Document:

EXHIBIT 10.2
                                                                    ------------

                             ABLE LABORATORIES, INC.

                               12% PROMISSORY NOTE

$____________                                             Needham, Massachusetts
                                                                   June 14, 2002

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL OR
OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.

         On June 14, 2004 (the "Maturity Date"), for value received, the
undersigned Able Laboratories, Inc., a Delaware corporation (the "Maker"),
promises to pay to the order of ___________________ (the "Payee"), or the
Payee's registered assigns, the principal sum of ____________________ United
States Dollars ($____________) or such lesser amount as shall then equal the
outstanding principal amount hereof, together with interest from the date of
issuance of this Note on the unpaid principal balance at a rate equal to twelve
percent (12%) per annum and computed on the basis of the actual number of days
elapsed and a year of 365 days. This Note is issued pursuant to that certain
Subscription Agreement, dated as of June 5, 2002 (the "Subscription Agreement"),
by and among the Maker, the Payee and the other investors named therein
("Investors"), and each holder of this Note, by his acceptance hereof, agrees to
be bound by the provisions of the Subscription Agreement. The Note is one of a
series of Notes of like tenor issued pursuant to the Subscription Agreement in
the aggregate principal amount of $2,300,000 (the "Notes").

1.       INTEREST; PRINCIPAL AND PAYMENT

         1.1  INTEREST. The Maker shall pay interest monthly on the outstanding
principal amount of this Note from the date hereof until such principal amount
is paid in full, at the rate of twelve percent (12%) per annum.

         1.2  PRINCIPAL. The entire outstanding principal together with interest
accrued on this Note shall be due and payable on the Maturity Date.
<PAGE>
         1.3  PREPAYMENT. Any portion or all of the outstanding principal may be
prepaid at any time by the Maker by paying an amount equal to the amount to be
prepaid together with interest accrued thereon through the date of prepayment
plus an additional amount equal to the monthly interest payments which would
have accrued thereon pursuant to paragraph 1.1 above from the date of prepayment
to the Maturity Date, but for the prepayment.

2.       DEFAULTS AND REMEDIES.

         2.1  EVENTS OF DEFAULT. An "Event of Default" shall occur if:

              (a)  the Maker fails to make any payment of interest on this Note
         when the same becomes due and payable and such failure continues for a
         period of 30 days;

              (b)  the Maker defaults in the payment of principal on this Note
         when the same becomes due and payable, at maturity or otherwise;

              (c)  the Maker fails to comply with any of the other agreements
         contained in this Note, and the Default continues for the period and
         after the notice specified below; and

              (d)  the Maker pursuant to or within the meaning of any Bankruptcy
         Law (as defined below):

                   (i) commences a voluntary case;

                   (ii) consents to the entry of an order against it for relief
              in an involuntary case; or

                   (iii) makes a general assignment for the benefit of its
              creditors; or

              (e) a court of competent jurisdiction enters an order or decree
         under Title 11, U.S. Code or any similar federal or state law that:

                   (i) is for relief against the Maker in an involuntary case;

                   (ii) appoints a receiver, trustee, assignee, liquidator, or
              similar official for all or substantially all of the assets of the
              Company; or

                   (iii) orders a liquidation of the Company;

         provided, that, an event specified in subparagraphs (a), (c), (d) or
(e) above shall not constitute a default or an Event of Default until Investors
holding a majority of the then-outstanding aggregate principal amounts of the
Notes so notify the Maker in writing and, in the case of clause (c), the Maker
does not cure the Default within 60 days of such notice. The notice must specify
the Event of Default, demand that it be remedied, and state that it is a notice
of Event of Default.

                                       -2-
<PAGE>
         2.2  ACCELERATION. If an Event of Default occurs and is continuing, the
holder of this Note may, by notice to the Maker, declare the principal of and
accrued interest on this Note to be immediately due and payable.

         2.3  OTHER REMEDIES. If an Event of Default occurs and is continuing,
the holder of this Note may pursue any available remedy to collect the payment
of interest, principal or premium, if any, on this Note or to enforce any
provision of this Note. A delay or omission by the holder of this Note in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver or acquiesce in the Event of
Default. All remedies are cumulative to the extent permitted by law.

3.       USURY

         It is the intention of the parties hereto to conform strictly to
applicable usury laws now or hereafter in effect. In the event that any of the
terms or provisions of this Note are in conflict with applicable usury law this
SECTION 3 shall govern as to such terms or provisions, and this Note shall in
all other respects remain in full force and effect. If any transaction
contemplated hereby would be usurious, it is agreed that the aggregate of all
consideration which constitutes interest under applicable law that is contracted
for, charged or received under this Note shall under no circumstances exceed the
maximum interest allowed by applicable law. Accordingly, if interest in excess
of the legal maximum is contracted for, charged or received: (i) this Note shall
be automatically reformed so that the effective rate of interest shall be
reduced to the maximum rate of interest permitted by applicable law, for the
purpose of determining said rate and to the extent permitted by applicable law,
all interest contracted for, charged or received shall be amortized, prorated
and spread throughout the full term of this Note so that the effective rate of
interest is uniform throughout the life of this Note, and (ii) any excess of
interest over the maximum amount allowed under applicable law shall be applied
as a credit against the then unpaid principal amount hereof.

4.       MISCELLANEOUS

         4.1  WAIVERS. The Maker hereby waives presentment, demand for payment,
notice of dishonor, and any and all other notices or demands in connection with
the delivery, acceptance, performance, default or enforcement of this Note, and
hereby consents to any extensions of time, renewals, releases of any party to
this Note, waivers or modifications that may be granted or consented to by the
Payee in respect to the time of payment or any other provision of this Note.

         4.2  GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws (exclusive of the laws governing conflicts of laws) of
The Commonwealth of Massachusetts.

         4.3  ASSIGNMENT. Neither this Note nor any of the rights, interests, or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Payee, without the prior written consent of the Maker;
PROVIDED, HOWEVER, that this Note may be assigned by Payee to its limited
partners or to another limited partnership or limited liability company managed
or controlled, directly or indirectly, by Sanders Morris Harris Inc.; PROVIDED
FURTHER, HOWEVER that any such assignment is made in accordance with all
applicable state and federal securities laws.

                                       -3-
<PAGE>
Subject to the preceding sentence, the rights and obligations of the Maker and
the Payee shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.

         4.4  AMENDMENTS. Any provision of this Note may be amended, waived, or
modified upon the written consent of the Maker and the Payee.

         4.5  NOTICE. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by recognized overnight courier or if
delivered by facsimile at the respective addresses or fax number of the parties
as set forth in the Subscription Agreement or on the register maintained by
Maker. Any party hereto may by notice so given change its address for future
notice hereunder. Notice shall conclusively be deemed to have been given when
received.

                                                    ABLE LABORATORIES, INC.

                                                    By:
                                                        ------------------------
                                                        Dhananjay G. Wadekar
                                                        President

                                       -4-EXHIBIT 10.4
                                                                    ------------

                           L E A S E A G R E E M E N T
                           - - - - - - - - - - - - - -

BY AND BETWEEN:

KENNEDY MONTROSE, L.L.C.,
a New Jersey Limited Liability Company,

                      "Landlord"

            -and-

ABLE LABORATORIES
a Delaware Corporation,

                      "Tenant"

PREMISES:   600 Montrose Avenue
            South Plainfield, New Jersey 07080

PREPARED BY:  ROBERT K. BROWN, ESQ.

DATED:
<PAGE>

                          L E A S E   A G R E E M E N T
                          - - - - -   - - - - - - - - -

                                    BY AND BETWEEN

                 KENNEDY MONTROSE, L.L.C.,
                 a New Jersey Limited Liability Company,

                                 "Landlord"

                 -and-

                 ABLE LABORATORIES
                 a Delaware Corporation,

                                 "Tenant"

                 DATED:

                                   LAW OFFICES

                           EPSTEIN, FITZSIMMONS, BROWN
                             GIOIA, JACOBS & SPROULS
                           A Professional Corporation
                             245 Green Village Road
                                  P.O. Box 901
                         Chatham Township, NJ 07928-0901
                                 (973) 593-4900
                               Fax (973) 593-4966
<PAGE>

                                TABLE OF CONTENTS

1.   LEASED PREMISES.........................................................1

2.   TERM OF LEASE...........................................................1

3.   RENT....................................................................2

4.   CONDITION OF LEASED PREMISES............................................4

5.   USE.....................................................................4

6.   REPAIRS AND MAINTENANCE.................................................4

7.   UTILITIES...............................................................5

8.   TAXES...................................................................5

9.   INSURANCE...............................................................7

10.  SIGNS...................................................................8

11.  FIXTURES................................................................9

12.  GLASS...................................................................9

13.  ASSIGNMENT AND SUBLETTING...............................................9

14.  FIRE AND CASUALTY......................................................11

15.  COMPLIANCE WITH LAWS, RULES AND REGULATIONS............................13

16.  INSPECTION BY LANDLORD.................................................15

17.  DEFAULT BY TENANT......................................................15

18.  LIABILITY OF TENANT FOR DEFICIENCY.....................................17

19.  NOTICES................................................................17

20.  NON-WAIVER BY LANDLORD.................................................18

21.  RIGHT OF TENANT TO MAKE ALTERATIONS AND IMPROVEMENTS...................18

22.  NON-LIABILITY OF LANDLORD..............................................18

23.  WARRANTY OF TITLE......................................................19

24.  RESERVATION OF EASEMENT................................................19

25.  AIR, GROUND AND WATER POLLUTION........................................19

26.  FINANCIAL INFORMATION..................................................19

27.  FORCE MAJEURE..........................................................20

28.  STATEMENTS BY LANDLORD AND TENANT; LANDLORD'S CONSENT..................20

29.  CONDEMNATION...........................................................20

30.  QUIET ENJOYMENT........................................................21

31.  SURRENDER OF PREMISES..................................................21

32.  INDEMNITY..............................................................22

33.  SHORT FORM LEASE.......................................................22

34.  LEASE CONSTRUCTION.....................................................22

35.  BIND AND INURE CLAUSE..................................................23

36.  DEFINITIONS............................................................23
<PAGE>

37.  NET RENT...............................................................23

38.  DEFINITION OF TERM OF..................................................23

39.  COVENANTS OF FURTHER ASSURANCES........................................23

40.  LANDLORD'S REMEDIES....................................................23

41.  COVENANT AGAINST LIENS.................................................24

42.  BROKERAGE..............................................................24

43.  SUBORDINATION OF LEASE.................................................25

44.  INTENTIONALLY OMITTED..................................................25

45.  SECURITY...............................................................25

46.  LIMIT OF LANDLORD'S LIABILITY..........................................25

47.  OPTION TO PURCHASE.....................................................25

48.  SURVIVAL OF OBLIGATION.................................................28

49.  OPTION TO RENEW........................................................28

50.  EXECUTION AND DELIVERY.................................................29

            SCHEDULE "A"   -     METES AND BOUNDS DESCRIPTION

            SCHEDULE "B"   -     TITLE EXCEPTIONS

<PAGE>
                                                                    EXHIBIT 10.4
                                                                    ------------

            THIS AGREEMENT (the "Lease"), made the 24th day of July, 2002, by
and between KENNEDY MONTROSE, L.L.C., a New Jersey Limited Liability Company,
c/o Adler Development, LLC, 160 Raritan Center Parkway, Unit 20, Edison, New
Jersey 08837, hereinafter called "Landlord"; and ABLE LABORATORIES, a Delaware
Corporation, about to have an office at 600 Montrose Avenue, South Plainfield,
New Jersey 07080, hereinafter called "Tenant".

                              W I T N E S S E T H :
                              - - - - - - - - - -

            WHEREAS, Landlord owns certain lands and premises in the Borough of
South Plainfield, County of Middlesex and State of New Jersey, which said lands
and premises are commonly known as 600 Montrose Avenue, South Plainfield (the
"Property"), all as more particularly referred to and described by metes and
bounds on Schedule "A" annexed hereto and made a part hereof; and

            WHEREAS, there exists a one-story industrial-type building
containing approximately 21,500 square feet (hereinafter called the "Building")
on the Property (which Building and Property shall hereinafter be called the
"Leased Premises"), all in accordance with the terms and conditions hereinafter
mentioned and the considerations herein expressed,

            NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for the rents
reserved, the mutual considerations herein and the parties mutually intending to
be legally bound hereby, Landlord does demise, lease and let unto Tenant and
Tenant does rent and take from Landlord the Leased Premises as described in
Paragraph #1, and Landlord and Tenant do hereby mutually covenant and agree as
follows:

            1. LEASED PREMISES

               1.1 The Leased Premises shall consist of the Building containing
approximately 21,500 square feet, based on outside outside dimensions, as said
Building is located on and together with the Property, together with all
improvements therein which have been constructed by Landlord for the use of
Tenant (including the parking area and driveways serving the Building), and
together with all easements, improvements, tenements, appurtenances,
hereditaments, fixtures and rights and privileges appurtenant thereto.

               1.2 Tenant's Percentage, for all Lease purposes, is hereby deemed
to be 100%.

            2. TERM OF LEASE

               2.1 Landlord leases unto Tenant and Tenant hires the Leased
Premises for the term of three (3) years (the "Term"), to commence on August 1,
2002 (the "Commencement Date"), subject to the provisions of Article 2.2 hereof.

               2.2 In the event the Leased Premises are delivered to Tenant
prior to or after August 1, 2002, the Term shall commence on the first day of
the next succeeding month following delivery of possession to Tenant (the
"Commencement Date") and shall continue for the Term of three (3) years
thereafter. Tenant shall, however, pay to Landlord a sum equal to the pro rata
share of one (1) month's Rent for that portion of the month from the date of
<PAGE>

delivery of the Leased Premises through the Commencement Date. During said
period of partial monthly occupancy, if any, all other terms and conditions of
the Lease shall be applicable. The last day of the Term shall be called the
"Expiration Date".

               2.3 Tenant agrees that it will execute, within ten (10) days of
Landlord's request therefor, an estoppel letter as may be required by Landlord's
mortgagee from time to time, certifying among other things the Commencement Date
and Expiration Date of the Lease, status of current rent payments by Tenant, and
any other pertinent information as may be reasonably required by such mortgagee.

            3. RENT

               3.1 The Tenant covenants and agrees to pay the annual rent
(hereinafter called "Base Rent") as follows:

                   (a) During the first (1st) year of the lease term, Tenant
shall pay Base Rent at the rate of ONE HUNDRED SEVEN THOUSAND FIVE HUNDRED AND
00/100 ($107,500.00) DOLLARS per annum, payable in equal installments in the sum
of EIGHT THOUSAND NINE HUNDRED FIFTY EIGHT AND 33/100 ($8,958.33) DOLLARS per
month.

                   (b) During the second (2nd) year of the lease term, Tenant
shall pay Base Rent at the rate of ONE HUNDRED SIXTEEN THOUSAND FIVE HUNDRED
THIRTY AND 00/100 ($116,530.00) DOLLARS per annum, payable in equal installments
in the sum of NINE THOUSAND SEVEN HUNDRED TEN AND 33/100 ($9,710.33) DOLLARS per
month.

                   (c) During the third (3rd) year of the lease term, Tenant
shall pay Base Rent at the rate of ONE HUNDRED TWENTY FIVE THOUSAND ONE HUNDRED
THIRTY AND 00/100 ($125,130.00) DOLLARS per annum, payable in equal installments
in the sum of TEN THOUSAND FOUR HUNDRED TWENTY SEVEN AND 50/100 ($10,427.50)
DOLLARS per month.

                   (d) The Base Rent shall be payable on the first day of each
and every month during the Term (except that the first installment of Base Rent
payable hereunder shall be paid on the execution of the Lease).

               3.2 (i) All sums payable by Tenant pursuant to the Lease, except
for Base Rent, shall be Additional Rent. Tenant shall reimburse Landlord for
Tenant's Percentage of Landlord's total expense incurred in operating, managing,
maintaining, repairing and replacing the Property including, but not limited to,
the following items:

                   (a) real estate taxes (Article 8);
                   (b) the cost of maintenance, repair and replacement services,
                       including management fees (Article 6);
                   (c) utility charges (Article 7); and
                   (d) insurance carried by Landlord (Article 9).

All Additional Rent payments by Tenant shall be received by Landlord within
thirty (30) days of receipt by Tenant of Landlord's invoice therefore, except
for real estate taxes, which shall be

                                       2
<PAGE>

paid with the Base Rent, as set forth in Article 8. All invoices delivered to
Tenant shall contain a breakdown of the required charges and backup invoices or
documentation.

                   (ii) Landlord shall make a reasonable estimate of the
Additional Rent which will be required during the period from September 1
through the following August 31 (an "Operating Year"), for each Operating Year
occurring during the Term. Landlord shall furnish such estimate to Tenant and
Tenant shall pay to Landlord one-twelfth (1/12) of the estimated Additional Rent
for such Operating Year during each month of said Operating Year, as Additional
Rent. At the expiration of the first Operating Year, Landlord shall furnish to
Tenant a breakdown, certified by Landlord, as to the total cost of required
Additional Rent for such Operating Year. In the event that the estimated
Additional Rent payments made by Tenant shall be less than the actual Additional
Rent required for such Operating Year, Tenant shall pay to Landlord, in one (1)
lump sum, any difference in such obligation, said sum to be paid within thirty
(30) days after demand. In the event the actual Additional Rent applicable to
such Operating Year shall be less than the estimated Additional Rent payments
made by Tenant, any such overage shall be applied to the monthly Base Rent and
Additional Rent charges prospectively due under the lease. This procedure shall
be followed during each Operating Year of the Term, and at the Expiration Date,
any overage or underage shall be credited or paid after computation by Landlord,
which obligation of Landlord and Tenant shall survive the expiration of the
Term. In the event that any item of Additional Rent has not been included in
Landlord's estimate, Landlord shall have the right to bill Tenant for any such
cost, and Tenant shall pay to Landlord the invoiced amount within thirty (30)
days after demand.

In addition to the aforementioned items, Additional Rent shall also include any
payments required of Tenant pursuant to Articles 3.3, 11.2, 13.4, and 40.4, as
well as all other items required to be paid by Tenant by the Lease.

               3.3 Any installment of Base Rent accruing hereunder which is not
received by Landlord prior to the fifth (5th) day of any month (including
Saturdays, Sundays and Holidays), or any Additional Rent which is not received
by Landlord within thirty (30) days of Tenant's receipt of Landlord's invoice
therefor (Base Rent and Additional Rent being sometimes collectively referred to
herein as "rent"), shall bear a late charge of ten (10%) per cent of such
amount, which amount shall be payable as Additional Rent hereunder, and the
failure to pay such charge shall be a default by Tenant hereunder. It is
expressly understood and agreed that the foregoing late charge is not a penalty,
but agreed upon compensation to Landlord for administrative costs incurred by
Landlord in connection with any such late payment. In addition, any payment of
Base Rent or Additional Rent which is not paid within thirty (30) days of the
date upon which it is due shall require the payment of interest at the rate of
one and one-half (1 1/2%) percent per month, calculated from the date that such
payment was due through the date that any such payment is actually made.

               3.4 If the term of this Lease shall begin or end on a day other
than the first or last day of a calendar month, as applicable, the rent for such
partial month shall be prorated.

                                       3
<PAGE>

               3.5 It is expressly understood and agreed that upon execution of
the within Lease Tenant shall pay the first (1st) monthly installment of Base
Rent and real estate taxes payable hereunder, together with the security deposit
which is hereinafter referred to.

            4. CONDITION OF LEASED PREMISES

               4.1 Tenant shall take the Leased Premises and improvements as of
the Commencement Date of this Lease in an "as is" condition, except that
Landlord shall(a) shampoo the existing carpet, (b) recarpet the remaining office
area of the Leased Premises and perform "touch up" painting, using building
standard materials, (c) replace damaged ceiling tiles and (d) deliver the Leased
Premises with all building systems, fixtures and equipment in good working order
and condition. Notwithstanding the above, the HVAC units serving the warehouse
area of the Leased Premises shall be delivered in their current, "as is"
condition.

               4.2 It is expressly understood and agreed that Tenant shall be
responsible to obtain a Certificate of Occupancy permitting Tenant's use and
occupancy of the Leased Premises in accordance with Article 5 hereof.

            5. USE

               5.1 Tenant covenants and agrees to use and occupy the Leased
Premises for office and warehouse purposes only, which use by Tenant, however,
is and shall be expressly subject to all applicable zoning ordinances, rules and
regulations of any governmental boards or bureaus having jurisdiction thereof.

               5.2 The Leased Premises shall not be used for the storage of
flammable, hazardous or toxic materials and that Tenant is expressly prohibited
from using the Leased Premises for manufacturing purposes.

            6. REPAIRS AND MAINTENANCE

               6.1 Landlord, shall, with due diligence, at its own cost and
expense (without reimbursement from Tenant), make all structural repairs to the
exterior walls, structural steel, foundation and roof of the Building, provided
that any damage to the foregoing is not caused by the negligence of Tenant, its
servants, employees, invitees or agents, in which case said damage shall be
repaired at the sole cost and expense of Tenant, except to the extent covered by
any insurance maintained for the Building and/or Leased Premises. Landlord
shall, subject to reimbursement as described in the following sentence,
undertake the maintenance of the roof and the maintenance, repair and
replacement of the roof leaders, flashings, metal gravel stops, gutters and
drains; Tenant shall reimburse Landlord within fifteen (15) days after written
demand for Tenant's Percentage of any cost attributable to the foregoing.
Landlord shall be responsible, at its sole cost and expense, for the repair and
replacement of the roof if the same shall become necessary at any time during
the Term of the Lease.

               6.2 Tenant shall, except as provided in Articles 6.1 and 6.3,
take good care of the Leased Premises and, at its cost and expense, keep and
maintain in good repair the interior and exterior of the Leased Premises,
including, but not limited to the floor,

                                       4
<PAGE>

loading docks, windows and doors, the air-conditioning and heating plant, the
plumbing, pipes and fixtures belonging thereto; and shall replace all mechanical
systems and working parts used in connection with the air-conditioning,
electrical, heating and plumbing plants, fixtures and systems exclusively
serving the Leased Premises, including ballasts and fluorescent fixtures; and
shall keep the water and sewer pipes and connections free from ice and other
obstructions, and shall generally maintain and repair the interior and exterior
of the Leased Premises and shall, at the end of the expiration of the term,
deliver up the Leased Premises in good order and condition, damages by the
elements, ordinary wear and tear, damage by fire and other casualty and taking
by eminent domain excepted. Tenant expressly agrees that it shall enter into a
periodic maintenance agreement with a reputable heating, ventilating and
air-conditioning contractor, which contract shall provide for a minimum of four
(4) inspections per year. A copy of said contract shall be forwarded to Landlord
when received and thereafter on an annual basis, and a copy of each inspection
report shall be delivered to Landlord within ten (10) days of receipt thereof by
Tenant. Tenant covenants and agrees that it shall not cause or permit any waste
(other than reasonable wear and tear), damage or disfigurement to the Leased
Premises, or any overloading of the floors of the Building.

               6.3 Tenant shall reimburse Landlord for Tenant's Percentage of
Landlord's total expense in maintaining, repairing and replacing the lawns,
shrubbery, driveways and parking areas (including snow removal from the parking
area) of the entire Property; which said sum shall be paid by Tenant to Landlord
within fifteen (15) days from the date of billing and Landlord shall supply to
Tenant a complete breakdown of the cost items. In addition to the above, Tenant
shall pay Landlord a management fee in the amount of three (3%) percent of
Tenant's Base Rent payments. Tenant shall, at its sole cost and expense, keep
the sidewalks and steps adjacent to the Leased Premises free and clear of ice,
snow and debris.

               6.4 If Landlord has installed a lawn sprinkler system serving the
Property, Tenant agrees to pay to Landlord Tenant's Percentage of Landlord's
cost of maintaining and operating said water sprinkler system, which cost shall
be paid in the same manner as hereinafter provided in Article 7.

            7. UTILITIES

               Tenant shall, at its own cost and expense, pay all utility meter
and service charges (which are separately metered), including gas and electric
charges, janitorial and garbage disposal service. Tenant shall pay to Landlord,
as Additional Rent, Tenant's Percentage of Landlord's cost and expense for
sewer, ordinary water usage, parking lot lighting and lawn sprinkler charges (if
any), within fifteen (15) days from the date of billing, and Landlord shall
supply to Tenant at its request a complete breakdown of such cost items.

            8. TAXES

               8.1 Tenant shall, during the Term of the Lease, promptly pay
monthly, as Additional Rent, one-twelfth (1/12th) of Tenant's Percentage of all
real estate and personal property taxes assessed against the Property for land,
Building and improvements,

                                       5
<PAGE>

including such added assessment or omitted assessment which may be levied
against the Property for the year 2002, et seq., by the applicable governmental
taxing authority, said obligation to be prorated as of the Commencement Date and
as of the Expiration Date hereof, as applicable. In addition, Tenant shall,
during the Term of this Lease, pay at its cost and expense Tenant's Percentage
of any levy for the installation of local improvements affecting the Property as
may be assessed by any governmental boards or bureaus having jurisdiction
thereof. Any assessment or imposition for capital or public improvements which
shall be payable by law at the option of the taxpayer in installments, may be so
paid by Tenant in installments, as to its pro rata portion thereof, together
with any required interest. The real estate tax obligation of Tenant hereinabove
set forth shall include Tenant's Percentage, if levied, of any tax or imposition
which may be levied by any governmental authority, agency or subdivision thereof
having jurisdiction applicable to parking lot usage. Landlord shall furnish to
Tenant the annual real estate tax bill and a breakdown of Tenant's Percentage
thereof. In the event of any change in real estate taxes which shall require an
adjustment of increase or decrease in Tenant's annual tax obligation, such
difference shall be adjusted by Landlord and Tenant annually during the month of
August of each Lease year, or as soon thereafter as is reasonably practicable.

               8.2 In the event Landlord wishes to contest any assessment or
levy of taxes on the Property, it is understood and agreed that said contest may
include other real property owned by Landlord. In the event of any reduction or
rebate of taxes which is paid to Landlord, Tenant shall be credited with its pro
rata portion thereof, after deducting the costs and expenses incurred by
Landlord in contesting or litigating said assessment, provided that Tenant has
previously paid a portion of the taxes being rebated. Tenant shall have no right
to file any tax appeal affecting the Property. Landlord hereby agrees that it
shall make a bona fide determination, on an annual basis, as to the advisability
of filing a tax appeal.

               8.3 If at any time during the term of this Lease the method or
scope of taxation prevailing at the commencement of the Lease term shall be
altered, modified or enlarged so as to cause the method of taxation to be
changed, in whole or in part, so that in substitution for the real estate taxes
now assessed there may be, in whole or in part, a capital levy or other
imposition based on the value of the Property, or the rents received therefrom,
or some other form of assessment based in whole or in part on some other
valuation of the Property, then and in such event, such substituted tax or
imposition shall be payable and discharged by Tenant pro rata in the manner
required pursuant to such law promulgated, which shall authorize such change in
the scope of taxation, and as required by the terms and conditions of the within
Lease.

               8.4 Nothing in this Lease contained shall require Tenant to pay
any franchise, estate, inheritance, succession, capital levy or transfer tax of
Landlord, or Federal Income Tax, State Income Tax, or excess profits or revenue
tax, unless such taxes are in substitution for real property taxes as a result
of such change in the manner and scope of taxation as hereinbefore provided in
Article 8.3.

                                       6
<PAGE>

            9. INSURANCE

               9.1 Landlord will, subject to the reimbursement as described
below, obtain for the benefit of Landlord, wherein Landlord shall be the named
insured, fire insurance on an "all risk" basis, including flood and earthquake
insurance (if obtainable) in an amount and value equivalent to the full
replacement value of all the insurable improvements located on the Property,
which policy of insurance shall include broad form boiler and machinery coverage
(inclusive of air-conditioning system, if requested by Tenant in writing)
together with insurance coverage against sprinkler damage to the Building and
its improvements. Said insurance, in any event, shall not be less than the
amount of any first mortgage which may be placed on the Property by Landlord and
shall be in such form as any such bona fide mortgagee may reasonably require.
Landlord shall have the right from time to time to determine the full
replacement value as may be required to comply with full replacement insurance
requirements. The insurance to be obtained by Landlord shall include casualty
rent insurance payable to and insuring the interest of Landlord as to the value
of the rental obligation hereunder to the extent of one (1) year's Rent,
(inclusive of real estate taxes and applicable insurance premiums). Landlord and
Tenant agree that the fire and casualty insurance policy to be obtained by
Landlord shall contain a deductible provision in the amount of TWO THOUSAND FIVE
HUNDRED AND 00/100 ($2,500.00) DOLLARS, or such higher amount as may be imposed
by Landlord's insurance carrier. In the event of fire or casualty as
contemplated by Article 14 hereof, Tenant expressly agrees that it shall pay to
Landlord a sum equal to an amount up to Tenant's pro rata portion of said
deductible amount, within thirty (30) days after demand, to cover such loss or
damage, based upon that portion of the Leased Premises which is damaged as
compared to all of the premises in the Building which are damaged, or the full
deductible amount if the loss is limited to all or a portion of the Leased
Premises.

               9.2 Tenant covenants and agrees that it will, at its sole cost
and expense, carry general public liability insurance in the minimum amount of
FIVE MILLION AND 00/100 ($5,000,000.00) DOLLARS, combined single limit for
personal injury and property damage. Tenant's liability insurance policy shall
(i) name as additional insureds Landlord and Landlord's mortgagees of whom
Landlord shall have given Tenant written notice, provided that Landlord and
Landlord's mortgagees shall only be insured as their interests may appear under
this Lease, and (ii) be written on a form reasonably satisfactory to Landlord by
a good and solvent insurance company of recognized standing, admitted to do
business in the State of New Jersey having an A-7 rating or better by AM Best.
Tenant shall furnish to Landlord a certificate of said liability insurance on
the Commencement Date hereunder and shall provide update certificates of said
insurance upon the renewal of any such policy.

               9.3 Landlord shall obtain liability insurance applicable to the
Property, which policy shall have the same coverage as hereinabove provided in
Article 9.2.

               9.4 It is expressly understood and agreed that all policies of
insurance shall contain a clause that the same shall

                                       7
<PAGE>

not be canceled except on thirty (30) days' written notice to any and all
parties in interest.

               9.5 Each party, in connection with insurance policies required to
be furnished in accordance with the terms and conditions of this Lease, or in
connection with insurance policies which they obtain insuring such insurable
interest as Landlord or Tenant may have in its own properties, whether personal
or real, shall expressly waive any right of subrogation on the part of the
insurer against Landlord or Tenant as the same may be applicable, which right to
the extent not prohibited or violative of any such policy is hereby expressly
waived, and Landlord and Tenant each mutually waive all right of recovery
against each other, their agents, or employees for any loss, damage or injury of
any nature whatsoever to property or person for which either party is required
by this Lease to carry insurance.

               9.6 Tenant shall pay to Landlord Tenant's Percentage of the cost
of all insurance to be carried by Landlord hereunder, except Tenant shall pay
the full premium for casualty rent insurance attributable to Tenant's Leased
Premises, which payment shall be made by Tenant to Landlord within fifteen (15)
days after written demand, said demand to include a copy of the insurance
premium bill and Certificate of Insurance, together with a computation of
Tenant's monetary obligations in connection therewith.

               9.7 In the event the use by Tenant of the Leased Premises shall
cause an increase in insurance premiums solely due to the use and conduct of
Tenant's business and occupancy of the Leased Premises, then and in that event,
Tenant shall pay at its cost and expense, within fifteen (15) days after written
demand, such excess premium costs. Landlord shall furnish to Tenant such
collaborating data as may be required to establish the basis for such additional
premium charge.

            10. SIGNS

               Tenant, at its sole cost and expense, shall have the right and
privilege of erecting at the Leased Premises such signs as are necessary or
desirable for the purpose of identifying Tenant, subject to the prior written
approval thereof by Landlord, which approval shall not be unreasonably withheld.
Landlord further agrees that it shall install a directory sign near the street,
at Tenant's sole cost and expense, subject to municipal approval. The said signs
shall comply with the applicable rules and regulations of the applicable
governmental boards and bureaus having jurisdiction thereof. The erection of
such signs shall not cause any structural damage to the Building. It is
expressly understood and agreed that Tenant shall not erect roof signs. Tenant
hereby agrees that it shall remove all of its signage upon the expiration or
earlier termination of this Lease, and Tenant shall restore any portion of the
Leased Premises, the Building or the Property which is damaged by the removal of
any such sign.

            11. FIXTURES

               11.1 Tenant is given the right and privilege of installing and
removing property, equipment and fixtures in the Leased Premises during the term
of the Lease. However, if Tenant is in default and moves out, or is
dispossessed, and fails to

                                       8
<PAGE>

remove any property, equipment and fixtures or other property prior to any such
dispossession or removal, then and in that event, the said property, equipment
and fixtures or other property shall be deemed at the option of Landlord to be
abandoned; or in lieu thereof, at Landlord's option, Landlord may remove such
property and charge the reasonable cost and expense of removal and storage or
disposal of the same to Tenant. 11.2 Anything to the contrary contained herein
notwithstanding, it is expressly understood and agreed that Tenant may install,
connect and operate equipment as may be deemed necessary by Tenant for its
business, subject to compliance with applicable rules and regulations of
governmental boards and bureaus having jurisdiction thereof. Subject to the
terms and conditions of this Lease, the machinery, fixtures and equipment
belonging to Tenant shall at all times be considered and intended to be personal
property of Tenant, and not part of the realty, and subject to removal by
Tenant, provided at the time of such removal, that Tenant is not in default
pursuant to the terms and conditions of this Lease, and that Tenant, at its own
cost and expense, pays for any damage to the Leased Premises and the Building
caused by such removal.

            12. GLASS

               Tenant expressly covenants and agrees to replace any broken glass
in the windows or other apertures of the Building which may become damaged or
destroyed, at Tenant's sole cost and expense.

            13. ASSIGNMENT AND SUBLETTING

               13.1 Tenant shall neither assign this Lease nor sublet all or any
portion of the Leased Premises without Landlord's prior written consent, which
consent shall not be unreasonably withheld, subject to Landlord's rights
hereinafter provided in Article 13.4. Landlord may withhold such consent if, in
the reasonable exercise of its judgment, it determines that any of the following
enumerated conditions are applicable:

                   (a) the proposed assignee's or subtenant's financial
     condition is not sufficient to meet its obligations undertaken in such
     assignment or sublease;

                   (b) the proposed use of the Leased Premises is not
     appropriate for the Building or in keeping with the character of its
     existing tenancies;

                   (c) such assignee's or subtenant's occupancy will cause an
     excessive density of traffic or make excessive demands on the Building's
     services, maintenance or facilities;

                   (d) such assignee or subtenant is a tenant of and is vacating
     premises in any other building owned by Landlord;

                   (e) the rental obligation of such assignee or subtenant would
     be less than that which Landlord is then offering to other tenants or
     potential tenants in South Plainfield, New Jersey;

                   (f) Landlord wishes to accept the offer as provided in
     Article 13.4.

                                       9
<PAGE>

               13.2 Any request by Tenant for Landlord's consent to an
assignment of the Lease shall state the proposed assignee's address and be
accompanied by a profit and loss and balance statements of the proposed assignee
for the prior three (3) years, as well as duplicate original of the instrument
of assignment (wherein the assignee assumes, jointly and severally with Tenant,
the performance of Tenant's obligations hereunder).

               13.3 Any request by Tenant for Landlord's consent to a sublease
shall state the proposed subtenant's address and be accompanied by profit and
loss and balance statements of the proposed subtenant for the prior three (3)
years, as well as a duplicate original of the instrument of sublease (wherein
Tenant and the proposed subtenant agree that such sublease is subject to the
Lease and such subtenant agrees that, if the Lease is terminated because of
Tenant's default, such subtenant shall, at Landlord's option, attorn to
Landlord).

               13.4 Any request by Tenant for Landlord's consent to an
assignment of the Lease or a sublease of all or substantially all of the Leased
Premises shall clearly set forth the proposed terms of such proposed assignment
or sublease and shall constitute Tenant's offer to cancel the Lease. Landlord
may accept such offer by notice to Tenant within thirty (30) days after
Landlord's receipt thereof, in which event, the Lease shall terminate as of the
end of the month following the month in which such notice is sent (with the same
effect as if such date were the date fixed herein for the natural expiration of
the term), Base Rent and Additional Rent shall be apportioned to such date,
Tenant shall surrender the Leased Premises on such date as herein provided, and
subject to payment of required Lease adjustments, the parties shall thereafter
have no further liability one to the other. If Landlord fails to send such
notice, Tenant, within twenty (20) days after the expiration of such thirty (30)
day period, may assign the Lease or sublet all or substantially all of the
Leased Premises to the proposed assignee or subtenant and upon the terms
specified in such request, subject, however, to Landlord's rights under Article
13.1(a) through (e). In any event, Tenant shall pay to Landlord, as Additional
Rent, all amounts received by Tenant from the assignee or subtenant in excess of
the Base Rent and Additional Rent payable by Tenant hereunder, after first
deducting therefrom the reasonable advertising costs, real estate brokerage
commissions and legal fees incurred by Tenant in connection with such assignment
or subletting.

               13.5 In the event of a permitted assignment, Landlord may collect
Base Rent and Additional Rent directly from the assignee. In the event of a
permitted sublease, Landlord may, if Tenant defaults hereunder, collect Base
Rent and Additional Rent directly from the subtenant. In either such event,
Landlord may apply any amounts so collected to the Base Rent and Additional Rent
hereunder without thereby waiving any provisions hereof or releasing Tenant from
liability for the performance of its obligations hereunder.

               13.6 Landlord's consent to any assignment or sublease hereunder
shall not be deemed a consent to any further

                                       10
<PAGE>

proposed assignment or sublease by Tenant or any one claiming under or through
Tenant, except in accordance with this Article 13.

               13.7 It is expressly understood and agreed that Tenant's Option
to Renew, as hereinafter set forth in Article 49, and Tenant's Option to
Purchase, as hereinafter set forth in Article 47, shall be personal to Tenant
only, and may not be exercised by any permitted assignee or subtenant hereunder.

               13.8 As an express inducement to Landlord to enter into the
within Lease, it is understood and agreed that in no event shall the Lease be
assigned or the Leased Premises be sublet for any use other than that permitted
to Tenant, or for any use including the storage of flammable liquids, or
hazardous or toxic substances, without Landlord's prior written approval, which
approval Landlord may withhold in its sole and absolute discretion.

               13.9 Notwithstanding the foregoing, Landlord's consent shall not
be required for any assignment or subletting to an entity controlling,
controlled by, for in common control with Tenant, nor to any entity that
succeeds to Tenant's interest in this Lease by reason of merger,
sale/acquisition (whether by reason of the sale/acquisition of all or
substantially all of the stock or assets of Tenant), consolidation or
reorganization; provided, however, with respect to an assignment or a sublease
of all or substantially all of the Leased Premises, such successor entity shall
have a net worth comparable to Tenant as of the date of such assignment and/or
sublease or as of the date of execution of this Lease, whichever is greater.

            14. FIRE AND CASUALTY

               14.1 In case of any damage to or destruction of the Building or
the Leased Premises by fire or other casualty occurring during the term of this
Lease which is not covered by the insurance required to be carried by Article
9.1, or which cannot be repaired within two hundred ten (210) days from the
happening of such casualty, or in the event that less than three (3) months will
remain in the Term (inclusive of any exercised renewal options) upon completion
of such repair, then, in such event, the term hereby created shall, at the
option of either party, upon written notice to the other by certified mail,
return receipt requested, within thirty (30) days of such fire or casualty,
cease and become null and void from the date of such destruction or damage.
Landlord shall notify Tenant within thirty (30) days from the happening of such
fire or casualty as to whether or not the Leased Premises can be restored within
the aforementioned two hundred ten (210) day period. However, if neither party
shall elect to cancel this Lease within the thirty (30) day period hereinabove
provided, Landlord shall thereupon repair and restore the Leased Premises with
reasonable speed and dispatch, and the rent shall not be accrued after said
damage or while the repairs and restorations are being made, but shall
recommence immediately after said Leased Premises are restored. Anything in this
Article 14 to the contrary notwithstanding, it is expressly understood and
agreed that Landlord shall be obligated to restore the Leased Premises only to
the extent of such cost as will be equivalent to the proceeds received by
Landlord pursuant to the fire insurance coverage to be provided to Landlord as
in Article 9 provided. If the insurance proceeds are not sufficient to restore
the Leased Premises to substantially the same condition which they were in prior
to the

                                       11
<PAGE>

casualty, then Landlord shall have a period of thirty (30) days within which to
determine whether to terminate the term hereby created unless Landlord and
Tenant shall mutually agree to the funding of any such excess construction
costs. In the event of cancellation in accordance with this Article, Tenant
shall immediately surrender the Leased Premises and Tenant's interest in said
Lease to Landlord, and Tenant shall only pay rent to the time of such
destruction or damage, in which event, Landlord may re-enter and repossess the
Leased Premises thus discharged from this Lease and may remove all parties
therefrom.

               14.2 In the event of any other insured casualty, which shall be
repairable within two hundred ten (210) days from the happening of such damage
or casualty, Landlord shall repair and restore the Leased Premises with
reasonable speed and dispatch, and the rent shall abate and be equitably
apportioned as the case may be as to any portion of the Leased Premises which
shall be unfit for occupancy by Tenant, or which cannot be used by Tenant so as
to conduct its business. The payment of rent, however, shall recommence
immediately upon restoration of the Leased Premises.

               14.3 Nothing hereinabove contained with respect to Tenant's right
to abate rent under proper conditions shall be construed to limit or affect
Landlord's right to payment under any claim for damages covered by the rent
insurance policy pursuant to the contract therefor required to be provided
pursuant to Article 9 of this Lease.

               14.4 For the purposes of this Article 14, in determining what
constitutes reasonable speed and dispatch, consideration shall be given for
delays which would be excuses for non-performance as in Article 27 hereinafter
provided (Force Majeure).

               14.5 In the event of such fire or casualty as above provided,
wherein Landlord shall rebuild, Tenant agrees, at its cost and expense, to
forthwith remove any and all of its equipment, fixtures, stock and personal
property as the same may be required to permit Landlord to expedite rebuilding
and/or repair. In any event, Tenant shall assume at its sole risk the
responsibility for damage or security with respect to such property in the event
the Building area where the same may be located has been damaged, until the
Building shall be restored and made secure.

               14.6 Anything in this Article 14 to the contrary notwithstanding,
it is expressly understood and agreed that wherever reconstruction shall be
undertaken, in the event of damage or casualty as in this Article 14 provided,
Landlord shall prosecute such reconstruction with reasonable speed and dispatch.
In the event, however, such reconstruction or repair shall not be completed
within seven (7) months from the date of such damage or casualty, then, in that
event, Tenant shall have the option at the expiration of the seven (7) month
period to terminate the Lease by notice in writing by Tenant to Landlord by
certified mail, return receipt requested. In the event of such termination,
neither party shall thereafter have any further liability, one to the other, in
accordance with the terms and conditions of the Lease.

                                       12
<PAGE>

            15. COMPLIANCE WITH LAWS, RULES AND REGULATIONS

               15.1 (i) Tenant covenants and agrees that upon acceptance and
occupancy of the Leased Premises, it will, during the Lease term, promptly, at
Tenant's cost and expense, execute and comply with all statutes, ordinances,
rules, orders, regulations and requirements of the Federal, State and City
Government and of any and all their departments and bureaus, applicable to the
Leased Premises, as the same may require correction, prevention and abatement of
nuisances, violations or other grievances, in, upon or connected with the Leased
Premises, arising from the operations of Tenant therein.

                   (ii) Tenant covenants and agrees, at its own cost and
expense, to comply with such regulations or requests as may be required by the
fire or liability insurance carriers providing insurance for the Leased
Premises, and will further comply with such other requirements that may be
promulgated by the Board of Fire Underwriters, in connection with the use and
occupancy by Tenant of the Leased Premises in the conduct of its business.

                   (iii) Tenant covenants and agrees that it will not commit any
nuisance, nor permit the emission of any objectionable sound, noise or odors
which would be violative of any applicable governmental rule or regulation or
would per se create a nuisance. Tenant further covenants and agrees that it will
handle and dispose of all rubbish, garbage and waste in connection with Tenant's
operations in the Leased Premises in accordance with reasonable regulations
established by Landlord from time to time in order to keep the Leased Premises
in an orderly condition and in order to avoid unreasonable emission of dirt,
fumes, odors or debris which may constitute a nuisance or induce pests or
vermin.

                   (iv) Notwithstanding anything hereinabove contained in this
Article 15.1, Landlord shall be responsible for compliance with all laws, rules
and regulations which are applicable to the Building as a matter of general
application as an office/warehouse type building. Tenant shall be responsible
for any such compliance which is required due to the specific manner of Tenant's
use and occupancy of the Leased Premises.

               15.2 In case Tenant shall fail or neglect to comply with the
aforesaid statutes, ordinances, rules, orders, regulations and requirements or
any of them, or in case Tenant shall neglect or fail to make any necessary
repairs, then Landlord or Landlord's agents may after ten (10) days' notice
(except for emergency repairs, which may be made immediately) enter said Leased
Premises and make said repairs and comply with any and all of the said statutes,
ordinances, rules, orders, regulations or requirements, at the cost and expense
of Tenant and in case of Tenant's failure to pay therefor, the said cost and
expense shall be added to the next month's rent and be due and payable as such,
or Landlord may deduct the same from the balance of any sum remaining in
Landlord's hands. This provision is in addition to the right of Landlord to
terminate this Lease pursuant to Article 17 hereof by reason of any default on
the part of Tenant, subject to the rights of Tenant as hereinabove mentioned in
the manner as in this Lease otherwise provided.

                                       13
<PAGE>

               15.3 Without limiting anything hereinabove contained in this
Article 15, Tenant expressly covenants and agrees to fully comply with the
provisions of the New Jersey Industrial Site Recovery Act (N.J.S.A. 13:1K-6, et
seq.) hereinafter referred to as "ISRA", and all regulations promulgated thereto
(or under its predecessor statute, the New Jersey Environmental Cleanup
Responsibility Act) prior to the expiration or earlier termination of the within
Lease, or at any time that any action of Tenant triggers the applicability of
ISRA. In particular, Tenant agrees that it shall comply with the provisions of
ISRA in the event of any "closing, terminating or transferring" of Tenant's
operations, as defined by and in accordance with the regulations which have been
promulgated pursuant to ISRA. In the event evidence of such compliance is not
delivered to Landlord prior to surrender of the Leased Premises by Tenant to
Landlord, it is understood and agreed that Tenant shall be liable to pay to
Landlord an amount equal to two times the Base Rent then in effect, prorated on
a monthly basis, together with all applicable Additional Rent from the date of
such surrender until such time as evidence of compliance with ISRA has been
delivered to Landlord, and together with any costs and expenses incurred by
Landlord in enforcing Tenant's obligations under this Article 15.3. Evidence of
compliance, as used herein, shall mean a "letter of non-applicability" issued by
the New Jersey Department of Environmental Protection, hereinafter referred to
as "NJDEP", or an approved "no further action letter" or a "remediation action
workplan" which has been fully implemented and approved by NJDEP. Evidence of
compliance shall be delivered to Landlord, together with copies of all
submissions made to, and received from, the NJDEP, including all environmental
reports, test results and other supporting documentation. In addition to the
above, Tenant hereby agrees that it shall cooperate with Landlord in the event
of the termination or expiration of any other lease affecting the Property, or a
transfer of any portion of the property indicated on Schedule "A", or any
interest therein, which triggers the provisions of ISRA. In such case, Tenant
agrees that it shall fully cooperate with Landlord in connection with any
information or documentation which may be requested by the NJDEP. In the event
that any remediation of the Property is required in connection with the conduct
by Tenant of its business in the Leased Premises, Tenant expressly covenants and
agrees that it shall be responsible for that portion of said remediation which
is attributable to Tenant's use and occupancy thereof. Tenant hereby represents
and warrants that its Standard Industrial Classification No. is 2834, and that
Tenant shall not generate, manufacture, refine, transport, treat, store, handle
or dispose of "hazardous substances" as the same are defined under ISRA and the
regulations promulgated pursuant thereto. Tenant hereby agrees that it shall
promptly inform Landlord of any change in its SIC number or the nature of the
business to be conducted in the Leased Premises. The within covenants shall
survive the expiration or earlier termination of the Lease Term.

            16. INSPECTION BY LANDLORD

               Tenant agrees that Landlord's agents, and other representatives,
shall have the right, upon reasonable piror oral notice to Tenant, during normal
business hours, to enter into and upon the Leased Premises, or any part thereof,
at all reasonable hours for the purpose of examining the same, or for exhibiting
the same to prospective tenants [during the last twelve (12) months of

                                       14
<PAGE>

the term of this Lease, or at any time that Tenant is in default hereunder] and
purchasers (at all times) in the presence of a representative of Tenant (except
in the event of emergency) or making such repairs or alterations therein as may
be necessary for the safety and preservation thereof, without unduly or
unreasonably disturbing the operations of Tenant (except in the event of
emergency).

            17. DEFAULT BY TENANT

               17.1 Each of the following shall be deemed a default by Tenant
and breach of this Lease:

                   (1) (i) filing of a petition by Tenant for adjudication as a
     bankrupt, or for reorganization, or for an arrangement under any federal or
     state statute;

                       (ii) dissolution or liquidation of Tenant;

                       (iii) appointment of a temporary or permanent receiver or
     a temporary or permanent trustee of all or substantially all the property
     of Tenant;

                       (iv) taking possession of the agency pursuant to
     statutory authority for dissolution, rehabilitation, reorganization or
     liquidation of Tenant;

                       (v) making by Tenant of an assignment for the benefit of
     creditors; or

                       (vi) abandonment, desertion or vacation of the Leased
     Premises by Tenant.

                       If any event mentioned in this subdivision (1) shall
     occur, Landlord may thereupon or at any time thereafter elect to cancel
     this Lease by ten (10) days' notice to Tenant, and this Lease shall
     terminate on the day in such notice specified with the same force and
     effect as if that date were the date herein fixed for the expiration of the
     term of the Lease.

                   (2) (i) Default in the payment of the Base Rent or Additional
     Rent herein reserved or any part thereof for a period of seven (7) days
     after the same is due and payable as in this Lease required.

                       (ii) A default in the performance of any other covenant
     or condition of this Lease on the part of Tenant to be performed for a
     period of thirty (30) days after written notice. For purposes of this
     subdivision (2) (ii) hereof, no default on the part of Tenant in
     performance of work required to be performed or acts to be done or
     conditions to be modified shall be deemed to exist if steps shall have been
     commenced by Tenant diligently after notice to rectify the same and shall
     be prosecuted to completion with reasonable diligence, subject, however, to
     unavoidable delays.

               17.2 In case of any such default under Article 17.1(2) and at any
time thereafter following the expiration of the respective grace periods above
mentioned, Landlord may serve a

                                       15
<PAGE>

notice upon Tenant electing to terminate this Lease upon a specified date not
less than five (5) days after the date of serving such notice and this Lease
shall then expire on the date so specified as if that date has been originally
fixed as the expiration date of the term herein granted; however, a default
under Article 17.1(2) hereof shall be deemed waived if such default is made good
before the date specified for termination in the notice of termination served on
Tenant.

               17.3 In case this Lease shall be terminated as hereinbefore
provided, or by summary proceedings or otherwise, Landlord or its agents may,
immediately or any time thereafter, re-enter and resume possession of the Leased
Premises or such part thereof, and remove all persons and property therefrom,
either by summary proceedings or by a suitable action or proceeding at law
without being liable for any damages, provided any entry pursuant to the
foregoing shall be in accordance with law. No re-entry by Landlord shall be
deemed an acceptance of a surrender of this Lease.

               17.4 In case this Lease shall be terminated as hereinafter
provided, or by summary proceedings or otherwise, Landlord may, in its own name
and in its own behalf, relet the whole or any portion of the Leased Premises,
for any period equal to or greater or less than the remainder of the then
current term, for any sum which it may deem reasonable, to any tenant which it
may deem suitable and satisfactory, and for any use and purpose which it may
deem appropriate, and in connection with any such Lease Landlord may make such
changes in the character of the improvements on the Leased Premises as Landlord
may determine to be appropriate or helpful in effecting such lease, and Landlord
may grant concessions or free rent. Landlord agrees that it will take reasonable
steps to mitigate Tenant's damages. It is specifically understood and agreed
that Landlord, by listing the Leased Premises for lease with a recognized real
estate broker doing business in the Middlesex County, New Jersey, shall be
conclusive proof of Landlord's reasonable efforts to mitigate Tenant's damages.
Landlord shall not in any event be required to pay Tenant any surplus of any
sums received by Landlord on a reletting of the Leased Premises in excess of the
rent reserved in this Lease.

               17.5 (1) Whether or not this Lease be terminated by summary
proceedings, or otherwise, as provided in this Article 17, and whether or not
the Leased Premises be relet, Landlord shall be entitled to recover from Tenant,
the following:

                       (i) a sum equal to all expenses, if any, including
     reasonable counsel fees, incurred by Landlord in recovering possession of
     the Leased Premises, the costs of reletting the Leased Premises, and all
     reasonable costs and charges for the care of the Leased Premises while
     vacant, which damages shall be due and payable by Tenant to Landlord at
     such time or times as such expenses shall have been incurred by Landlord;
     and

                       (ii) a sum equal to all damages set forth in this Article
     17 and in Article 18 hereinafter referred to.

                                       16
<PAGE>

                    (2) Without any previous notice or demand, separate actions
may be maintained by Landlord against Tenant from time to time to recover any
damages which, at the commencement of any such action, have then or theretofore
become due and payable to Landlord under this Article 17 and subsections hereof
without waiting until the end of the then current term.

                    (3) All sums which Tenant has agreed to pay by way of taxes,
sewer charges, water rents or water meter charges, insurance premiums and other
similar items becoming due from time to time under the terms of this Lease,
shall be deemed Additional Rent reserved in this Lease within the meaning of
this Article 17 and subsections hereof. Notwithstanding anything in this Lease
to the contrary, all amounts payable by Tenant to or on behalf of Landlord under
this Lease, whether or not expressly denominated as rent, shall constitute rent
for the purposes of section 502(b)(6)of the Bankruptcy Code, 11 U.S.C. Section
502(b)(6), or any successor statute.

                    (4) LANDLORD AND TENANT EXPRESSLY WAIVE THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION BROUGHT TO ENFORCE OR INTERPRET THE TERMS AND CONDITIONS
OF THIS LEASE.

            18. LIABILITY OF TENANT FOR DEFICIENCY

               In the event that the relation of Landlord and Tenant may cease
or terminate by reason of the default by Tenant and the re-entry of Landlord as
permitted by the terms and conditions contained in this Lease or by the
ejectment of Tenant by summary proceedings or other judicial proceedings, or
after the abandonment of the Leased Premises by Tenant, it is hereby agreed that
Tenant shall remain liable to pay in monthly payments the rent which shall
accrue subsequent to the re-entry by Landlord, and Tenant expressly agrees to
pay as damages for the breach of the covenants herein contained the difference
between the rent reserved and the rent collected and received, if any, by
Landlord, during the remainder of the unexpired term, as the amount of such
difference or deficiency shall from time to time be ascertained. Anything herein
contained to the contrary notwithstanding, the rent referred to shall include
the stated reserved Base Rent together with all Additional Rent and charges
required to be paid by Tenant under the Lease including but not limited to taxes
and insurance costs, and the costs of re-renting.

            19. NOTICES

               All notices required or permitted to be given to Landlord shall
be given by certified mail, return receipt requested, or by overnight courier,
at the address hereinbefore set forth on the first page of this Lease, and/or
such other place as Landlord may designate in writing, with a copy thereof being
delivered by regular mail to EPSTEIN, FITZSIMMONS, BROWN, GIOIA, JACOBS &
SPROULS P.C., Attention: ROBERT K. BROWN, ESQ., 245 Green Village Road, P.O. Box
901, Chatham Township, New Jersey 07928.

               All notices required or permitted to be given to Tenant shall be
given by certified mail, return receipt requested, or by overnight courier at
the address hereinbefore set forth on the first page of this Lease, and/or such
other place as Tenant shall designate in writing.

                                       17
<PAGE>

            20. NON-WAIVER BY LANDLORD

               The failure of Landlord to insist upon strict performance of any
of the covenants or conditions of this Lease, or to exercise any option of
Landlord herein conferred in any one or more instances, shall not be construed
as a waiver by Landlord of any of its rights or remedies in this Lease, and
shall not be construed as a waiver, relinquishment or failure of any such
covenants, conditions, or options, but the same shall be and remain in full
force and effect.

            21. RIGHT OF TENANT TO MAKE ALTERATIONS AND IMPROVEMENTS

               21.1 Tenant may make alterations, additions or improvements to
the Leased Premises only with the prior written consent of Landlord, which
consent shall not be unreasonably withheld, provided such alterations, additions
or improvements do not require structural changes in the Leased Premises, or do
not lessen the value of the Leased Premises or the Building. Any consent which
Landlord may give shall be conditioned upon Tenant furnishing to Landlord,
detailed plans and specifications with respect to any such changes, to be
approved by Landlord in writing. As a condition of such consent, Landlord
reserves the right to require Tenant to remove, at Tenant's sole cost and
expense, any such alterations or additions prior to the expiration of the Lease
term, which election shall be made by landlord at the time it gives its consent
to any such alteration or addition. If Landlord does not require such removal,
any such alterations or additions shall be deemed to be part of the realty upon
installation. All such alterations, additions or improvements shall be only in
conformity with applicable governmental and insurance company requirements and
regulations applicable to the Leased Premises. Landlord reserves the right to
require Tenant to use Landlord's designated contractors in the event of any
changes to the mechanical, electrical, or fire safety systems serving the Leased
Premises. Tenant shall hold and save Landlord harmless and indemnify Landlord
against any claim for damage or injury in connection with any of the foregoing
work which Tenant may make as hereinabove provided.

               21.2 Nothing herein contained shall be construed as a consent on
the part of Landlord to subject the estate of Landlord to liability under the
Construction Lien Law of the State of New Jersey, it being expressly understood
that Landlord's estate shall not be subject to such liability.

            22. NON-LIABILITY OF LANDLORD

               22.1 It is expressly understood and agreed by and between the
parties to this agreement that Tenant shall assume all risk of damage to its
property, equipment and fixtures occurring in or about the Leased Premises,
whatever the cause of such damage or casualty.

               22.2 It is expressly understood and agreed that in any event,
Landlord shall not be liable for any damage or injury to property or person
caused by or resulting from steam, electricity, gas, water, rain, ice or snow,
or any leak or flow from or into any part of the Building, or from any damage or
injury resulting or arising from any other cause or happening whatsoever.

                                       18
<PAGE>

            23. WARRANTY OF TITLE

               Landlord represents that it has title to the lands and premises
which are the subject of this Lease and that it has the full right, capacity and
authority to enter into the within Lease Agreement.

            24. RESERVATION OF EASEMENT

               Landlord reserves the right, easement and privilege to enter on
the Leased Premises, Building and Property in order to install, at its own cost
and expense, any storm drains and sewers and/or utility lines in connection
therewith as may be required by Landlord. It is understood and agreed that if
such work as may be required by Landlord requires an installation which may
displace any paving, lawn, seeded area or shrubs, Landlord, shall, at its own
cost and expense, restore said paving, lawn, seeded area or shrubs. Landlord
covenants that the foregoing work shall not unreasonably interfere with the
normal operation of Tenant's business, and Landlord shall indemnify and save
Tenant harmless in connection with such installations.

            25. AIR, GROUND AND WATER POLLUTION

               Tenant expressly covenants and agrees to indemnify, defend, and
save Landlord harmless against any claim, damage, liability, costs, penalties,
or fines which Landlord may suffer as a result of air, ground or water pollution
caused by Tenant in its use of the Leased Premises. Tenant covenants and agrees
to notify Landlord immediately of any claim or notice served upon it with
respect to any such claim Tenant is causing water, ground or air pollution; and
Tenant, in any event, will take immediate steps to halt, remedy or cure any
pollution of air, ground or water caused by Tenant by its use of the Leased
Premises. Landlord hereby agrees that it shall indemnify, defend and save
harmless Tenant from and against any and all claims or liabilities incurred in
connection with the environmental condition of the Leased Premises existing as
of the Commencement Date hereunder. The foregoing covenants shall survive the
expiration or earlier termination of this Lease.

            26. FINANCIAL INFORMATION

               Tenant hereby agrees to deliver, upon Landlord's written request,
sufficient financial information to any proposed mortgagee of Landlord in order
that said proposed mortgagee may properly evaluate the financial condition of
Tenant in connection with any proposed mortgage loan affecting the Building. All
such information shall be kept confidential by Landlord and its proposed
mortgagees, and upon request of Tenant, Landlord and any such proposed mortgagee
shall execute to Tenant a non-disclosure agreement in form reasonably acceptable
to Landlord and such proposed mortgagee.

            27. FORCE MAJEURE

               Except for the obligation of Tenant to pay rent and other charges
as in this Lease provided, the period of time during which Landlord or Tenant is
prevented from performing any act required to be performed under this Lease by
reason of fire, catastrophe, strikes, lockouts, civil commotion, acts of God or
the public enemy, government prohibitions or preemptions, embargoes, inability
to obtain material or labor by reason of governmental regulations or
prohibitions, the act or default of the other party, or other events beyond the
reasonable control of Landlord or Tenant, as the case may be, shall be added to
the time for

                                       19
<PAGE>

performance of such act. This provision shall not, however, be construed to
extend the Lease term under any circumstances.

            28. STATEMENTS BY LANDLORD AND TENANT; LANDLORD'S CONSENT

               28.1 Landlord and Tenant agree at any time and from time to time
upon not less than ten (10) days' prior notice from the other to execute,
acknowledge and deliver to the party requesting same, a statement in writing,
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), that it is not in default (or if
claimed to be in default, stating the amount and nature of the default),
specifying the dates to which the Base Rent and other charges have been paid in
advance, if any, and setting forth the Commencement Date and the date of
expiration hereunder; it being intended that any such statement delivered
pursuant to this paragraph may be relied upon as to the facts contained therein.

               28.2 Upon Tenant's request, Landlord further agrees to execute a
Landlord's Consent and Waiver in connection with any current or future financing
transaction of Tenant relating to its property, equipment and fixtures, waiving
any Landlord's lien which Landlord may possess against said property equipment
and fixtures. Any such Landlord's Consent and Waiver shall be in a form which is
reasonably acceptable to Landlord.

            29. CONDEMNATION

               29.1 If due to condemnation or taking or seizure by any authority
having the right of eminent domain, (i) more than fifteen (15%) per cent of the
Leased Premises is taken, or (ii) in the event that more than twenty-five (25%)
per cent of the Property is taken (including the parking areas, but exclusive of
front, side and rear set back areas), or (iii) if access to the Leased Premises
be denied, which taking in the manner hereinabove referred to and in excess of
the foregoing percentage amounts shall unreasonably or unduly interfere with the
use of the Building or parking area, or deny access to the Leased Premises, then
and in any of such events as hereinabove provided, the Lease term created shall,
at the option of Tenant, terminate, cease and become null and void from the date
when the authority exercising the power of eminent domain takes or interferes
with the use of the Leased Premises, its use of the ground area, parking area,
or area of access to the Leased Premises. Tenant shall only be responsible for
the payment of rent until the time of surrender. In any event, no part of
Landlord's condemnation award shall belong to or be claimed by Tenant. Without
diminishing Landlord's award, Tenant shall have the right to make a claim
against the condemning authority for such independent claim which it may have
and as may be allowed by law, for costs and damages due to relocating, moving
and other similar costs and charges directly incurred by Tenant and resulting
from such condemnation.

               29.2 In the event of any partial taking which would not be cause
for termination of the within Lease or in the event of any partial taking in
excess of the percentages provided in Article 29.1, and in which event Tenant
shall elect to retain the balance of the Leased Premises remaining after such
taking, then and in either event, the rent shall abate in an amount mutually to
be

                                       20
<PAGE>

agreed upon between Landlord and Tenant based on the relationship that the
character of the property taken bears to the property which shall remain after
such condemnation. In any event, no part of Landlord's condemnation award shall
belong to or be claimed by Tenant. However, Landlord shall, to the extent
permitted by applicable law and as the same may be practicable on the site of
the Leased Premises, at Landlord's sole cost and expense, promptly make such
repairs and alterations in order to restore the Building, Property and/or
improvements to the extent of the condemnation award.

            30. QUIET ENJOYMENT

               Landlord further covenants that Tenant, on paying the rental and
performing the covenants and conditions contained in this Lease, shall and may
peaceably and quietly have, hold and enjoy the Leased Premises for the term
aforesaid.

            31. SURRENDER OF PREMISES

               On the last day, or earlier permitted termination of the Lease
term, Tenant shall quit and surrender the Leased Premises in good and orderly
condition and repair (reasonable wear and tear, and damage by fire or other
casualty excepted) and shall deliver and surrender the Leased Premises to
Landlord peaceably, together with all alterations, additions and improvements
in, to or on the Leased Premises made by Tenant as permitted under the Lease.
Landlord reserves the right, however, to require Tenant at its cost and expense
to remove any alterations or improvements installed by Tenant and not permitted
or consented to by Landlord pursuant to the terms and conditions of the Lease,
so as to restore the Leased Premises to the condition found at the inception of
the Lease term, which covenant by Tenant shall survive the surrender and the
delivery of the Leased Premises as provided hereunder. Tenant expressly
covenants and agrees that the Leased Premises shall be surrendered to Landlord
in "broom clean" condition. Prior to the expiration of the Lease term Tenant
shall remove all of its property, fixtures, equipment and trade fixtures from
the Leased Premises. All property not removed by Tenant shall be deemed
abandoned by Tenant, and Landlord reserves the right to charge the reasonable
cost of removal, storage and disposal of the same to Tenant, which obligation
shall survive the Lease termination and surrender hereinabove provided. If the
Leased Premises are not surrendered to the end of the Lease term, Tenant shall
indemnify Landlord against loss or liability resulting from delay by Tenant in
surrendering the Leased Premises, including, without limitation, any claims made
by any succeeding tenant founded on the delay.

            32. INDEMNITY

               Anything in this Lease to the contrary notwithstanding, and
without limiting Tenant's obligation to provide insurance pursuant to Article 9
hereunder, Tenant covenants and agrees that it will indemnify, defend and save
harmless Landlord against and from all liabilities, obligations, damages,
penalties, claims, costs, charges and expenses, including without limitation
reasonable attorneys' fees, which may be imposed upon or incurred by Landlord by
reason of any of the following occurring during the term of this Lease:

                                       21
<PAGE>

                (i) Any matter, cause or thing arising out of use, occupancy,
     control or management of the Leased Premises and any part thereof;

                (ii) Any negligence on the part of Tenant or any of its agents,
     contractors, servants, employees, licensees or invitees;

                (iii) Any accident, injury, damage to any person or property
     occurring in, or about the Leased Premises;

                (iv) Any failure on the part of Tenant to perform or comply with
     any of the covenants, agreements, terms or conditions contained in this
     Lease on its part to be performed or complied with.

                (v) Subject to the exception set forth in Article 22.1, the
     foregoing shall not require indemnity by Tenant in the event of damage or
     injury occasioned by the negligence or acts of commission or omission of
     Landlord, its agents, servants or employees.

               Landlord shall promptly notify Tenant of any such claim asserted
against it and shall promptly send to Tenant copies of all papers or legal
process served upon it in connection with any action or proceeding brought
against Landlord by reason of any such claim.

            33. SHORT FORM LEASE

               It is understood between the parties hereto that this Lease will
not be recorded, but that a short form lease, describing the property leased
hereby, giving the term of this Lease, and making particular mention of any
special clauses as herein contained, may be recorded by Landlord in accordance
with the laws governing and regulating the recording of such documents in the
State of New Jersey.

            34. LEASE CONSTRUCTION

               This Lease shall be construed pursuant to the laws of the State
of New Jersey.

            35. BIND AND INURE CLAUSE

               The terms, covenants and conditions of the within Lease shall be
binding upon and inure to the benefit of each of the parties hereto, their
respective executors, administrators, heirs, successors and assigns, as the case
may be.

            36. DEFINITIONS

               The neuter gender, when used herein and in the acknowledgment
hereafter set forth, shall include all persons and corporations, and words used
in the singular shall include words in the plural where the text of the
instrument so requires.

            37. NET RENT

               It is the purpose and intent of Landlord and Tenant that the rent
shall be absolutely net to Landlord, so that this Lease shall yield, net, to
Landlord, the rent specified in Article 3 hereof in each month during the term
of the Lease, and that all costs, expenses and obligations of every kind and
nature whatsoever relating to the Leased Premises which may arise or become due

                                       22
<PAGE>

during or out of the term of this Lease, shall be paid by Tenant, except for
such obligations and charges as have otherwise expressly been assumed by
Landlord in accordance with the terms and conditions of this Lease. Nothing
herein shall require Tenant to undertake obligations in connection with the sale
or mortgaging of the Leased Premises, unless otherwise expressly provided in
accordance with the terms and conditions of this Lease.

            38. DEFINITION OF TERM OF "LANDLORD"

               When the term "Landlord" is used in this Lease it shall be
construed to mean and include only the owner of the fee title of the Property.
Upon the transfer by Landlord of the fee title hereunder, Landlord shall advise
Tenant in writing by certified mail, return receipt requested of the name of
Landlord's transferee. In such event, the then Landlord shall be automatically
freed and relieved from and after the date of such transfer of title of all
personal liability with respect to the performance of any of the covenants and
obligations on the part of Landlord herein contained to be performed, provided
any such transfer and conveyance by Landlord is expressly subject to the
assumption by the grantee or transferee of the obligations of Landlord to be
performed pursuant to the terms and conditions of the within Lease.

            39. COVENANTS OF FURTHER ASSURANCES

               If, in connection with obtaining financing for the Building, the
Mortgage Lender shall request reasonable modifications to this Lease as a
condition to such financing, Tenant will not unreasonably withhold, delay or
refuse its consent thereto, provided that such modifications do not in Tenant's
reasonable judgment increase the obligations of Tenant hereunder or materially
adversely affect the leasehold interest hereby created or Tenant's use and
enjoyment of the Leased Premises.

            40. LANDLORD'S REMEDIES

               40.1 The rights and remedies given to Landlord in this Lease are
distinct, separate and cumulative remedies, and no one of them, whether or not
exercised by Landlord, shall be deemed to be in exclusion of any of the others.

               40.2 In addition to any other legal remedies for violation or
breach by or on the part of Tenant or by any undertenant or by anyone holding or
claiming under Tenant or any one of them, of the restrictions, agreements or
covenants of this Lease on the part of Tenant to be performed or fulfilled, such
violation or breach shall be restrainable by injunction at the suit of Landlord.

               40.3 No receipt of money by Landlord from any receiver, trustee
or custodian, debtor in possession, or any permitted subtenant, shall reinstate,
continue or extend the term of this Lease or affect any notice theretofore given
to Tenant, or to any such receiver, trustee or custodian, debtor in possession,
or any permitted subtenant, or operate as a waiver or estoppel of the right of
Landlord to recover possession of the Leased Premises for any of the causes
therein enumerated by any lawful remedy; and the failure of Landlord to enforce
any covenant or condition by reason of its breach by Tenant shall not be deemed
to void or

                                       23
<PAGE>

affect the right of Landlord to enforce the same covenant or condition on the
occasion of any subsequent default or breach.

               40.4 Tenant agrees that it shall reimburse Landlord for
Landlord's reasonable attorney's fees incurred in enforcing the terms and
conditions of this Lease on the part of Tenant to be performed. Tenant further
agrees to reimburse Landlord for Landlord's attorney's fees incurred in
connection with the review by Landlord of any Landlord's waiver, assignment or
sublet agreement or any other documentation reviewed by Landlord at Tenant's
request.

            41. COVENANT AGAINST LIENS

               Tenant agrees that it shall not knowingly encumber, or suffer or
permit to be encumbered, the Leased Premises or the fee thereof by any lien,
charge or encumbrance, and Tenant shall have no authority to mortgage or
hypothecate this Lease in any way whatsoever. The violations of this Article
shall be considered a breach of this Lease.

            42. BROKERAGE

               The parties mutually represent to each other that SHELDON GROSS
REALTY INC. and RESOURCE REALTY OF CENTRAL NJ are the sole brokers who
negotiated and consummated the within transaction, and that neither party dealt
with any other broker in connection with the within agreement, it being
understood and agreed that the Landlord shall be responsible, at its sole cost
and expense, to pay the real estate brokerage commission in connection with this
transaction. Landlord agrees to indemnify, defend and save harmless Tenant in
connection with the claims of any other real estate broker claiming commissions
in connection with the within transaction and claiming authority from Landlord.
Tenant agrees to indemnify, defend and save harmless Landlord in connection with
the claims of any other real estate broker claiming commissions in connection
with the within transaction and claiming authority from Tenant.

            43. SUBORDINATION OF LEASE

               This Lease shall be subject and subordinate at all times to the
lien of any mortgages or ground rents or other encumbrances now or hereafter
placed on the Complex, Building and Leased Premises without the necessity of any
further instrument or act on the part of Tenant to effectuate such
subordination, but Tenant covenants and agrees to execute and deliver upon
demand such further instrument or instruments evidencing such subordination of
the Lease to the lien of any such mortgage or ground rent or other encumbrances
as shall be desired by a mortgagee or proposed mortgagee or by any person.
Landlord shall use reasonable efforts to obtain from its current mortgagee, and
Landlord shall obtain from all future mortagees of the Leased Premises, a
Subordination, Non-Disturbance and Attornment Agreement for the benefit of
Tenant; any such Subordination, Non-Disturbance and Attornment Agreement shall
be written on the applicable mortgagee's customary form.

                                       24
<PAGE>

            44. INTENTIONALLY OMITTED

            45. SECURITY

               Upon execution of this Lease, the Tenant shall deposit with the
Landlord the sum of ELEVEN THOUSAND EIGHT HUNDRED TWENTY FIVE AND 00/100
($11,825.00) DOLLARS as security for the full and faithful performance of this
Lease upon the part of the Tenant to be performed. Upon termination of this
Lease, and providing the Tenant has not been in default hereunder and has
performed all of the conditions of this Lease, the Landlord shall return the
balance of the security deposit then remaining in Landlord's hands to the
Tenant. Anything herein contained to the contrary notwithstanding, it is
expressly understood and agreed that the said security deposit shall not bear
interest. Tenant covenants and agrees that it will not assign, pledge,
hypothecate, mortgage or otherwise encumber the aforementioned security during
the term of this Lease. It is expressly understood and agreed that the Landlord
shall have the right to co-mingle the security funds with its general funds and
said security shall not be required to be segregated.

            46. LIMIT OF LANDLORD'S LIABILITY

               Tenant shall look solely to Landlord's estate in the Property for
the enforcement of any judgment or decree requiring the payment of money to
Tenant by reason of any default or breach by Landlord under this Lease. In no
event shall there be any personal liability on the part of Landlord (or its
individual partners) beyond its interest in the Property and no other assets of
Landlord (or its individual partners) shall be subject to levy, execution,
attachment or any other legal process.

            47. OPTION TO PURCHASE

               The option to purchase hereinafter set forth shall become
operative and effective simultaneously with the Lease term commencing as
provided in this Lease.

               47.1 Time to Purchase

                    Provided the Tenant is not in default under the terms and
conditions of this Lease, the Tenant is hereby granted the right, privilege and
option to purchase the Property described on Schedule "A" annexed hereto and
made a part hereof, together with the Building and improvements located thereon,
only at the end of the initial lease Term, providing Tenant shall give the
Landlord at least twelve (12) months' prior written notice of the exercise of
such option to purchase by certified mail, return receipt requested.

               47.2 Purchase Price

                    The purchase price to be paid by Tenant to Landlord in the
event Tenant elects to exercise its option to purchase, shall be the sum of ONE
MILLION SEVEN HUNDRED TWENTY AND 00/100 ($1,720,000.00) DOLLARS, subject to the
adjustments and costs hereinafter provided. It is expressly understood and
agreed that the purchase price shall be increased in the event of any increase
in the Cost of Living Index, as hereinafter set forth:

                    (a) Tenant shall pay the minimum purchase price of ONE
MILLION SEVEN HUNDRED TWENTY AND 00/100 ($1,720,000.00) DOLLARS, hereinafter
referred to as the "Original Purchase Price", and adjusted as hereinafter
provided. The

                                       25
<PAGE>

Original Purchase Price shall be increased, if applicable, in the event of an
increase in the Cost of Living Index based on application of the Cost of Living
formula which is hereinafter defined as follows:

            On or before the Closing Date, there shall be compared the "All
            Items" Index figures for the New York-Northeastern New Jersey
            average of the "Consumers Price Index for All Urban Consumers"
            (revised CPI-U) (1982-84 equal to 100) published by the Bureau of
            Labor Statistics of the U.S. Department of Labor (in this paragraph
            hereinafter referred to as the "Index") for the month which is three
            (3) months prior to the Commencement Date of the original Term of
            this Lease with the month which is three (3) months prior to the
            Expiration Date. If there is an increase in the Index for the month
            which is the three (3) months prior to the Expiration Date compared
            to the applicable Index for the first month of the original Term of
            this Lease, said increase in Index figures shall be used to
            determine the applicable percentage of increase which shall be the
            basis for determining the increase over the Original Purchase Price
            in accordance with the formula hereinbefore set forth, and as shown
            in the following example:

                EXAMPLE:    If the Index figure for the month which is three (3)
                -------     months prior to the Commencement Date of the
                            original Term of this Lease is 100 (the denominator)
                            and the Index figure for the month which is three
                            (3) months prior to the Expiration Date is 110, the
                            increase in the Index figures will produce an
                            increase of 10%.
                                                (110-100)
                                                 -------
                                                   100
                            Applying the formula, 10% of $1,720,000.00 is equal
                            to $172,000.00. Adding said sum of $172,000.00 to
                            the Original Purchase Price of $1,720,000.00
                            produces a purchase price of $1,892,000.00.

It is expressly understood and agreed that the purchase price shall not be less
than the sum of ONE MILLION SEVEN HUNDRED TWENTY AND 00/100 ($1,720,000.00)
DOLLARS, in any event.

                    (b) It is understood and agreed that should the applicable
Index figure not be published for any particular month when the same shall be
applicable under the terms of this lease, the last published figure prior to
that date shall be used, but in no event shall such figure be retroactive for a
period in excess of three (3) months. In the event that the applicable Index
figure is discontinued by way of publication with respect to the entire Index,
then and in that event, the parties shall agree on an equivalent and substituted
Cost of Living Index to be applied in the same manner as in this lease provided.
In the event the parties cannot mutually agree as to the equivalent substituted
Index, then and in that event the question should be submitted for arbitration
to the American Arbitration Association.

                    (c) If the base year (1982-84 equal to 100) hereinabove
referred to with respect to the "Index" shall be changed after the execution of
this lease, appropriate adjustments

                                       26
<PAGE>

based on such new Index shall be made so as to have a proper application of the
Cost of Living formula.

               47.3 Conveyance

                    (1) Landlord covenants and agrees to convey to the Tenant
marketable title by Deed of Bargain and Sale, covenant against Grantor's Acts,
together with an Affidavit of Title and such other proofs as may be required by
any title insurance company insuring title for the Tenant as purchaser. Title
shall be conveyed subject to the following:

                         (i) Such easements as may be required for utilities,
sanitary sewers or storm sewers, to properly service the Leased Premises herein
described as shall be given to utility companies or applicable governmental
boards or bureaus, as may be required.

                         (ii) Easements of record and such facts as an accurate
survey will disclose.

                         (iii) Such exceptions to title as are set forth on
Schedule "B" annexed hereto and made a part hereof.

                    (2) Rent shall be adjusted as of the date of closing.

                    (3) The Tenant shall be obligated to assume and pay the cost
of any confirmed or unconfirmed assessments as imposed by governmental boards or
bureaus having jurisdiction thereof as the same may affect the Premises.

                    (4) Tenant shall, at its cost and expense, pay such
applicable transfer tax or affix such documentary stamps as may be required by
then existing law.

                    (5) Tenant shall be responsible, at its sole cost and
expense, for obtaining evidence of compliance with ISRA prior to the date of
closing.

                    (6) The closing of Title shall take place on or before the
Expiration Date (unless extended as hereinafter set forth in Article 47.4), at
10:00 a.m. at the offices of Epstein, Fitzsimmons, Brown, Gioia, Jacobs &
Sprouls.

               47.4 Tax Free Exchange.

               Tenant understands and agrees that Landlord intends to treat the
conveyance of the Leased Premises to Tenant as part of a tax free exchange
pursuant to Section 1031 of the Internal Revenue Code. Tenant will cooperate
with Landlord and will sign such documentation as is necessary so as to permit
Landlord to effectuate such tax free exchange. Landlord shall have the right to
delay the closing date for up to nine (9) months in order to permit Landlord to
properly complete such exchange. It is understood and agreed, however, that the
Purchase Price shall not be further increased due to the extension of the
closing date.

            48. SURVIVAL OF OBLIGATION

               It is expressly understood and agreed that in the event there are
any obligations of Tenant with respect to payment

                                       27
<PAGE>

or performance as required under the terms and conditions of this Lease that
shall have not been performed prior to the expiration or termination of the
Lease in accordance with its terms, such obligation, including the obligation to
make rent adjustments and other Lease adjustments, shall survive the expiration
or termination of the Lease term and surrender of the Leased Premises by Tenant
to Landlord.

            49. OPTION TO RENEW

                Provided Tenant is not in default pursuant to the terms and
conditions of this Lease, Tenant is hereby given the right and privilege to
renew the within Lease, for one (l) year renewal period of approximately two (2)
years and two (2) months, to commence at the end of the initial Term of this
Lease and to continue through September 30, 2007, which renewal shall be upon
the same terms and conditions as in this Lease contained, except as follows:

                (l) During the renewal term, there shall be paid annually Base
Rent in the amount of ONE HUNDRED THIRTY THREE THOUSAND THREE HUNDRED AND 00/100
($133,300.00) DOLLARS per annum payable in equal installments of ELEVEN THOUSAND
ONE HUNDRED EIGHT AND 33/100 ($11,108.33) DOLLARS per month. Tenant shall
continue to pay all Additional Rent and other charges required by the terms and
conditions of this Lease during renewal term.

                (2) The right, option, and privilege of Tenant to renew this
Lease as hereinabove set forth is expressly conditioned upon Tenant delivering
to Landlord, in writing, by certified mail, return receipt requested, twelve
(12) months's prior notice of its intention to renew, which notice shall be
given to Landlord by Tenant no later than twelve (12) months prior to the date
fixed for termination of the original Term of this Lease.

            50. EXECUTION AND DELIVERY

                The submission of the within Lease by Landlord to Tenant for
review and approval shall not be deemed an option to lease, an offer to lease,
or a reservation of the Leased Premises in favor of Tenant, it being intended
that no rights or obligations shall be created by Landlord or Tenant until the
execution and delivery of the within Lease by Landlord and Tenant, one to the
other.

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

WITNESS:                                       KENNEDY MONTROSE, L.L.C.

________________________                       By:
                                                  ------------------------------
                                                  Joshua Adler, Manager

ATTEST:                                        ABLE LABORATORIES

________________________                        By:
                                                   -----------------------------

                                       28
<PAGE>

STATE OF NEW JERSEY )
                    ) SS.:
COUNTY OF           )

            BE IT REMEMBERED, that on this _____ day of __________, 2002, before
me the subscriber, _________________________________ personally appeared JOSHUA
ADLER, who, I am satisfied, is a Manager of KENNEDY MONTROSE, L.L.C., a New
Jersey Limited Liability Company, the Landlord mentioned in the within
Instrument, and thereupon he acknowledged that he signed, sealed and delivered
the same as his act and deed, for the uses and purposes therein expressed.

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

STATE OF            )
                    ) SS.
COUNTY OF           )

            BE IT REMEMBERED, that on this _____ day of ________, 2002, before
me, the subscriber, _______________________________________ personally appeared
__________________________ , who, I am satisfied, is the person who signed the
within Instrument as ___________________________________ of ABLE LABORATORIES, a
Delaware Corporation, the Tenant named therein, and he thereupon acknowledged
that the said instrument made by the corporation and sealed with its corporate
seal, was signed, sealed with the corporate seal and delivered by him as such
officer and is the voluntary act and deed of the corporation, made by virtue of
authority from its Board of Directors.

                          -----------------------------
<PAGE>

                                 REFERENCE DATA
                                 --------------

The following definitions shall be applicable for all purposes of this Lease,
wherever the same are initially capitalized:

Base Rent:  See Article 3.1.

Additional Rent: See Article 3.2.

Building: 600 Montrose Avenue, South Plainfield, New Jersey, containing
approximately 21,500 gross rentable square feet.

Commencement Date: August 1, 2002, subject to the provisions of  Article 2.2.

Expiration Date: July 31, 2005, subject to the provisions of  Article 2.2.

Leased Premises:  The entire Building and Property.

Property: The Property described by metes and bounds on Schedule "A" of the
Lease.

Rent:  All Base Rent and Additional Rent payable by Tenant under this Lease.

Tenant's Percentage: 100%.

Term:   Three (3) years.

                                    KENNEDY MONTROSE, L.L.C.

                                    By:____________________________
                                    Joshua Adler, Managing Member

                                    ABLE LABORATORIES

                                    By:____________________

<PAGE>

                                  SCHEDULE "B"

                              PERMITTED EXCEPTIONS
                              --------------------

     1.  The lien of taxes not yet due and payable.

     2.  Easements and restrictions of record provided the same do not prohibit
         the use of the property for currently zoned purposes.

     3.  Such state of facts as a current survey of the Property shall revile,
         provided the same do not prohibit the use of the Property for currently
         zoned purposes.

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