Document:

Telecard Agreement

 EXHIBIT 10.7 
  
 Confidential Treatment Requested 
 Under 17 C.F.R. Sections 200.80(b)(4) 
 200.83 and 203.406 
  
 AXW-P1900(B) SUPPLY AGREEMENT 
  
 This Product Supply Agreement is made on the         
of November in the year 2003 between; 
  
 TeleCard Limited, having
it’s registered office at World Trade Centre 75-East Blue Area, Fazul-ul-Haq road, Islamabad, Pakistan and Corporate office at World Trade Centre, 10 Khyaban-e-Roomi, Clifton, Karachi, Pakistan (hereinafter referred to as “TeleCard”)

  
 and 
  
 Axesstel Inc., having it’s registered office at 6305 Lusk Blvd, San
Diego, CA 92121, United States of America (hereinafter referred to as “Axesstel”) 
  
 TeleCard is a government licensed CDMA based Wireless-Local-Loop (WLL) operator and is engaged in development of its network in Pakistan. TeleCard wishes to purchase CDMA Terminals for onward supply to its customers.
Axesstel having the required equipment, expertise and skill to provide the terminals has agreed to supply the goods to TeleCard. 
  
 The Parties now agree to the following: 
  

	1.	TeleCard shall purchase [***] Low-tier WLL terminals from Axesstel as follows: 

  

	 	1.1	Product 

  

							
	 Model

	 	 Technology

	 	 Quantity

	 	 S/W

	 AXW-P1900(B)
	 	CDMA2000 1xRTT	 	[***] units	 	Standard

  

	 	1.2	Price table 

  

							
	 Q/Year

	 	 2Q/04

	 	 3Q/04

	 	 4Q/04

	 Price
	 	US$ [***]	 	US$ [***]	 	US$ [***]
	 Min. Q’ty / Q
	 	[***]	 	[***]	 	[***]

  
 In case TeleCard purchases a total of
[***] units over the same period, the price for the additional [***] units shall not be higher than US$ [***] per unit. The above unit prices are FOB Korea. In case TeleCard decides to use CIF Terms, the freight charges will be added at actuals to
the per unit price. All prices in this Agreement are inclusive of printing [***]. 
  

	2.	General Specification and Development Schedule 

  

	 	2.1	General Specifications 

          Form factor: WLL phone type (desktop) 
          Single-band CDMA 1xRTT, 1900MHz 
         
Chipset: Qualcomm MSM 5010 (1x chipset, no data service) 
  

											
	 Initial for TeleCard
	 	 	 	 	 	 	 	 	 	Initial for Axesstel
	
	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 
	
	 	 	 	 	 	 	 	 	 	

  
 ***
Confidential Treatment Requested 
  

 Page 1 of 3 

 Power LED 
 Generates local dial tone (stutter-tone for v-mail indication) 
 Automatic sending of digits 
 Caller ID: 2 Line LCD 
 2 way SMS: From
3rd Quarter of 2004 
 Backup battery: 1,000mAh Ni-MH 
 No backlight 
 Charger: 110-250V AC-50~60Hz (with high voltage resistance as provided for ACW- P1900) 
 Air interface standard: TIA/EIA/IS-2000 
 Frequency Range: TX 1850-1910 MHz & RX 1930-1990 MHz 
 Plastic Keyboard 
 RUIM not supported 
 Speakerphone/ hands-free
mode not supported 
 PCO software could be added at TeleCard’s option at no extra cost, would be available from Q2 2004 
 The Phones delivered to TeleCard would be locked to the parameters of TeleCard network so that it cannot be used by any other operator using the 1900 MHz.
frequency range. 
  

	 	2.2	Schedule 

 Product Supply Agreement: D day 
 Product specification confirm: D + 7 days 
 Development: D + 70 days 
 Field Trial/ Acceptance/ type approval: D + 90 days 
 Any delay in the development of the phone will result in an adjustment of the delivery schedule accordingly. 
  

	3.	Upon type approval issued by the Pakistan Telecommunications Authority and field trials/ acceptance, TeleCard shall issue a single Purchase Order for each quarter’s requirement
with and [***] each PO for the [***] units. The quantity, the last date of shipment and partial shipping allowance will be mentioned in the [***]. [***]. However, the quantity of a single delivery lot would not be less than [***] ([***]) units.

  

	4.	In lieu of warranty, Axesstel shall provide [***] percent ([***]%) extra quantity of the Goods (Swap Quantity) in each shipment to cover probable defective parts or malfunctioning
of the Equipment. However, in case of any epidemic / large scale failure in the Goods, Axesstel will be liable to remove the defect / replace the faulty equipment, as required. 

  

	5.	Axesstel shall not [***] 

  

											
	 Initial for TeleCard
	 	 	 	 	 	 	 	 	 	Initial for Axesstel
	
	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 
	
	 	 	 	 	 	 	 	 	 	

  
 ***
Confidential Treatment Requested 
  

 Page 2 of 3 

	6.	Any type of equipment for which Type Approval certificate has already not been obtained from Pakistan’s regulatory body—Pakistan Telecommunication Authority
(PTA)—[***] shall be responsible to get the certification prior to first shipment. [***] shall extend support to [***] for processing the approval with the PTA. All direct costs of processing the type approval application and certificate will
be borne by [***]. Type Approval fees are US$[***] per item. In case any costs are paid on becoming due by [***], these will be refunded / adjusted by [***]. Evidence and/or receipt should be sent to [***] by PTA or [***]. 

 

	7.	[***]. 

  

	8.	Axesstel agrees to provide to TeleCard the necessary Training and Test & Repair Equipment for setting up [***] Repair Centers in Pakistan to service/ repair the units being sold
to TeleCard. 

  

	9.	For all Shipments, one hundred percent ([***]%) of the Price shall be paid by TeleCard through [***] in favour of Axesstel. [***] shall be preferably established from a foreign
first class bank (Citibank or ABN/Amro) to avoid confirmation charges. TeleCard will make [***] efforts to make this possible. 

  

									
	 Signed for and on behalf of
 TELECARD LIMITED
	 	 	 	 Signed for and on behalf of
 AXESSTEL INC.

					
	By (name)	  	JAVAID FIROZ	 	 	 	By (name)	  	MIKE KWON
	 	 	
	 	 	 	 	 	

					
	Signature	  	 	 	 	 	Signature	  	 
	 	 	
	 	 	 	 	 	

					
	Title	  	Chief Executive Officer (CEO)	 	 	 	Title	  	Chairman of the Board
	 	 	
	 	 	 	 	 	

					
	Date	  	 	 	 	 	Date	  	 
	 	 	
	 	 	 	 	 	

  

											
	 Initial for TeleCard
	 	 	 	 	 	 	 	 	 	Initial for Axesstel
	
	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 
	
	 	 	 	 	 	 	 	 	 	

  
 ***
Confidential Treatment Reqested 
  

 Page 3 of 3Exhibit 10.26

                                 LEASE AGREEMENT

This lease Agreement, made this 1st day of May, 2003,

Between GUSSACK REALTY COMPANY, LLC, residing or located at 44 High Street, West
Nyack, New York, 10994, herein designated as the Landlord, and GENERAL BEARING
CORPORATION, residing or located at 44 High Street, West Nyack, New York, 10994,
herein designated as the Tenant;

Witnesseth that, the Landlord does hereby lease to the Tenant and the Tenant
does hereby rent from the Landlord, the following described premises: 44 High
Street, West Nyack, New York 10994, consisting of approximately one hundred
ninety thousand (190,000) square feet situated on 18 acres, for a term of ten
years, commencing on November 1, 2003 and ending on October 31, 2013, to be used
and occupied only and for no other purpose than offices, manufacturing,
warehousing and other incidental uses, at the following Annual Rents in the
monthly installments indicated:

November 1, 2003 - October 31,2005 - $1,140,000.00 payable @ $95,000.00 per
month.

      Commencing on November 1, 2005 and every two years thereafter (referred to
as a New Rent Year), the annual rent shall be increased to the greater of A)
106% of the next preceding year's rent or B) said preceding year's rent
multiplied by a fraction, the numerator of which is the Consumer Price Index
(CPI) in effect ninety (90) days prior to November 1st of the new rent year and
the denominator of which is the CPI in effect (90) days prior to November 1st of
the preceding New Rent Year, not to exceed 5% per year. The Consumer Price Index
(CPI) used shall be as published by the United States Government for the area
including Rockland County, New York, or if no such Index is published, then for
northern New Jersey. If no CPI is published specifically for any of the above
dates, then the CPI published for the most recent date before each such date
shall be used. The amount of rent for each year which is not a "new rent" year
shall be the same amount as that for the next preceding year.

      The tenant shall have the option of extending this lease for an additional
five years (the extended period) provided it exercises such option and gives
written notice thereof to the landlord no later than 6 months prior to the
expiration of the lease term.

If the tenant exercises such option, the rent for first year of the extended
period shall be at fair market value (FMV) as agreed upon by the parties. If the
parties do not reach agreement as to FMV by February 1, 2013, they shall jointly
retain a mutually acceptable appraiser to appraise FMV and whose appraisal shall
be binding. The landlord and the tenant shall each pay one half the cost of the
appraisal.

      The third and fifth years of the extended period shall be deemed "new rent
years" for which the rent shall be increased pursuant to the above formula
applicable to "new rent years" occurring during the base term of the lease.

      All monthly rental installments shall be payable in advance on the first
day of the month. If Tenant defaults in any rent payment for a period of 15
days, Tenant shall pay Landlord a late charge of 5% (of the amount of rent due)
which shall be payable as "additional rent".

                            Conditions and Covenants:

      FIRST.-The Tenant covenants and agrees to pay to the Landlord the rent as
above provided.

      SECOND.- Throughout said term the Tenant shall take good care of the
demised premises, fixtures and appurtenances, including all heating, ventilating
and air conditioning equipment (HVAC), electrical systems, sprinkler system,
plumbing and all alterations, additions and improvements thereto, make all
repairs in and about same necessary to preserve them in good order and
condition, ordinary wear and tear and damage by fire or other casualty excepted,
which repairs shall be, in quality and class, equal to the original work;
promptly pay the expense of such repairs; suffer no waste or injury; give notice
to the Landlord of any fire that may occur; execute and comply with all laws,
rules, orders, ordinances and regulations at any time issued or in force (except
those requiring structural alterations for which tenant is not liable hereunder,
if any) applicable to the demised premises or to the Tenant's occupation
thereof, of the Federal, State and Local

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<PAGE>

Governments, and of each and every department, bureau and official thereof, and
of the New York Board of Fire Underwriters; permit at all times during usual
business hours, the Landlord and representatives of the landlord to enter the
demised premises for the purpose of inspection, and to exhibit them for purposes
of sale or rental; suffer the landlord to make repairs and improvements to all
parts of the building, and to comply with all orders and requirements of
governmental authority applicable to said building or to any occupation thereof;
suffer the landlord to erect, use, maintain, repair and replace pipes and
conduits in the demised premises and to the floors above and below; forever
indemnify and save harmless the Landlord for and against any and all liability,
penalties, damages, expenses and judgments arising from injury during said term
to person or property of any nature, occasioned wholly or in part by any act or
acts, omission or omissions of the Tenant, or of the employees, guests, agents,
assigns or sub-tenants of the Tenant and also for any matter or thing growing
out of the occupation of the demised premises or of the streets, sidewalks or
vaults adjacent thereto; permit, during the six months next prior to the
expiration of the term the usual notice "To Let" or similar language, to be
placed and to remain unmolested in a conspicuous place upon the exterior of the
demised premises; repair, at or before the end of the term, all injury done by
the installation or removal of furniture and property; and at the end of the
term, to quit and surrender the demised premises with all alterations, additions
and improvements in good order and condition.

      The landlord shall be responsible for all structural repairs to the walls
of the premises (other than damage caused by Tenant, its agents, servants or
employees) except that Tenant shall be responsible for maintenance, repair and
replacement of the roof and all HVAC equipment.

      THIRD.- Tenant will not perform any alterations or renovations, shall not
disfigure or deface any part of the building; or suffer the same to be done,
except so far as may be necessary for its business purposes and as are
specifically consented to in advance by the Landlord; the Tenant will not
obstruct, or permit the obstruction of the street or the sidewalk adjacent
thereto; will not do anything, or suffer anything to be done upon the demised
premises which will increase the rate of fire insurance upon the building or any
of its contents, or be liable to cause structural injury to said building; will
not permit the accumulation of waste or refuse matter, and will not, without the
prior written consent of the landlord (which consent shall not be unreasonably
withheld) in each case, either sell, assign, mortgage or transfer this lease,
sublet the demised premises or any part thereof, permit the same or any part
thereof to be occupied by anybody other than the Tenant and the Tenant's
employees, make any alterations in the demised premises, use the demised
premises or any part thereof for any purpose other than the one first above
stipulated, or for any purpose deemed extra hazardous on account of fire risk,
nor in violation of any law or ordinance. The Tenant will not obstruct or permit
the obstruction of the light, halls, stairway or entrances to the building, and
will not erect or inscribe any sign, signals or advertisements unless and until
the style and location thereof have been approved by the Landlord; and if any be
erected or inscribed without such approval, the Landlord may remove the same. No
water cooler, air conditioning unit or system or other apparatus shall be
installed or used without the prior written consent of the Landlord, which shall
not be unreasonably withheld.

The tenant shall comply with the Rules and Regulations annexed to this lease.

      FOURTH.-If the demised premises shall be partially damaged by fire or
other cause without the fault or neglect of Tenant, Tenant's servants,
employees, agents, visitors or licensees, the damages shall be repaired by and
at the expense of the Landlord and the rent until such repairs shall be made
shall be apportioned according to the part of the demised premises which is
usable by Tenant. But if such partial damage is due to the fault or neglect of
Tenant, Tenant's servants, employees, agents, visitors or licensees, without
prejudice to any other rights and remedies of Landlord and without prejudice to
the rights of subrogation of Landlord's insurer, the damages shall be repaired
by the Landlord (at Tenant's expense) but there shall be no apportionment or
abatement of rent. No penalty shall accrue for reasonable delay which may arise
by reason of adjustment of insurance on the part of the Landlord and/or Tenant,
and for reasonable delay on account of "labor troubles", or any other cause
beyond Landlord's control. If the demised premises are totally damaged or are
rendered wholly untenantable by fire or other cause, and if Landlord shall
decide not to restore or not to rebuild the same, or if the building shall be so
damaged that Landlord shall decide to demolish it or to rebuild it, then or in
any of such events Landlord may, within ninety (90) days after such fire or
other cause, give Tenant a notice in writing of such decision, which notice
shall be given as in Paragraph Twelfth hereof provided, and thereupon the term
of this lease shall expire by lapse of time upon the third day after such notice
is given, and Tenant shall vacate the demised premises and surrender the same to
Landlord. If Tenant shall not be in default under the lease then, upon the
termination of this lease under the conditions provided for in the sentence
immediately preceding, Tenant's liability for rent shall cease as of the day
following the casualty. Tenant hereby expressly waives the provisions of Section
227 of the Real Property Law and agrees that the foregoing provisions of this
Article shall govern and control in lieu thereof. If the damage or destruction
is due to the fault or neglect of Tenant the debris shall be removed by, and at
expense of Tenant.

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<PAGE>

FIFTH.-If the whole or any part of the premises hereby demised shall be taken or
condemned by any competent authority for any public use or purpose then the term
hereby granted shall cease from the time when possession of the part so taken
shall be required for such public purpose and without apportionment of award
(except with regard to Tenant's trade fixtures), the Tenant hereby assigning to
the Landlord all right and claim to any such award (other than for trade
fixtures), the current rent, however, in such case to be apportioned.

      SIXTH.-If, before the commencement of the term, the Tenant be adjudicated
a bankrupt, or make a "general assignment", or take the benefit of any insolvent
act, or if a Receiver or Trustee be appointed for the Tenant's property, or if
this lease or the estate of the Tenant hereunder be assigned, transferred or
pass to or devolve upon any other person or corporation, voluntarily or
involuntarily, or if the Tenant shall default in the performance of any
agreement by the Tenant contained in any other lease between the Tenant and the
Landlord or between Tenant and any corporation of which an officer of the
Landlord is a Director, this lease shall thereby, at the option of the Landlord,
be terminated and in that case, neither the Tenant nor anybody claiming under
the Tenant shall be entitled to go into possession of the demised premises. If
after the commencement of the term, any of the events mentioned above in this
subdivision shall occur, or if Tenant shall default in fulfilling any of the
covenants of this lease, other than the covenants for the payment of rent or
"additional rent" or if the demised premises become vacant or deserted, the
Landlord may give to the Tenant ten days' notice of intention to end the term of
this lease, and thereupon at the expiration of said ten days (if said condition
which was the basis of said notice shall continue to exist) the term under this
lease shall expire as fully and completely as if that day were the date herein
definitely fixed for the expiration of the term and Tenant will then quit and
surrender the demised premises to the Landlord, but the Tenant shall remain
liable as hereinafter provided.

      If the Tenant shall default in the payment of the rent reserved hereunder,
or any item of "additional rent" herein mentioned, or any part of either or in
making any other payment herein provided for, or if the notice last above
provided for shall have been given and if the condition for which the basis of
said notice shall exist at the expiration of said ten days' period, the Landlord
may immediately, or at any time thereafter, re-enter the demised premises and
remove all persons and all or any property therefrom either by summary
dispossess proceedings, or by any suitable action or proceeding at law, or by
force or otherwise, without being liable to indictment, prosecution or damages
therefor, and re-possess and enjoy said premises together with all additions,
alterations and improvements. In any such case or in the event that this lease
be "terminated" before the commencement of the term, as above provided, the
Landlord may either re-let the demised premises or any part or parts thereof as
the agent of the Tenant, and receive the rents therefor, applying the same first
to the payment of such expenses as the Landlord may have incurred, and then to
the fulfillment of the covenants of the Tenant herein, and the balance, if any,
at the expiration of the term first above provided for, shall be paid to the
Tenant. Landlord may rent the premises for a term extending beyond the term
hereby granted without releasing Tenant from any liability. In the event that
the term of this lease shall expire as above in this subdivision "Sixth"
provided, or terminate by summary proceedings or otherwise, and if the Landlord
shall not re-let, the Tenant shall remain liable for, and the Tenant hereby
agrees to pay to the Landlord, until the time when this lease would have expired
but for such termination or expiration, the equivalent of the amount of all of
the rent and "additional rent" reserved herein, less the costs of reletting, if
any, and the same shall be due and payable by the Tenant to the Landlord on the
several rent days above specified, that is upon each of such rent days the
Tenant shall pay to the Landlord the amount of deficiency then existing. The
Tenant hereby expressly waives any and all right of redemption in case the
Tenant shall be dispossessed by judgment or warrant of any court or judge, and
the Tenant waives and will waive all right to trial by jury in any summary
proceedings hereafter instituted by the Landlord against the Tenant in respect
to the demised premises. The words "re-enter" and "re-entry" as used in this
lease are not restricted to their technical legal meaning.

      In the event of a breach or threatened breach by the Tenant of any of the
covenants or provisions hereof, the Landlord shall have the right of injunction
and the right to invoke any remedy allowed at law or in equity, as if re-entry,
summary proceedings and other remedies were not herein provided for.

SEVENTH.-If the Tenant shall default in the performance of any covenant herein
contained, the Landlord may immediately, or at any time thereafter, without
notice, perform the same for the account of the Tenant. If a notice of
mechanic's lien be filed against the demised premises or against premises of
which the demised premises are part, for or purporting to be for, labor or
material alleged to have been furnished, or to be furnished to or for the Tenant
at the demised premises, and if the Tenant shall fail to take such action as
shall cause such lien to be discharged within fifteen days after the filing of
such notice, the Landlord may pay the amount of such lien or discharge the same
by deposit or by bonding proceedings, and in the event of such

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<PAGE>

deposit or bonding proceedings, the Landlord may require the lienor to prosecute
an appropriate action to enforce the lienor's claim. In such case, the Landlord
may pay any judgment recovered on such claim. Any amount paid or expense
incurred by the Landlord as in this subdivision of this lease provided, and any
amount as to which the Tenant shall at any time be in default for or in respect
to the use of water, electric current or sprinkler supervisory service, and any
expense incurred or sum of money paid by the Landlord by reason of the failure
of the Tenant to pay any taxes, insurance or maintenance or repairs, or to
comply with any provision of this lease, or in defending any such action
(including reasonable attorney's fees), shall be deemed to be "additional rent"
for the demised premises, and shall be due and payable by the Tenant to the
Landlord on the first day of the next month, or, at the option of the Landlord,
on the first day of any succeeding month. The receipt by the Landlord of any
installment of the regular stipulated rent hereunder or any of said " additional
rent" shall not be a waiver of any other "additional rent" then due.

      EIGHTH.- The failure of the Landlord to insist, in any one or more
instances upon a strict performance of any of the covenants of this lease, or to
exercise any option herein contained, shall not be construed as a waiver or a
relinquishment for the future of such covenant or option, but the same shall
continue and remain in full force and effect. The receipt by the Landlord of
rent, with knowledge of the breach of any covenant hereof, shall not be deemed a
waiver of such breach and no waiver by the Landlord of any provision hereof
shall be deemed to have been made unless expressed in writing and signed by the
Landlord. Even if the Landlord consents to an assignment hereof no further
assignment shall be made without further express consent in writing by the
Landlord. No waiver by Landlord or Tenant of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by the
other party of any other provision.

      NINTH.-If this lease be assigned, or if the demised premises or any part
thereof be sublet or occupied by anybody other than the Tenant the Landlord may
collect rent from the assignee, sub-tenant or occupant, and apply the net amount
collected to the rent herein reserved, and no such collection shall be deemed a
waiver of the covenant herein against assignment and subletting, or the
acceptance of the assignee, sub-tenant, or occupant as tenant, or a release of
the Tenant from the further performance by the Tenant of the covenants herein
contained on the part of the Tenant.

      TENTH.-This lease shall be subject and subordinate at all times, to the
lien of the mortgages now on the demised premises, and to all advances made or
hereafter to be made upon the security thereof, and subject and subordinate to
the lien of any mortgage or mortgages which at any time may be made a lien upon
the premises, provided the holder of any such mortgage shall execute and deliver
to Tenant in a form reasonably acceptable to Tenant an agreement that it will
recognize this lease and not disturb Tenant's possession of the premises in the
event of foreclosure if the Tenant is not then in default hereunder. The Tenant
will execute and deliver such further instrument or instruments subordinating
this lease to the lien of any such mortgage or mortgages as shall be requested
by the Landlord.

      ELEVENTH.-All improvements made by the Tenant to or upon the demised
premises, except trade fixtures and other non-fixture property of Tenant
necessary for the Tenant's business, shall when made, at once be deemed to be
attached to the freehold, and become the property of the Landlord, and at the
end or other expiration of the term, shall be surrendered to the Landlord in as
good order and condition as they were when installed, reasonable wear and
damages by the elements excepted.

TWELFTH.-Any notice or demand which under the terms of this lease or under any
statute must or may be given or made by the parties hereto shall be in writing
and shall be given or made by mailing the same by certified or registered mail
to, or personal service upon the respective parties at the following addresses:

Tenant:   General Bearing Corporation, Attn: John E. Stein
          44 High Street
          West Nyack, New York 10994

Landlord: Gussack Realty Company, LLC
          44 High Street
          West Nyack, New York 10994

      THIRTEENTH.-The Landlord shall not be liable for any failure of water
supply or electrical current, sprinkler damage, or failure of sprinkler service,
nor for injury or damage to person or property caused by the elements or by
other tenants or persons in said building, or resulting from steam, gas,
electricity, water, rain or snow, which may leak or flow from any part of said
buildings, or from the pipes, appliances or plumbing works of the same, or from
the street or sub-surface, or from any other place, nor for interference with
light or other incorporeal hereditaments by anybody other than the Landlord, or
caused by operations by or for a governmental authority in construction of any
public or quasi-public work, neither shall the Landlord be liable

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<PAGE>

for any latent defect in the building, unless caused by the Landlord's negligent
acts or omissions and Landlord has not cured the same within 15 days of
notification thereof.

      FOURTEENTH.-No diminution or abatement of rent, or other compensation
shall be claimed or allowed for inconvenience or discomfort arising from the
making of repairs or improvements to the building or to its appliances, nor for
any space taken to comply with any law, ordinance or order of a governmental
authority. In respect to the various "services," if any, herein expressly or
impliedly agreed to be furnished by the Landlord to the Tenant, it is agreed
that there shall be no diminution or abatement of the rent, or any other
compensation, for interruption or curtailment of such "service" when such
interruption or curtailment shall be due to accident, alterations or repairs
desirable or necessary to be made or to inability or difficulty in securing
supplies or labor for the maintenance of such "service" or to some other cause
not due to negligence on the part of the Landlord. No such interruption or
curtailment of any such "service" shall be deemed a constructive eviction. The
Landlord shall not be required to furnish, and the Tenant shall not be entitled
to receive, any of such "services" during any period wherein the Tenant shall be
in default in respect to the payment of rent. Neither shall there be any
abatement or diminution of rent because of making of repairs, improvements or
decorations to the demised premises after the date above fixed for the
commencement of the term, it being understood that rent shall, in any event,
commence to run at such date so above fixed.

FIFTEENTH.-In the event that an excavation shall be made for building or other
purposes upon land adjacent to the demised premises or shall be contemplated to
be made, the Tenant shall afford to the person or persons causing or to cause
such excavation, license to enter upon the demised premises for the purpose of
doing such work as said person or persons shall deem to be necessary to preserve
the wall or walls, structure or structures upon the demised premises from injury
and to support the same by proper foundations.

      SIXTEENTH.-No vaults or space not within the property line of the building
are leased hereunder. Landlord makes no representation as to the location of the
property line of the building. Such vaults or space as Tenant may be permitted
to use or occupy are to be used or occupied under a revocable license and if
such license be revoked by the Landlord as to the use of part or all of the
vaults or space Landlord shall not be subject to any liability; Tenant shall not
be entitled to any compensation or reduction in rent nor shall this be deemed
constructive or actual eviction. Any tax, fee or charge of municipal or other
authorities for such vaults or space shall be paid by the Tenant for the period
of the Tenant's use or occupancy thereof.

      SEVENTEENTH .-During six months prior to the expiration of the term hereby
granted, on reasonable advance notice, applicants shall be admitted at all
reasonable hours of the day to view the premises until rented; and the Landlord
and the Landlord's agents shall be permitted at any time during the term to
visit and examine them at any reasonable hour of the day, and workmen may enter
at any time, when authorized by the Landlord or the Landlord's agents, to make
or facilitate repairs in any part of the building; and if the said Tenant shall
not be personally present to open and permit an entry into said premises, at any
time, when for any reason an entry therein shall be necessary or permissible
hereunder, the Landlord or the Landlord's agents may forcibly enter the same
without rendering the Landlord or such agents liable to any claim or cause of
action for damages by reason thereof (if during such entry the Landlord shall
accord reasonable care to the Tenant's property) and without in any manner
affecting the obligations and covenants of this lease; it is, however, expressly
understood that the right and authority hereby reserved, does not impose, nor
does the Landlord assume, by reason thereof, any responsibility or liability
whatsoever for the care or supervision of said premises, or any of the pipes,
fixtures, appliances or appurtenances therein contained or therewith in any
manner connected.

      EIGHTEENTH.-The Landlord has made no representations or promises in
respect to said building or to the demised premises except those contained
herein, and those, if any, contained in some written communication to the
Tenant, signed by the Landlord. This instrument represents the entire agreement
of the parties and may not be changed, modified, discharged or terminated
orally.

      NINETEENTH.-If the Tenant shall at any time be in default hereunder, and
if the Landlord shall institute an action or summary proceeding against the
Tenant based upon such default, then the Tenant will reimburse the Landlord for
the expense of attorneys' fees and disbursements thereby incurred by the
Landlord, so far as the same are reasonable in amount. Also so long as the
Tenant shall be a tenant hereunder the amount of such expenses shall be deemed
to be "additional rent" hereunder and shall be due from the Tenant to the
Landlord on the first day of the month following the incurring of such
respective expenses.

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<PAGE>

      TWENTIETH.-Landlord shall not be liable for failure to give possession of
the premises upon commencement date by reason of the fact that premises are not
ready for occupancy, if due to a prior Tenant other than Landlord or its
affiliates wrongfully holding over in possession. In such event the rent shall
not commence until possession is given or is available, but the term herein
shall not be extended.

TWENTY-FIRST.-The Tenant will keep the sidewalk, roadways, parking areas and
curb clean at all times and free from snow and ice and shall be solely
responsible for all repairs and maintenance thereto and for all landscaping.
Landscape plants and trees surrounding the building shall be maintained at a
level equivalent to that at the time of the commencement of this lease and trees
and shrubs that die are to be replaced by tenant. Tenant acknowledges that at
the commencement of this lease the premises and surrounding grounds, including
wooded areas, were free of trash, debris and garbage and tenant shall maintain
the premises and grounds in such condition.

      TWENTY-SECOND.-If a separate water meter be installed for the demised
premises, or any part thereof, the Tenant will keep the same in repair and pay
the charges made by the municipality or water supply company for or in respect
to the consumption of water, as and when bills therefor are rendered. If the
demised premises, or any part thereof, be supplied with water through a meter
which supplies other premises, the Tenant will pay to the Landlord, as and when
bills are rendered therefor, the Tenant's proportionate part of all charges
which the municipality or water supply company shall make for all water consumed
through said meter, as indicated by said meter. Such proportionate part shall be
fixed by apportioning the respective charge according to floor area against all
of the rentable floor area in the building (exclusive of the basement) which
shall have been occupied during the period of the respective charges, taking
into account the period that each part of such area was occupied. Tenant agrees
to pay as additional rent the Tenant's proportionate part, determined as
aforesaid, of the sewer charge imposed or assessed upon the building of which
the premises are a part.

      TWENTY-THIRD.-From the date of occupancy by Tenant, Tenant shall pay all
charges or fees for use or consumption of all utilities provided to the premises
occupied by Tenant including water, gas, electricity, telephone and other
utilities and services together with any taxes thereon. In the event the
premises are not separately metered Landlord may secure an independent audit of
Tenant's consumption of such utilities or install a device to monitor same,
advising Tenant of the percentage of such utilities used and consumed by Tenant.
Landlord shall thereupon invoice Tenant for Tenant's share of such utilities on
a monthly basis and Tenant shall reimburse the Landlord for such expense. All
utilities shall be paid to the Landlord (if applicable) within ten days of
receipt of billings.

      TWENTY-FOURTH.-If there now is or shall be installed in said building a
"sprinkler system" the Tenant agrees to keep the appliances thereto in the
demised premises in repair and good working condition, and if the New York Board
of Fire Underwriters of the New York Fire Insurance Exchange or any bureau,
department or official of the State or local government requires or recommends
that any changes, modifications, alterations or additional sprinkler heads or
other equipment be made or supplied by reason of the Tenant's business, or the
location of partitions, trade fixtures, or other contents of the demised
premises, or if such changes, modifications, alterations, additional sprinkler
heads or other equipment in the demised premises are necessary to prevent the
imposition of a penalty or charge against the full allowance for a sprinkler
system in the fire insurance rate as fixed by said Exchange, or by any Fire
Insurance Company, the Tenant will at the Tenant's own expense, promptly make
and supply such changes, modifications, alterations, additional sprinkler heads
or other equipment.

      TWENTY-FIFTH.-Tenant agrees that it will keep the leased Premises insured,
at a minimum, against loss or damage by fire with extended coverage ("all risk")
endorsement, vandalism and malicious mischief coverage, and differences in
conditions coverage (for the perils of earthquake, surface water flood and
sudden and accidental collapse or rupture to non-pressurized vessels). Such
insurance shall be in an amount of the full replacement value of the premises as
determined from time to time. Tenant shall name Landlord as a party insured and
shall require the insurer to give Landlord at least thirty (30) days notice of
cancellation. Landlord and Tenant acknowledge that as of the date hereof the
full replacement value of the premises is Nine Million Dollars ($9,000,000.00).

Insurance Requirements. For purposes of this Section, the parties agree during
the term hereof that Tenant shall maintain adequate public liability and other
insurance with reputable insurance companies as hereinabove and hereinafter set
forth, shall furnish Landlord with certificates of insurance properly executed
by its insurance companies evidencing such fact, and requiring their insurers to
give at least thirty (30) days notice in the event of cancellation. Such
insurance shall cover all damage or injury which results or is claimed to have
resulted from an act or omission on the part of Tenant, its agents, employees or
business invitees.

                                       69
<PAGE>

      TWENTY-SIXTH.-Tenant shall be responsible for the payment of all real
estate taxes and current installments of special assessments levied against the
premises which become due during the term of the lease. Landlord shall notify
Tenant and forward a copy of each tax bill to Tenant upon Landlord's receipt
thereof. Tenant shall pay Landlord the amount of the tax or installment of
assessment set forth on the bill within seven (7) days of the presentation by
the Landlord thereof. Landlord shall present such bill to Tenant within five (5)
days of its receipt from the taxing authority. Failure to pay Landlord such
amount within the time period set forth herein shall constitute a default
pursuant to the terms hereof. If the term of this lease shall not begin or
expire concurrently with the beginning or expiration of any tax fiscal year,
Tenant's liability for real estate taxes and current installments of special
assessments for any tax fiscal year during which Tenant is not in possession of
the premises for the entire tax fiscal year shall be prorated. In the event the
premises constitute less than one entire taxable parcel, the real estate taxes
and current installments of special assessments attributable to the premises
shall be prorated on a square footage basis comparing the square footage of the
premises to the square footage of the tax parcel of which the premises forms a
part. Landlord represents that there are no tax abatements or exemptions
effecting the premises and Landlord does not make payments in lieu of taxes.

      Excise Taxes. Tenant shall assume and pay to Landlord as additional rent
any excise, sales, gross receipts, rent tax or other taxes, if any (other than a
net income or excess profits tax), which may be imposed on or measured by the
rent or may be imposed on or on account of the letting, which Landlord may be
required to pay or collect under any law now in effect or hereafter enacted,
provided that such law places the primary obligation to pay such tax on the
Tenant.

      In the event Tenant has made payment to Landlord of the aforementioned
taxes and Landlord has failed to make payment of the same and due notice thereof
has been given by the Tenant to the Landlord, Tenant shall have the right to
make such payments directly to the taxing authorities and all interest and
penalties paid by the Tenant shall be the responsibility of the Landlord and may
be offset as against the rental herein. In the event that Tenant fails to make
payment of such taxes to Landlord, in addition to any other remedies pursuant to
this lease, Landlord may pay such taxes and Tenant shall be responsible for any
interest or penalties that may be assessed. If the taxing authorities permit
taxes to be paid in less than annual installments, Landlord will not object to
Tenant's payment of such taxes in a like manner.

      Landlord shall not seek to accomplish or effect a change in the tax
assessment of the premises (except to seek a reduction of same) without Tenant's
approval.

      TWENTY-SEVENTH.-Tenant will not use Hazardous Materials (as defined
hereinafter) on, from, or affecting the premises in any manner which violates
Federal, state or local laws, ordinances, rules, regulations or policies
governing the use, storage, treatment, transportation, manufacture, refinement,
handling, production or disposal of Hazardous Materials. For purposes of this
paragraph, "Hazardous Materials" includes, without limit, any flammable
explosives, radioactive materials, hazardous materials, hazardous or infectious
wastes, hazardous or toxic substances, or related materials defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 USC Secs. 9601, et seq.), the Hazardous Materials Transportation
Act, as amended (49 USC Secs. 1801, et seq.), the Resource Conservations and
Recovery Act, as amended (42 USC Secs. 9601, et seq.) and in the regulations
adopted and publications promulgated pursuant thereto, or any other Federal,
state or local environmental law, ordinance, rule or regulation. Tenant shall
indemnify and hold Landlord free and harmless from any liability whatsoever
during and subsequent to the term of this Lease as a result of Tenant's breach
of the obligations set forth in this paragraph. Landlord shall be responsible
for and shall indemnify and hold Tenant free and harmless from any liability
whatsoever during and subsequent to the terms of this Lease with regard to any
hazardous materials or environmental condition effecting the demised premises
not caused by Tenant, Tenant's agents or employees and/or not occurring during
the term of the within lease.

      TWENTY-EIGHTH.-The Tenant agrees that it will not require, permit, suffer,
nor allow the cleaning of any window, or windows, in the demised premises from
the outside (within the meaning of Section 202 of the Labor Law) unless the
equipment and safety devices required by law, ordinance, regulation or rule,
including, without limitation, Section 202 of the New York Labor Law, are
provided and used, and unless the rules, or any supplemental rules of the
Industrial Board of the State of New York are fully complied with; and the
Tenant hereby agrees to indemnify the Landlord, Owner, Agent, Manager and/or
Superintendent, as a result of the Tenant's requiring, permitting, suffering, or
allowing any window, or windows in the demised premises to be cleaned from the
outside in violation of the requirements of the aforesaid laws, ordinances,
regulation and/or rules.

                                       70
<PAGE>

      TWENTY-NINTH.-The invalidity or unenforceability of any provision of this
lease shall in no way affect the validity or enforceability of any other
provision hereof.

      THIRTIETH.-The Landlord shall replace at the expense of the Tenant any and
all broken glass in the skylights, doors and walls in and about the demised
premises. The Landlord may insure and keep insured all plate glass in the
skylights, doors and walls in the demised premises, for and in the name of the
Landlord and bills for the premiums therefor shall be rendered by the Landlord
to the Tenant at such times as the Landlord may elect, and shall be due from and
payable by the Tenant when rendered, and the amount thereof shall be deemed to
be, and shall be paid as additional rent.

      THIRTY-FIRST.-This lease and the obligation of Tenant to pay rent
hereunder and perform all of the other covenants and agreements hereunder on
part of Tenant to be performed shall in no way be affected, impaired or excused
because Landlord is unable to supply or is delayed in supplying any service
expressly or impliedly to be supplied or is unable to make, or is delayed in
making any repairs, additions, alterations or decorations or is unable to supply
or is delayed in supplying any equipment or fixtures if Landlord is prevented or
delayed from so doing by reason of governmental preemption in connection with a
National Emergency declared by the President of the United States or in
connection with any rule, order or regulation of any department or subdivision
thereof of any government agency or by reason of the conditions of supply and
demand which have been or are affected by war or other emergency.

      THIRTY-SECOND.-Landlord covenants that if and so long as the Tenant pays
the rent and "additional rent" reserved hereby, and performs and observes the
covenants and provisions hereof, the Tenant shall quietly enjoy the demised
premises, subject, however, to the terms of this lease, and to the mortgages
above mentioned.

      THIRTY-THIRD.-Tenant shall, at its sole cost and expense, obtain all
required Federal, State, County and/or Municipal approvals, permits, licenses,
including a Certificate of Occupancy (if required), to conduct its business.
Landlord shall cooperate with Tenant in Tenant's effort to obtain any and all
necessary permits, licenses, and approvals and shall expeditiously execute all
necessary permit applications and documents necessary to comply with all
regulatory requirements for the operation of Tenant's business and performance
of Tenant's improvements.

      THIRTY-FOURTH.- If Tenant remains in possession of the premises or any
part thereof after expiration of the term hereof, such occupancy shall be a
tenancy from month to month upon all of the terms hereof applicable to a month
to month tenancy except that the monthly rent shall be increased to 120% of the
rent for the last month prior to such expiration. Landlord's failure to object
to such holding over shall not constitute a waiver of any of Landlord's rights
pursuant to this lease.

      IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals, or caused these presents to be signed by their proper corporate officers
and their proper corporate seal to be hereto affixed, the day and year first
above written.

Signed, Sealed and Delivered
in the presence of or Attested by:      Gussack Realty Company, LLC

/s/ Maurene Laffey                      By: /s/ David Gussack
--------------------------------            ------------------------------------
                                            David Gussack
                                            Managing Member

                                        General Bearing Corporation

/s/ Maurene Laffey                      By: /s/ John E. Stein
--------------------------------            ------------------------------------
                                            John E. Stein
                                            Secretary & General Counsel

                                       71
<PAGE>

                              RULES AND REGULATIONS

      1. Tenant shall keep all machinery and equipment free of vibration and
noise, and shall not do or permit anything to be done in the Demised Premises
which would constitute a nuisance in the Building or Complex.

      2. Tenant shall not cause to be discharged, spill or dispose of on site
any dangerous, hazardous, flammable, toxic, combustible or explosive substance,
material or object except according to law and in an approved legal container.

      3. Tenant shall not cause to be discharged or permit to be discharged into
the sewer system, waste lines, vents or flues of the Demised Premises or the
Complex any acids or hazardous or toxic substances, except as allowed by law.

      4. Tenant shall keep all exterior located garbage, trash, rubbish and
refuse in rat-proof containers and shall remove or cause the same to be removed
from the Demised Premises and the Complex on a regular basis.

      5. Tenant shall not store, stack or place or permit to be stored, stacked
or placed any machinery, equipment, goods or merchandise outside of the Demised
Premises except as authorized by Landlord and permitted by law or the approvals
obtained by the Tenant from the applicable authorities.

      6. A fire lane (12 foot width) around the entire facility must be kept
clear at all times.

      7. No debris, garbage, spare parts or containers of any kind may be left
in the yard or on the roof, except a dumpster.

                                       72

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