Document:

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                             DATED            1995

                       INNOVATION LAND & ESTATES LIMITED

                                     -and-

                         VISUAL COMMUNICATIONS LIMITED

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

                             Counterpart / LEASE of
                  Office Suite 18 / situate on the Third Floor
                            of the Innovation Centre
                           225 Marsh Wall, Docklands
                                   London E14

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

                           Harris Rosenblatt & Kramer
                               26/28 Bedford Row
                                London WCIR 4HE

                               Tel: 0171-242-3254
                               Fax: 0171-831-7475

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                                     INDEX

<TABLE>
<CAPTION>
CLAUSE                                                                   PAGE
NUMBER  DESCRIPTION                                                     NUMBER
------  -----------                                                     ------
<S>     <C>                                                             <C>
1       DEFINITIONS AND INTERPRETATION                                  1-4
2       DEMISE                                                          4
3       TENANTS COVENANTS                                               4
3:1     To pay rent/telephone charge/private charge                     4
3:2     To pay rates and outgoing                                       4
3:3     To pay interest                                                 5
3:4     To pay gas electricity and water supply charges                 5
3:5     To repair and decorate                                          5
3:5:1   To keep in repair                                               5
3:5:2   To notify Landlord of defects                                   5
3:5:3   To decorate interior                                            6
3:5:4   To make good damage                                             6
3:5:5   To replace carpeting                                            6
3:5:6   To pay Landlords Surveyors fees                                 6
3:6:1   To maintain drains etc.                                         6
3:6:2   To clean windows                                                6
3:6:3   To keep clean and tidy                                          6
3:6:4   Cleaners                                                        6
3:7:1   To make good defects in accordance with Landlords notice        7
3:7:2   Landlords right to repair in case of default by Tenant          7
3:8     To allow Landlord to inspect and repair adjoining premises etc. 7
3:9:1   To comply with Acts of Parliament etc.                          7
3:9:2   To provide Landlord with copy consents etc.                     8
3:10    Restrictions on Assignment/Underletting                         8
3:10:6  Registration of Assignments/Underlettings                      10
3:11:1  Restrictions on Alterations                                    10
3:11:2  Restrictions on Alterations to electrical system etc.          10
3:11:3  Not to merge with adjoining premises                           11
3:12    Not to overload floors or structure                            11
3:13    Restrictions on signs etc.                                     11
3:14    Not to cause nuisance annoyance etc.                           11
3:15    Restrictions on User and activities                            11
3:16    Not to store inflammable or explosive articles etc.            12
3:17:1  Not to invalidate insurance etc.                               12
3:17:2  To provide fire fighting appliances etc.                       12
3:18    Not to obstruct drains etc.                                    12
3:19    Not to overload electrical system                              13
3:20    To produce and comply with notices etc.                        13
3:21    To indemnify Landlord against damage to Estate etc.            13
3:22    To comply with planning legislation etc.                       13
3:23:1  To preserve easements etc.                                     14
3:23:2  Acquisition of easements                                       14
3:24    To pay Landlords costs on breach etc.                          15
3:25    Restrictions on storage of goods                               15
</TABLE>
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<TABLE>
<S>                                                         <C>
THE FIRST SCHEDULE - NAMES OF PARTIES DESCRIPTION OF        24-25
PREMISES TERM OF LEASE RENTS PAYABLE AND PERMITTED USE

THE SECOND SCHEDULE
PART I - RIGHTS GRANTED                                     25-26
PART II - RIGHTS EXCEPTED AND RESERVED                      26-27
PART III - MATTERS TO WHICH DEMISE IS SUBJECT               27

THE THIRD SCHEDULE - ADDITIONAL TENANTS COVENANTS           27

THE FOURTH SCHEDULE - RENT REVIEW PROVISIONS                27-30

THE FIFTH SCHEDULE - SERVICES PROVIDED BY LANDLORD          30-31

THE SIXTH SCHEDULE - THE SERVICE CHARGE                     31

THE SEVENTH SCHEDULE - THE EXPENDITURE                      32-35

THE EIGHTH SCHEDULE - INSURANCE                             35-36

THE NINTH SCHEDULE - THE ADVANCE SERVICE CHARGE             36

THE TENTH SCHEDULE - RESTRICTIONS ON UNDERLETTING           36-37
</TABLE>
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THIS LEASE is made the ___________ day of _______________ 1995 BETWEEN the
party named in paragraph 1 of the First Schedule hereto (hereinafter called "the
Landlord") of the First part and the party or parties named in paragraph 2 of
the First Schedule hereto (hereinafter called "The Tenant") of the Second part

WITNESSETH as follows:-

1.   In this Lease save where the context otherwise requires the following words
and expressions shall have the meanings assigned to them hereunder:-

1:1  "the Landlord" shall include the person or persons for the time being
     entitled to the reversion immediately expectant on the term hereby granted

1:2  "the Tenant" shall include the successors in title to the Tenant

1:3  "the demised premises" shall mean the premises described in paragraph 3 of
     the First Schedule hereto

1:4  "the Building" shall mean The Innovation Centre 225 Marsh Wall Docklands
     London E14 9FW

1:5  "the Rent" shall mean the sum specified as the rent in paragraph 4 of the
     First Schedule hereto (or such other sum as may be substituted therefor in
     accordance with the provisions of the Fourth Schedule hereto)

1:6  "the Term" shall mean the term of years specified as the term in paragraph
     5 of the First Schedule hereto

1:7  "Person" shall include a Company or other body legally capable of holding
     land

1:8  The masculine shall include the feminine and the singular the plural and
     vice versa

1:9  Obligations undertaken (or to be undertaken) by more than a single person
     are (or shall be) joint and several obligations

1:10 Any agreement by the Tenant not to do any act or thing shall be construed
     as if it were an agreement not to do or permit or suffer such act or thing

1:11 Right excepted reserved or granted to the Landlord shall be construed as
     excepted reserved or granted to the Landlord the Superior Landlord and all
     persons respectively authorised by it or them

1:12 A reference to a statute shall refer to the statute as amended at the date
     hereof and shall include any subsequent statutory amendments or
     re-enactment thereof

1:13 "the Bank" shall mean Midland Bank Plc or the Bank which is the successor
     to the business of that Bank or if such Bank ceases to trade in
     circumstances that no one Bank succeeds to that business such member of
     the Committee of London Clearing

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      Bankers as the Landlord nominates

1:14  "Base Rate" shall mean the published base rate from time to time of the
      Bank but if no such rate shall be published two per centum above the rate
      paid by the Bank from time to time on deposits of the minimum sum accepted
      at interest for repayment on seven days notice

1:15  "Interest" is at the annual rate of four per centum above the Base Rate
      for the time being compounded with rests the 30th June and 31st December
      in each year of the Term

1:16  Any covenant to pay interest shall be a covenant to pay interest at the
      said rate both before and after judgement or arbitration award

1:17  "the Service Charge" shall mean the sum specified or referred to in
      paragraph 6 of the First Schedule hereto

1:18  "the Advance Service Charge" shall mean the sum specified or referred to
      in paragraph 9 of the First Schedule hereto

1:19  "the Insurance Rent" shall mean the sum specified or referred to in
      paragraph 7 of the First Schedule hereto

1:20  "the Common Parts" shall mean the roads footpaths pavements car parking
      areas (including the access to individual parking bays) landscaped areas
      and other open areas entrance hall (including reception and waiting areas)
      landings lifts lift shafts staircases passages fire escape routes and all
      other areas which are from time to time during the Term provided by the
      Landlord for common use and enjoyment by the tenants and occupiers of the
      Building and all persons expressly or by implication authorised by them

1:21  "the Permitted Use" shall mean the use specified as the permitted use in
      paragraph 8 of the First Schedule hereto

1:22  "the Landlords Surveyor" means any person or firm who or the partners in
      which shall be an associate or fellow of the Royal Institution of
      Chartered Surveyors acting for the Landlord including an employee of the
      Landlord appointed to perform the function of a surveyor for any purpose
      of this Lease

1:23  "the Telephone Charge" means the proportion of the cost of telephone calls
      made to and from the Building attributable exclusively to the demised
      premises and as determined by the Telephone Equipment and a copy of the
      computer printout from the Telephone Equipment shall (save for manifest or
      proven error) be conclusive of the same

1:24  "the Telephone Equipment" means all equipment (including the computer for
      monitoring the same) installed in the Building from time to time in order
      to provide a telephone service for the occupiers of the Building other
      than telephone handsets or

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     similar equipment installed in individual units within the Building

1:25 "the Private Services" means such services as shall be provided by the
     Landlord for the benefit of individual tenants within the Building from
     time to time the cost of which is intended shall be borne only by such
     tenants as shall use such services including (but without prejudice to the
     generality of the foregoing):-

1:25:1    Secretarial and clerical services

1:25:2    Telegraphic facsimile transmission services

1:25:3    Photocopying services

1:25:4    Conference facility services

1:25:5    Audio/visual facility services

1:25:6    Any other service which may from time to time be provided by the
          Landlord for the benefit of individual tenants within the Building

1:26 "the Private Charge" means the amount payable by the Tenant monthly in
     arrears in respect of the Tenants use of the Private Services during the
     month in question and representing the cost of such services as determined
     from time to time by the Landlord

1:27 "the Superior Lease" means a lease dated 1st May 1991 and made between
     London Docklands Corporation (1) Carroll Investment Corporation Limited (2)

1:28 "the Superior Landlord" means the persons for the time being entitled to
     the reversion immediately expectant on the determination of the term
     created by the Superior Lease together with any persons for the time being
     entitled to the reversion immediately expectant on the determination of any
     term created by any other lease ranking superior to this Lease

1:29 "the Permitted Hours" means the hours between 8:30 a.m. and 6:00 p.m.
      Mondays to Fridays (other than Bank and other Public Holidays) and
      8:30 a.m. to 12:30 p.m. on Saturdays

1:30 "the Break Date" means the 29th September 1999

1:31 "Inherent Defect" means any defect in the Building or in anything installed
     in or on the Building which is attributable to:-

1:31:1    defective design or

1:31:2    defective workmanship or materials or

1:31:3    defective supervision of the construction of or the installation of
          anything in

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        or on the Building or

1:31:4  defective preparation of the site upon which the Building is constructed

1:32    "the Car Parking Spaces" means the 7 car parking spaces shown edged blue
        on plan number 2 annexed hereto or such other 7 car parking spaces as
        shall from time to time be designated by the Landlord upon giving the
        Tenant reasonable prior notice

2.      IN CONSIDERATION of the Rent and of the covenants on the part of the
Tenant hereinafter contained the Landlord HEREBY DEMISES unto the Tenant ALL
THAT the demised premises TOGETHER WITH the easements and rights described in
Part 1 of the Second Schedule hereto EXCEPT AND RESERVING as mentioned in Part 2
of the Second Schedule hereto SUBJECT AS specified in Part 3 of the Second
Schedule TO HOLD the same unto the Tenant for the Term PAYING THEREFOR to the
Landlord the following rents:

2:1     Firstly the Rent

2:2     Secondly the Service Charge

2:3     Thirdly the Insurance Rent

2:4     Fourthly the Advance Service Charge (if any)

3.      THE TENANT HEREBY COVENANTS with the Landlord in manner following that
is to say:-

3:1:1   To pay the Rent the Service Charge the Insurance Rent and the Advance
        Service Charge at the times and in the manner described and specified in
        the First Schedule hereto and if so required to make all or any such
        payments by Bankers Standing Order or any other reasonable means (other
        than by direct debit) which the Landlord may require

3:1:2   To pay the Landlord within 21 days of written demand (which demand shall
        be accompanied by a copy of the computer printout from the Telephone
        Equipment) the Telephone Charge

3:1:3   To pay to the Landlord within 21 days of written demand the Private
        Charge

3:2     To pay all existing and future rates (or any similar tax or outgoing
        replacing the same from time to time) taxes assessments impositions and
        outgoings assessed or imposed on or in respect of the demised premises
        (whether assessed or imposed on the Landlord or the Tenant) PROVIDED
        ALWAYS that if any of the foregoing shall be or become assessed or
        imposed (without formal apportionment) upon or payable (whether by the
        owner or the occupier) in respect of the demised premises or any part or
        parts thereof together with other premises not included in this Lease
        the Tenant shall pay and discharge (and indemnify the Landlord against)
        the fair and proper proportion thereof attributable to the demised
        premises or the part or parts thereof so

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     affected such fair and proper proportion to be determined by the Landlord's
     Surveyor for the time being who shall act reasonably in making such
     determination and whose decision shall save for any manifest or proven
     error be final and binding upon the Tenant

3:3  If any rent or other sums payable by the Tenant to the Landlord under this
     Lease shall be due but unpaid for fourteen days to pay to the Landlord (if
     the Landlord shall so require) interest from the due date until payment
     Provided that this subclause shall not prejudice any other right or remedy
     in respect of such money

3:4  Without prejudice to Clauses 3:1:2 and 3:1:3 hereof to pay to the suppliers
     thereof all charges for gas electricity water and other services supplied
     to the demised premises

3:5:1     To repair and keep in good and substantial repair and condition
          (including well and substantially decorated) the whole of the interior
          of the demised premises (including without prejudice to the generality
          of the foregoing the suspended ceilings the raised floors and other
          floor surfaces all plasterwork and other internal finishes any fire
          exit doors and normal entrance doors and door frames all windows and
          window frames all electrical circuits and wiring and fittings within
          the demised premises or solely serving the demised premises and all
          partitions and fixtures and fittings within the demised premises and
          at the expiration or sooner determination of the Term quietly yield up
          to the Landlord the demised premises (including all additions and
          improvements made thereto) in such good and substantial repair and
          condition and properly cleaned and decorated Provided that this
          sub-clause shall not apply to damage by fire and other perils
          specified in Clause 3 of the Eighth Schedule hereto unless and to the
          extent that any act or omission of the Tenant renders the insurance
          money irrecoverable PROVIDED FURTHER that nothing in this Lease
          contained shall oblige the Tenant to repair any damage to the demised
          premises arising out of an Inherent Defect nor shall the Tenant be
          obliged to rectify any Inherent Defect

3:5:2     As soon as reasonably possible after the Tenant becomes aware of the
          same or should reasonably have become aware of the same to give notice
          to the Landlord and the Superior Landlord of any defect or need of
          repair or renewal arising to the demised premises which would or might
          result in the Landlord and/or the Superior Landlord becoming liable to
          third parties by reason of the provisions of the Defective Premises
          Act 1972 or which would or might give rise to an obligation on the
          Landlord to do or refrain from doing any act or thing in order to
          comply with its duty of care imposed on the Landlord pursuant to such
          provisions and insofar as any such defect or need of repair or renewal
          as aforesaid shall be the responsibility of the Tenant under this
          Lease to indemnify the Landlord (to the extent that it can so require)
          against all liability and costs arising in respect of any notice claim
          or demand costs and proceedings made or brought thereunder and
          furthermore (without prejudice to the foregoing) to indemnify and keep
          indemnified the Landlord and the Superior Landlord from and against
          any losses claims actions costs demands or other liability arising
          from a failure to give such notice as aforesaid and furthermore at all
          times to display and maintain all notices (including the wording
          thereof) which the Landlord may from time to time display or require
          to be displayed on the demised premises

                                       5
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3:5:3  As often as shall be required and in any event in the year 1998 and in
       the last year of the Term (howsoever determined) in a proper and
       workmanlike manner

       (a)  to prepare and paint all the inside wood metal and other parts of
       the demised premises usually or requiring to be painted with not less
       than two coats of good quality oil or other suitable paint

       (b)  to prepare and repolish any inside wood of the demised premises now
       polished with best quality materials

       (c)  to prepare and paint the ceilings and walls of the demised premises
       as the same are now treated and

       (d)  to clean and treat in a suitable manner for its maintenance in good
       condition any inside wood metal work tiles bricks and similar surfaces
       to the demised premises not required to be painted or polished.

       Provided that the painting in the last year of the term shall be done in
       colours first approved in writing by the Landlord such approval not to
       be unreasonably withheld or delayed and Provided also that the Tenant
       shall not be liable to carry out any decorative works of this nature the
       need for which arises wholly or partly from an Inherent Defect or damage
       caused by an Inherent Defect

3:5:4  To make good forthwith any damage to the demised premises or fixtures
       therein caused by the Tenant his licensees and invitees whether
       accidentally or otherwise

3:5:5  At the expiration or sooner determination of the Term (howsoever
       determined) provided that such expiration or sooner determination shall
       occur after the third anniversary of the Term to replace all the
       carpeting (or carpet tiles as appropriate) within the demised premises
       with new carpeting (or carpet tiles as appropriate) of a quality design
       and colour similar to the quality design and colour of the carpeting (or
       carpet tiles as appropriate) supplied by the Landlord at the
       commencement of the Term such replacement carpeting (or carpet tiles as
       appropriate) to be first approved in writing by the Landlord (such
       approval not to be unreasonably withheld)

3:5:6  The Tenant shall pay the Landlord's Surveyor's reasonable and proper fees
       incurred as a result of any breach of this sub clause

3:6:1  To keep and maintain all drains and pipes exclusively serving the
       demised premises in good repair and condition and clear and unobstructed
       and not to cause or allow to be caused any blockage or stoppage of those
       within the Common Parts

3:6:2  To clean the interior of the windows and other glazing of the demised
       premises at least once in every month

3:6:3  To keep all areas forming part of the demised premises clean and tidy

3:6:4  To employ for the cleaning of the demised premises only such firm or
       company as

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       shall be approved in writing by the Landlord such approval not to be
       unreasonably withheld or delayed

3:7:1  To make good within one month (or sooner if necessary) any defect in
       repair or decoration of the demised premises for which the Tenant is
       liable in accordance with the Tenant's covenants hereunder and of which
       the Landlord has given notice in writing to the Tenant

3:7:2  If the Tenant shall not comply with Clause 3:7:1 the Landlord may enter
       the demised premises and make good such defects and the reasonable
       expense of so doing (including reasonable Surveyor's fees necessarily
       incurred) shall be repaid to the Landlord by the Tenant within 21 days of
       written demand and if not so repaid shall be recoverable by action or
       distress as if rent in arrear

3:8    To permit the Landlord and its Agents and all others authorised by the
       Landlord together with workmen and all necessary tools and appliances on
       reasonable notice (except in emergency) at all reasonable hours to enter
       the demised premises for the purpose of:-

3:8:1  Viewing and recording the condition of the demised premises

3:8:2  Repairing maintaining altering or cleaning adjoining or nearby units
       within the Building Provided such works cannot be carried out from
       outside the demised premises

3:8:3  Repairing maintaining cleaning altering replacing or adding to any pipes
       wires flues channels or apparatus which serve other parts of the Building
       or adjoining or nearby premises Provided such works cannot be carried out
       from outside the demised premises

3:8:4  Enabling the Landlord to comply with the covenants on its part and the
       conditions contained in the Superior Lease or for any purpose that is in
       the reasonable opinion of the Landlord necessary in order to enable it to
       do so in either case so far as the Tenant does not expressly covenant
       hereunder to observe and perform the same

PROVIDED THAT the Landlord or those experiencing such right (as appropriate)
shall cause as little damage and/or disturbance as practicable and shall as soon
as practicable make good (to the reasonable satisfaction of the Tenant) all
damage to the demised premises caused by such entry but shall not otherwise be
liable for any damage or inconvenience caused to the Tenant

3:9:1  At the Tenant's own cost to observe and comply as soon as reasonably
       practicable in all respects with the provisions and requirements of any
       and every enactment (which expression in this sub-clause includes every
       general and local Act or Acts of Parliament now or hereafter enacted and
       every statutory order rule instrument regulation and bye-law and every
       notice order or direction and every license consent or permission already
       or hereafter to be made or given thereunder) including (but without
       prejudice to the generality of the foregoing) the Health and Safety at
       Work

                                       7

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          etc Act 1974 and the lawful requirements of any local or public
          authority so far as the same shall relate to or affect the demised
          premises or the user thereof for the purposes of any manufacture
          process or business or the employment therein of any person or persons
          or any fixtures machinery plant or chattels for the time being affixed
          thereto or being thereupon or used for the purposes thereof and to do
          and execute or cause to be done and executed all such works and
          provide and maintain all arrangements which by or under any enactment
          or by any government department local authority or other public
          authority or duly authorized officer or Court of competent
          jurisdiction acting under or in pursuance of any enactment are or may
          be directed or required to be done executed provided and maintained at
          any time during the Term upon or in respect of the demised premises or
          any part or parts thereof or in respect of any such user thereof or
          employment therein of any person or persons or fixtures machinery
          plant or chattels as aforesaid whether by the Landlord or the Tenant
          or occupier thereof and to indemnify the Landlord at all times against
          all costs charges and expenses of or incidental to the execution of
          any works or the provision or maintenance of any arrangements so
          directed or required as aforesaid and to pay the reasonable costs
          charges and expenses of the Solicitors and of the surveyors for the
          time being of the Landlord in relation thereto and not at any time
          during the Term to do or omit or suffer to be done or omitted on or
          about the demised premises any act or thing by reason of which the
          Landlord may under any enactment incur or have imposed upon it or
          become liable to pay any penalty damages compensation costs charges or
          expenses and to pay all costs charges and expenses incurred by the
          Landlord in abating a nuisance and executing all such works as may be
          necessary for abating a nuisance in connection with the demised
          premises whether or not in obedience to a notice served by a Local
          Authority.

3:9:2     To furnish the Landlord with copies of all consents and certificates
          which may be obtained by the Tenant under the Health and Safety at
          Work etc Act 1974 or any other enactment from time to time affecting
          the same

3:10:1    Not to assign charge underlet or part with possession of part only of
          the demised premises nor allow any person deriving title from the
          tenant to do so

3:10:2    Not without the Landlord's prior written consent (which shall not be
          unreasonably withheld or delayed) to underlet the whole of the demised
          premises nor allow any person deriving title from the Tenant to do so
          Provided that in the event of the Tenant applying for consent to
          underlet the whole of the demised premises the Landlord shall be
          entitled (without prejudice to the generality of the foregoing and
          without prejudice to any other matters the Landlord may wish to take
          into account in determining such application) to refuse to consider
          such application if in the opinion of the Landlord acting reasonably
          there may be a breach of the provisions of the Tenth Schedule hereto
          and furthermore the Tenant shall in the event that the Landlord grants
          consent to underlet the whole of the demised premises at all times
          comply with such provisions contained in the Tenth Schedule hereto

3:10:3    Not without the Landlord's prior written consent (which shall not be
          unreasonably withheld or delayed) to assign charge or part with
          possession of

                                       8

<PAGE>   12
        the demised premises as a whole

3:10:4  Upon every assignment of the whole of the demised premises if so
        required by the Landlord to procure that the intending assignee shall
        join in the Licence to Assign to give a direct covenant to the Landlord
        to pay the Rent the Service Charge the Insurance Rent the Advance
        Service Charge the Telephone Charge and the Private Charge and perform
        and observe the covenants contained in this Lease and if such intending
        assignee shall be a limited liability company then upon the Landlord's
        reasonable demand in that behalf at least two (or more if the Landlord
        reasonably so requires) of such company's directors of satisfactory
        standing shall join in such deed as sureties for such company in order
        jointly and severally to covenant with the Landlord as sureties that at
        all times during the Term (or any extension thereof) the Rent the
        Service Charge the Insurance Rent the Advance Service Charge the
        Telephone Charge and the Private Charge and all other sums and payments
        herein or therein covenanted to be paid by the Tenant shall be paid at
        the respective times and in manner herein or therein appointed and that
        all covenants on the part of the Tenant herein or therein contained
        shall be duly performed and observed and that in case of default in
        such payment of the Rent the Service Charge the Insurance Rent the
        Advance Service Charge the Telephone Charge the Private Charge or other
        moneys or performance or observance of covenants as aforesaid as well
        after as before any disclaimer the sureties will pay and make good to
        the Landlord on demand all loss damage costs and expenses thereby
        arising or incurred by the Landlord and such covenant shall further
        provide that:-

   (a)  no neglect or forbearance of the Landlord in endeavouring to obtain
   payment of the Rent the Service Charge the Insurance Rent the Advance Service
   Charge the Telephone Charge or the Private Charge hereby reserved or other
   moneys when the same become due or delay in taking steps to enforce
   performance or observance of the covenants on the Tenant's part herein or
   therein contained

   (b)  nor any refusal by the Landlord to accept the Rent the Service Charge
   the Insurance Rent the Advance Service Charge the Telephone Charge or the
   Private Charge tendered by or on behalf of the Tenant during a period in
   which the Landlord is entitled or would after service of a notice under
   Section 146 of the Law of Property Act 1925 be entitled to re-enter the
   demised premises

   (c)  nor any time which may be given by the Landlord to the Tenant

   (d)  nor any variation by agreement between the Landlord and the Tenant of
   the terms of this Lease or any extension thereof where such variation is
   immaterial and not prejudicial to the sureties

   (e)  nor any other act or thing whereby but for this provision the sureties
   would have been released

   shall release or exonerate or in any way lessen or affect the liability of
   the sureties AND such deed shall further provide for the sureties jointly and
   severally to covenant

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<PAGE>   13
        with the Landlord that in the event of the intending assignee during the
        Term (or any extension thereof pursuant to notice served under the
        provisions of the Landlord and Tenant Act 1954) having a receiving order
        made against the intending assignee or entering into liquidation and the
        receiver or liquidator disclaiming this Lease or extension thereof the
        sureties will accept a new lease of the demised premises for a term
        equal in duration to the residue remaining unexpired of the Term or of
        the term of the extension thereof at the time of the grant of such lease
        to the sureties such lease to contain the like Landlord's and the
        Tenant's covenants respectively and the proviso for re-entry as are
        contained in this Lease PROVIDED ALWAYS that the Landlord within the
        period of six (6) months after such disclaimer serves upon the sureties
        a notice in writing so to do AND in such case the sureties shall pay the
        Landlord's reasonable legal and surveyors' costs and fees and
        disbursements necessarily incurred on the grant of such lease or
        underlease and execute and deliver to the Landlord a counterpart thereof

3:10:5  Notwithstanding anything herein contained and subject to and without
        prejudice to the express provisions of Clause 3:10 hereof hereinbefore
        contained the Tenant shall not create or permit the creation of any
        interest derived out of the Term howsoever remote or inferior upon the
        payment of a fine or premium or at a rent less than the Rent or the full
        market rent (obtainable without taking a fine or premium) of the demised
        premises (whichever shall be the greater) or whereunder any rent is
        payable more than one quarter in advance or whereby the rent is not
        subject to review on the Review Dates specified in Clause 1 of the
        Fourth Schedule hereto (such review to be in identical terms to the
        provisions of the Fourth Schedule hereto) and shall not create or permit
        the creation of any such derivative interest as aforesaid save by
        instrument in writing

3:10:6  Within twenty-eight days of any permitted assignment charge or
        underletting of the whole of the demised premises or any transmission of
        this Lease by reason of a death or otherwise affecting the demised
        premises or any part thereof the Tenant shall submit two certified
        copies of such assignment charge or counterpart underlease or other
        document evidencing or effecting the same (as the case may be) to the
        Landlord's Solicitors (for retention by the Landlord and the Superior
        Landlord respectively) and shall pay to such Solicitors their reasonable
        fees (not being less than L30.00 (Plus VAT)) for the registration
        thereof together with the reasonable registration fees payable to the
        Superior Landlord (or its Managing Agents) and as prescribed or referred
        to in the Superior Leases

3:11:1  Not to make any alterations or additions whatsoever to the demised
        premises externally or internally except what the Tenant may with the
        Landlord's and the Superior Landlord's prior written consent (which
        shall not be unreasonably withheld or delayed) carry out internal
        non-structural alterations which do not result in a material increase in
        the net lettable area of the demised premises

3:11:2  Without prejudice to the generality of Clause 3:11:1 hereof not to alter
        amend or add to the electrical circuits wiring and fittings within the
        demised premises

                                       10
<PAGE>   14
          or solely serving the demised premises without the Landlord's prior
          written consent which shall not be unreasonably withheld or delayed
          Provided that the Landlord may as a condition of such consent require
          the Tenant to produce to the Landlord following completion of any such
          works a certificate signed by a competent electrician that any such
          works have been carried out in accordance with and the electrical
          installations at the demised premises have been inspected and tested
          (following completion of such works) in accordance with the current
          requirements regulations and conditions of the Electricity Supply
          Authority and has been found to be satisfactory

3:11:3    Not to merge the demised premises with any adjoining units within the
          Building

3:12 Not to overload the floors or structures of the demised premises or the
     Building or permit or suffer the same to be used in any manner which will
     cause undue strain or interfere therewith and not to install or permit to
     be installed any machinery on the demised premises which shall be unduly
     noisy or cause dangerous vibrations or to use or permit or suffer to be
     used on the demised premises or any part thereof in such manner as to
     subject the same to any strain beyond that which it is designed to bear

3:13 Not to place or display outside the demised premises or inside the demised
     premises so as to be visible from the outside any poster placard notice
     advertisement name or sign other than such as shall be approved in writing
     by the Landlord (such approval not to be unreasonably withheld or delayed)
     giving the name of the Tenant and nature of the Tenant's business within
     the locational signboard in the entrance lobby to the Building

3:14 Not to do anything upon the demised premises which is or may in the opinion
     of the Landlord become a nuisance damage or annoyance to the Landlord or to
     the tenants or occupiers of the Building or any nearby premises

3:15:1    Not to use the whole or any part of the demised premises

3:15:1:1  For any illegal or immoral purposes

3:15:1:2  For any dangerous noxious noisy noisome or offensive trade business
          occupation or manufacture

3:15:1:3  For any social business functions within the Permitted Hours or any
          social functions unconnected with the Tenant's business at any time

3:15:1:4  For any purpose other than the Permitted Use

3:15:1:5  otherwise than during the Permitted Hours

3:15:2    Provided Always and the Tenant hereby acknowledges and admits that
          notwithstanding the foregoing provisions as to use of the demised
          premises the Landlord does not thereby or in any other way give or
          make nor has given or

                                       11
<PAGE>   15
                made at any other time any representation or warranty that any
                such use is or will be permitted within the provisions of the
                legislation currently in force relating to Town and Country
                Planning

3:15:3          Not to leave the demised premises continuously unoccupied for
                more than one month without:-

3:15:3:1        notifying the Landlord in writing

3:15:3:2        providing such security arrangements as the Landlord shall
                reasonably require

3:15:3:3        providing such security or other arrangements as the insurers of
                the Building shall require in order to protect the demised
                premises from vandalism theft damage or unlawful occupation

 3:15:4         Not to play or use in the demised premises any musical
                instrument loudspeakers tape recorder gramophone radio or other
                equipment or apparatus that produces sound that may be heard in
                nearby premises or outside the demised premises

3:15:5          Not to hold any sale or auction on the demised premises

3:15:6          Not to do on the demised premises or any part thereof or the
                Building or any part hereof any act matter or thing whatsoever
                which may or may tend to depreciate the value of the demised
                premises or the Building or which may be or tend to be
                detrimental to the letting of the same or individual units
                therein

3:16      Not to store or bring upon the demised premises or any part
          thereof any articles or substance of a specially combustible
          inflammable explosive or dangerous nature other than those used by the
          Tenant in the usual course of its business at the demised premises and
          to comply with all recommendations of any Fire Officer and of the
          Insurers of the Building as to fire precautions relating to the
          demised premises

3:17:1          Not to bring or permit or suffer to be brought in or upon the
                demised premises or any part thereof any goods nor to do or
                permit or suffer to be done in or upon the demised premises of
                any part thereof anything which in either case may invalidate
                any insurance for the time being effected on the demised
                premises or any part thereof or the Building or whereby any such
                insurance may be in any way affected or made void or voidable
                nor without the consent of the Landlord to do or allow to be
                done anything whereby any additional premium may become payable
                for he insurance of the demised premises or any other part of
                the Building and to repay to the Landlord on demand all sums
                paid by way of increased premiums and all expenses incurred by
                it in consequence of a breach of this sub-clause

3:17:2          To keep the demised premises sufficiently supplied and equipped
                with such fire fighting and extinguishing appliances as shall
                from time to time be required by law or by the Local or other
                competent authority or by the

                                       12

<PAGE>   16
          Landlord's insurers of the Building and not to obstruct or permit or
          suffer to be obstructed the access to or means of working such
          appliances or the means of escape from the demised premises in the
          case of fire or other emergency

3:18 Not to stop up or obstruct or permit or suffer to be stopped up or
     obstructed in any way whatsoever or permit or suffer oil grease or other
     deleterious or noxious matter or substance to enter the drains sewers
     gutters pipes channels or watercourses of or serving the demised premises
     or the Building and in the event of any breach of this covenant by the
     Tenant forthwith to make good any damage to the reasonable satisfaction of
     the Landlord

3:19 Not to overload or permit or suffer to be overloaded the electrical system
     serving the demised premises or the Building (whether serving the same
     exclusively or in common with adjoining or neighbouring units in the
     Building)

3:20 Within seven days of the receipt of notice of the same to give full
     particulars to the Landlord of any notice direction licence consent or
     permission or order or proposal for a notice or order relating to the
     demised premises made given or issued to the Tenant by any government
     department local or public authority under or by virtue of any statutory
     powers and to produce such notice direction licence consent or permission
     or order or proposal for a notice or order to the Landlord AND ALSO without
     delay to take all necessary steps to comply with the same AND ALSO at the
     request of the Landlord to make or join with the Landlord in making such
     objections or representations against or in respect of any such notice
     direction licence consent or permission or order or proposal as aforesaid
     as the Landlord shall deem reasonably expedient

3:21 To be responsible for and to indemnify the Landlord against all damage
     occasioned to any part of the Building or to any person chattel or
     property (whether or not upon the demised premises) caused by any act
     default or negligence of the Tenant or the servants agents or licensees of
     the Tenant

3:22:1    At all times to comply with the requirements of the Planning Acts
          insofar as they affect the demised premises and in particular (but
          without prejudice to the generality of the foregoing) so often as
          occasion shall require at the expense in all respects of the Tenant to
          obtain from the Local Authority the Local Planning Authority and/or
          the Secretary of State for the Environment (or other appropriate
          Minister) all such licences consents and permissions (if any) as may
          be required for the carrying out by the Tenant of any operations on
          the demised premises or the institution or continuance by the Tenant
          of any use thereof which may constitute development within the
          meaning of the Planning Acts

3:22:2    Not without the prior written consent of the Landlord (which shall
          not be unreasonably withheld or delayed) to apply for permission to
          carry out on the demised premises any development requiring
          permission under the Planning Acts and upon obtaining any such
          permission immediately to produce the same to the Landlord

                                       13
<PAGE>   17
3:22:3  Not without the prior written consent of the Landlord (which shall not
        be unreasonably withheld or delayed) to implement any planning
        permission relating to the demised premises

3:22:4  To comply with any conditions attached to any temporary planning
        permission that the Tenant implements and which are intended to be
        complied with when the demised premises cease to be used in accordance
        with such planning permission even though the period for which the
        permission was granted extends beyond the date of termination of this
        Lease

3:22:5  Forthwith upon receipt of any notice relating to the development of the
        demised premises or any neighbouring property to deliver a copy thereof
        to the Landlord and if so required by the Landlord to join with the
        Landlord in making representations concerning the same

3:22:6  Whenever reasonably required to permit the Landlord to enter upon the
        demised premises to comply with any requirement lawfully made of it
        under the Planning Acts by any competent authority notwithstanding that
        any action reasonably necessary for compliance interferes with the
        Tenant's enjoyment of the demised premises

3:22:7  At all times hereafter to indemnify and keep indemnified the Landlord
        against all actions proceedings costs expenses claims and demands in
        respect of any contravention of the provisions of the Planning Acts

3:22:8  For the purposes of this sub-clause "the Planning Acts" shall mean the
        Town and Country Planning Act 1990 the Planning (Listed Buildings and
        Conservation Areas) Act 1990 and the Planning and Compensation Act 1991
        and the rules regulations and orders which are either made under one of
        them or are continued by the Planning (Consequential Provisions) Act
        1990 as they apply from time to time

3:23:1  To preserve so far as the Tenant is able all rights of light and other
        easements enjoyed by the demised premises and at all times at the
        Tenant's cost to afford to the Landlord such facilities and assistance
        as may enable the Landlord to prevent anyone acquiring any right of
        light or other easement over the demised premises and/or the Building
        and in addition but without prejudice to the generality of the foregoing
        to permit the Landlord to bring all such actions as it may reasonably
        and properly think fit in the name of the Tenant in respect of any
        obstruction of the access of light or air to any windows or openings in
        the demised premises or in respect of any encroachment upon the demised
        premises or the obstruction of any other easement enjoyed by the demised
        premises

3:23:2  Without prejudice to the generality of Clause 3:23:1 hereof not to give
        to any third party any acknowledgment that the Tenant enjoys the access
        of light or air to any of the windows or openings in the demised
        premises by the consent of such third party or to pay any sum of money
        to or to enter into any

                                       14
<PAGE>   18
            agreement with such third party for the purpose of inducing or
            binding him to abstain from obstructing the access of light or air
            to any such windows or openings and in the event of any such third
            party doing or threatening to do anything which obstructs or would
            obstruct such access of light or air to notify the same forthwith in
            writing to the Landlord

3:24:1      To pay the Landlord's reasonable and proper expenses (including
            legal costs bailiffs fees and Surveyor's fees) incidental to any
            notice or proceedings preparatory to forfeiture of this Lease for a
            breach of its terms even if forfeiture is avoided without a Court
            Order

3:24:2      To pay the Landlord's reasonable and proper expenses (including
            legal costs and Surveyor's fees) properly incurred by the Landlord
            incidental to the preparation and service of any notice and/or
            Schedule relating to a Schedule of Dilapidations and whether or not
            the same is served during or after the expiry of the Term (howsoever
            determined) but relating in all cases only to dilapidations which
            accrued prior to the expiry of the Term

3:24:3      In the event of the Tenant committing any material breach of any
            covenant on the part of the Tenant herein contained whether for
            payment of rent or otherwise then if the Landlord shall incur any
            expenses (including legal costs bailiffs fees and Surveyor's fees)
            to fully and effectively indemnify the Landlord in respect thereof

3:25   Not to store either permanently or temporarily any goods in the Building
       other than within the demised premises or (in respect of refuse only) in
       the Bin Store located in the basement of the Building

3:26   To comply with the Landlord's reasonable regulations which may be imposed
       from time to time by the Landlord for the proper and efficient management
       of the Building (including the demised premises) together with the
       Superior Landlords regulations as referred to in Clause 3(10) of the
       Superior Lease Provided that nothing in any regulations imposed by the
       Landlord shall purport to amend the terms of this Lease and in the event
       of any inconsistency between the terms of this Lease and any such
       regulations the terms of this Lease shall prevail

3:27:1      Not to obstruct or otherwise prevent the use by the Landlord or any
            others entitled thereto of the Common Parts including (without
            prejudice to the generality of the foregoing) the Pedestrian Public
            Access Areas and the Emergency Vehicular Public Access Areas defined
            in the Superior Lease

3:27:2      Without prejudice to the generality of Clause 3:27:1 hereof not to
            load or unload any goods or materials onto or from vehicles and
            convey the same from and into the Building and the demised premises
            except through such entrances as may from time to time be designated
            by the Landlord (acting reasonably) as service entrances and by
            means of any lift designated from time to time by the Landlord for
            such purposes

                                       15

<PAGE>   19
3:28 To take all reasonable precautions to prevent the occurrence or outbreak
     (as the case may be) of any fire explosion or other occurrence which might
     cause damage to the demised premises or the Building

3:29 If at any time the Tenant is entitled to the benefit of any insurance on
     the demised premises or any part or parts thereof or on the Landlord's
     fixtures and fittings therein the Tenant shall without delay apply all
     monies received by virtue of such insurance in making good the loss or
     damage in respect of which the same shall have been received

3:30 Upon the expiry of the Term (howsoever determined) to give up all keys of
     the demised premises to the Landlord

3:31 To use the Common Parts for their proper purposes only and to indemnify the
     Landlord against the costs of making good any damage done thereto by the
     Tenant or any employee or Licensee of the Tenant

3:32 Not to keep any animals whatsoever in the demised premises

3:33:1    Not to do anything which interferes with the heating cooling or
          ventilation of the Common Parts or which imposes an additional load on
          any heating cooling or ventilation plant and equipment in the Building

3:33:2    Not to operate the ventilation equipment in the demised premises
          otherwise than:-

3:33:2:1  during the Permitted Hours

3:33:2:2  in accordance with the reasonable regulations for such purpose made by
          the Landlord from time to time

3:34 To permit the Landlord at any time during the last six months of the Term
     to enter upon the demised premises to affix and retain without interference
     upon any part of the demised premises a notice for selling or disposing of
     the same PROVIDED ALWAYS that such notice shall not obstruct or interfere
     unreasonably with the Tenants use of the demised premises And to permit
     persons with authority from the Landlord or the Agent of the Landlord at
     all reasonable times of the day but upon prior appointment to enter and
     view the demised premises or any part thereof

3:35 To pay in addition to any monies due from the Tenant under the provisions
     of this Lease such Value Added Tax (at the rate for the time being in
     force) as shall be chargeable in respect of any such monies all of which
     shall be deemed exclusive of Value Added Tax

3:36 Throughout the period from and including 1st October to and including 30th
     April in every year of the Term to provide and maintain during the
     Permitted Hours an air temperature within the demised premises of not less
     than 65 degrees centigrade

                                       16
<PAGE>   20
          whether or not the demised premises are unoccupied temporarily or
          otherwise for any periods during the Term

3:37      To comply at all times with the additional covenants (if any) set
          forth in the Third Schedule hereto

3:38      To indemnify the Landlord against any liability arising directly or
          indirectly out of the Tenants occupation and/or use of the demised
          premises

3:39      Not to use or permit or suffer to be used any parking spaces within
          the Building (or the curtilage thereof and whether forming part of the
          demised premises or the Common Parts) other than the Car Parking
          Spaces for the temporary parking (meaning parking for a period not
          exceeding 8 hours in any 24 hour period) of motor vehicles Provided
          that:-

3:39:1    No motor vehicles shall be parked within the Building (as aforesaid)
          other than those serving the demised premises

3:39:2    All motor vehicles shall be parked in the relevant Car Parking Spaces
          in a proper orderly and tidy manner

3:40      To give to the Landlord at least 2 weeks prior notice in writing of
          any creditors meeting intended to be held for the purpose of
          considering or implementing any compromise or proposal under the
          provisions of the Insolvency Act 1986

3:41      Not to lodge with the district valuer or the Local Authority any
          appeal in respect of the rateable value of the demised premises (or
          any similar valuation of the same for the purposes of assessing
          premises for liability as to rates or any similar tax or outgoing
          replacing the same from time to time) without the consent in writing
          of the Landlord and if reasonably required by the Landlord to allow
          the Landlord to conduct any such appeal as agent for and at the cost
          in all respects of the Tenant

3:42      To indemnify the Landlord against all rates (or any similar tax or
          outgoing replacing the same from time to time) which are payable by
          the Landlord as a result of the Tenant vacating the demised premises
          at any date prior to the termination of the Term to the intent that
          this sub-clause shall remain in force notwithstanding such termination

3:43      If the Landlord should suffer any loss of rating relief which may be
          applicable to empty premises after the termination of the Term by
          reason of such relief being allowed to the Tenant in respect of any
          period before such termination to immediately make good such loss to
          the Landlord on demand

3:44      Upon making any application for any written consent or approval of the
          Landlord which is required by this Lease to declare to and provide the
          Landlord with such information as the Landlord shall reasonably
          require

                                       17
<PAGE>   21
3:45 To pay the Landlord's reasonable and proper legal expenses and Surveyor's
     fees (including disbursements and Stamp Duty) on all licences and duplicate
     copies thereof resulting from all applications to the Landlord for any
     consent or approval of the Landlord required by this Lease including
     charges fees and disbursements actually incurred in cases where consent is
     refused or the application is withdrawn

3:46 To observe and perform the covenants and the conditions on the part of the
     lessee contained in the Superior Lease (except insofar as the same relate
     to matters of repair and maintenance but without prejudice to the Tenant's
     obligations in respect of such matters hereinbefore contained) so far as
     the same relate to the demised premises and except insofar also as the
     Landlord expressly covenants in this Lease to observe and perform the same
     and to indemnify the Landlord from and against any actions proceedings
     claims damages costs expenses losses or other liability arising from any
     breach non-observance or non-performance of such covenants and conditions
     and furthermore not to do omit suffer or permit in relation to the demised
     premises any act or thing which would or might cause the Landlord to be in
     breach of the Superior Lease or which if done omitted suffered or permitted
     by the Landlord would or might constitute a breach of the covenants on the
     part of the lessee and the conditions contained in the Superior Lease

4.   The Landlord HEREBY COVENANTS with the Tenant that:-

4:1  The Tenant paying the rents hereinbefore reserved and observing and
     performing the several covenants conditions agreements and stipulations on
     the part of the Tenant hereinbefore contained shall and may peaceably and
     quietly hold and enjoy the demised premises during the Term without
     interruption or disturbance from or by the Landlord or any person or
     persons rightfully claiming by through under or in trust for the Landlord
     or by title paramount

4:2  To keep in a good and substantial state of repair and condition the Common
     Parts (damage by fire and other perils specified in Clause 3 of the Eighth
     Schedule hereto excepted)

4:3  To insure or cause to be insured the Building in accordance with the
     provisions of the Eighth Schedule hereto Provided that the Landlord shall
     not be obliged to insure or cause to be insured any fixtures and fittings
     which may be installed by the Tenant in the demised premises and which may
     become fixtures and fittings of the Landlord until the Tenant has in
     writing informed the Landlord of the re-instatement value thereof but the
     Landlord may in its discretion increase the amount of insurance in respect
     of such fixtures and fittings

4:4  If the demised premises shall be destroyed or damaged by any of the risks
     specified in Clause 3 of the Eighth Schedule hereto then (unless any such
     insurance shall be vitiated or payment of the Policy monies refused in
     whole or in part in consequence of any act or default of or permitted by
     the Tenant) the Landlord will as soon as reasonably practicable re-instate
     or repair such destruction or damage Provided that as regards fixtures and
     fittings which have been installed by the Tenant and become fixtures and
     fittings of the Landlord the Landlord shall only be responsible to

                                       18

<PAGE>   22
        re-instate or repair the same to the extent of the re-instatement value
        thereof notified by the Tenant to the Landlord pursuant to Clause 4:3
        hereof or (if any) to the amount of the increased insurance thereof
        effected at the discretion of the Landlord

4:5     Subject to the Tenant duly and punctually paying the Advance Service
        Charge to provide the services specified in the Fifth Schedule hereto
        for the benefit of the demised premises

4:6     To pay the rent reserved by the Superior Lease (if demanded) and to
        perform so far as the Tenant or any other tenant or occupier within the
        Building is not liable for such performance under the terms of this
        Lease or any other lease of any part of the Building or otherwise (as
        appropriate) the covenants and the conditions on the part of the lessee
        contained in the Superior Lease and to indemnify the Tenant from and
        against all actions claims proceedings costs expenses and demands
        incurred by the Tenant as a result of any failure by the Landlord so to
        do

4:7     At the request and cost of the Tenant to use its best endeavours to
        enforce:-

4:7:1   the covenants on the part of the Superior Landlord contained in the
        Superior Lease

4:7:2   the covenant on the part of other tenants occupiers of the Building
        (other than the demised premises) contained in their respective leases
        of the relevant parts of the Building provided that the Tenant shall
        upon the Landlord's reasonable demand in that behalf deposit with the
        Landlord such security for costs incurred or to be incurred by the
        Landlord in respect thereof as the Landlord shall reasonably require

4:8     To use its reasonable endeavours to obtain the consent of the Superior
        Landlord whenever the Tenant makes application for any consent required
        under this Lease where the consent of both the landlord and the Superior
        Landlord is needed by virtue of the Lease and the Superior Lease

5.      PROVIDED ALWAYS and notwithstanding anything hereinbefore contained to
the contrary:-

5:1     That if the rents hereby reserved or any part thereof or following an
        assignment of this Lease by the said Visual Communications Limited the
        Telephone Charge and/or the Private Charge or any part thereof
        respectively shall be unpaid for the space of 14 days next after any of
        the days hereinbefore appointed for payment thereof (whether such rents
        shall have been legally demanded or not) or if default shall be made in
        the performance or observance of any of the covenants stipulations
        conditions or agreements on the part of the Tenant herein contained or
        if the Tenant being a Company shall go into liquidation whether
        compulsory or voluntary (otherwise than for the purpose of amalgamation
        or reconstruction without insolvency) or shall pass a resolution for
        winding up (save as aforesaid) or is unable to pay its debts or has no
        reasonable prospect of being able to pay its debts within the meaning of
        Sections 122 and 123 of the Insolvency Act 1986 or summons a meeting of
        its creditors or any of them under Part I of the said Act or suffers a
        petition for an Administration Order in respect of it to be filed in
        Court or suffers a receiver or administrative receiver to be

                                       19
<PAGE>   23
     appointed or if the Tenant being an individual (or being individuals any
     one of them) shall become bankrupt or is unable to pay his debts or has no
     reasonable prospect of being able to pay his debts within the meaning of
     Sections 267 and 268 of the said Insolvency Act or shall enter into any
     composition with his or their creditors or if the Tenant shall suffer any
     distress or execution to be levied upon his or their goods or if an
     interim order is made under Part VIII of the said Insolvency Act then and
     in any such case it shall be lawful for the Landlord or any person or
     persons duly authorised by it in that behalf into and upon the demised
     premises or any part thereof in the name of the whole to re-enter and the
     same to have again repossess and enjoy as in it first and former estate
     anything herein contained to the contrary notwithstanding and thereupon
     the Term shall immediately cease but without prejudice to any right of
     action or remedy of the Landlord in respect of any antecedent breach of
     any of the covenants stipulations conditions or agreements on the part of
     the Tenant herein contained

5:2  The Tenant shall not (save as hereinbefore is expressly granted to it and
     then subject to the rights herein reserved to the Landlord and the
     Superior Landlord and the rights subject to which this demise is made) be
     entitled to any right of light air way or other easement or to exercise
     any right or other easement over or against the Building or any adjoining
     or neighbouring property of the Landlord and/or the Superior Landlord and
     this Lease shall be deemed expressly to preclude the grant of any such
     right of easement

5:3  If the demised premises or any part thereof or the access thereto are
     destroyed or damaged by any of the risks specified in Clause 3 of the
     English Schedule hereto or because of an Inherent Defect so as to render
     the demised premises unfit or unsafe for occupation or sue and the demised
     premises are not rendered fit and safe for occupation or use within seven
     days of the event giving rise to such destruction or damage then (unless
     any insurance effected or caused to be effected by the Landlord shall have
     been vitiated or payment of the policy monies refused in whole or in part
     in consequence of some act or default of or permitted by the Tenant) (a)
     the yearly rent hereby Firstly reserved and for the time being payable
     hereunder or a fair proportion thereof according to the nature and extent
     to the damage sustained shall be suspended from the expiration of such
     seven days until the demised premises shall be again rendered fit and safe
     for occupation and use or until the expiration of 3 years from such date
     whichever shall be the earlier and (b) the rent hereby secondly reserved
     and for the time being payable hereunder or a fair proportion thereof
     according to the nature and extent of the damage sustained shall be
     suspended from the expiration of such seven days until the demised
     premises shall be again rendered fit and safe for occupation and use or
     until the expiration of 3 years from such date whichever shall be the
     earlier but so that the Tenant shall remain liable to pay any balance due
     in respect of such rent for any period prior to the expiration of such
     seven days when the same shall have been certified AND in case of any
     difference between the parties under this present sub-clause the same shall
     be referred to an independent surveyor acting as an expert and not as an
     arbitrator to be agreed upon by the Landlord and by the Tenant or (in the
     event of failure so to agree) to be nominated on the application of either
     party by the President of the Royal Institution of Chartered Surveyors or
     his deputy and the decision of that independent surveyor

                                       20
<PAGE>   24
     (including any decision as to the costs of the determination) shall be
     final and binding on the parties Provided that in the event of any such
     damage to or disturbance of the demised premises or the access thereto not
     being made good so as to render the demised premises fit and safe for
     occupation or use within three years of the date of occurrence of the same
     either party may within six months thereafter (time being of the essence)
     determine the Lease by giving to the other notice in writing pursuant to
     this clause and upon service of any such notice this Lease and the Term
     shall immediately expire and determine but without prejudice to the rights
     and remedies of either party against the other in respect of any antecedent
     breach or non-observance of any of the provisions of this Lease and in the
     event of service of such a notice the said period of three years
     hereinbefore referred to shall be extended to the expiration of the Term

5:4  Subject to the provisions of Section 38(2) of the Landlord and Tenant Act
     1954 neither the Tenant nor any assignee of the Tenant shall be entitled on
     quitting the demised premises to any compensation under Section 37 of the
     same Act

5:5  All monies received in respect of loss of rents by virtue of any policy of
     insurance effected or caused to be effected by the Landlord shall be paid
     to the Landlord for its own use and benefit

5:6  Notwithstanding anything herein contained the Landlord shall not be
     responsible for any delay or failure in connection with the performance or
     observance of its obligations herein contained or implied or for any
     omission to perform the same nor for any loss or inconvenience arising from
     any such delay failure or omission if such delay failure or omission shall
     be due to causes beyond the control of the Landlord or if the Landlord has
     not been at fault or negligent nor shall the Landlord be responsible to the
     Tenant or the Tenant's licensees servants agents or other persons in the
     demised premises or calling upon the Tenant for any accident happening or
     injury suffered or damage to or loss of any chattel or property sustained
     on the demised premises or in the Building

5:7  The Landlord shall be entitled to alter add to execute works on and rebuild
     the Landlord's adjoining and nearby suites situated in the Building
     notwithstanding that the access of light and air to the demised premises
     may be interfered with Provided that the Landlord shall cause as little
     damage and/or disturbance as practicable and shall as soon as practicable
     make good all damage to the demised premises caused by its works to the
     reasonable satisfaction of the Tenant but shall not otherwise be liable for
     any damage or inconvenience caused to the Tenant

5:8  If at the end of the Term any furniture or effects belonging to the Tenant
     are left in the demised premises for more than seven days the Landlord
     shall have power to sell the same as agent for and on behalf of the Tenant
     and the Landlord shall on demand pay or account to the Tenant for the
     proceeds of sale (but not any interest thereon) less any costs of storage
     and sale reasonably incurred by the Landlord and the Tenant will indemnify
     the Landlord against any liability incurred by the Landlord to any third
     party whose property shall have been sold by the Landlord in the mistaken
     belief held in good faith (which shall be presumed unless the contrary be
     proved) that such

                                       21

<PAGE>   25
    property belonged to the Tenant

5:9 Each of the Tenant's covenants herein contained shall remain in full
    force both at law and in equity notwithstanding that the Landlord shall
    have waived or released temporarily or permanently revocably or
    irrevocable or otherwise howsoever a similar covenant or similar
    covenants affecting adjoining or neighbouring suites within the Building

5:10:1  If any part of the rents sums or other payments payable hereunder
        (including for the avoidance of doubt the Service Charge the Insurance
        Rent and the Advance Service Charge) shall be in arrear for twenty-one
        days whether legally demanded or not it shall be lawful for the Landlord
        to enter into and upon the demised premises or any part thereof and
        distrain and the distress or distresses then and there found to dispose
        of in due course of law and to apply the proceeds thereof in or towards
        payment of the said rents sums or other payments so in arrear and all
        costs charges and expenses occasioned by the non-payment thereof and so
        that the power of the Landlord to distrain upon the demised premises for
        rents or other monies in arrear shall extend to and include any Tenant's
        fixtures and fittings not otherwise by law distrainable which may from
        time to time be thereon

5:10:2  If any rent or other payments referred to in Clause 5:10:1 hereof shall
        be in arrear for more than twenty-one days beyond the days appointed for
        payment (whether formally demanded or not) and shall be paid only after
        the Landlord or the Landlords Solicitors have instructed or caused
        distress to be levied therefor then the Tenant shall pay to the Landlord
        within 21 days of written demand the Landlords reasonable Solicitors
        costs and expenses incurred by reason of the foregoing including but
        without prejudice to the generality of the foregoing Bailiff's fees and
        commission

5:11 The internal division walls that divide the demised premises from the
     adjoining suites in the Building shall be deemed to be party walls
     within the meaning of Section 38 of the Law of Property Act 1925 and
     shall be maintained at the equally shared expense of the Tenant and the
     tenants of such adjoining suites

5:12 The Tenant hereby warrants and acknowledges:-

5:12:1  that prior to the execution of this Lease the Tenant has disclosed to
        the Landlord in writing any conviction judgment or finding of any Court
        or tribunal relating to the Tenant (or any director or officer or major
        shareholder of the Tenant) of such a nature as to be likely to affect
        the decision of any insurer or underwriter to grant or to continue
        insurance of the demised premises and/or the Building

5:12:2  that this Lease has not been entered into in reliance wholly or
        partially on any statement or representation made by or on behalf of the
        Landlord except any such statement or representation that is expressly
        set out in this Lease or in the Landlord's Solicitors' replies to the
        Tenant's Solicitors' enquiries raised

                                       22
<PAGE>   26
        before the grant hereof

5:13    This Lease embodies the entire understanding of the parties relating to
        the demised premises and to all the matters dealt with by any of the
        provisions of this Lease

5:14    The Schedules to this Lease shall be deemed to be incorporated in this
        Lease and form part hereof

5:15    The index to this Lease shall not be taken into account for the purpose
        of its construction or interpretation

5:16    Any Notice under this Lease shall be in writing. Any Notice to the
        Landlord shall be sufficiently served if sent by registered or recorded
        delivery post addressed to the registered office or such other address
        as the Landlord may from time to time designate for such purpose. Any
        Notice to the Tenant who is a Company shall be sufficiently served if
        delivered personally (by the Landlord's employee servant or agent) to or
        sent by registered or recorded delivery post addressed to its registered
        office or to the demised premises and in the case of a Tenant who is not
        a Company if delivered to the Tenant (or if more than one the first
        named) personally (as aforesaid) or sent to the Tenant (or if more than
        one the first named) by registered or recorded delivery post addressed
        to the Tenant at the demised premises or to the Tenant's last known
        address in Great Britain or Ireland (whether Eire or Northern Ireland)

6:1     The Tenant shall be entitled to determine this lease on the Break Date
        by giving to the Landlord at least six months previous written notice

6:2     In the case of a notice by the Tenant it shall be a pre-condition that
        there is not any material outstanding breach of any of the Tenants
        covenants contained in this Lease or that any breach of covenant by the
        Tenant that may have occurred has so far as possible been remedied so
        that no material prejudice to the Landlord has resulted

6:3     Upon the expiry of any such notice as aforesaid provided that upon the
        expiry thereof in the case of a notice by the Tenant there shall be no
        arrears of the Rent the Service Charge (provided that the same shall not
        be the subject of a material dispute) the Insurance Rent or the Advance
        Service Charge or following an assignment of the Lease by the said
        Visual communications Limited the Telephone Charge and/or the Private
        Charge and upon the Tenant giving up vacant possession of the demised
        premises (subject to clause 6:4 below) this Lease shall expire and
        determine but without prejudice to the rights and remedies of either
        party against the other in respect of any antecedent breach or
        non-observance of any of the provisions of this Lease

6:4     In the event of the parties entering into new arrangements under which
        the Tenant is to be entitled to remain in occupation following the
        expiry and determination of this Lease such new arrangements shall not
        prejudice the validity of any notice served under the provisions of this
        clause

                                       23
<PAGE>   27
7.        IT IS HEREBY AGREED that the provision of Section 24 to 28 (inclusive)
          of the Landlord and Tenant Act 1954 shall not apply to this demise
          which agreement has been authorised by an Order of the Central London
          County Court dated the ___, day of _______ 1995 under the provisions
          of Section 38(4) of the Landlord and Tenant Act 1954

IN WITNESS whereof the Landlord the Tenant have respectively executed and
delivered this Lease as a Deed in both cases the day and year first before
written

                               THE FIRST SCHEDULE

1.   The Landlord:            INNOVATION LAND & ESTATES LIMITED whose registered
                              office is situate at 16 Wimpole Street London W1
                              (Company No. 3037194)

2.   The Tenant:              VISUAL COMMUNICATIONS LIMITED (Company
                              Registration Number 320338) whose registered
                              office is situate at Visual House 1 Mastmaker
                              Road London E14 9WT

3.   The Demised Premises     ALL THAT office suite situate on the Third Floor
                              of the Building as the same is shown edged red on
                              plan number 1 annexed hereto together with the Car
                              Parking Spaces

4.   The Rent:                With effect from the date hereof until and
                              including the 24th April 1996 one peppercorn (if
                              demanded) and thereafter from and including the
                              25th April 1996 the sum of Twenty seven thousand
                              one hundred pounds (L27,100.00) per annum payable
                              by equal quarterly payments in advance on the
                              usual quarter days in each year of the Term the
                              first payment in respect of the period from and
                              including the 25th April 1996 to and including the
                              23rd June 1996 to be made on the 25th March 1996.
                              The Rent is subject to review in accordance with
                              the provisions of the Fourth Schedule hereto

5.   The Term:                A term from and including the date hereof and
                              expiring on 12th December 2002

6.   The Service Charge:      Such periodic sum as may be determined by the
                              Landlord's Surveyor pursuant to the provisions of
                              the

                                       24<PAGE>   1
                                                                   EXHIBIT 10.42

                             SPACELABS MEDICAL, INC.

                             AUDIT COMMITTEE CHARTER

<PAGE>   2
                             SPACELABS MEDICAL, INC.
                             AUDIT COMMITTEE CHARTER

PURPOSE AND SCOPE

The Audit Committee (the "Committee") is a committee of the Board of Directors
(the "Board"). Its primary function is to assist the Board in fulfilling its
oversight responsibilities by reviewing the financial information which will be
provided to the shareholders and other appropriate parties, the systems of
internal controls which management and the Board have established, and the audit
process. In doing so, it is the responsibility of the Committee to provide an
open avenue of communication between the Board, management, the internal
auditor, and the independent outside accountants ("Outside Auditor").

ORGANIZATION

o    The Committee shall be appointed annually by the Board.

o    The Committee shall be composed of at least three independent directors.

o    Only independent directors may be members of the Committee. An independent
     director is a director who:

     (1)  is not and has not been employed in an executive capacity of the
          Company or its affiliates in the current or past three years;

     (2)  has not accepted any compensation from the Company or its affiliates
          in excess of $60,000 during the previous fiscal year (except for Board
          service, retirement plan benefits, or non-discretionary compensation);

     (3)  has no immediate family member who is or has been in the past three
          years, employed by the Company or its affiliates as an executive
          officer;

     (4)  is not and has not been a partner, controlling shareholder or an
          executive officer of any for-profit business to which the Company or
          its affiliates made, or from which the Company or its affiliates
          received, payments (other than those which arise solely from
          investments in the Company's securities) that exceed five percent of
          the Company's consolidated gross revenues for that year, or $200,000,
          whichever is more, in any of the past three years; or

     (5)  has not been employed as an executive of another entity where any of
          the Company's executives serve on that entity's Compensation
          Committee.

o    Effective June 14, 2001, all directors must be able to read and understand
     fundamental financial statements, including the Company's balance sheet,
     income statement and cash flow statement.

                                        2

<PAGE>   3
                             SPACELABS MEDICAL, INC.
                             AUDIT COMMITTEE CHARTER

o    Effective June 14, 2001, at least one member of the Committee must also
     have past employment experience in finance or accounting, the requisite
     professional certification in accounting, or other comparable experience or
     background, including a current or past position as a chief executive or
     financial officer or other senior officer with financial oversight
     responsibilities.

o    The Board shall appoint one of the members of the Committee as Chairperson.
     It is the responsibility of the Chairperson to lead all meetings of the
     Committee and ensure their appropriate conduct.

In meeting its responsibilities, the Committee shall:

GENERAL

o    Have the power to conduct or authorize investigations into any matters
     within the Committee's scope of responsibilities. The Committee shall have
     unrestricted access to members of management and all information relevant
     to its responsibilities.

o    Meet at least two (2) times per year or more frequently as circumstances
     require. The Committee may ask members of management or others to attend
     the meetings and provide pertinent information as necessary.

o    Report Committee actions to the Board with such recommendations as the
     Committee may deem appropriate.

o    Review and update the Committee's charter at least annually.

o    Perform such other functions assigned by law, the Company's charter or
     bylaws, or the Board.

INTERNAL CONTROLS AND RISK ASSESSMENT

o    Review and evaluate the effectiveness of the Company's process for
     assessing significant risks or exposures and the steps management has taken
     to minimize such risks to the Company.

                                       3

<PAGE>   4
                             SPACELABS MEDICAL, INC.
                             AUDIT COMMITTEE CHARTER

o    Consider and review with management, the Outside Auditor and the internal
     auditor:

     -    The effectiveness of or weaknesses in the Company's internal controls
          including computerized information system controls and security, the
          overall control environment and accounting and financial controls.

     -    Any related significant findings and recommendations of the Outside
          Auditor and internal auditor together with management's responses
          thereto, including the timetable for implementation of recommendations
          to correct identified weaknesses in internal controls.

o    Review the coordination of the internal audit plan to assure completeness
     of coverage of key business controls and risk areas, reduction of redundant
     efforts, and the effective use of audit resources.

FINANCIAL REPORTING

o    Review filings with the SEC and other agencies and other published
     documents containing the Company's financial statements, including annual
     and interim reports, and statutory filings, and consider whether the
     information contained in these documents is consistent with the information
     contained in the financial statements.

o    Review with management and the Outside Auditor at the completion of the
     annual examination:

     -    The Company's annual financial statements and related footnotes.

     -    The Outside Auditor's audit of the financial statements and report
          thereon.

     -    Any significant changes required in the financial statement audit
          plan.

     -    Any serious difficulties or disputes with management encountered
          during the course of the audit.

     -    The existence of significant estimates and judgments underlying the
          financial statements, including the rationale behind those estimates
          as well as the details on material accruals and reserves.

     -    Other matters related to the conduct of the financial statement audit
          which are to be communicated to the Committee under generally accepted
          auditing standards.

     -    Review and approve the Company's accounting principles.

o    Assess internal processes for determining and managing key financial
     statement risk areas.

                                       4

<PAGE>   5
                             SPACELABS MEDICAL, INC.
                             AUDIT COMMITTEE CHARTER

OUTSIDE AUDITOR

The Outside Auditor is ultimately accountable to the Board through the
Committee, as representatives of the shareholders. Accordingly with respect to
the Outside Auditor the Committee shall:

o    Evaluate and recommend to the Board the outside auditor to be nominated for
     approval, and, where appropriate, recommend the discharge of the Outside
     Auditor.

o    Take appropriate action to oversee the independence of the Outside Auditor.

o    Obtain a formal written statement from the Outside Auditor delineating all
     relationships between the auditor and the Company, consistent with
     Independence Standards Board Standard No. 1 and through active engagement
     of dialog with the auditor, determine if any disclosed relationships or
     services may impact the objectivity and independence of the auditor.

o    Review the scope and approach of the annual financial statement audit with
     the Outside Auditor.

o    Assess the Outside Auditor's process for identifying and responding to key
     audit and internal control risks.

o    Review the Outside Auditor's identification of issues and business and
     financial risks and exposures.

o    Instruct the Outside Auditor to communicate directly to the Committee any
     serious difficulties or disputes with management.

o    Meet with the internal auditor, Outside Auditors and/or representatives of
     management privately as the Committee deems appropriate in its discretion.

INTERNAL AUDITOR (EITHER EMPLOYEE OR CONTRACTOR)

o    Evaluate the internal audit process for establishing the annual internal
     audit plan and the focus on key business risks.

o    Determine, in consultation with the internal auditor and management, the
     internal audit scope and role of the internal auditors.

o    Review and evaluate the scope, risk assessment and nature of the annual
     internal audit plan and any subsequent changes, including whether or not
     the internal audit plan is

                                       5

<PAGE>   6
                             SPACELABS MEDICAL, INC.
                             AUDIT COMMITTEE CHARTER

     sufficiently linked to the Company's overall business objectives and
     management's success and risk factors.

o    Review and concur in the appointment, replacement, reassignment, or
     dismissal of the internal auditor.

o    Confirm and assure the independence of the internal auditor.

COMPLIANCE WITH LAWS AND REGULATIONS

o    Ascertain whether the Company has an effective process for determining the
     risks and exposures from asserted and unasserted litigation and claims and
     from noncompliance with laws and regulations, if any.

o    Review with the Company's general counsel and other appropriate parties,
     any legal, tax or regulatory matters that may have a material impact on
     Company operations and/or the financial statements, related Company
     compliance policies, and programs, and material reports received from
     regulatory agencies.

COMPLIANCE WITH CODES OF ETHICAL CONDUCT

o    Review and assess the Company's processes for administering a code of
     ethical conduct.

o    Review with the internal auditor and the Outside Auditor the results of
     their review of the Company's monitoring of compliance with the Company's
     code of conduct.

o    Review policies and procedures with respect to officers' expense accounts
     and perquisites, including their use of corporate assets, and consider the
     results of any review of these areas by the internal auditor or the Outside
     Auditor.

                                       6

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