent is not hereby waived.

     25.  Mechanic's Lien. Tenant will not permit any mechanic's lien or liens
to be placed upon the Premises or the Project or improvements thereon during
the term hereof caused by or resulting from any work performed, materials
furnished or obligation incurred by or at the request of Tenant, and in the
case of the filing of any such lien Tenant will promptly pay same. If default
in payment thereof shall continue for twenty (20) days after written notice
thereof from Landlord to the Tenant, the Landlord shall have the right and
privilege at Landlord's option of paying the same or any portion thereof
without inquiry as to the validity thereof, and any amounts so paid, including
expenses and interest, shall be so much additional rent hereunder due from
Tenant to Landlord and shall be repaid to Landlord immediately on rendition of
bill therefor, together with interest until repaid as provided in Paragraph 35.
Tenant will have the option to "bond around" any mechanics's lien or liens,
provided such bonding around is in accordance with, and permitted by, deeds of
trust or mortgages affecting the Building.

     26.  Waiver of Subrogation. Anything in this lease to the contrary
notwithstanding, the parties hereto hereby waive any and all rights of
recovery, claim action or cause of action, against each other, their agents,
officers, and employees, for any loss or damage that may occur to the Premises
hereby demised, or any improvements thereof, or such Project of which the
Premises are a part, any improvements thereto, or related facilities, by reason
of fire, the elements, or any other cause which could be insured against under
the terms of standard fire and extended coverage insurance policies, regardless
of cause or origin, including negligence of the parties hereto, their agents,
officers and employees.

     No insurer of one party hereunder shall hold any right of subrogation
against the other party. If the respective insurer of Landlord and Tenant does
not permit the foregoing waiver without an appropriate endorsement to such
party's insurance policy, then Landlord and Tenant each covenant and agree to
notify its insurer of the waiver set forth herein and to secure from such
insurer an appropriate endorsement to its respective insurance policy with
respect to such waiver.

     27.  Notices. Each provision of the Agreement, or of any applicable
governmental laws, ordinances, regulations, and other requirements with
reference to the sending, mailing or delivery of any notice, or with reference
to the making of any payment by Tenant to Landlord, shall be deemed to be
complied with when and if the following steps are taken:

                                      5

<PAGE>

     (a)  All rent and other payment required to be made by Tenant to Landlord
hereunder shall be payable to Landlord in Dallas County, Texas, at the address
herein below set forth, or at such other address as Landlord may specify from
time to time by written notice delivered in accordance herewith:

     (b)  Any notice or document required to be delivered hereunder shall be
deemed to be delivered if actually received and whether or not received when
deposited in the United States mail, postage prepaid, certified or registered
mail (with or without return receipt requested) addressed to the parties hereto
at the respective addresses set out opposite their names below, or at such
other address as they have heretofore specified by written notice delivered in
accordance herewith:

LANDLORD:      Collins Campbell Joint Venture
               c/o Thompson Realty Corporation
               1701 N. Collins, Suite 120
               Richardson, Texas 75080

TENANT:        Telecom Technologies, Inc.
               1701 N. Collins, Suite 3000
               Richardson, Texas 75080

     28.  Force Majeure. Whenever a period of time is herein prescribed for
action to be taken by either party, specifically excluding Tenant's obligation
to pay rental and other monetary obligations of Tenant hereunder, such party
shall not be liable or responsible for, and there shall be excluded from the
computation of any such period of time, any delays due to strikes, riots, Acts
of God, shortages of labor or materials, war, governmental laws, regulations or
restrictions or any other causes of any kind whatsoever which are beyond the
control of such party.

     29.  Separability. If any clause or provision of this lease is illegal,
invalid or unenforceable under present or future laws effective during the term
of this lease, then and in that event, it is the intention of the parties
hereto that the remainder of this lease shall not be affected thereby, and it
is also the intention of the parties to this that in lieu of each clause or
provision of this lease that is illegal, invalid, or unenforceable, there be
added as part of this lease a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.

     30.  Entire Agreement: Amendments: Binding Effect. This lease contains the
entire agreement between the parties and may not be altered, changed or
amended, except by instrument in writing signed by both parties hereto. No
provision of this lease shall be deemed to have been waived by Landlord unless
such waiver be in writing signed by Landlord and addressed to Tenant, nor shall
any custom or practice which may grow up between the parties in the
administration of the terms hereof be construed to waive or lessen the right of
Landlord to insist upon the performance by Tenant in strict accordance with the
terms hereof. The terms, provisions, covenants and conditions contained in this
lease shall apply to, inure to the benefit of, and binding upon the parties
hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided.

     31.  Quiet Enjoyment. Provided Tenant has performed all of the terms,
covenants, agreements and conditions of this lease, including the payment of
rent, to be performed by Tenant, Tenant shall peaceably and quietly hold and
enjoy the Premises for the term hereof, without hindrance from landlord,
subject to the terms and conditions of this lease.

     32.  Rules and Regulations. Tenant and Tenant's agents, employees, and
invitees will comply fully with all requirements of the rules and regulations
of the Project and related facilities which are attached hereto as Exhibit
"D", and made a part hereof as though fully set out herein. Landlord shall at
all times have the right to change such rules and regulations or to promulgate
other rules and regulations in such reasonable manner as may be deemed
advisable for safety, care, or cleanliness of the Project, the Premises, or
related facilities, and for preservation of good order therein, all of which
rules and regulations, changes and amendments will be forwarded to Tenant in
writing and shall be carried out and observed by Tenant. Tenant shall further
be responsible for the compliance with such rules and regulations by the
employees, servants, agents, visitors and invitees of Tenant.

     33.  Broker's or Agent's Commission. Tenant represents and warrants that
there are no claims for brokerage commissions or finder's fees in connection
with the execution of this lease, except as listed below, and Tenant agrees to
indemnify and hold harmless Landlord against all liabilities and costs arising
from such claims, including without limitation attorneys' fees in connection
therewith. Broker for Tenant is Partners National Real Estate Group, Inc.
Broker for Landlord is Thompson Realty Corporation.

     34.  Guaranty, Joint and Several Liability. If there be more than one
Tenant, the obligations hereunder imposed upon Tenant shall be joint and
several. If there be a guarantor of Tenant's obligations hereunder, the
obligations hereunder imposed upon Tenant shall be the joint and several
obligations of Tenant and such guarantor and Landlord need not first proceed
against the Tenant hereunder before proceeding against such guarantor, nor
shall any such guarantor be released from its guaranty for any reason
whatsoever, including without limitation, in case of any amendments hereto,
waivers hereof or failure to give such guarantor any notices hereunder.

    35.  Interest. Any rent or other amount which becomes owing by Tenant to
Landlord under this lease (including unpaid service charges) shall bear
interest from the date of demand at the lesser of the highest lawful rate or
ten percent (10%) per annum.

     36. Estoppel Certificate. Tenant will, at any time and from time to time,
upon not less than ten (10) days' prior request by Landlord, execute,
acknowledge and deliver to Landlord a statement in writing executed by Tenant
certifying that this lease is unmodified and in full effect (or, if there have
been modifications, that this lease is in full effect as modified, and selling
forth such modifications) and the dates to which the rent has been paid, and
either stating that to the knowledge of the signer of such certificate no
default exists hereunder or specifying each such default of which the signer
may have knowledge; it being intended that any such statement by Tenant may be
relied upon by any prospective purchaser or mortgagee of the Project. I.

     37.  Landlord's Liability. The liability of Landlord to Tenant for any
default by Landlord under the terms of this lease shall be limited to the
proceeds of sale on execution of the interest of Landlord in the Building and
Landlord shall not be personally liable for any deficiency. This clause shall
not be deemed to limit or deny any remedies which Tenant may have in the event
of default by Landlord hereunder, which do not involve the personal liability
of Landlord.

     38.  Captions. The captions contained in this lease are for convenience of
reference only, and in no way limit or enlarge the terms and conditions of this
lease.

     39.  Gender. Words of any gender used in this lease shall be held and
construed to include any other gender, and words in the singular number shall
be held to include the plural, unless the context otherwise requires.

     40.  Place of Performance. Tenant shall perform all covenants, conditions
and agreements contained herein, including but not limited to payment of rent,
in Dallas County, Texas. Any suit arising from or relating to this agreement
shall be brought in Dallas County, Texas.

     41.  I Relocation. Upon request by Landlord during the term of this lease,
but only at a point in time that Tenant falls to occupy seventy-five percent
(75%) of an entire floor in the Building, Tenant agrees to relocate to other
space in the Building designated by Landlord, provided such other space is as
large or larger than the Premises (the "Substitution Space"). If Landlord
desires to exercise such right to relocate Tenant, it shall give Tenant at
least sixty (60) days prior written notice thereof specifying the effective
date of such substitution and the location of the Substitution Space (including
any new expansion areas or right of first refusal areas if this lease contains
any options for same). As of such effective date; (i) the description of the
Premises set forth in this lease shall, without further act on the part of
Landlord or Tenant, be deemed amended so that the Substitution Space shall, for
all intents and purposes, be deemed to be the Premises hereunder and all of the
terms, covenants, conditions, provisions and agreements of this lease shall
continue in full force and effect and shall apply to the Substitution Space;
and (ii) Tenant shall move from the existing Premises into the Substitution
Space and shall vacate and surrender possession to Landlord of the existing
Premises. Tenant shall have the option either to accept possession of the
Substitution Space in its "as is" condition as of such effective date or to
require Landlord to after the Substitution Space in the same manner as the
existing Premises were altered pursuant to the Work Letter Agreement attached
hereto as Exhibit "C". Such

                                      6

<PAGE>

option shall be exercised by notice from Tenant to Landlord within ten (10)
days after the aforesaid notice from Landlord to Tenant of such proposed
relocation. If Tenant fails to deliver to Landlord within such ten (10) day
period notice of its election, or if Tenant is in default under any of the
terms, covenants, conditions, provisions or agreements of this lease as of the
date of such notice by Landlord, Tenant shall be deemed to have elected to
accept possession of the Substitution Space in its "as is" condition. If
Landlord exercises this relocation right, Landlord shall, after receipt of paid
invoices, promptly reimburse Tenant for Tenant's reasonable out-of-pocket
expenses for (i) printing a reasonable supply of new business stationery, and
(ii) moving Tenant's furniture, equipment, supplies and telephones from the
existing Premises to the Substitution Space.

     42.  Moving Allowance. Upon Tenant's occupancy of the First Portion of the
Premises and if no uncured event of default exists under this lease, Landlord
agrees to pay Tenant a moving allowance equal to $8,250.00. Upon Tenant's
occupancy of the Second Portion of the Premises and if no uncured event of
default exists under this lease, Landlord agrees to pay Tenant a moving
allowance equal to $6,864.75.

     43.  Building Signage. After Tenant occupies the First Portion of the
Premises, Tenant may, after having obtained any necessary governmental
approvals and the written approval of Landlord, at Tenant's sole cost and
expense, install a sign on the Building. Landlord will have the right to
approve all aspects of such sign, in its reasonable discretion, including
location, manner of installation, size, color, lettering, lighting, and
content. Tenant agrees to remove such sign immediately at its sole cost and
expense if Tenant is no longer occupying an entire floor in the Building, or if
for any reason the lease is terminated or expires. In connection with the
installation or removal of such sign, Tenant will repair any and all damage to
the Building at Tenant's sole cost and expense.

     44.  Intentionally deleted.

     45.  Intentionally deleted.

     46.  Lender Approval. This lease is subject to the approval of existing
lienholders on the Building. If Landlord is unable to obtain any and all
necessary lender approvals on or before April 15, 1997, this lease shall
thereafter be null and void, any prepaid rent shall be returned to Tenant, and
neither party shall have any liability to the other by reason of such
cancellation.

     47.  Special Provisions. Exhibits A, B, C, D, E, Rider No. 101 and Rider
No. 201.

                       LANDLORD:          Collins Campbell Joint Venture,
                                           a Texas general partnership

                                          By: Jaytex Properties, Ltd.,
                                               a Texas limited partnership

                                              By: JRS Management, Inc.,
                                                   a Texas corporation

                                               By: /s/ W. T. Field
                                                   ---------------------------
                                                   W. T. Field, President

                       TENANT:            Telecom Technologies, Inc.

                                          By: /s/ ANOUSHEH ANSARI
                                             ---------------------------------
                                          Printed Name:  ANOUSHEH ANSARI
                                                        ----------------------
                                          Title:  PRESIDENT
                                                 -----------------------------

                                       7
<PAGE>

                                  EXHIBIT "A"
                                   SITE PLAN

TELECOM TECHNOLOGIES, INC.

PREMISES:  20,153 SQUARE FEET OF RENTABLE AREA

[Diagram of 3rd Level Floorplan]

<PAGE>

                                  EXHIBIT "A"
                                   SITE PLAN

TELECOM TECHNOLOGIES, INC.
RIGHT OF FIRST REFUSAL SPACE

GROWTH AREA:  18,880 SQUARE FEET OF RENTABLE AREA

[Diagram of 2nd Level Floorplan]

<PAGE>

                                  EXHIBIT "B"

                     RENTAL ESCALATION - OPERATING EXPENSES

     In addition to the basic rental payable by Tenant in accordance with
Paragraph 1(e) of this lease, Tenant shall pay additional rent determined as
follows:

     (a)  For the purposes of this provision, the term "Basic Cost" shall
mean any and all costs, expenses and disbursements of every kind and character
(subject to the limitations set forth below) (specifically excluding leasing
commissions, attorney's fees, costs and disbursements and other expenses
incurred in connection with leasing, renovating or improving space for tenants,
and costs incurred in lease disputes) which Landlord shall incur, pay or become
obligated to pay in connection with the ownership of any estate or interest in,
operation, maintenance, repair, replacement, and security of the Building,
determined in accordance with generally accepted accounting principles
consistently applied, including but not limited to the following:

          (i)    Wages and salaries (including management fees) of all employees
engaged in the operation, repair, replacement, maintenance, and security of the
Building, including taxes, insurance, and benefits relating thereto.

          (ii)   All supplies and materials used in the operation, maintenance,
repair, replacement, and security of the Building.

          (iii)  Annual cost of all capital improvements made to the Building
which although capital in nature can reasonably be expected to reduce the
normal operating costs of the Building, as well as all capital improvements
made in order to comply with any statutes, rules, regulations or directives
hereafter promulgated by a governmental authority relating to energy,
conservation, public safety or security, as amortized over the useful life of
such improvements by Landlord for federal income tax purposes.

          (iv)   Cost of all utilities.

          (v)    Cost of all maintenance and service agreements on equipment,
including alarm service, window cleaning and elevator maintenance.

          (vi)   Cost of casualty and liability insurance applicable to the
Building and Landlord's personal property used in connection therewith.

          (vii)  All taxes, assessments and governmental charges, whether
federal, state, county or municipal, and whether they be by taxing districts or
authorities presently taxing or by other, subsequently created or otherwise,
and any other taxes, assessments or other governmental charges attributable to
the Building or its operation, excluding, however, federal and state taxes on
income.

          (viii) Cost of repairs, replacements, and general maintenance of the
Building.

          (ix)   Cost of service or maintenance contract with independent
contractors for the operation, maintenance, repair, replacement, or security of
the Building.

If Landlord incurs any such costs and expenses that are applicable to both The
Atrium on Collins Phase I and Phase II, Landlord will apportion such costs and
expenses between Phase I and Phase II as the Landlord, in the exercise of its
reasonable judgment, deems appropriate.

There are specifically excluded from the definition of the term "Basic Cost"
expenses for capital improvements made to the Building, other than capital
improvements described in subparagraph (iii) above and except for items which,
though capital for accounting purposes, are properly considered maintenance and
repair items, such as painting of common areas, replacement of carpet in
elevator lobbies, and the like; expenses for repair, replacements and general
maintenance paid by proceeds of insurance or by Tenant or other third parties,
and alterations attributable solely to tenants of the Building other than
Tenant; interest, amortization or other payments on loans to Landlord, whether
secured or unsecured; depreciation of the Building; legal expenses; and income,
excess profits or franchise taxes or other such taxes imposed on or measured by
the income of the Landlord from the operation of the Building.

     (b)  Tenant shall during the term of this lease pay as additional rent an
amount (the "Excess") equal to (i) the total amount of Basic Costs for a
calendar year, divided by the rentable area of the Building, and multiplied by
the rentable area of the Premises minus (ii) the product of the "Basic Costs
Stop" (herein after defined) multiplied by the rentable area of the Premises.
Basic Cost Stop is herein defined to be the quotient of the Basic Cost
applicable to the Premises per calendar year 1998 divided by the number of
square feet of rentable area in the Premises. Landlord may collect such
additional rent in arrears on a calendar year basis. Beginning with January 1,
1999, and on each January 1 thereafter, Landlord shall also have the option to
make a good faith estimate of the Excess for each upcoming calendar year and
upon thirty (30) days' written notice to Tenant may require the monthly payment
of such additional rent equal to 1/12 of such estimate. Any amounts paid based
on such an estimate shall be subject to adjustment pursuant to subparagraph (c)
when actual Basic Cost is available for each calendar year. For the purposes of
calculating the additional rental payable hereunder with respect to any
fractional calendar year during the term of this lease, Landlord may either (i)
estimate Basic Cost for the portion of the lease term during such partial year,
or (ii) estimate Basic Cost for the entire calendar year and reduce the same to
an amount bearing the same proportion to the full amount of estimated Basic
Cost for such year as the number of days in such fractional calendar year bears
to the total number of days in such full calendar year.

     (c)  By April 1 of each calendar year during Tenant's occupancy, or as
soon thereafter as practical, Landlord shall furnish to Tenant a statement of
Landlord's actual Basic Cost for the previous year adjusted as provided in
subparagraph (d). If for any calendar year additional rent collected for the
prior year as a result of Landlord's estimate of Basic Cost is in excess of the
additional rent actually due during such prior year, then Landlord shall refund
to Tenant any overpayment. Likewise, Tenant shall pay to Landlord, on demand,
any underpayment with respect to the prior year.

     (d)  With respect to any calendar year or partial calendar year during the
term of this lease in which the Building is not occupied to the extent of
ninety-five percent (95%) of the rentable area thereof, the Basic Cost for such
period shall, for the purposes hereof, be increased to the amount which would
have been incurred had the Building been occupied to the extent of ninety-five
percent (95%) of the rentable area thereof.

     (e)  If any amounts which become due by reason hereof are not paid by the
5th day following the day on which they are due, a service charge of 2% of such
rental escalation amount shall become due and payable in addition to such
rental escalation. Such service charge is for the purpose of reimbursing
Landlord for the extra costs and expenses incurred in connection with the
handling and processing of late rental escalation payments.

<PAGE>

                                  EXHIBIT "C"
                             WORK LETTER AGREEMENT

Telecom Technologies, Inc.
2425 N. Central Expressway
Suite 910
Richardson, Texas 75080

Re:  Suite 3000, 1701 N. Collins, The Atrium on Collins Phase II, Richardson,
     Texas, Specifically divided into two portions, the First Portion and the
     Second Portion

Ladies and Gentlemen:

     You (herein after referred to as "Tenant") and we (herein after referred
to as "Landlord") are executing, simultaneously with this "Work Letter
Agreement" (herein so called), a written lease (the "Lease") covering the
space referred to above (hereinafter called the "Premises").

     To induce Tenant to enter into such Lease (which is hereby incorporated by
reference) and in consideration of the mutual covenants hereinafter contained,
Landlord and Tenant mutually agree as follows:

     1.   Final Plans. Landlord agrees to provide, by Landlord's designated
space planner, architect and/or engineer, the following Building Standard
(hereinafter defined) space plans and architectural and mechanical drawings and
specifications (hereinafter collectively referred to as the "Final Plans"),
to be drawn for the First Portion and the Second Portion of the Premises on
Tenant's behalf:

          (a)  Complete Building Standard "Space Plans" (herein so called)
for the layout of the Premises;

          (b)  Complete, finished and detailed 1/8 inch scale architectural
drawings and specifications for Tenant's partition layout, reflected ceiling,
telephone and electrical outlets, and finish schedule for the work to be done
by Landlord under Paragraph 3 hereof (the "Construction Plans"); and

          (c)  Complete Building Standard mechanical plans and specifications
where necessary for installation of normal air conditioning system and duct
work and heating and electrical facilities for the work to be done by Landlord
under Paragraph 3 hereof (the "MP & E Plans").

     Tenant shall pay all costs of preparing the Final Plans, subject, however,
to the reimbursement provisions of Paragraph 7 below.

     2.   Preparation of Final Plans: Changes to Final Plans. Tenant covenants
and agrees to furnish to Landlord all information necessary for the preparation
of each of the Space Plans, the Construction Plans and the M P & E Plans on or
before January 31, 1997. Landlord will cause the Space Plans, the Construction
Plans, and the M P & E Plans to be prepared from such information and will
submit such plans to Tenant. Within ten (10) days after receipt thereof, Tenant
shall approve the Space Plans, Construction Plans and M P & E Plans or indicate
what changes, if any, that it desires to make. Such proposed changes, if any,
shall be submitted to Landlord in writing for Landlord's written approval. If
within ten (10) days after receipt thereof, Tenant fails to approve any of the
Space Plans, Construction Plans and M P & E Plans or if Tenant fails to propose
in writing any changes to be made to such Space Plans, Construction Plans and M
P & E Plans, then Tenant shall be deemed to have approved each of same. Any
redrawing of all or any of the Final Plans occasioned by Tenant after Tenant's
approval (or deemed approval) thereof as well as any changes requested by
Tenant in connection with its initial review of the Final Plans which are
agreed to by Landlord shall be at Tenant's sole cost and expense and no portion
of the Credit (as defined in Paragraph 7 below) shall be applicable to such
costs.

     3.   Construction of Improvements. Subject to each of Paragraph 2 and
Paragraph 28 of the Lease, provided that Tenant has not committed an event of
default pursuant to Paragraph 20 of the Lease, Landlord agrees to cause the
improvements to the Premises to be constructed pursuant to and in substantial
accordance with the Final Plans. The construction of such improvements in the
Premises shall be at Tenant's sole cost and expense, subject, however, to the
reimbursement provisions of Paragraph 7 below. Tenant acknowledges that
commencement of construction of the work in the First Portion of the Premises
will take place before commencement of construction of the work in the Second
Portion of the Premises and the timing of such construction will be structured
to achieve delivery of space in accordance with Paragraph 2 of the Lease.
Tenant acknowledges that all work done in the Premises pursuant to this Work
Letter Agreement shall be performed by a contractor (and such subcontractors,
suppliers and laborers) designated by Landlord and approved by Tenant.

     4.   Condition of Premises. Landlord will, at Landlord's sole cost and
expense, construct all improvements to the Premises necessary to characterize
the Premises as being in Shell Condition (hereinafter defined). As used herein
the term "Shell Condition" means:

          (a)  The sprinkler system and sprinkler heads have been installed.

          (b)  The main ducting for the HVAC system has been installed.

          (c)  Electric lines have been run to junction boxes in the Premises.

          (d)  Semi-finished ceiling.

          (e)  Smooth concrete floor slab.

<PAGE>

     5.   Modifications to Shell Condition. To the extent that the Final Plans
call for any modifications (herein "Shell Modifications") to the Shell
Condition, the costs of such Shell Modifications shall be borne solely by
Tenant, subject, however, to the reimbursement provisions of Paragraph 7 below.
By way of example, and not by way of limitation, the following shall each be
examples of Shell Modifications:

          (a)  Any modifications to the existing sprinkler system, or the
moving of existing sprinkler heads, or the installation of additional sprinkler
heads.

          (b)  Any modifications to the existing HVAC system, the moving of the
existing duct work and/or diffusers, or the installation of additional duct
work and/or diffusers.

          (c)  Any rewiring of existing junction boxes, relocation of existing
junction boxes, or installation of additional junction boxes.

     6.   Building Standard. Tenant shall be required to use, and the Final
Plans shall specify Building Standard (a) light fixtures, (b) doors, (c)
ceiling tiles, and (d) hardware throughout the Premises and the costs of
purchasing, transporting and installing each of the foregoing Building Standard
items shall be borne solely by Tenant, subject, however, to the reimbursement
provisions of Paragraph 7 below. Whenever the term "Building Standard" is
used in this Work Letter Agreement, it shall mean the exclusive type, brand,
quality, and/or quantity of materials Landlord designates from time to time to
be the quality or quantity to be used in the Building.

     7.   Payment of Costs: Credit. Tenant agrees to pay Landlord, promptly
upon being billed therefor, the actual cost (labor, materials, architectural,
space planning, engineering and other costs) of all work performed pursuant to
this Work Letter Agreement plus a fee of four percent (4%) of such cost for
Landlord's review, supervision and management of such work; Landlord shall have
the right to submit interim statements of cost incurred which shall be promptly
paid by Tenant to Landlord. Tenant agrees that all payments due to Landlord
pursuant hereto shall constitute payments of additional rent and that in the
event of default of payment thereof, Landlord shall (in addition to all other
remedies) have the same rights as in the event of default of payment of rent
under the Lease. Notwithstanding the above, so long as no event of default, as
defined in Paragraph 20 of the Lease, shall have occurred, Landlord shall
credit Tenant in an amount not to exceed $18.50 per square foot of Rentable
Area in the Premises (the "Credit"), such Credit to be applied only against
sums due from Tenant to Landlord pursuant to this Work Letter Agreement
(exclusive of those sums which, pursuant to Paragraph 2 above are not eligible
to be offset by the Credit).

     8.   Delays. It is agreed that, notwithstanding the provisions of
Paragraph 2 of the Lease, waiving Tenant's obligation for the payment of rental
under Paragraph 1(f) of the Lease until the date on which Landlord can deliver
possession of the Premises, if Landlord shall be delayed in substantially
completing the work to be performed by Landlord pursuant to this Work Letter
Agreement as a result of:

<PAGE>

          (a)  Tenant's failure to timely furnish information or specifications
in accordance with Paragraph 2 above; or

          (b)  Tenant's request for materials, finishes or installations other
than Landlord's Building Standard; or

          (c)  Tenant's changes in or modifications to any plans and
specifications or any of the Final Plans; or

          (d)  The performance of any work in the Premises by a person, firm or
corporation employed by Tenant; (all such persons, firms or corporations being
subject to the approval of Landlord);

Tenant's obligation for payment of rental under the Lease (as affected by such
waiver) shall be accelerated by the number of days of such delay.

     9.   Entry by Tenant's Agents. Landlord will permit Tenant and its agents
to enter the Premises prior to the date specified for the commencement of
Tenant's occupancy under the Lease, in order that Tenant may perform through
its own contractors (to be first approved by Landlord) such other work and
decorations as Landlord may approve at the same time that Landlord's
contractors are working in the Premises. The foregoing license to enter prior
to the commencement of the lease term, however, is conditioned upon Tenant's
workmen and mechanics working in harmony and not interfering with the labor
employed by Landlord, Landlord's mechanics or contractors or by any other
tenant or their contractors. Such license is further conditioned upon workers'
compensation and public liability insurance for bodily injury and property
damage, all in amounts and with companies and on forms satisfactory to
Landlord, being provided and at all times maintained by Tenant's contractors
engaged in the performance of the work, and certificates of such insurance
being furnished to Landlord prior to proceeding with the work. If at any time
such entry shall cause disharmony or interference therewith, this license may
be withdrawn by Landlord upon forty-eight (48) hours written notice to Tenant.
Such entry conditions shall be deemed to be under all of the terms, covenants,
provisions and conditions of the Lease except as to the covenant to pay rent.
Landlord shall not be liable in any way for any injury, loss or damage which
may occur to any of Tenant's decorations or installations so made prior to
commencement of the lease term, the same being solely at Tenant's risk, and
Tenant shall hold Landlord harmless from any claim, demand or action arising
from activities of Tenant's contractors, workmen or mechanics.

     If the foregoing correctly sets forth our understanding, kindly
acknowledge your approval in the space provided below whereupon this work
letter shall become a binding agreement between us.

                                  Yours very truly,

                                  COLLINS CAMPBELL JOINT VENTURE
                                    a Texas general partnership

                                  By: Jaytex Properties, Ltd.,
                                        a Texas limited partnership

                                      By: JRS Management, Inc.,
                                            a Texas corporation

                                          By: /s/ W. T. Field
                                             ------------------------------
                                               W. T. Field, President

AGREED TO AND ACCEPTED
as of the 4th day of April, 1997.

TELECOM TECHNOLOGIES, INC.,
a Texas corporation

By: /s/ ANOUSHEH ANSARI
   -----------------------

Name: ANOUSHEH ANSARI
      --------------------

Title: PRESIDENT
       -------------------

<PAGE>

                                  EXHIBIT "D"

                         BUILDING RULES AND REGULATIONS

1.   Landlord agrees to furnish Tenant two keys to Tenant door at no charge and
two keys to entry doors requiring a $10.00 refundable deposit. Additional keys
will be furnished at a nominal charge.

2.   Tenant will refer all contractors, contractor's representatives and
installation technicians, rendering any service on or to the Premises for
Tenant, to Landlord for Landlord's approval and supervision before performance
of any contractual service. This provision shall apply to all work performed in
the Building including installation of telephones, telegraph equipment,
electrical devices and attachments and installations of any nature affecting
floors, walls, woodwork, trim, windows, celling, equipment or any other
physical portion of the Building.

3.   No Tenant shall at any time occupy any part of the Project as sleeping or
lodging quarters.

4.   Tenant shall not place, install or operate on Premises or in any part of
the Project, any engine, stove or machinery or conduct mechanical operations or
cook thereon or therein, or place or use in or about Premises any explosives,
gasoline, kerosene, oil, acids, caustics, or any other inflammable, explosive,
or hazardous material without prior written consent of Landlord.

5.   Landlord will not be responsible for lost or stolen personal property,
equipment, money or jewelry from Tenant's area or public rooms regardless of
whether such loss occurs when area is locked against entry or not.

6.   No birds, fowl, dogs, animals or pets of any kind shall be brought into or
kept in or about the Project.

7.   Landlord will not permit entrance to Tenant's offices by use of pass key
controlled by Landlord, to any person at any time without permission by Tenant,
except employees, contractors, or service directly supervised or employed by
Landlord.

8.   None of the entries, passages, doors, elevators, hallways or stairways
shall be blocked or obstructed, or any rubbish, litter, trash, or material of
any nature placed, emptied or thrown into these areas, or shall such areas be
used at any time except for ingress or egress by Tenant, Tenant's agents,
employees or invitees.

9.   The water closets and other water fixtures shall not be used for any
purpose other than those for which they were constructed. No person shall waste
water by interfering with the faucets or otherwise.

10.  No person shall disturb the occupants of the Building by the use of any
musical instruments, the making of raucous noises, or other unreasonable use.

11.  Nothing shall be thrown out of the windows of the Building, or down the
stairways or other passages.

12.  Tenant shall not store any materials, equipment, products, etc., outside
the Premises as shown on the plats attached hereto.

13.  Tenant shall not erect any sign or other insignia upon or in any part of
the Project or other portion of the Premises without the prior written consent
of the Landlord.

14.  Tenant shall comply with all local and federal codes and ordinances. In
the event of fire or code problems, Tenant shall comply with such requirements.

15.  Tenant and its agents, employees and invitees shall observe and comply
with the driving and parking signs and markers on the Project grounds and
surrounding areas.

16.  Corridor and passage doors when not in use shall be kept closed.

17.  Movement in or out of the Building of furniture, office equipment, or any
other bulky or heavy materials shall be controlled by the Landlord. Landlord
will determine the method of routing of such items so as to ensure the safety
of all concerned.

<PAGE>

18.  Directories will be placed by the Landlord, at Landlord's expense, in the
building and no other directories shall be permitted.

19.  No signs, draperies, shutters, window coverings, decorations, hangings or
obstructions of any type shall be placed on any skylights or on any doors or
windows which are visible from outside the leased premises without the prior
written consent of the Landlord.

20.  All locks for doors in each tenant's leased area shall be building
standard and no tenant shall place any additional lock or locks on any door in
its leased area without Building Management's written consent.

21.  Building Management shall have the authority to prescribe the weight and
manner that safes and other heavy equipment are positioned.

22.  Tenant space that is visible from public areas must be kept neat and clean.

23.  Standard climate control hours are 7 a.m. to 6 p.m., Monday through
Friday, and 8 a.m. to 12 noon on Saturday. Landlord shall adjust thermostats to
maintain building standard temperature. Tenant shall not attempt to adjust
temperature control thermostats. Window blinds should remain down and lifted at
a 45-degree angle toward the street to maintain temperatures and conserve
energy.

24.  Tenant will comply with all requirements necessary for the security of the
Premises both during business hours and after hours and on weekends.

25.  Tenants are to lock all office doors leading to corridors and to turn out
all lights at the close of their working day.

26.  The work of the janitor or cleaning personnel shall not be hindered by
Tenant after 6:30 p.m. The windows, doors and fixtures may be cleaned at any
time. Tenant shall provide adequate waste and rubbish receptacles, cabinets,
bookcases, map cases, etc., necessary to prevent unreasonable hardship to
Landlord in discharging its obligation regarding cleaning service.

27.  Employees of Landlord shall not receive or carry messages for or to any
tenant or other person nor contact with or render free or paid services to any
tenant or tenant's agent, employees or invitees.

28.  Landlord desires to maintain standards of environment, comfort and
convenience for its tenants. It will be appreciated if any undesirable
conditions or lack of courtesy or attention by its employees are reported
directly to Landlord.

29.  All tenant modifications resulting from remodeling in or to the leased
Premises must conform to the City of Richardson Building and Fire Codes and
approved by Property Management in writing prior to performance of the work.

30.  The Landlord reserves the right to rescind any of these rules and make
such other and further rules and regulations as in the judgment of Landlord
shall from time to time be needed for the safety, protection, care and
cleanliness of the Project, the operation thereof, the preservation of good
order therein, and the protection and comfort of its tenants, their agents,
employees and invitees, including but not limited to rules and regulations
regarding hours of access to the Project, which rules when made and notice
thereof given to a tenant shall be binding upon him in like manner as if
originally prescribed. In the event of any conflict, inconsistency, or other
difference between the terms and provisions of these rules and regulations and
any lease now or hereafter in effect between Landlord and any tenant in the
Building, Landlord shall have the right to rely on the term or provision in
either such lease or such Rules and Regulations which is most restrictive on
such tenant and most favorable to Landlord.

<PAGE>

                                  EXHIBIT "E"
                              DESCRIPTION OF LAND

STATE OF TEXAS
COUNTY OF DALLAS
CITY OF RICHARDSON

WHEREAS, Collins Campbell Joint Venture, a Texas Joint Venture, is the owner of
a tract of land situated in the WILLIAM HUGHES SURVEY, Abstract No. 573 in
Dallas County, Texas and all of COLLINS ATRIUM ADDITION, on addition to the
City of Richardson as recorded in Volume 85032, Page 3368 of the Deed Records
of Dallas County, Texas (DRDCT) and being more particularly described as
follows:

COMMENCING at the Intersection of the southerly right-of-way MUNICIPAL DRIVE
(80 foot right-of-way) and the westerly right-of-way of NORTH COLLINS BOULEVARD
(100 foot right-of-way);

THENCE departing the southerly right-of-way of said MUNICIPAL DRIVE and along
the westerly right-of-way of NORTH COLLINS BOULEVARD South 00'06'07'' West, a
distance of 450.00 feet to a 1/2 inch iron rod found for the POINT OF
BEGINNING, said point being the most southeasterly corner of Lot 1, Block 1,
COLLINS PLAZA recorded in Volume 83215, Page 2473 (DRDCT);

THENCE continuing along the westerly right-of-way of said NORTH COLLINS
BOULEVARD South 00'06'07'' West, a distance of 387.48 feet to a 1/2 Inch Iron
rod set for corner, said point being the most northeasterly corner of the
UNIVERSITY PLACE TWO recorded in Volume 84114, Page 2132 (DRDCT);

THENCE departing the westerly right-of-way of said NORTH COLLINS BOULEVARD and
along the northerly line of said UNIVERSITY PLACE TWO as follows:

     North 89'53'53'' West, a distance of 503.31 feet to a 1/2 inch iron rod
     found for corner;

     South 51'59'00'' West, a distance of 17.53 feet to a 1/2 inch Iron rod set
     for corner. in the northeasterly right-of-way of the G.C. & S.F. RAILROAD
     (150 foot right-of-way);

THENCE departing the northerly line of said UNIVERSITY PLACE TWO and along the
northeasterly right-of-way of said RAILROAD North 38'01'00'' West, a distance
of 221.82 feet to a 1/2 inch Iron rod. set for corner, said point being the
most southwesterly corner of the RICHARDSON MEDICAL PARK recorded in Volume
79020, Page 5 (DRDCT);

THENCE departing the northeasterly right-of-way of said RAILROAD and along the
southerly line of said RICHARDSON MEDICAL PARK North 51'54'32'' East, a
distance of 408.39 feet to a 1/2 inch Iron rod found for corner, said point
being found in the westerly line of said Lot 1, Block 1, COLLINS PLAZA;

THENCE departing the southerly line of said RICHARDSON MEDICAL PARK and along
the westerly line of said Lot 1, Block 1 South 28'26'50'' East, a distance of
32.70 feet to a 1/2 inch Iron rod set for corner, said point being the most
southwesterly corner of said Lot 1, Block 1;

THENCE departing the westerly line of said Lot 1, Block 1 and along the
southerly line of said Lot 1, Block 1 South 89'53'53'' East, a distance of
317.43 feet to the POINT OF BEGINNING;

CONTAINING within these mates and bounds 4.866 acres or 211,952 square feet of
land, more or less.

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                                 RIDER NO. 101
                                 -------------
                                OPTION TO EXTEND
                                ----------------

Tenant at its option may extend the term of this lease for up to one (1)
extension term(s) of five (5) years (each) by serving written notice thereof
upon Landlord at least six (6) months before the expiration of the initial
lease term (or the prior extension term), provided that at the time of such
notice and at the commencement of such extended term, no event of default, as
defined in Paragraph 20 of this lease, shall have occurred. Upon the service of
such notice and subject to the conditions set forth in the preceding sentence,
this lease shall be extended without the necessity of the execution of any
further Instrument or document. Such extended term shall commence upon the
expiration date of the initial lease term (or the prior extension term), expire
upon the annual anniversary of such date five (5) years thereafter, and be upon
the same terms, covenants, and conditions as provided in this lease for the
initial term, except that the basic rental payable during each extended term
shall be at the prevailing rate (the "Market Rate") for comparable space in the
Building and office/buildings comparable to the Building located in Richardson,
Dallas County, Texas, taking into consideration factors including, but not
limited to, the quality of construction and finish of the Building, the ease of
accessibility to the Building and the visibility of the Building from major
thoroughfares, and the availability of free parking associated with the
Building, at the commencement of each such extended term, which new basic
rental shall be adjusted as provided in and under this lease. Payment of all
additional rent and other charges required to be made by Tenant as provided in
this lease for the initial term shall continue to be made during each such
extended term. Any termination of this lease during the initial term (or the
prior extension term) shall terminate all rights of extension hereunder. Any
assignment or subletting by Tenant pursuant to Paragraph 11 of this lease,
except an assignment or subletting to a Fortune 1000 company specifically
described under Paragraph 11, shall terminate the option(s) of Tenant contained
herein, except for a permitted transfer described in Paragraph 11.
Notwithstanding the foregoing, in no event shall the monthly rental installment
for any extension term be less than the monthly rental installment during the
last year of the initial term (or the prior extension term).

<PAGE>

                                 RIDER NO. 201

                             RIGHT OF FIRST REFUSAL

Provided this lease is then in full force and effect and no event of default,
as defined in Paragraph 20 of this lease, shall have occurred, Tenant shall
have the right of first refusal as hereinafter described to lease all (or any
applicable part) of the space (the "Right of First Refusal Space") containing
approximately 18,880 square feet of rentable area which is labelled on Exhibit
"A" to this lease as the "Growth Area"; subject to the rights of the
existing tenant, Thompson Realty Investment Corporation, on 9,847 square feet
of rentable area comprising the northern portion of the Growth Area, at such
time as Landlord engages in negotiations with a prospective tenant, exercisable
at the following times and upon the following conditions:

     1.   If Landlord enters into negotiations with a prospective tenant to
          lease all or any part of the Right of First Refusal Space, Landlord
          shall notify Tenant of such fact and shall include in such notice the
          rent, term, and other terms (including finish out) at which Landlord
          is prepared to offer such Right of First Refusal Space to such
          prospective tenant.  Tenant shall have a period of five (5) days from
          the date of delivery of the notice to notify Landlord whether Tenant
          elects to exercise the right granted hereby to lease the entire
          Right of First Refusal Space. If Tenant fails to give any notice to
          Landlord within the required five (5) day period, Tenant shall be
          deemed to have waived its right to lease the Right of First Refusal
          Space.

     2.   If Tenant so waives its right to lease the Right of First Refusal
          Space (either by giving written notice thereof or by failing to give
          any notice), Landlord shall have the right thereafter to lease all or
          the applicable portion of the Right of First Refusal Space to the
          prospective tenant and upon the execution of such lease between
          Landlord and the prospective Tenant this Right of First Refusal shall
          thereafter be null, void and of no further force or effect.

     3.   If Landlord does not enter into a lease with such prospective tenant
          covering all or the applicable portion of the Right of First Refusal
          Space, Landlord shall not thereafter engage in other lease
          negotiations with respect to the Right of First Refusal Space without
          first complying with the provisions of this Rider No. 201.

     4.   Upon the exercise by Tenant of its right of first refusal as provided
          in this Rider No. 201, Landlord and Tenant shall, within ten (10)
          days after Tenant delivers to Landlord notice of its election, enter
          into a lease covering the Right of First Refusal Space for the rent,
          for the term, and containing such other terms and conditions as
          Landlord notified Tenant pursuant to paragraph 1 above.

     5.   Any assignment or subletting by Tenant pursuant to Paragraph 11 of
          this lease, except for an assignment of subletting specifically
          permitted under Paragraph 11 without Landlord's consent, shall
          terminate the right of first refusal of Tenant contained herein.
          Notwithstanding anything to the contrary contained in this Rider No.
          201, upon the second anniversary of the Commencement Date of this
          lease, the right of first refusal of Tenant contained herein shall
          terminate and be of no further force or effect.

<PAGE>

[Diagram of Preliminary Signage]

<PAGE>

[Diagram of Sign]

<PAGE>

[Blueprint of East Elevation with signage detail]

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