Document:

SUPPLY PARTNERSHIP AGREEMENT

                                       OF

                             CRITICARE SYSTEMS INC.

                                       AND

                         TRIVIRIX INTERNATIONAL LIMITED,

                                 26 OCTOBER 2000

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                          SUPPLY PARTNERSHIP AGREEMENT

THIS SUPPLY PARTNERSHIP AGREEMENT (hereinafter called Agreement), dated as of 26
October,  2000  (hereinafter  called  Effective  Date),  is  entered into by and
between:

CRITICARE SYSTEMS INC., a corporation duly organized and existing under the laws
of  Wisconsin,  USA,  having its principal place of business at 20925 Crossroads
Circle,  Waukesha,  WI 53186-4054, USA (hereinafter referred to as "Criticare"),
and

TRIVIRIX  INTERNATIONAL LIMITED, a corporation duly organized and existing under
the  laws  of  Northern  Ireland,  UK, having its principal place of business at
Advantage  Way,  Ballygomartin  Industrial Park, Belfast, Northern Ireland, BT13
3PN  (hereinafter  referred  to  as  "TriVirix  ").

WHEREAS,  Criticare  has  substantial  expertise  in the design, development and
market  the  patient  monitoring systems and noninvasive sensors for anesthesia,
critical  care,  respirator  care, emergency transport, outpatient care and home
care;

WHEREAS,  TriVirix  International  has  substantial  expertise  in  the  design,
development  and  manufacture  of the medical diagnostic systems and the related
accessory  and  consumables;

WHEREAS,  Criticare  and  TriVirix  desire  to  establish  a  supply partnership
cooperation  for  Criticare to appoint TriVirix to manufacture the Products with
cost-effective  advantages.

NOW,  THEREFORE, in consideration of the mutual conveniences and promises herein
contained,  Criticare  and  TriVirix  hereto  agree  as  follows:

1.   Definition.

     (1)  The  term  "Products"  means  all  designated products manufactured by
          TriVirix  for  Criticare.

     (2)  The  term  "Territory"  means  all  countries  in  the  US and Europe.

     (3)  The  term  "Specification"  means  the  detailed specifications of the
          Products provided by Criticare. This Specification may be updated from
          time to time pursuant to the mutual written agreement of Criticare and
          TriVirix.

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     (4)  The  term  "Party"  shall mean either Criticare or TriVirix ; the term
          "Parties"  shall  mean  Criticare  and  TriVirix  .

     (5)  "Intellectual  Property"  shall  mean  any  and  all  patents,  patent
          applications,  copyrights,  mask work rights, trade secrets (including
          without  limitation  of  Party's  Confidential  Information) and other
          intellectual  property  rights  in  and to the Products, to the extent
          that  such rights are to be embodied in, or which must be practiced in
          order  to  make,  use  or  sell,  the  Products.

     (6)  "Trademarks"  shall  mean  the  trademarks,  trade  names  and  other
          commercial  symbols  of  Criticare  or Criticare's Criticare listed on
          Exhibit  A  attached  hereto.

     (7)  "Business Day" shall mean a day on which banks in Waukesha, Wisconsin,
          USA  and  Belfast,  Northern  Ireland  are  open  for  business.

     (8)  "Initial  Term"  shall  mean  the  period of three (3) years after the
          Effective  Date.

     (9)  "Term"  shall  mean  the  Initial  Term  and  any  extension terms, as
          described  in  Article  15.  (1)  below.

     (10) "Affiliate"  shall  mean  any  corporation  or other legal entity that
          controls, is controlled by, or is under common control with the Party.
          For  purposes  of  this  definition, control shall mean the ownership,
          directly or indirectly, of fifty percent or more of the voting capital
          shares  or  similar  voting  securities  of  an  entity.

2.   Purpose  of  Agreement.

     (1)  The  Parties  shall  cooperate  in  the  manufacturing  of Products in
          accordance  with  Section  3  below.

     (2)  During the Term of this Agreement, Criticare shall appoint TriVirix as
          the  exclusive  contracted  supplier  in  the Territory to manufacture
          Criticare's  designated  Products,  TriVirix  shall  not  sell  to the
          Medical  Market  any  other  products  that  are in competing with the
          Criticare's  Products  without the prior written consent of Criticare.

3.   Scope  of  Cooperation  in  the  Manufacturing  of  the  Products.

     (1)  The  Parties  hereto  agree  to cooperate as provided hereunder during
          each  of  the  following  stages of the manufacturing of the Products.

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          a.   Pre-manufacturing  phase;

          b.   Pilot  manufacturing  phase;  and

          c.   Standard  manufacturing  phase.

     (2)  In  connection  with the Pre-manufacturing phase, the Parties agree to
          and  not  limit  to  cooperate  as  follows:

          a.   Criticare  may  send  TriVirix  a  written  request  notice  for
               quotation  for  the  Products.  The  purchase  quantity  of  the
               Products,  the  duration  of  the  purchase  order,  the delivery
               schedule  and  the  quantity  of  each partial shipment should be
               indicated  in  this  written  notice.

          b.   TriVirix  shall  send Criticare the requested quotation and other
               related  information  within  forty-five  (45) working days after
               receiving  all technical documents as described in Article 3. (2)
               d.  below.

          c.   Criticare  shall  send  TriVirix  a  formal  purchase  order  or
               Criticare's  suggestion within forty-five (45) working days after
               receiving  TriVirix's  quotation  for  the  Products,  subject to
               extension  as  necessary  and  agreed  by  the  Parties.

          d.   Criticare  shall  provide  TriVirix all necessary information for
               the  manufacturing  of  the Products including and not limited to
               the  following  documents:

               (a)  Bill  of  materials  of  the  Products.

               (b)  Specification,  engineering  drawing,  manufacturer's  brand
                    name  and  parts  number  of  the  materials.

               (c)  Gerber  files  of  the  printed  circuit  boards.

               (d)  Samples  of  one  of each of the unpopulated printed circuit
                    board, the populated printed circuit board and the Products.

               (e)  User's  manual  and  service  manual.

               (f)  Standard  operation  procedures and tools for assembling the
                    Products.

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               (g)  Quality control procedures and test fixtures for testing the
                    Products.

               (h)  Specification  of  labeling  and  marking  (i.e. S/N) of the
                    Products.

               (i)  Specification  of  package  and  packaging  materials.

               (j)  Format or content of the QC report that TriVirix may need to
                    provide  to  Criticare  during  each  shipment.

     (3)  In connection with the Pilot manufacturing phase, the Parties agree to
          and  not  limit  to  cooperate  as  follows:

          a.   TriVirix  shall  manufacture  and  deliver  the  prototype or the
               validation  lot  of  the  Products  to Criticare according to the
               terms and conditions as set forth in the purchase order agreed by
               the  Parties.

          b.   Criticare  has  the  right  to  cancel  the purchase order if the
               prototype  or  the  first  validation  lot  is  unacceptable  to
               Criticare  and  can  not  be  made  acceptable by TriVirix within
               forty-five  (45)  days,  subject to the exception as described in
               Article  3.  (5).

          c.   In  the  event  that  Criticare has to cancel the purchase order,
               Criticare  is  financially  responsible  for  the  cost  of
               manufacturing of the prototype or the first validation lot of the
               Products,  this includes the cost of tooling, setup, prototype or
               the  first  validation lot and the rest of the raw materials that
               TriVirix  has  purchased  for  the  purchase  order.

     (4)  With respect to the Standard manufacturing phase, the Parties agree to
          and  not  limit  to  cooperate  as  follows:

          a.   TriVirix  shall manufacture and deliver the Products to Criticare
               according  to  the  terms  and  conditions  as  set  forth in the
               purchase  order  agreed  by  the  Parties.

          b.   Criticare  has  the  right  to  cancel  the purchase order if the
               Products  is  unacceptable  to  Criticare  and  cannot  be  made
               acceptable  by  TriVirix  within forty-five (45) days, subject to
               the  exception  as  described  in  Article  3.  (5).

          c.   In  the  event  that  Criticare has to cancel the purchase order,
               Criticare  is  financially  responsible  for  the rest of the raw
               materials  that  TriVirix  has  purchased for the purchase order.

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     (5)  Criticare  is  responsible in providing TriVirix the correct technical
          information  for  the manufacturing and the quality control testing of
          the  Products.  If  the  Products  fail  to  pass Criticare's incoming
          inspection and system level functional test due to incorrect technical
          document,  then  Criticare  is financially responsible for the cost of
          manufacturing  of  the  Products,  this  includes the cost of tooling,
          setup,  Products,  and the rest of the raw materials that TriVirix has
          purchased  for  the  purchase  order.

     (6)  TriVirix  should  immediately inform Criticare if the manufacturers of
          one  or  more  of the materials, components, parts and modules for the
          Products  cease  to  produce. In this case, the Parties will cooperate
          together  to  purchase  enough quantities of these phase-out materials
          and  Criticare  will  consider  re-designing  the  Products.

     (7)  TriVirix  shall not be responsible for discontinuing the supply of the
          Products  to  Criticare  in  the  case of shortage of the materials as
          described  in  Article  3.  (6).

     (8)  In  the  event  that Criticare has to cancel the purchase order due to
          shortage of the materials as described in Article 3. (6), Criticare is
          financially  responsible for the cost of the rest of the raw materials
          that  TriVirix  has  purchased  for  the  purchase  order.

     (9)  In  connection  with  the manufacturing of the Products, Criticare and
          TriVirix  may  each  be  responsible  for:

          a.   having  their  respective  engineering  groups  work  together to
               discuss  the  technical  issues arising from the manufacturing of
               the  Products;  and

          b.   conducting  phased  reviews to ensure continued monitoring of the
               manufacturing  of  the  Products  including without limitation of
               detailed  design  review, quality improvement and cost reduction.

     (10) As  part  of the transfer of manufacturing to TriVirix, materials left
          over  at  Criticare's  current manufacturers including printed circuit
          board  components  may  be  in surplus. TriVirix agree to purchase all
          usable  materials  from  Criticare  at  TriVirix'  quoted  cost.

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4.   Licenses.

     (1)  Criticare  hereby  grants  TriVirix  a  non-exclusive,  royalty-free,
          worldwide  license  during  the Term of this Agreement to practice the
          Criticare's  Intellectual Property in order to manufacture Products in
          accordance  with  this  Agreement.

     (2)  TriVirix shall not have the rights to grant sublicenses to other third
          parties  to  practice  the  Criticare's Intellectual Property to other
          uses.

     (3)  Any  other  use  of  the Criticare's Intellectual Property by TriVirix
          shall  be  a  material  breach  of  this  Agreement  by  TriVirix.

5.   Manufacturing.

     (1)  During  the  Term  of  this  Agreement, TriVirix shall manufacture the
          Products  only  for  sale  to  Criticare,  or  at Criticare's request,
          Criticare's  Criticares.  Criticare shall have the right to use and/or
          resell  such  Products  on  a  worldwide  basis,  as  it  sees  fit.

     (2)  TriVirix  shall  manufacture  and  deliver  the  Products to Criticare
          according  to  the  terms  and  conditions as set forth in each of the
          written  purchase  order  agreed  by  the  Parties.

     (3)  All  Products  sold  to  Criticare  by  TriVirix  shall  be  marked by
          Trademarks  of  Criticare,  or  at  Criticare's request, Trademarks of
          Criticare's  Criticares.

     (4)  TriVirix  shall  not  use  Trademarks  of  Criticare  and  Criticare's
          Criticares  for  any  other  purposes.

     (5)  TriVirix  agrees  to  maintain at all times in their finished products
          inventories  one  full  month quantities of all products under current
          purchase  orders  from  Criticare.  This shall be achieved within four
          months  after  the  initial  delivery.  Should  Criticare  increase it
          orders,  such that the one month finished goods inventory is utilized,
          TriVirix  shall  have  six  months  to  re-establish  the one month of
          finished  good  inventory.

6.   Quality  Control  Procedures.

     (1)  Quality  Control  Procedures  of  the  Products  may be established by
          Criticare  and  approved  by  the  Parties.

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     (2)  TriVirix shall provide Criticare on a monthly basis with copies of all
          records  concerning  TriVirix'  compliance  with  the  Quality Control
          Procedures  upon  Criticare's  request.  Criticare  shall  meet  with
          TriVirix  on  an urgent basis to discuss and address any concerns that
          Criticare  may  have  from  time  to  time  with  respect to TriVirix'
          compliance  with  those  Quality  Control  Procedures.

7.   Purchase  Prices.

     (1)  The  Purchase  Prices  of  the  Products  manufactured by TriVirix for
          Criticare  are set forth in each of the written purchase orders agreed
          by  the  Parties.  Pricing  on  Purchase  Orders  is agreed to by both
          parties  and  shall  be  fixed  for  one  year.

8.   Delivery.

     (1)  The  Products  ordered  by Criticare and accepted by TriVirix shall be
          delivered  to  Criticare  (or the recipient) on the conditions of FOB,
          Belfast.

     (2)  The  ultimate  shipment  of  the Products by TriVirix to the recipient
          shall  be  subject  to the right and ability of TriVirix, to make such
          sales  and  obtain  required  licenses and permits, under all decrees,
          statutes,  rules  and  regulations  of  its  respective government and
          agencies or instrumentalities thereof presently in effect or which may
          be  in  effect  hereafter.

          The  recipient  of  such  shipments  hereby  agrees:

          a.   to  assist  TriVirix  in  obtaining any such required licenses or
               permits  by supplying such documentation or information as may be
               requested  by  the  other  Party;

          b.   to  comply  with such decrees, statutes, rules and regulations of
               the  government  of  TriVirix  and  agencies  or  instrumentality
               thereof;

          c.   to  maintain  the  necessary records to comply with such decrees,
               statutes,  rules  and  regulations;

          d.   not  to  re-export  any  Products, except in compliance with such
               decrees,  statutes,  rules  and  regulations;

          e.   to  obtain  all  governmental approvals and licenses necessary to
               import  the  Products  into  its  respective  country;

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          f.   not  to  sell,  transfer  or otherwise dispose of the Products in
               violation  of  the  export  laws  of  TriVirix'  country;  and

          g.   to  indemnify, defend and hold harmless TriVirix from any and all
               fines,  damages,  losses, costs and expenses including reasonable
               attorneys'  fees.  incurred by TriVirix as a result of any breach
               of  this  Article  8.  2.  by  the  recipient  of such shipments.

     (3)  Unless  the  recipient  of  Products  requests otherwise, all Products
          ordered  by such recipient shall be packed for shipment and storage in
          accordance  with  TriVirix'  standard  commercial practices. It is the
          recipient's  obligation  to  notify  TriVirix of any special packaging
          requirements,  which  shall  be  at  the  recipient's  expense.

     (4)  TriVirix  shall  deliver  the Products into the possession of a common
          carrier  designated  by the recipient no later than the date specified
          for  such  delivery  on the relevant purchase order for such Products;
          provided,  however,  that if the recipient does not designate a common
          carrier  by  such  date,  the  TriVirix  may  do so on the recipient's
          behalf.

     (5)  Risk  of  loss  and damage to the Products shall pass to the recipient
          upon  the  delivery of such Products to the designated common carrier.
          All  claims  for  short  shipments  must  be  made  in  writing by the
          recipient  to TriVirix within ten (10) days of the recipient's receipt
          of  such  Products  at  its  shipping destination. Any claims of short
          shipment  not  made  within  such  period  shall  be deemed waived and
          released.

     (6)  In the event of any discrepancy between any purchase order accepted by
          a Party hereunder and this Agreement, the terms and conditions of this
          Agreement  shall  govern.

9.   Payment.

     (1)  All  amounts  due  and  payable  with respect to Products delivered by
          TriVirix  to  the recipient in accordance with Article 8. (2) shall be
          paid  in  full  amount  within  thirty (30) days after the recipient's
          receipt of an invoice covering such Products. Invoices may not be sent
          prior  to  the  delivery date of the Products covered by such invoice.

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     (2)  All  payment and other amounts payable hereunder shall be paid in U.S.
          Dollars  by  wire transfer to TriVirix's designated bank or account in
          writing.  Whenever any amount hereunder is due on a day which is not a
          Business Day, such amount shall be paid on the next such Business Day.
          Amounts  hereunder  shall  be  considered  to be paid as of the day on
          which funds are received by TriVirix's designated bank. No part of any
          amount  payable  to  TriVirix  hereunder  may  be  reduced  due to any
          counterclaim, set-off, adjustment or other right which the payer might
          have  against  the  payee,  any  other  party  or  otherwise.

     (3)  All  payment  and  other  amounts  due  and  owing  from the recipient
          hereunder  but not paid by the recipient on the due date thereof shall
          bear  interest  (in  U.S.  Dollars)  at  the  rate  of  the lesser of:

          a.   twelve  percent  (12%)  per  annum;  and

          b.   the  maximum lawful interest rate permitted under applicable law.

          Such  interest  shall  accrue  on the unpaid balance from time to time
          outstanding  from the date on such payment and other amount become due
          and  owing  until  payment  thereof  in  full.

10.  Warranty.

     (1)  TriVirix  warrants  that, after successful testing of the prototype or
          the  validation lot as described in Article 3. (3) and after Criticare
          gives  its  final  written approval of the quality of the prototype or
          the  validation  lot:

           a.  the  Products  shall  conform  to  the  Specifications;  and

           b.  the Products shall be manufactured in accordance with the Quality
               Control  Procedures.

           c.  Unless  other  specified  in the written purchase order agreed by
               the  Parties,  the  Products  are  warranted  against  defects in
               materials and workmanship for a period of 12 months from the date
               of  delivery.

     (2)  The  Parties  agree  that,  upon  breach by TriVirix of its respective
          warranty  under  this  Article  10.  (1), TriVirix's remedies shall be
          limited  to  repair  or  replacement  of  the non-conforming Products.

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     (3)  EXCEPT  AS  STATED  ABOVE,  EACH PARTY DISCLAIMS ALL WARRANTIES OF ANY
          KIND,  WHETHER  EXPRESS  OR  IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO
          SYSTEM, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
          PARTICULAR  PURPOSE,  AND  TITLE.

11.  Ownership  of  the  Intellectual  Properties.

     (1)  Criticare  will  own  all Intellectual Properties rights in and to the
          Products,  to  the  extent  that such rights are to be embodied in, or
          which  must  be practiced in order to make, use or sell, the Products.

     (2)  Each  Party  shall execute any and all documents which the other Party
          may reasonably request in order to protect the other Party's rights in
          the  other  Party's  Intellectual  Property.  The  other  Party  shall
          reimburse  such  Party  for  reasonable  out-of-pocket  costs which it
          incurs  in  carrying  out  the  foregoing  responsibilities.

12.  Intellectual  Properties  Indemnification.

     (1)  Criticare  agrees  to indemnify, defend and hold harmless TriVirix and
          its  officers,  directors,  employees, and agents from and against any
          and  all  claims,  demands,  costs  and  liabilities  (including  all
          reasonable  attorneys'  fees  and court costs) of any kind whatsoever,
          arising  directly  or  indirectly  out  of  claims  that  TriVirix  is
          infringing on the intellectual property rights of third parties due to
          TriVirix'  use  of  the  Products  as  follows:

          a.   In the event that the Products is held in a suit or proceeding to
               infringe  any  intellectual  property rights of a third party and
               the  use  of  such  Products is enjoined, or Criticare reasonably
               believes  that  it is likely to be found to infringe or likely to
               be  enjoined, then Criticare shall, at its sole cost and expense,
               either

               (a)  procure  for  TriVirix  the  right  to  continue  using such
                    Products,  or

               (b)  modify  such  Products  so  that  it becomes non-infringing.

          b.   Criticare  shall have no obligation for any claim of infringement
               arising  from:

               (a)  any  combination  of the Products with products not supplied
                    or approved in writing by Criticare, where such infringement
                    would  not  have  occurred  but  for  such  combination;

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               (b)  the adaptation or modification of the Products not performed
                    by  Criticare,  where  such  infringement  would  not  have
                    occurred  but  for  such  adaptation  or  modification;

               (c)  the  use  of the Products in an application for which it was
                    not  designed or intended, where such infringement would not
                    have  occurred  but  for  such  use;  or

               (d)  a  claim  based on intellectual property rights not owned by
                    Criticare.

          c.   Article  11.  (1) states Criticare's sole and exclusive remedy in
               the  event  that  the  Products  infringes  on  the  intellectual
               property  right  of  any  third  party.

     (2)  TriVirix  hereby  agrees  that:

          a.   Criticare  shall  have sole control and authority with respect to
               the  defense  or  settlement  of  any  such  claim;  and

          b.   TriVirix shall cooperate fully with Criticare at Criticare's cost
               and  expense, in the defense of any such claim. Any settlement of
               any  such  claims  that  imposes  any  liability or limitation on
               TriVirix  shall  not  be  entered  into without the prior written
               consent  of  TriVirix.

     (3)  In  the  event  a  claim is based on an indemnified claim described in
          Article  11.  (1)  above,  any  payments  and reasonable attorney fees
          incurred  in connection with such claims are to be apportioned between
          the  Parties  in  accordance  with the degree of cause attributable to
          each  Party.

13.  Limitations  of  Liability.

     (1)  EXCEPT  FOR  ITS  INDEMNIFICATION  OBLIGATIONS UNDER ARTICLE 11 ABOVE,
          NEITHER  PARTY  SHALL IN ANY EVENT BE LIABLE TO THE OTHER PARTY OR ANY
          THIRD PARTY FOR ANY DAMAGES RESULTING FROM LOSS OF PROFITS, OR FOR ANY
          SPECIAL,  INCIDENTAL,  CONSEQUENTIAL,  INDIRECT  OR  EXEMPLARY DAMAGES
          ARISING OUT OF, OR IN CONNECTION WITH, THE USE, MANUFACTURE OR SALE OF
          PRODUCTS.

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     (2)  EXCEPT FOR THIRD PARTY CLAIMS FOR PERSONAL INJURY OR PROPERTY DAMAGES,
          EXCEPT FOR UNAUTHORIZED USE OF THE OTHER PARTY'S INTELLECTUAL PROPERTY
          RIGHTS AND EXCEPT FOR ITS INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 11
          ABOVE,  EACH  PARTY'S LIABILITY FOR DAMAGES TO THE OTHER PARTY FOR ANY
          CAUSE WHATSOEVER, REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION, SHALL
          NOT EXCEED THE TOTAL FEES AND OTHER AMOUNTS PAID BY THE OTHER PARTY TO
          SUCH  PARTY  HEREUNDER  DURING  THE  IMMEDIATELY  PRECEDING SIX MONTHS
          PERIOD.

14.  Confidentiality.

     (1)  Each  Party  acknowledges  and  agrees  that  in  the  course  of  its
          performance of this Agreement, it may receive confidential information
          of  the  other  party (the "disclosing Party"). Accordingly, the Party
          receiving such confidential information (the "receiving Party") hereby
          represents  and  agrees  that,  during  and  after  the  Term  of this
          Agreement,  all  disclosures  of  confidential  information  to  the
          receiving  Party,  its  agents  and  employees shall be held in strict
          confidence  by  such  receiving  Party,  which  shall  disclose  the
          confidential  information only to those of its agents and employees to
          whom  it  is  necessary in order to properly carry out their duties as
          limited  by the Terms and Conditions hereof. During and after the Term
          of  this Agreement, the receiving Party shall not use the confidential
          information  except  for  the  purposes  of  exercising its rights and
          carrying  out  its duties hereunder. The provisions of this Article 14
          shall  also  apply  to  any  consultants or subcontractors, during and
          after  the Term of this Agreement, that the receiving Party may engage
          in  connection  with  this  Agreement. Each Party shall take necessary
          steps  to  ensure  that  its  employees,  consultants,  agents  and
          subcontractors  respect  the  provisions  of  this  Article  14.

     (2)  Notwithstanding  anything contained in this Agreement to the contrary,
          neither  Party  shall  be  liable  for  a disclosure of the disclosing
          Party's  confidential  information  if  the  information so disclosed:

          a.   was  in  the  public  domain  at the time it was disclosed by the
               disclosing  Party  to  the  receiving Party or thereafter becomes
               part  of  the  public  domain  through  no fault of the receiving
               Party;  or

          b.   was  known  to or contained in the records of the receiving Party
               at  the  time  of  disclosure  by  the  disclosing  Party  to the
               receiving  Party  and  can  be  so  demonstrated;  or

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          c.   becomes known to the receiving Party from a source other than the
               disclosing  Party  without  such  source  breaching  its
               confidentiality  obligations  to  the  disclosing  Party;  or

          d.   was  required  to  be  disclosed  under  court  order,  legal  or
               administrative  process or as otherwise required by law, provided
               that  the  receiving Party has given the disclosing Party no less
               than  ten (10) days prior written notice of the receiving Party's
               intention to make a disclosure pursuant to this Article 14. 2. d.

15.  Term  and  Termination.

     (1)  Unless sooner terminated in accordance with Article 15. (2) below, the
          Term  of  this  Agreement  shall begin on the Effective Date and shall
          expire  at  the  end  of the Initial Term; provided, however, that the
          Term  of  this  Agreement  shall automatically be extended, subject to
          termination in accordance with Article 15. (2), for additional periods
          of  two  (2)  years  each,  unless  either Party gives the other Party
          written  notice  to the contrary at least sixty (60) days prior to the
          end  of  the  Initial  Term or the then-current extension term, as the
          case  may be, in which case the Term of this Agreement shall expire at
          the end of the Initial Term or the then-current extension term, as the
          case  may  be.

     (2)  Upon the occurrence of any one of the following events with respect to
          a  party (the "breaching Party"), the other Party shall have the right
          to  terminate  this  Agreement,  effective immediately upon giving the
          breaching  Party  written  notice  of  such  termination  as  follows:

          a.   a material breach by the breaching Party in fulfilling any one or
               more  of  its covenants, obligations or responsibilities pursuant
               to  this Agreement, which failure is not cured within thirty (30)
               days  after  the  breaching Party receives written notice of such
               breach  from  the  other  Party;

          b.   dissolution, termination of existence, liquidation, insolvency or
               business  failure of the breaching Party, or the appointment of a
               custodian  or receiver for the breaching Party or any part of the
               property  of  the  breaching  Party  if  such  appointment is not
               terminated  or  dismissed  within  thirty  (30)  days; except for
               transmittance  of  control  from  one  Party  to  its  Affiliate.

                                       13
<PAGE>
          c.   the  institution  by  the breaching Party of any proceeding under
               applicable  bankruptcy  laws or the making by the breaching Party
               of  a  composition  or  any  assignment or trust mortgage for the
               benefit  of  creditors;  or

          d.   the institution against the breaching Party of a proceeding under
               applicable  bankruptcy,  reorganization, receivership, insolvency
               or other similar law affecting the rights of creditors generally,
               which  proceeding  is  not  dismissed  within thirty (30) days of
               filing.

          e.   TriVirix  fails  to  maintain  its  ISO 9002 certification and is
               unable to recover its certification within a reasonable period of
               time.

     (3)  In  no  event  shall  termination  of  this  Agreement  terminate  the
          obligation of either Party to make royalty, fee or other amount either
          due  hereunder  as  of  the  date  of termination or which becomes due
          thereafter  in  accordance  with  the  terms  of  this  Agreement.

     (4)  Upon  termination  of  this  Agreement  for  any  reason:

          a.   TriVirix  shall  immediately  terminate  production  of Products.

          b.   Each  Party  shall  cease  using  the  other Party's Confidential
               Information  and  either  promptly  return  to the other Party or
               dispose  of  all of the other Party's Confidential Information in
               any  form whatsoever which it may have in its possession, custody
               or  control  (whether  direct  or  indirect).

     (5)  Neither  Party shall by reason of the termination of this Agreement be
          liable  to  the  other Party for compensation or damages on account of
          the  loss  of  profits  or  sales,  or  expenditures,  investments  or
          commitments  in  connection  therewith.

     (6)  The provisions of Sections 11, 12, 13, 14, 15(3) through (6) and 16 of
          this  Agreement  shall  survive  any  termination  of  this Agreement.

     (7)  If a "Change of Control" occurs on either parties part, this Agreement
          will  stay  in  effect for one full year after the "Change of Control"
          takes place. Written notification of "Change of Control" must be given
          to  the  other  party  within 30 days after the "Change of Control" is
          instituted.

                                       14
<PAGE>
16.  General  Provisions.

     (1)  Assignability.  Neither  this  Agreement  nor  any  of  the  rights or
          obligations  hereunder  may  be  assigned  by either Party without the
          consent  of the other Party except in connection the assignment to the
          Affiliate  of the Part. This Agreement shall be binding upon and inure
          to  the  benefit of the Parties hereto and their respective successors
          and  permitted  assigns.

     (2)  Governing  Law.  This  Agreement shall be governed by and construed in
          accordance  with  laws  of  the  Common wealth of Northern Ireland and
          Wisconsin,  excluding  (a)  its  conflict  of laws principles; (b) the
          United  Nations  Convention on Contracts for the International Sale of
          Goods;  (c)  the  1974  Convention  on  the  Limitation  Period in the
          International  Sale  of  Goods  (the  "1974  Convention"); and (d) the
          Protocol  amending the 1974 Convention, done at Vienna April 11, 1980.

     (3)  Dispute  Resolution.  Any dispute, controversy or claim arising out of
          or  relating  to this Agreement, or to a breach thereof, including its
          interpretation,  performance or termination, shall be submitted to and
          finally resolved by arbitration. The arbitration shall be conducted in
          accordance  with  the  commercial  arbitration  rules  of the American
          Arbitration  Association  ("AAA").  The  arbitration,  including  the
          rendering of the reward, shall take place in Waukesha, Wisconsin, USA,
          and  shall  be  the  exclusive  forum  for  resolving  such  dispute,
          controversy  or  claim. The decision of the arbitrators shall be final
          and  binding  upon  the  Parties  hereto.  The  arbitration  shall  be
          conducted in English by three arbitrators to be selected by the AAA in
          accordance  with  its  normal  procedures.  Notwithstanding  this,
          application  may be made to any court for a judicial acceptance of the
          award  or  order of enforcement. Notwithstanding anything contained in
          this  Section  17 (3) to the contrary, each Party shall have the right
          to  institute  judicial  proceedings against the other Party or anyone
          acting  by, through or under such other Party, in order to enforce the
          instituting  Party's rights hereunder through reformation of contract,
          specific  performance,  injunction  or  similar  equitable  relief.

     (4)  Waiver.  The  waiver  by  either Party of a breach or a default of any
          provision  of this Agreement by the other Party shall not be construed
          as  a  waiver  of  any  succeeding  breach  of  the  same or any other
          provision, nor shall any delay or omission on the part of either Party
          to  exercise  or avail itself of any right, power or privilege that it
          has, or may have hereunder, operate as a waiver of any right, power or
          privilege  by  such  Party.

                                       15
<PAGE>
     (5)  No  Agency.  Nothing  contained  in  this Agreement shall be deemed to
          constitute  either  Party  as the agent or representative of the other
          Party, or both Parties as joint venturers or partners for any purpose.
          Neither  Party  shall  be responsible for the acts or omissions of the
          other  Party,  and  neither  Party  will  have authority to speak for,
          represent or obligate the other Party in any way without prior written
          authority  from  the  other  Party.

     (6)  Severability.  In  the  event  that any provision of this Agreement is
          held  by a court of competent jurisdiction to be unenforceable because
          it  is  invalid  or  in  conflict  with  any  law  of  any  relevant
          jurisdiction,  the  validity  of the remaining provisions shall not be
          affected  and  the  rights  and  obligations  of  the Parties shall be
          construed  and  enforced  as  if  the  Agreement  did  not contain the
          particular  provisions  held  to  be  unenforceable.

     (7)  Notices.  Any  and  all notices and other communications in connection
          with  this  Agreement  shall  be  in  writing  and  shall  be sent (a)
          personally  delivered, (b) transmitted by registered air mail, postage
          prepaid,  return  receipt  requested,  (c) by Federal Express or other
          recognized  courier service, (d) transmitted by telex/facsimile/e-mail
          with  confirmed  answer-back,  to  the  Parties  hereto  as  follows:

          To:     Criticare  Systems,  Inc.
                  20925  Crossroads  Circle,
                  Waukesha,  WI  53186-4054,  USA
                  Attention:     Emil  Soika,  President  and  CEO
                  Joseph  P.  Lester,  Vice  President  and  General  Manager
                  Telex/Facsimile  No.:  1-262-798-8290
                  E-mail:  joe.lester@csiusa.com
                  Answerback:  1-262-798-8282

          To:     TriVirix  International  Limited
                  Advantage  Way,  Ballygomartin  Industrial  Park,
                  Belfast,  N.I.,  BT13  3PN
                  Attention:  Tom Larrichio, Director of Materials and Contracts
                  Telex/Facsimile  No.:  919  259-9011
                  E-mail:  tlarrichio@trivirix.com
                  Answerback:  919  259-9000

          or  to  such other address, telex/facsimile number, e-mail address and
          individual  as  either Party may from time to time designate by notice
          hereunder.

                                       16
<PAGE>
     (8)  Entire  Agreement.  This  Agreement  constitutes  the entire agreement
          between the Parties. No waiver, consent, modification or change of the
          terms  of  this  Agreement  shall  bind either Party unless in writing
          signed by both Parties, and then such waiver, consent, modification or
          change  shall  be  effective only in the specific instance and for the
          specific  purpose  given.

     (9)  Force  Majeure.  Neither Party shall be in default hereunder by reason
          of  its  delay  in the performance of or failure to perform any of its
          obligations  hereunder,  if such delay or failure is cause by strikes,
          fires,  casualties,  floods,  wars,  acts  of God or the public enemy,
          riots,  incendiaries,  lockouts,  failure  of  public  utilities,
          injunctions  or  any  act,  exercise,  assertion  or  requirement  of
          governmental  authorities,  epidemic,  destruction  of  production
          facilities,  insurrection,  inability  to  procure  materials,  labor,
          equipment,  transportation  or energy sufficient to meet manufacturing
          needs,  interference by civil or military authorities, compliance with
          governmental laws, rules, regulations and decisions, including without
          limitation,  those relating to exchange restrictions or similar events
          that  beyond  its control or without its fault or negligence. However,
          each  Party  hereto  shall  promptly  notify  the  other  Party of the
          occurrence  of  each  such  force  majeure  condition.

     (10) Performance.  TriVirix  shall  make  available  by electronic or other
          means  any  information  required  by  Criticare  to  be  obtained  or
          maintained as it relates to Products, including current data regarding
          status  and  performance  on  this  purchase  order.

     (11) Government  and  Agency  Requirements. TriVirix makes no warranty that
          the  Product  Specifications  meet  all  applicable  government  and
          independent  agency  requirements,  standards,  and  approvals.

     (12) Product  Repair.  Criticare,  its  distributors,  Customers,  or other
          designee  may  return  Products  to  TriVirix  that  are determined by
          Criticare  to  be defective or that need repair. Upon determination of
          any  defective  Product,  Criticare  may  request,  and TriVirix shall
          issue,  a  "return  authorization  number"  enabling  Criticare or the
          end-user  to ship such Product on a freight-collect basis to TriVirix.
          TriVirix shall, at TriVirix' option, either replace or repair Products
          found  to  be defective during the Warranty period with Products which
          conform  to the Product Specifications which are part of this Purchase
          Order  and in force at the time the defective Products were originally
          delivered.  Products  returned  for  defects  in  workmanship  and/or
          materials during the Warranty Period will be repaired and shipped back
          to  the  appropriate  destination at no charge to Criticare. Repair of
          non-warranty and/or post-warranty Products shall be in accordance with
          Criticare's

                                       17
<PAGE>
          instruction.  Repair  and  shipping  costs  for  Products returned for
          defects  that  are  not  the  responsibility  of  TriVirix,  including
          Products  that  have been improperly used and/or handled, non-warranty
          Products,  and  post-warranty Products, shall be paid by Criticare. If
          the  Products  are  returned to TriVirix, and TriVirix determines that
          said  Products are not defective in any way, and Criticare agrees with
          TriVirix' findings, Criticare agrees to pay TriVirix a fixed amount to
          be negotiated between TriVirix and Criticare (no defects found charge)
          for  each  such  Product.  TriVirix'  warranty  shall not apply to any
          defects  caused  by  improper use, handling, or transportation, unless
          improperly  packaged  by  TriVirix  for  delivery  to Criticare or its
          designee.

     (13) Product  Specification  Changes.  In  the  event Criticare changes the
          Product  Specifications,  Criticare  shall promptly advise TriVirix in
          writing  of  such  changes;  or  in  the  case  of  a  change  to  the
          specification  required  due  to parts obsolescence or unavailability,
          TriVirix  shall  promptly  advise  Criticare  in  writing  as  to  any
          scheduling  and/or  price  adjustments  which  may  result  from  such
          changes. Prior to implementation of such changes, the Parties agree to
          negotiate  in  good  faith in an attempt to reach agreement on (a) the
          new  price  for any Product manufactured or service provided hereunder
          by  TriVirix which embodies such changes, and (b) any other amendments
          to  this  Purchase  Order  which  may  be necessitated by such changes
          (i.e.,  an adjustment to the lead time for purchase orders). Criticare
          agrees  to  reimburse  TriVirix  for  the  reasonable, mutually agreed
          expenses  incurred by TriVirix as a result of such changes, including,
          but  not  limited  to, reimbursing TriVirix for its development costs,
          capital  expenditure costs, rework costs, and costs for any components
          or  other  materials  rendered  unusable  as a result of such changes.

     (14) Price  Changes.  Certain  events,  such as the increase or decrease in
          cost  of  a  component or material, may increase or decrease TriVirix'
          cost  per  unit. TriVirix may present this cost data at the end of the
          Contract  Year. The parties agree to negotiate in good faith to arrive
          at  an  upward  or  downward  adjustment  to  the  unit  price.

     (15) Records.  TriVirix  shall maintain all engineering, manufacturing, and
          inspection  records,  all  records  of  shipments of the Products from
          TriVirix  to  Criticare  or  Criticare's  designees,  and  all records
          related  to Product or facility regulations and certifications for the
          time  periods required by applicable laws and regulations with respect
          to  the  Products. TriVirix shall make such records and data available
          for  review  and  copying  by  Criticare  at  TriVirix'  facility upon
          reasonable  prior  written  notice  from  Criticare  to  TriVirix.  In
          addition,  upon  termination  or  expiration  of  this Purchase Order,

                                       18
<PAGE>
          whichever  occurs  first, TriVirix will upon Criticare's request, make
          copies  of  such  records  and  data  for  Criticare.

     (16) Employee  Solicitation.  During  the  period  beginning  with the date
          hereof  and  ending  twelve  months  after all Services to be provided
          hereunder  have  been  performed,  each of TriVirix and Criticare, for
          itself  and its Affiliates, agree that it will not offer employment to
          or  otherwise  interfere  with  the  employment of any employee of the
          except  as  may  be  expressly  stated  in  any  Proposal, without the
          permission  of  the  other  Party.

     (17) Bankruptcy; Insolvency. Either Party may terminate this Purchase Order
          upon  the  occurrence  of  either of the following: (a) The entry of a
          decree  or  order  for  relief  by  a court having jurisdiction in the
          premises  in  respect  of  such Party in an involuntary case under any
          applicable  federal  or  state  insolvency or other similar law in any
          applicable  jurisdiction  and  the  continuance  of any such decree or
          order  unstayed  and  in effect for a period of sixty (60) consecutive
          days;  or  (b) The filing by such Party of a petition for relief under
          any  applicable  federal  or  state  insolvency  or other similar law.

     (18) Expiration;  Termination.  (a)  Upon expiration or termination of this
          Purchase  Order  for  any  reason,  (i)  Criticare shall purchase from
          TriVirix  and  TriVirix  shall  sell at TriVirix' acquisition cost all
          usable  inventories  and  materials  reasonably  acquired  by TriVirix
          hereunder  for  the  manufacture  of  or  development of Product, (ii)
          Criticare  shall  purchase  from  TriVirix and TriVirix shall sell all
          work-in-progress for the Product at TriVirix' cost and (iii) Criticare
          shall purchase and TriVirix shall sell all other finished Product then
          in  TriVirix'  possession.  (b) Upon expiration or termination of this
          Purchase  Order  for any reason, TriVirix shall release to the custody
          of  Criticare  or  Criticare'  designee all Product Specifications (in
          whatever  form occurring, whether hard copy, magnetic or optical disk,
          etc.),  all  Criticare-owned  tooling,  dies,  molds,  testing  or
          manufacturing  or  other  Criticare  equipment,  together  with either
          originals  or  validated  copies  of all testing, inspection, or other
          data regarding the performance or regulatory compliance of any Product
          sold  to  Criticare  hereunder,  as  well  as  any  other  property of
          Criticare  that  is on the premises of TriVirix. In addition, TriVirix
          shall  sell  to  Criticare,  and  Criticare'  shall  purchase,  for  a
          reasonable  and  mutually-agreeable  price,  any property or equipment
          owned  by  TriVirix  or its Affiliates specifically and solely for the
          production  of  Criticare'  Products.

                                       19
<PAGE>
     (19) Indemnification  by  Criticare.  Except  as  otherwise provided below,
          Criticare  shall  indemnify,  defend and hold TriVirix, its Affiliates
          and  their  respective  directors,  officers,  employees,  agents,
          successors  and  assigns  harmless  from  and  against  any  damages,
          judgments,  claims,  suits,  actions,  liabilities, costs and expenses
          (including,  but  not  limited to, reasonable attorneys' fees) arising
          out  of  or connected with (a) the design, manufacture, use, handling,
          distribution,  marketing or sale of the Products (except to the extent
          caused  by  TriVirix'  grossly  negligent acts or omissions or willful
          misconduct in the procurement of components or in the manufacturing of
          the  Products)  or  from  any  accident  resulting from the use of the
          Products,  (b)  negligent  acts,  omissions, willful misconduct or any
          breach or default of any representation of Criticare or any obligation
          on  the  part  of  Criticare to be performed pursuant to this Purchase
          Order  or  any  of its agents, contractors, employees or licensees, or
          (c)  any  proceeding instituted by or on behalf of a Third Party based
          upon  a  claim  that  the  manufacture,  use  or  sale of the Products
          infringes  a  United  States  patent  or any other proprietary rights.

     (20) Indemnification  by  TriVirix.  Except  as  otherwise  provided above,
          TriVirix  shall  indemnify,  defend and hold Criticare, its Affiliates
          and  their  respective  directors,  officers,  employees,  agents,
          successors  and  assigns  harmless  from  and  against  any  damages,
          judgments,  claims,  suits,  actions,  liabilities, costs and expenses
          (including,  but not limited to, reasonable attorneys' fees) resulting
          from  (a)  any  Third  Party  claims  or  suits  arising solely out of
          TriVirix' grossly negligent acts or omissions or willful misconduct in
          the  manufacture  of  the  Products; or, (b) grossly negligent acts or
          omissions,  willful  misconduct  or  any  breach  or  default  of  any
          representation  of  TriVirix or any obligation on the part of TriVirix
          to  be performed pursuant to this Purchase Order or any of its agents,
          contractors,  employees  or  licensees.

     (21) Press  Releases.  Any press release, publicity or other form of public
          written  disclosure  related  to  this  Purchase Order prepared by one
          Party  shall  be  submitted  to  the  other Party prior to release for
          approval,  which  approval  shall not be unreasonably withheld by such
          other  party.

     (22) Use  of  Names. Except as otherwise required by law or by the terms of
          this  Purchase  Order  or mutually agreed upon by the Parties, neither
          Party  shall  make any use of the name of the other Party or any trade
          name  or  trademark belonging to the other Party in any advertising or
          promotional  material  without  the  prior consent of the other Party,
          which  consent  shall  not  be  unreasonably  withheld.

                                       20
<PAGE>
     (23) Independent  Contractors.  The  relationship  between  Criticare  and
          TriVirix  is  that of independent contractors and nothing herein shall
          be deemed to constitute the relationship of partners, joint venturers,
          nor  of  principal  and  agent between Criticare and TriVirix. Neither
          Party  shall  have any express or implied right or authority to assume
          or  create  any  obligations  on behalf of or in the name of the other
          Party  or  to  bind  the  other  Party  to  any contract, agreement or
          undertaking  with  any  Third  Party.

     (24) Assignment.  This  Purchase  Order  may  not  be assigned or otherwise
          transferred  by  either Party without the prior written consent of the
          other  Party.  Any  purported assignment in violation of the preceding
          sentence  shall  be  void. No assignment shall relieve either Party of
          responsibility  for  the  performance  of any obligation which accrued
          prior  to  the  effective  date  of  such  assignment.

     (25) Publicity.  Neither  Party shall originate any publicity, news release
          or  other  public  announcement  relating  to  this  Agreement  or the
          existence  of  an  arrangement  between  the Parties without the prior
          written  approval  of the other Party, except as otherwise required by
          law.

     (26) Headings.  Captions and headings contained in this Agreement have been
          included  for  ease  of  reference  and  convenience  and shall not be
          considered  in  interpreting  or  construing  this  Agreement.

     (27) Counterparts.  This Agreement may be executed in several counterparts,
          each  of  which shall be deemed an original, but all of which together
          shall  constitute  one  and  the  same  instrument.

     (28) Order  of Precedence. In the case of any conflict, the following order
          of  precedence  shall  apply:  (1)  Purchase  Order;  (2)  Terms  and
          Conditions;  (3)  Proposal;  (4)  Product  Specifications;  (5)  Other
          exhibits,  data  incorporated  herein  as  attachments.

IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be duly
signed  and  executed  as  of  the  date  first  above  specified.

CRITICARE  SYSTEMS  INC.               TRIVIRIX  INTERNATIONAL

By:  /s/  Joseph  P.  Lester            By:  /s/  Tom  M.  Larrichio
     -----------------------                 -----------------------
     Mr.  Joseph  Lester                     Mr.  Tom  M.  Larrichio
     Vice  President and General Manager     Director of Materials and Contracts

Date:  11/15/00                         Date:  11/15/00
       --------                                 --------

                                       21
<PAGE>
                                    Exhibit A

                              Criticare's Trademark

                                [GRAPHIC OMITTED]

                                       22EXHIBIT 10.xi
                                                                   -------------

                                 LEASE AGREEMENT
                                 ---------------

         This Lease Agreement (this "Lease")entered into this 30th day of
August, 2001, by and between ACME REALTY, a New York general partnership with an
address of P.O. Box 207, Scarsdale, New York 10583 (the "Landlord"), and SONICS
& MATERIALS, INC., a Delaware corporation with offices at 53 Church Hill Road,
Newtown, Connecticut 06470 (the "Tenant").

                              W I T N E S S E T H :

In consideration of the mutual promises, covenants and agreements herein
contained and in consideration of the rents hereinafter reserved, Landlord does
hereby let to Tenant, and Tenant does hereby take and lease from Landlord, the
demised premises hereinafter described for commercial use upon all of the terms,
promises, covenants and agreements hereinafter set forth.

1.       DEMISED PREMISES.

         1.1    DESCRIPTION.

A.       The premises subject to this Lease shall initially consist of
         approximately Fifty Eight Thousand Three Hundred Sixty Three (58,363)
         square feet of office and manufacturing space in a certain office
         building (the "Building") located at 53 Church Hill Road, Newtown,
         Connecticut (the "Property"), more particularly described in Schedule A
         attached hereto and made a part hereof (the "Demised Premises"). The
         term and rent for this Lease are shown hereinafter in paragraphs 3 and
         4.

B.       The Landlord is presently under contract to purchase the property from
         the Tenant. Upon signing of that purchase and sale contract, the
         Landlord shall at its own expense conduct a leasing program to fill an
         area of approximately 13,898 square feet that is initially part of the
         Demised Premises, which area (the "Contraction Space")is shown on
         Exhibit 1.1.B. In no event shall Landlord lease space in the Building,
         at any time during the term of this Lease, as the same may be extended,
         to a tenant who is a competitor of Tenant. Landlord shall only lease
         space in the Building to tenants who have a good reputation in the
         business community. The Landlord shall be responsible for any and all
         leasing expenses including new tenant fit-outs and leasing commissions
         incurred in connection with any leasing activities in the Building.
         Tenant agrees that after closing of sale, the Tenant will cooperate
         with the Landlord in accommodating new tenants and vacate the
         newly-leased premises within thirty (30) days of a lease being signed
         by a new tenant for the Contraction Space or any portion thereof.

C.       The Demised Premises shall be reduced by that portion of the
         Contraction Space which may be leased to one or more other tenants
         during the first year of this Lease, which reduction shall be effective
         upon the date of occupancy of the Contraction Space or any part thereof
         by the new tenant or the effective date of the lease or leases with
         such new tenant(s),
<PAGE>
         whichever is earlier. In the event of such a reduction in the size of
         the Demised Premises during the first year of this Lease, the base rent
         payable by Tenant pursuant to Section 4.2 shall be reduced in
         proportion to the reduction in the size of the Demised Premises. In any
         event, the Demised Premises shall no longer include any part of the
         Contraction Space following the expiration of the first year of the
         term of this Lease, and commencing on the second anniversary of the
         term of this Lease, the Demised Premises shall consist of the space
         shown on Exhibit 1.1.B. (which space shall include the large bathroom
         area located in the center of the Building)(the Demised Premises, after
         removal of the Contraction Space, as shown on Exhibit 1.1.B., is herein
         sometimes referred to as the "Redefined Demised Premises").

D.       Tenant shall be responsible for the cost of reconfiguring the
         mechanical systems to the Redefined Demised Premises, including but not
         limited to the cost of separating the HVAC and electrical systems and
         the realignment of any fire sprinklers within the Redefined Demised
         Premises. Tenant shall further be responsible for the cost of any
         reconfiguration of the walls within the Redefined Demised Premises.

E.       Landlord shall be responsible for the cost of installing all demising
         walls separating the Redefined Demised Premises from all other space in
         the Building, including the Contraction Space. Landlord shall further
         be responsible for the cost of reconfiguring the mechanical systems to
         the Contraction Space, including but not limited to the cost of
         separating of the HVAC and electrical systems and the realignment of
         any fire sprinklers within the Contraction Space. Landlord shall also
         be responsible for the cost of all tenant fit-up work in the
         Contraction Space, including, without limitation, any reconfiguration
         of the walls within the Contraction Space.

         1.2    USE OF COMMON AREAS. The Tenant shall have the right, for the
benefit of Tenant and its employees, customers, and invitees, to the
nonexclusive use of all areas and facilities within the Property that are
provided and designated by the Landlord for the general nonexclusive use of the
Landlord, Tenant, other tenants of the Building and their respective employees,
customers and invitees including, but not limited to, the front entryway to the
Building, parking areas, loading and unloading areas, drives, walkways,
roadways, trash areas and landscaped areas (the "Common Areas").

         1.3    PARKING. Tenant shall have the right for the benefit of Tenant
and its employees, customers and invitees, to the use of parking spaces within
those portions of the Common Areas designated for parking by Landlord. Such
spaces may be used by all tenants of the Building on an unassigned basis, except
that the two spaces located in the front of the Building shall continue to be
reserved for Tenant.

         1.4    CONDITION OF THE PREMISES. Tenant acknowledges that neither the
Landlord nor any agent or any employee of the Landlord has made any
representation or warranty with respect to the Demised Premises, the Building or
the Property or the suitability of the same for the conduct of Tenant's
business. Tenant warrants and represents that it has inspected the Demised
Premises and the condition thereof and, except as specifically provided
elsewhere in this Lease, agrees to accept the Demised Premises in "as is"
condition. Landlord shall have no obligation to improve the Premises in any way
except as specifically provided in this Lease.

                                        2
<PAGE>
2.       USE OF PREMISES.

         2.1    EXISTING USE. Tenant shall have the right to use and occupy the
Demised Premises for general office, engineering, research and manufacturing
purposes and no other uses without the prior written consent of the Landlord.
Tenant shall continue to use the Premises in the manner in which it presently
uses the Premises.

         2.2    LICENSES AND PERMITS. It shall be Tenant's sole obligation to
obtain all licenses, permits and franchises required for the lawful conduct of
Tenant's business in the Demised Premises. No failure to obtain the same, nor
any revocation thereof by any governmental authority of any such licenses,
permits or franchises heretofore or hereafter granted by any such governmental
authority, shall in any manner affect this Lease or diminish the amount of rent
or any other payments or charges payable by Tenant hereunder.

         2.3   COMPLIANCE WITH LAWS. Tenant shall comply with and conform to all
the laws of the State of Connecticut, and the rules and regulations of the town
in which the Property is located applicable to Tenant's use of the Demised
Premises. Tenant agrees to save the Landlord harmless from all fines, penalties
or costs for violation of or non-compliance with the same.

         2.4    NUISANCE. The Tenant agrees to use the Premises in a manner that
does not interfere with or infringe upon the rights of other tenants in the
Building. Tenant shall not cause, maintain or permit any nuisance in, on or
about the Demised Premises, the Building or the Property; nor shall Tenant
commit or suffer to be committed any waste in, on or about the Demised Premises,
the Building or the Property. Landlord acknowledges and agrees that such levels
of noise as are customarily associated with the sonic and ultrasonic
applications that are a part of Tenant's business are permissible and shall not
be deemed a violation of this section.

3.       TERM.

         The term of this Lease shall commence on August 30, 2001 ("Commencement
Date"), and shall terminate on the tenth (10th) anniversary of the Commencement
Date ("Termination Date"). The term of this Lease may be extended by two
additional five-year terms in accordance with section 29 of this Lease.

4.       RENT.

         4.1    FIRST YEAR'S BASE RENT. Upon the signing of this Lease, for the
first year of the term of said Lease, the Tenant shall pay to the Landlord the
sum of $6.75 per square foot, for an annual base rental of $393,950.25, payable
in equal monthly installments of $32,829.19. The Tenant shall pay the first
month's base rent of $32,829.19 upon signing of this Lease.

                                        3
<PAGE>
         4.2    YEARS TWO THROUGH TEN BASE RENT. At the expiration of the first
year of the term of this Lease, the Demised Premises shall be reduced by the
elimination from the Demised Premises of the Contraction Space (a reduction of
approximately 13,890 square feet), so that following such reduction in the size
of the Demised Premises, the Demised Premises shall thereafter consist of the
Redefined Demised Premises, as shown on Exhibit 1.1.B attached, consisting of
approximately 44,465 square feet. The base rent per square foot will escalate
three percent (3%) per annum on each anniversary date of the Commencement Date,
so that the annual base rent, based on the three percent (3%) increase stated
above, shall be as follows:

         Year      Rate        Sq. Ft.        Annual           Monthly
         ===============================================================
          2       $ 6.95       44,465       $309,031.75       $25,752.65
          3       $ 7.16       44,465       $318,369.40       $26,530.78
          4       $ 7.38       44,465       $328,151.70       $27,345.98
          5       $ 7.60       44,465       $337,934.00       $28,161.17
          6       $ 7.83       44,465       $3448,160.95      $29,013.41
          7       $ 8.06       44,465       $358,387.90       $29,865.66
          8       $ 8.30       44,465       $369,059.50       $30,754.96
          9       $ 8.55       44,465       $380,175.75       $31,681.31
         10       $ 8.81       44,465       $391,736.65       $32,644.72

First Extended Term (if first Extension Option is exercised by Tenant pursuant
to Section 29:

         11       $ 9.07       44,465       $403,297.55       $33,608.13
         12       $ 9.34       44,465       $415,303.10       $34,608.59
         13       $ 9.62       44,465       $427,753.30       $35,646.11
         14       $ 9.91       44,465       $440,648.15       $36,720.68
         15       $10.21       44,465       $453,987.65       $37,832.30

Second Extended Term (if second Extension Option is exercised by Tenant pursuant
to Section 29:

         16       $10.52       44,465       $467,771.80       $38,980.98
         17       $10.84       44,465       $482,000.60       $40,166.72
         18       $11.17       44,465       $496,674.05       $41,389.50
         19       $11.51       44,465       $511,792.15       $42,649.35
         20       $11.86       44,465       $527,354.90       $43,946.24

         4.3    ADDITIONAL RENT. All other amounts that Tenant is required to
pay pursuant to the Lease (including interest and costs that may be added for
nonpayment or late payments and attorney's and collection fees) shall constitute
additional rent due hereunder ("Additional Rent"). If the Tenant fails to pay
Additional Rent when due, the Landlord shall have the right to pay the same and
shall have all right, powers, and remedies with respect thereto as are provided
herein or by law in the case of nonpayment of base rent.

         4.4    LATE CHARGE. Tenant shall pay as Additional Rent an amount equal
to five (5) percent of any installment of Base Rent or Additional Rent not paid
to the Landlord within ten (10) days after such payment is due.

5. SECURITY DEPOSIT.

                                        4
<PAGE>
         A security deposit in the amount of $25,011.56 (the "Security
Deposit")shall be paid by the Tenant to the Landlord on the Commencement Date of
this Lease. Such Security Deposit shall be deposited by Landlord in an interest
bearing account and held as collateral security for the payment of any rents or
other sums of money payable by Tenant under this Lease and for the faithful
performance by Tenant of all other covenants, conditions and agreements of this
Lease. The amount of the Security Deposit, together with all interest earned
thereon, shall be repaid to the Tenant within ten (10) days after the expiration
or termination of this Lease and any renewal thereof, provided the Tenant shall
have made all such payments and performed all such covenants, conditions and
agreements. Upon any default by the Tenant hereunder, all or part of said
Security Deposit may, at any time and in Landlord's sole discretion, be applied
on account of such default. Thereafter the Tenant shall restore the resulting
deficiency in said Security Deposit within ten (10) days of notice of Landlord's
application. Tenant's failure to restore said deficiency shall constitute a
default hereunder. Tenant hereby waives the benefit of any provision of law
requiring such Security Deposit to be held in escrow or in trust.

         The Tenant shall have the option to replace this Security Deposit with
a Letter of Credit at any time, provided it gives two months' notice of its
intention to do so. Simultaneously with the delivery by Tenant to Landlord of
the letter of credit, Landlord shall return the cash Security Deposit, together
with all interest earned thereon, to Tenant.

6.       TAXES AND COMMON CHARGES.

         6.1    DEFINITIONS.

                (a) Computation Year shall mean each calendar year, all or any
         portion of which falls within the term of this Lease, as extended from
         time to time. Notwithstanding the foregoing, the first Computation Year
         shall commence on the Commencement Date and shall end on December 31,
         2001, and the last Computation Year shall end on the last day of the
         term of this Lease, as extended from time to time. Tenant's obligation
         to pay Tenant's Pro-Rata Share of estimated and actual amounts towards
         Taxes and Common Expenses for the first and last Computation Year shall
         be prorated by multiplying the total estimated or actual (as the case
         may be) Taxes and Common Expenses paid or incurred during the first or
         last (as the case may be) Computation Year by a fraction, the numerator
         of which shall be the number of days in the first or last (as the case
         may be) Computation Year, and the denominator of which shall be 365.

                (b) For purposes of this Section 6, the Building is deemed to be
         65,372 square feet, and the Demised Premises is deemed to be 58,363
         square feet during the first year of this Lease, and 44,465 square feet
         during each year following the first year of this Lease.

                (c) Tenant's Pro-Rata Share shall be during the first year of
         this Lease eighty nine percent (89%) which is the percentage figure
         computed by dividing the square footage allocated to the Demised
         Premises by the total square footage of the Building. In the second
         through tenth years of this Lease, when the square footage of the
         Tenant's share shall be reduced to 44,465 square feet, the Tenant's
         Pro-Rata Share shall be adjusted to sixty eight percent (68%).

                (d) Taxes shall mean all taxes, assessments and charges levied

                                        5
<PAGE>
         upon or with respect to the Property and shall include, without
         limitation, all real estate taxes, assessments, sewer rents and
         charges, and other governmental impositions and charges of every kind
         and nature whatsoever, special and several, extraordinary as well as
         ordinary, and each and every installment thereof, which shall or may
         during the term of this Lease be charged, laid, levied, assessed,
         imposed, become due and payable, or become liens upon the Property or
         any part thereof and all improvements thereon, under or by virtue of
         all present or future laws, ordinances, requirements, orders,
         directions, rules or regulations of the federal, state, county and city
         governments and of all other governmental authorities whatsoever;
         provided, however, that the term "Taxes" shall not mean any interest or
         penalties which may become due by reason of the failure to pay any such
         taxes when due and payable, or any federal, state or local income,
         estate, inheritance, transfer, corporate or franchise taxes assessed
         against Landlord.

                (e) Common Expenses shall mean the aggregate amount of the
         following expenses provided the same are reasonable and customary for
         similar buildings in northern Fairfield County, Connecticut (1) the
         total costs and expenses paid or incurred by Landlord in connection
         with the operation, repair and maintenance of the Common Areas and the
         Property including, without limitation, parking areas, loading and
         unloading areas, trash areas, roadways, driveways, walkways, landscaped
         areas, striping, bumpers, lighting facilities, fences and gates; (2)
         the cost of fire, extended coverage, boiler, sprinkler, public
         liability, property damages, rent, earthquake and other insurance
         obtained by Landlord in connection with the Property; (3) the cost of
         trash disposal services; (4) the cost of maintaining tenant
         directories; (5) the cost of operating, repairing and maintaining life
         safety systems including, without limitation, sprinkler systems; (6)
         the cost of security services, if provided by Landlord; (7) the cost of
         water, electricity, gas and other utilities used in connection with the
         operation, maintenance and repair of the Building and the Property (but
         excluding the cost of water, electricity, gas and other utilities
         consumed by other tenants of the Building); and (8) managerial fees and
         administrative expenses related solely to the Building and the
         Property. Notwithstanding anything to the contrary contained herein,
         "Common Expenses" shall not include (i) items which are the
         responsibility of any tenant of the Building or are caused by the
         intentional or negligent act of any tenant, its agents, employees,
         contractors, licensees or invitees; (ii) expenses of alterations to any
         portion of the Building for the accommodation of a specific tenant or
         tenants; (iii) costs and expenses of leasing space in the Building,
         including, without limitation, legal fees and broker's commissions and
         advertising, and the salary of any employee of Landlord engaged in
         leasing space in the building; (iv) costs and expenses actually paid by
         Landlord's insurance or with respect to which Landlord is otherwise
         reimbursed; (v) the cost of any capital improvement or replacement to
         the Building or the Property; (vi) costs incurred due to Landlord's
         violations of any of the terms and conditions of any leases in the
         Building and/or costs attributable to enforcing leases against tenants
         in the Building, such as attorney's fees, court costs, adverse
         judgments and similar expenses; (vii) debt service on any mortgages of
         Landlord and rental under any ground or underlying leases affecting or
         related to the Property or any part thereof; (viii) the cost of
         repairs, replacement and restoration work occasioned by fire or other
         casualty or condemnation, whether or not Landlord is reimbursed by
         insurance proceeds or condemnation award; (ix) any costs, fines or
         penalties incurred due to violations by Landlord or any governmental
         rule or authority and the defense of the same; or (x) items and
         services for which Landlord is reimbursed under other leases for space
         in the Building, or under other provisions of this Lease, including
         Taxes.

                                        6
<PAGE>
                (f) Tenant shall pay to Landlord, as Additional Rent hereunder,
         an amount equal to Tenant's Pro-Rata Share of Taxes and Common Expenses
         for each Computation Year in the following manner:

                       (i) Landlord may reasonably estimate in advance the
                amounts Tenant shall owe for Taxes and Common Expenses for any
                full or partial calendar year of the term, which estimate of
                Common Expenses shall be consistent with the types and levels of
                common expenses incurred by owners of comparable buildings in
                northern Fairfield County, Connecticut. In such event, Tenant
                shall pay such estimated amounts, on a monthly basis, on or
                before the first day of each calendar month, together with
                Tenant's payment of base rent. Such estimate may be reasonably
                adjusted from time to time by Landlord.

                       (ii) Within 60 days after the end of each calendar year,
                Landlord shall provide a statement (the "Statement") to Tenant
                showing: (a) the amount of actual Taxes and Common Expenses for
                such calendar year, with a listing of amounts for major
                categories of Common Expenses, (b) any amount paid by Tenant
                towards Taxes and Common Expenses during such calendar year on
                an estimated basis, and (c) any revised estimate of Tenant's
                obligations for Taxes and Common Expenses for the current
                calendar year.

                       (iii) If the Statement shows that Tenant's estimated
                payments were less than Tenant's actual obligations for Taxes
                and Common Expenses for such year, Tenant shall pay the
                difference. If the Statement shows an increase in Tenant's
                estimated payments for the current calendar year, Tenant shall
                pay the difference between the new and former estimates, for the
                period from January 1 of the current calendar year through the
                month in which the Statement is sent. Tenant shall make such
                payments in 12 equal consecutive monthly installments commencing
                on the first day of the month following receipt of the
                Statement, which obligation shall survive the expiration of the
                term of this Lease.

                       (iv) If the Statement shows that Tenant's estimated
                payments exceeded Tenant's actual obligations for Taxes and
                Common Expenses, Tenant shall receive a credit for the
                difference against payments of rent next due. If the term of
                this Lease shall have expired and no further rent shall be due,
                Tenant shall receive a refund of such difference, within thirty
                (30) days after Landlord sends the Statement.

                (g)    If the Commencement Date shall be other than the first
         day of a Computation Year, or ends other than on the last day of a
         Computation Year, Tenant's obligations to pay estimated and actual
         amounts towards Taxes and Common Expenses for such first or final years
         shall be prorated to reflect the portion of such years included in the
         term of this Lease.

                (f)    Landlord shall maintain records respecting Taxes and
         Common Expenses and determine the same in accordance with sound
         accounting and management practices, consistently applied. Tenant or
         its representative shall have the right to examine such records upon
         reasonable prior, during normal business hours at the office of
         Landlord or Landlord's accountant in Fairfield County, Connecticut by
         sending such notice no later than ninety (90) days following Tenant's
         receipt of the Statement. Tenant may take exception to matters included
         in Taxes or Common Expenses, or Landlord's computation of Tenant's
         Pro-Rata Share of either, by sending notice specifying such exception
         and the reasons therefor to Landlord no later than ninety (90) days
         after Landlord makes such records available for examination. Such
         Statement shall be considered final, except as to matters to which
         exception is taken after examination of Landlord's records in the
         foregoing manner and within the foregoing times. If Tenant takes
         exception to any matter contained in the Statement as provided herein,
         the parties shall refer the matter to an independent certified public
         accountant mutually selected by Landlord and Tenant, whose
         certification as to the proper amount shall be final and conclusive as
         between Landlord and Tenant. Tenant shall promptly pay the cost of such
         certification unless such certification determines that Tenant was
         overbilled by more than two percent (2%), in which case Landlord shall
         pay the cost of such certification. Pending resolution of any such
         exceptions in
                                        7
<PAGE>
         the foregoing manner, Tenant shall continue paying Tenant's Pro-Rata
         Share of Taxes and Common Expenses in the amounts determined by
         Landlord, subject to adjustment after any such exceptions are so
         resolved. If Landlord and Tenant are unable to agree upon the selection
         of the independent certified public accountant within ten (10) days
         after Tenant notifies Landlord that it takes exception to matters
         contained in the Statement, such selection shall be determined by
         arbitration in accordance with the Commercial Rules of the American
         Arbitration Association then in effect. Landlord and Tenant shall each
         pay one-half of the expense of the arbitration.

         6.2    PERSONAL PROPERTY TAXES. Tenant shall be liable for and shall
pay before delinquency all taxes levied or assessed against trade fixtures,
equipment, furnishings, merchandise and other personal property that Tenant
located within or installed in or upon the Demised Premises, whether or not
affixed to the realty.

7.       UTILITIES.

         7.1    UTILITIES SEPARATELY METERED TO TENANT. During the term of this
Lease or any extension thereof, electricity serving the Demised Premises shall
be separately metered to the Tenant and shall be promptly paid by the Tenant to
the utility supplier. Landlord and Tenant shall attempt to establish separate
accounts with the gas company for each tenant in the Contraction Space. If such
accounts cannot be established, then the invoices for gas consumption for the
Building shall be prorated so that Tenant shall reimburse Landlord for Tenant's
Pro-Rata Share of the cost of furnishing gas to the Building. Water bills shall
be pro-rated in accordance with the foregoing provision. Tenant shall pay the
cost of installing all meters to its space and Landlord shall pay the cost of
installing all meters to the space of other tenants in the Building. Tenant
shall be responsible for any installation and service costs associated with any
telephone, cable television, computer lines, or other similar installations made
at Tenant's request on the Demised Premises.

8.       MAINTENANCE AND REPAIRS.

         8.1    LANDLORD'S OBLIGATIONS. Landlord shall repair, maintain and
replace, as necessary, the parking lots, driveways, sidewalks, exterior
lighting, landscaping and other exterior improvements of the Property, the
hallways and other common areas of the Building, the structural components of
the Building, including without limitation its roof, foundation, exterior walls,
windows, exterior doors, heating, ventilation, air conditioning, electrical,
plumbing and other systems and equipment serving the Property and Landlord's
fixtures within the building ,so as to maintain the same at all times during the
term of this Lease in good repair, reasonable wear and use and maintenance
occasioned by Tenant's misuse or negligence excepted.

         8.2    TENANT'S OBLIGATIONS. During the term of this Lease or any
extension thereof, Tenant shall be responsible for the separation of the HVAC,
the sprinkler, electric, and plumbing to be utilized by the Tenant in the
Demised Premises. Tenant will be responsible for maintaining and replacing any
HVAC equipment servicing the Demised Premises. In the event that Tenant replaces
an HVAC unit during the final five (5) years of the Term (as the same may be
extended), Landlord shall reimburse Tenant for a fraction of the cost of such
replacement, the denominator of which shall be ten (10) and the numerator of
which shall be a number equal to the number of years remaining in the Term.
Tenant shall pay to the Landlord as Additional Rent hereunder Tenant's Pro-Rata
Share of the cost of the services to be performed by Landlord pursuant to
Section 8.1, in accordance with and subject to the limitations set forth in

                                        8
<PAGE>
Section 6 herein. Landlord shall also provide trash removal services (for trash
generated by normal office use only) for the Demised Premises, and Tenant shall
deposit trash in the location specified by the Landlord.

         8.3    TENANT'S REPAIRS AND MAINTENANCE. Notwithstanding the foregoing,
Tenant shall, at all times during the term of this Lease, and at its own cost
and expense, keep and maintain or cause to be kept and maintained in repair and
good condition (ordinary wear and tear excepted), the Demised Premises, and
shall use all reasonable precaution to prevent waste, damage or injury. Except
as provided in this Lease, Landlord shall not be required to furnish any
services or facilities or to make any improvements, repairs or alterations in or
to the Demised Premises during the term of this Lease or any renewal thereof.

         8.4    JANITORIAL SERVICES. Janitorial services and such other services
as Tenant may find necessary or desirable in connection with its occupancy of
the Demised Premises shall be supplied by Tenant at its own expense.

9.       INSURANCE; INDEMNIFICATION.

         9.1    FIRE AND EXTENDED COVERAGE. During the term of this Lease or any
extension thereof, Landlord shall maintain fire and extended coverage on the
Building in an amount equal at all times to not less than the full insurable
replacement cost of the Building (without deduction for depreciation but
excluding the cost of excavation or foundations). Such insurance shall contain a
waiver of subrogation endorsement in favor of Tenant. Prior to or upon the
execution and delivery of this Lease, Landlord shall deliver to Tenant a
certificate evidencing such coverage. Tenant shall pay to the Landlord as
Additional Rent hereunder Tenant's Pro Rata Share of such fire and extended
coverage insurance on the Building, in accordance with Section 6.

         9.2    LIABILITY INSURANCE. During the term of this Lease or any
extension thereof, Landlord shall maintain commercial general liability
insurance, including contractual liability insurance coverage, covering
Landlord's operations on the Property, with combined single limits of not less
than $1,000,000 per occurrence for bodily injury or property damage. Such
policies shall be written in standard Connecticut form, shall name Tenant as an
additional insured therein, and shall be primary and noncontributing with
respect to any insurance carried by Tenant. Simultaneously with the execution
and delivery of this Lease, Landlord shall deliver to Tenant certificates
evidencing such insurance and, at Tenant's option, deliver said original
policies to Tenant. Tenant shall pay to the Landlord as Additional Rent
hereunder Tenant's Pro Rata Share of such liability insurance coverage, in
accordance with Section 6. Tenant shall, at its own expense, during the entire
term of this Lease, or any extensions thereof, maintain commercial general
liability insurance, including contractual liability insurance coverage,
covering Tenant's operations in the Demised Premises, with combined single
limits of not less than $1,000,000 per occurrence for bodily injury or property
damage. Such policies shall be written in standard Connecticut form, shall name
the Landlord as an additional insured therein, and shall be primary and
noncontributing with respect to any insurance carried by the Landlord. Prior to
occupying the Demises Premises, Tenant shall deliver to the Landlord
certificates evidencing such insurance and, at Landlord's option, deliver said
original policies to the Landlord.

         9.3    TENANT'S USE OF PREMISES. Tenant shall not use the Demised
Premises in a manner that will increase the rate of fire insurance in the

                                        9
<PAGE>
Building over the rate in effect prior to this Lease. If by reason of the
failure of the Tenant to comply with the provisions of this section the fire
insurance rate is increased higher than it would be otherwise, the Tenant shall
reimburse the Landlord for the part of all fire insurance premiums thereafter
paid by the Landlord that have been charged because of such failure of the
Tenant, such reimbursement to be in addition to Tenant's Pro Rata Share of
hazard insurance premiums provided for in this section.

         9.4    CONTENTS INSURANCE. Tenant shall, at its own cost and expense,
keep its own personal property, furniture, fixtures and equipment belonging to
Tenant and located in the Demised Premises insured for not less than one hundred
percent (100%) of its actual replacement value against loss or damage by fire,
with the usual extended coverage endorsements.

         9.5    EVIDENCE OF INSURANCE. Tenant shall, at any time upon request of
the Landlord, provide Landlord with copies of all policies required hereunder,
certificates of insurance evidencing the same, and/or evidence of payment of
premiums for such policies.

         9.6    WAIVER OF SUBROGATION. Landlord and Tenant each hereby release
each other and waive any and all rights of recovery against the other, or
against the officers, employees, agents and representatives of the other, for
loss of or damage to property arising out of or incident to any peril required
to be insured against in this Lease. The effect of such release and waiver is
not limited to the amount of insurance actually carried, to the actual proceeds
received after a loss or to any deductibles applicable thereto. Landlord and
Tenant shall, upon obtaining the policies of insurance required hereunder, give
notice to the insurance carrier that the foregoing mutual waiver of subrogation
is contained in this Lease.

10.      INDEMNIFICATION.

         10.1   INDEMNIFICATION. Landlord hereby indemnifies and holds Tenant
harmless from and against any and all claims arising from any breach or default
in the performance of any obligation on Landlord's part to be performed under
the terms of this Lease; or from any negligence of Landlord, or any of
Landlord's agents, contractors or employees, and from and against all costs,
attorney's fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon. In the event that any action
or proceeding is brought against Tenant by reason of any such claim, Landlord
upon notice from Tenant shall defend the same at Landlord's sole expense by
counsel satisfactory to Tenant. Tenant hereby indemnifies and holds Landlord
harmless from and against any and all claims arising from Tenant's use of the
Demised Premises and the Property; from the conduct of Tenant's business; from
any activity, work or things done, permitted or suffered by Tenant in or about
the Demised Premises, the Property or elsewhere; from and against any and all
claims arising from any breach or default in the performance of any obligation
on Tenant's part to be performed under the terms of this Lease; or from any
negligence of the Tenant, or any of Tenant's agents, contractors or employees,
and from and against all costs, attorney's fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon. In the event that any action or proceeding is brought against Landlord
by reason of any such claim, Tenant upon notice from Landlord shall defend the
same at Tenant's sole expense by counsel satisfactory to Landlord.

         10.2   EXEMPTION OF LANDLORD FROM LIABILITY. Tenant shall make no claim
against Landlord for any injury or damage to Tenant or to any other person or
for any damage to, or loss of, or loss of use of, any property of Tenant or of
                                       10
<PAGE>
any other person, irrespective of the cause of such injury, damage or loss,
unless caused by the negligence of Landlord, its agents or employees, in the
operation or maintenance of the Property or the Building. Landlord shall not be
liable for any damages arising from any act or neglect of any other tenant, if
any, of the Building.

11.      DAMAGE BY FIRE OR OTHER CASUALTY.

         11.1   TOTAL DESTRUCTION. In the event the Building and/or the Demised
Premises shall be destroyed or so damaged by fire or other casualty so as to
render the Demised Premises wholly untenantable or unfit for the reasonable
conduct of Tenant's business, Landlord may elect by written notice to be given
to Tenant within thirty (30) days after such fire or casualty to (a) restore and
repair such damage to the Demised Premises within 60 days after such
destruction, in which case all rent (to include Base Rent and Additional Rent)
due hereunder shall abate on a per-diem, thirty-day-month basis during the
period of restoration or (b) terminate this Lease or any extension thereof, in
which case all rent due hereunder shall terminate as of the day of such fire or
casualty and any overpayment of the same shall be promptly refunded to the
Tenant.

         In the event Landlord is unable to restore and repair such damage
within 60 days after such destruction, Tenant may elect to terminate this Lease
by giving Landlord written notice of its intention to do so within two (2) weeks
after the earlier of the expiration of such 60 day period or notification from
Landlord that the estimated time required to repair such damages and restore the
Demised Premises is in excess of 60 days from the date of destruction.

         11.2   PARTIAL DAMAGE. In the event the Building and/or the Demised
Premises shall be so damaged but are not thereby rendered wholly untenantable or
unfit for the reasonable conduct of Tenant's business, Landlord shall restore
the Building and the Demised Premises with reasonable dispatch. Provided such
damage was not intentionally caused by Tenant, then while such damage is being
repaired, all rent due hereunder shall be reduced by an amount which bears the
same ratio to the monthly rent that the floor area rendered untenantable or
unfit for the reasonable conduct of Tenant's business bears to the total floor
area of the Demised Premises. Provided such damage was not intentionally caused
by Tenant, then if restoration of the portion of the Demised Premises used for
manufacturing purposes is not completed within sixty (60) days of the date of
damage or destruction, Tenant may, at its option, terminate this Lease by giving
Landlord written notice of its intention to do so within two (2) weeks after the
earlier of the expiration of such sixty (60) day period or notification from
Landlord that the estimated time required to repair such damages and restore the
Demised Premises is in excess of sixty (60) days from the date of destruction.

         11.3  LANDLORD'S OBLIGATIONS. Nothing herein shall obligate Landlord to
replace or repair the personal property or fixtures of the Tenant. Nor shall the
Landlord be obligated for any repairs made necessary by a casualty not covered
by any standard form fire and extended coverage insurance required to be
maintained hereunder.

12.      IMPROVEMENTS.

         12.1  TENANT'S ADDITIONAL IMPROVEMENTS. Upon obtaining Landlord's prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed, Tenant may, at its option and at its own cost and expense, at any
time and from time to time, make additional alterations, changes, replacements,

                                       11
<PAGE>
improvements and additions in and to the Demised Premises, as it may deem
desirable. Prior to the commencement of such improvements, Tenant shall submit
the plans and specifications of said proposed alterations and a list of its
proposed contractors and subcontractors to be used in connection with said
alterations to the Landlord and must obtain Landlord's written approval for the
same, which approval shall not be unreasonably withheld, conditioned or delayed.
All work shall be done in conformance with said prior approvals and (with the
exception of trade fixtures) shall be deemed the property of the Landlord upon
termination of this Lease. Landlord's approval of such alterations shall not be
deemed a representation or warranty by Landlord of the fitness or quality of the
plans as proposed or the work as completed.

         12.2   SIGNS. Landlord, at Landlord's expense, will maintain the
free-standing directory sign on the Property; and Tenant, at Tenant's own cost
and expense, will be able to place signage information on this directory in
common with others. In addition, Landlord, at Landlord's expense, will install a
lobby directory sign; and Tenant will have space available to Tenant on this
directory in common with others. No signs may be installed in the Building or on
the Property by the Tenant without Landlord's prior written approval as to the
number, size and design of such signs, which approval shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding anything to the contrary
contained herein, Landlord shall continue to keep and maintain the sign
identifying Tenant and other tenants of the Property that exists as of the date
of this Lease first written above on Church Hill Road as well as the sign
identifying Tenant in the parking lot of the Property.

         12.3   MECHANIC'S LIENS. If, as a result of Tenant's alterations
hereunder, any mechanic's lien or other lien is placed on the Demised Premises,
Tenant shall cause the same to be cancelled and discharged of record, by bond or
otherwise, at Tenant's sole cost and expense, within thirty (30) days after
having been requested in writing so to do by the Landlord. In addition, Tenant
shall defend, on behalf of the Landlord, at Tenant's sole cost and expense, any
action, suit or proceeding that may be brought thereon or for the enforcement of
such lien, and Tenant shall pay any damages and discharge any judgment entered
therein and hold harmless Landlord from and indemnify it against any claim,
damage or costs, including reasonable attorneys' fees, resulting therefrom.

         12.4   COMPLIANCE WITH BUILDING CODES. All work done by Tenant in
connection with any repairs or in connection with alterations, installations and
changes in the Demised Premises shall be in compliance with building and zoning
rules and regulations and with all applicable laws, orders, ordinances, rules,
regulations and requirements of all federal, state and municipal governments or
departments, commissions, boards and officers thereof and in accordance with the
rules, orders and regulations of any applicable insurance underwriters.

13.      QUIET ENJOYMENT.

The Landlord covenants with the Tenant that it has good right to lease the
Demised Premises in manner aforesaid, and that it will suffer and permit the
Tenant (it keeping all the covenants on its part, as herein contained) to
occupy, possess, and enjoy said premises during the term aforesaid, without
hindrance or molestation from it or any person claiming by, from or under it.

14.      TENANT'S DEFAULT.

         14.1   EVENTS OF DEFAULT. Tenant shall be in default under this
Lease if:

                                       12
<PAGE>
                (a) Tenant fails to pay any installment of Base Rent or
         Additional Rent within ten (10)days after the same is due; or

                (b) Tenant defaults in the performance of any other term,
         covenant or condition of this Lease and such default has not been cured
         within thirty (30) days after notice by Landlord to Tenant specifying
         such default and requiring it to be remedied, or where such default
         cannot reasonably be remedied within such period of thirty (30) days,
         if Tenant shall not have, in good faith, commenced the remedying
         thereof within such period of time and shall not be proceeding with due
         diligence to remedy it; or

                (c) Upon Tenant's filing of a petition under the federal
         Bankruptcy Code; if any involuntary petition under the provisions of
         said Code is filed against Tenant and such involuntary petition is not
         dismissed within sixty (60) days thereafter; or if Tenant makes an
         assignment of all its assets for the benefit of creditors or is placed
         in receivership and said receiver has not been discharged thirty (30)
         days after his appointment; or

                (d) If Tenant fails to exist as a corporation under the laws of
         the State of Delaware qualified as a foreign corporation to transact
         business in the State of Connecticut.

         14.2   TERMINATION BY LANDLORD. If Tenant shall be in default under
this Lease, Landlord, at its option, may terminate this Lease without further
notice to Tenant, and upon such termination, Tenant shall quit and surrender the
Demised Premises and all improvements located thereon to Landlord, but such
termination shall not affect the Landlord's rights to recover damages or
exercise any other rights as hereinafter provided.

         14.3   RE-ENTRY BY LANDLORD. Upon termination of this Lease as
aforesaid, Landlord may (a) re-enter and resume possession of the Demised
Premises and enter and possess all improvements thereon and remove all persons
and property therefrom either by summary process proceedings or by a suitable
action or proceeding, at law or in equity, without being liable for any damages
therefor and (b) Landlord may relet the whole or any part of the Demised
Premises on behalf of Tenant for a period equal to, greater or less than the
remainder of the then term of this Lease, at such rental and upon such terms and
conditions as Landlord shall deem reasonable, to any tenant it may deem suitable
and for any use and purpose it may deem appropriate. Landlord shall not be
liable in any respect for the failure to relet the Demised Premises and the
improvements located thereon, or, in the event of such reletting, for failure to
collect the rent thereunder and any sums received by Landlord on a reletting in
excess of the rent reserved in this Lease, shall belong to Landlord.

         14.4   DAMAGES. Upon the termination of this Lease as aforesaid,
Landlord shall forthwith be entitled to recover from Tenant all damages
sustained by the Landlord as a result of Tenant's default, including, but not
limited to, the following items:

                (a) If the Base Rent and the Additional Rent provided for herein
         exceed the net sum received by Landlord on any reletting, the amount of
         such excess;

                (b) All reasonable and customary expenses of operating the
         Demised Premises while they are vacant; all reasonable and customary
         expenses, including reasonable attorneys' fees, incurred by Landlord in
         recovering possession of the Demised Premises and reletting the same,
         and all reasonable and customary costs of performing any work to be
         done by Tenant under this Lease; and

                                       13
<PAGE>
                (c) Broker's commission at the rate typically charged for
         commercial lease transactions in the market area in which the Property
         is located, but limited to the unexpired term only.

         14.5  COSTS AND EXPENSES. Tenant shall pay as Additional Rent hereunder
all other expenses reasonably incurred by Landlord, including attorney's fees,
in seeking to enforce the obligations of Tenant hereunder occasioned by the
Tenant's default, provided that a court enters a judgment that Tenant so
defaulted under the terms of this Lease. Tenant agrees that Landlord shall be
entitled to recover the sum set forth in this paragraph in one action or, at
Landlord's option and provided there shall be good reason to do, so in several
separate actions. In such latter event, Tenant hereby waives the right to assert
the rule against splitting the cost of action as a defense thereto. Both
Landlord and Tenant hereby expressly waive their right to a trial by jury in any
action brought by either party. Landlord shall pay all expenses reasonably
incurred by Tenant, including attorney's fees, in seeking to enforce the
obligations of Landlord hereunder occasioned by the Landlord's default, provided
that a court enters a judgment that Landlord so defaulted under the terms of
this Lease. Landlord agrees that Tenant shall be entitled to recover the sum set
forth in this paragraph in one action or, at Tenant's option and provided there
shall be good reason to do, so in several separate actions. In such latter
event, Landlord hereby waives the right to assert the rule against splitting the
cost of action as a defense thereto.

         14.6   WAIVER. A waiver by Landlord of any breach by the Tenant of any
of the terms, covenants, conditions and agreements of this Lease shall be
limited to the particular instance and shall not operate or be deemed as a
waiver of any future breaches of said terms, covenants, conditions and
agreements of this Lease. The failure of Landlord to enforce any agreement,
condition, covenant or term of this Lease against the Tenant shall not be deemed
to void or affect the right of Landlord to enforce the same agreement,
condition, covenant or term on the occasion of such subsequent breach or
default. A waiver by Tenant of any breach by the Landlord of any of the terms,
covenants, conditions and agreements of this Lease shall be limited to the
particular instance and shall not operate or be deemed as a waiver of any future
breaches of said terms, covenants, conditions and agreements of this Lease. The
failure of Tenant to enforce any agreement, condition, covenant or term of this
Lease against the Landlord shall not be deemed to void or affect the right of
Tenant to enforce the same agreement, condition, covenant or term on the
occasion of such subsequent breach or default.

15.      RIGHT TO CURE DEFAULT. If Tenant defaults in the performance of any
covenant or condition of this Lease required to be performed by Tenant,
Landlord, at its option, may after 30 days notice to Tenant, or without notice
if in Landlord's opinion an emergency exists, perform such covenant or condition
for the account and at the expense of Tenant and Tenant shall reimburse Landlord
for such expense. The amount of such expense shall be deemed to be Additional
Rent and shall be paid by Tenant with the next monthly installment of rent due
hereunder Lease. If Landlord defaults in the performance of any covenant or
condition of this Lease required to be performed by Landlord, Tenant, at its
option, may after 30 days notice to Landlord, or without notice if in Tenant's
opinion an emergency exists, perform such covenant or condition for the account
and at the expense of Landlord and Landlord shall reimburse Tenant for such

                                       14
<PAGE>
expense within ten (10) days after receipt of a demand for payment. The
provisions of this paragraph shall survive the termination of the Lease.

16.      EMINENT DOMAIN.

         16.1   TOTAL CONDEMNATION. In the event the whole of the Demised
Premises shall be taken under the power of eminent domain for any public or
quasi-public use or purpose, this Lease shall thereupon terminate as of the date
possession shall be taken by or under the condemnor. Tenant shall have no claim
against Landlord for the value of any unexpired term of this Lease.

         16.2   PARTIAL CONDEMNATION. In the event that proceedings in the
eminent domain shall have been instituted with respect to the Property and such
proceedings or any action consequent thereon render the Demised Premises
unusable for Tenant's operations as previously conducted thereon, Tenant shall
have the right upon notice to Landlord (rendered within sixty (60) days after
Tenant shall have ascertained or been duly notified by Landlord (whichever shall
first occur) of the existence of such proceedings in eminent domain) to
terminate this Lease, effective as of' the date possession shall be taken by or
under the condemnor.

         16.3   TERMINATION OF LEASE. In the event this Lease shall be
terminated, as provided in this section, the Demised Premises and the
improvements shall belong absolutely to the Landlord and Tenant shall promptly
remove all of Tenant's personal property and each party hereto shall thereupon
be released from every obligation hereunder to the other, except:

                (a) With respect to any covenants the breach of which occurred
         prior to termination date; and

                (b) The obligation of Landlord to refund to Tenant any rent paid
         by Tenant for the period subsequent to the termination date and
         Tenant's security deposit hereunder to the extent it is refundable
         hereunder.

         16.4.  DAMAGES. All damages awarded for any such taking under the power
of eminent domain, whether for the whole or a part of the Demised Premises,
shall belong to and be the property of Landlord, whether such damages shall be
awarded as compensation for diminution in value of the leasehold or for the fee
of the. Demised Premises, provided, however, that Landlord shall not be entitled
to any award made to Tenant for loss of or damage to Tenant's trade fixtures and
removable person property or for damages to improvements made by Tenant with
approval of Landlord during the term of this Lease and any extension thereof or
for damages for cessation or interruption of Tenant's business.

         16.5   ADJUSTMENT OF RENTS. If this Lease is terminated as provided in
this section, all rent shall be paid up to the date that possession is taken by
the condemning authority, and Landlord shall make an equitable refund of any
rent paid by Tenant in advance and not yet earned.

         16.6   VOLUNTARY SALE. A voluntary sale by Landlord to any public or
quasi-public body, agency or person, corporate or otherwise, having the power of
eminent domain, either under threat of condemnation, or while condemnation
proceedings are pending, shall be deemed to be a taking by eminent domain for
the purposes of this section.

17.      ASSIGNMENT AND SUBLETTING.

                                       15
<PAGE>
         17.1   LANDLORD'S CONSENT REQUIRED. Except as otherwise expressly
provided below, Tenant may not assign or sublet all or any part of the Demised
Premises for any portion of the term of this Lease or any extension thereof
except with the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed ; and any such transfer, if
approved, shall not relieve Tenant of any liability hereunder. Notwithstanding
the foregoing prohibition against assignment or subletting, this Lease may be
assigned without consent of Landlord to any entity which shall purchase or
otherwise acquire a substantial portion of the assets of Tenant or shall succeed
to a substantial portion of the business of Tenant conducted at the Demised
Premises, provided each of the following conditions shall be complied with:

         (i)   the assignee shall at all times use the Demised Premises for only
the purposes permitted in this Lease;

         (ii)  the assignee shall execute and deliver to Landlord an assignment
and assumption agreement in form satisfactory to Landlord pursuant to which the
assignee shall assume and agree to perform all of Tenant's obligations under
this Lease arising on and after the effective date of the assignment.

         Upon the satisfaction of each of said conditions, Tenant shall be
relieved of all liability hereunder arising on or after the effective date of
the assignment.

         17.2   EXCESS RENT. With respect to any sublease approved by the
Landlord for all or a portion of the Demised Premises, any "profit" on such
sublease shall be payable fifty percent (50%)to the Landlord and fifty percent
(50%) to Tenant; provided, however, that if more than 50% of the Demised
Premises is sublet by Tenant, then Tenant shall not be entitled to any portion
of profit.  For the purposes of this Subparagraph 17.2, "profit" shall refer to
the difference between (1) all payments made by a subtenant to the Tenant as
rent or otherwise under or in connection with said sublease and (2) the sum of
the Base Rent and Additional Rent payable hereunder with respect to the sublet
space. The Tenant shall pay Landlord's share of sublease profit to the Landlord
in advance on a monthly basis as Additional Rent.

         18.    NOTICES. Any notice required or permitted to be given under this
Lease shall be in writing and shall be sent by registered or certified mail,
return receipt requested, to:

                       LANDLORD:

                       Attn: Edward Falkenberg
                       Acme Realty
                       P.O. Box 207
                       Scarsdale, NY 10583

                       TENANT:

                       Attn: Robert Soloff
                       Sonics & Materials, Inc.
                       53 Church Hill Road
                       Newtown, CT   06470

                                       16
<PAGE>
Such notice shall be deemed to have been given as of the date of the postmark on
the envelope enclosing the same.

19.      ACCESS TO PREMISES.

         19.1  ACCESS FOR REPAIRS AND IMPROVEMENTS. Tenant shall permit Landlord
or Landlord's agents to enter the Demised Premises and improvements thereof in
the case of an emergency in which Landlord or Landlord's agents reasonably
believe that a risk of injury, death or property damage may exist and also at
all reasonable hours, for the purpose of inspecting the same, or of making
repairs or performing any other work on the Demised Premises and improvements
thereon that Tenant may have failed to commence in accordance with the
agreements, conditions, covenants and terms hereof. Except in the case of an
emergency, Landlord or Landlord's agents shall give to Tenant not less than two
(2) days' prior notice of its intention to enter the Demised Premises and all
persons so entering the Demised Premises shall be accompanied by an employee or
representative of Tenant at all times.

         19.2  ACCESS FOR SALE OR LEASE. Tenant shall also permit Landlord or
Landlord's agents to enter the Demised Premises at all reasonable hours for the
purpose of showing the Demised Premises to prospective mortgagees or to persons
wishing to purchase the same and, within six (6) months prior to the expiration
of the terms of this Lease, to persons wishing to hire the Demised Premises; and
Tenant shall, within six (6) months prior to the expiration of the term of this
Lease, permit the usual notices of "To Let" and "For Sale" to be placed upon the
Property and to remain thereon without molestation. Landlord or Landlord's
agents shall give to Tenant not less than two (2) days' prior notice of its
intention to enter the Demised Premises and all persons so entering the Demised
Premises shall be accompanied by an employee or representative of Tenant at all
times.

20.      SUBORDINATION.

         This Lease and any extension thereof, the lien thereof upon the Demised
Premises, and all rights of the Tenant hereunder, are hereby subordinated and
made subject to liens of all bona fide mortgages to any bank, institutional
lender or insurance company hereinafter placed on the Demised Premises;
provided, however, that Landlord and such mortgagee shall have first executed
and delivered to Tenant a non-disturbance agreement in favor of Tenant in form
and substance satisfactory to Tenant. No other instrument shall be necessary to
subordinate this Lease and all rights hereunder to the lien or liens of any such
mortgage or mortgages. Nonetheless, Tenant hereby agrees that it will, upon
demand, at any time or times, (subject, however, to receipt of said
non-disturbance agreement)execute, acknowledge and deliver to the Landlord,
without expense to the Landlord, any and all instruments that may be necessary
or proper to subordinate this Lease and all rights hereunder to the lien or
liens of any such new mortgage or mortgages.

21.      ESTOPPEL CERTIFICATE.

         The Tenant, upon Landlord's written request, shall execute an estoppel
certificate prepared by Landlord which certificate shall describe the lease and
any amendments thereto and shall set forth the lease term, a description of the
Demised Premises, whether the lease is in full force and effect, whether the
Tenant has any defenses or rights of offset against the Landlord, whether there
is any default on the part of the other party, and acknowledging that the
prospective lender or purchaser is relying on the certificate and the
information contained therein. The Landlord, upon Tenant's written request,
                                       17
<PAGE>
shall execute an estoppel certificate prepared by Tenant which certificate shall
describe the lease and any amendments thereto and shall set forth the lease
term, a description of the Demised Premises, whether the lease is in full force
and effect, whether the Landlord has any claims for breach of the Lease against
the Tenant, whether there is any default on the part of the other party, and
acknowledging that the prospective lender or purchaser is relying on the
certificate and the information contained therein.

22.      NOTICE OF LEASE.

         The Landlord, upon Tenant's written request, shall execute a notice of
lease prepared by Tenant and containing such information required by Section
47-19 of the Connecticut General Statutes to be recorded in the land records of
the town in which the Property is located.

23.      CONVEYANCE BY LANDLORD AND LIMIT OF LIABILITY.

         Landlord shall be entitled to convey and otherwise dispose of the
Demised Premises and shall be entirely free and released of all covenants and
obligations of the Landlord after the Demised Premises are so conveyed, and
Landlord shall not be subject to any liability resulting from any act or
omission or event occurring after such conveyance. The purchaser, or any person
who takes title to the Demised Premises from the Landlord or any person who
subsequently holds title to the Demised Premises, shall be deemed to have
assumed and agreed to carry out any and all covenants on Landlord's part to be
performed under this Lease. No further agreement will be required between the
Landlord and Tenant and any person holding title subsequent to Landlord in
connection with the assumption of the obligations of Landlord hereunder.

24.      RESTORATION OF DEMISED PREMISES.

         At the expiration or sooner termination of this Lease, the Tenant shall
quit and surrender the Demised Premises; the improvements on said Demised
Premises shall belong absolutely to the Landlord; Tenant shall promptly remove
all of Tenant's trade fixture and other personal property from the Demised
Premises; and Tenant shall make such repairs of any damages caused by the
removal of such trade fixtures and other personal and to place the Demised
Premises in good order and repair.

25.      FORCE MAJEURE.

         In the event the Landlord or Tenant shall be delayed, hindered in or
prevented from the performance of any act required hereunder by reason of
strikes, lock-outs, labor troubles, inability to procure materials, failure of
power, restrictive governmental laws or regulations, riots insurrection, the
act, failure to act or default of the other party, war or other reason beyond
their control, then performance of such act shall be excused for the period of
the delay and the period for the performance of any such act shall be extended
for a period equivalent to the period of such delay.

                                       18
<PAGE>
26.      HOLDING OVER.

         If Tenant remains in possession of the Demised Premises or any other
part thereof after the expiration of the term hereof without the express written
consent of Landlord, Landlord may elect to (a) deem such occupancy to be a
tenancy from month to month at a rental in an amount equal to 150% of the last
monthly rental payment plus any other charges payable by Tenant hereunder and
upon all terms and conditions hereof applicable to a month-to-month tenancy or
(b) deem such occupancy to be unauthorized and immediately commence proceedings
under the Connecticut summary process statute and acceptance by Landlord of any
sums from Tenant shall not be construed as its consent to Tenant's continued
occupancy or as a renewal of this Lease or as an agreement to month-to-month
occupancy.

27.      ENVIRONMENTAL PROVISIONS.

         27.1   REPRESENTATIONS AND WARRANTIES. Tenant represents and warrants
that it will comply with any and all federal, state and local rules, laws,
statutes, ordinances and orders regulating the Environment (collectively the
"Environmental Laws") that affect the use and occupation of the Demised
Premises. The Tenant agrees that it shall not allow its employees, agents or
contractors, visitors, guests and invitees to cause any action or practice, by
act or omission that would (a) violate any Environmental Laws, (b) cause
Hazardous Substances to be stored and/or used on the Property in violation of
any Environmental Laws; (e) cause the Property to be classified as a treatment,
storage or disposal facility (as such term is defined in the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Sec. 6901 et seq.); (d) cause
the Property to be classified as an Establishment under Connecticut Transfer
Act; or (e) cause any Release of any Hazardous Substances on the Premises. For
the purpose of this Lease, Hazardous Substances are defined as any petroleum,
petroleum products, fuel oil, derivatives of or additives to petroleum,
petroleum products or fuel oil, explosives, reactive materials, ignitable
materials, corrosive materials, hazardous chemicals, hazardous wastes, hazardous
substances, hazardous air pollutants, air pollutants, extremely hazardous
substances, toxic substances, toxic chemicals, radioactive materials, medical
waste, biomedical waste, any mixture of sewage or other waste material that
passes through a sewer system to a treatment facility, any industrial
waste-water discharges subject to regulation and any infectious materials, as
such foregoing terms may be defined in the Environmental Laws, and any other
element, compound, mixture, solution or substance that may pose a present or
potential hazard to human health or the environment.

         27.2   NOTICE. The Tenant agrees to promptly to notify the Landlord if
any of it becomes aware of any release of a Hazardous Substance or any violation
of any Environmental Laws affecting the Property including, without limitation,
any inspection report, notice of inspection, abatement notice, abatement order
or notice of noncompliance, or notice by a third party (a "Violation").

         27.3   REMEDIATION. In the event of a Violation caused on the Premises
by the Tenant or by Tenant's employees, agents, contractors, visitors, guests,
invitees or subtenants, the Tenant, at Tenants own cost and within a reasonable
period of time, shall take or cause to be taken all actions which are necessary
or desirable to remediate any or satisfy or comply with all Environmental Laws,
including environmental site remediation measures required by any federal, state
or local agency.

                                       19
<PAGE>
         27.4   INDEMNIFICATION BY TENANT. The Tenant shall indemnify, defend,
and hold harmless the Landlord, its successors and assigns, from and against all
loss, costs, liability, claims, damages and expense, including, without
limitation, costs associated with administrative and judicial proceedings,
engineering, consulting and attorneys fees suffered or incurred by Landlord, or
by its successors and assigns, arising from the Tenant's (or from any employee,
agent, contractor, visitor, guest, invitee or subtenant of the Tenant) failure
to comply with any Environmental Laws applicable to the Property, including any
lien asserted thereunder; from any Release of Hazardous Substances or any other
contaminant or pollutant at, on, to or into the or any adjoining property,
during the term of this Lease caused by Tenant (or by any employee, agent,
contractor, visitor, guest, invitee or subtenant of the Tenant); and from all
costs and expenses incurred in Tenant's fulfillment of all Tenant's obligation
under this section entitled "Environmental Provisions."

28.      BROKER.

         The Tenant and Landlord covenant, warrant and represent each to the
other that the sole broker is involved in this transaction is J. Michael Struna
of Advantage Realty, Inc., 39 Katrinia Circle, Bethel, Connecticut. Tenant and
Landlord each agree to indemnify and hold each other harmless with respect to
all other brokerage commissions claimed as a result of Tenant's occupancy under
this Lease. Landlord shall pay any commission due J. Michael Struna of Advantage
Realty, Inc. in connection with the execution of this Lease. Tenant shall pay
any commission due J. Michael Struna of Advantage Realty, Inc. in connection
with Landlord's purchase of the Property from Tenant.

29.      TENANT'S OPTIONS TO RENEW.

         29.1   NOTICE TO EXTEND. Provided this Lease shall be in full force and
effect and the Tenant shall have fully performed all of its terms and
conditions, the Tenant shall have the option to extend this Lease for two
additional terms of five (5) years each (each such option is hereinafter
referred to as an "Extension Option" and each such 5-year extension term is
hereinafter referred to as an "Extended Term") provided that its notice of
intention to exercise such option is delivered to the Landlord not later than
one hundred and twenty (120) days prior to the expiration of the then-current
term.

         29.2   RENT OF EXTENDED TERM. If the Tenant exercises its option as set
forth above, all of the terms and conditions of this Lease shall govern an
Extended Term, including the obligation to pay Additional Rent with respect to
Taxes and Common Charges pursuant to Section 6. Base Rent during each Extended
Term shall be as set forth in Section 4.2.

         29.3  TENANT'S WAIVER OF OPTION. In the event that Tenant determines it
will not exercise either or both of the options to extend this Lease, as set
forth above, Tenant will provide Landlord with its written waiver of its option
to extend this Lease upon Landlord's request for the same after the notification
deadline set forth above.

30.      GENERAL PROVISIONS.

         30.1   ENTIRE AGREEMENT. This instrument contains the entire and only
agreement between the parties and no oral statements or representations or prior
written matter not contained in this instrument shall have any force or effect.

                                       20
<PAGE>
This Lease may only be changed, modified or discharged by an agreement in
writing executed by the parties hereto.

         30.2  PARTIAL INVALIDITY. If any term, covenant, condition or provision
of this Lease or the application thereof to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term, covenant, condition and provision of this Lease shall be
valid and be enforced to the fullest extent permitted by law.

         30.3  MARGINAL NOTES. The marginal notes used as headings for the
various subject matters covered in this Lease are used only as a matter of
convenience as an aid to finding the subject matters and are not to be construed
as part of this Lease and shall not in any way limit or amplify the terms or
provisions thereof.

         30.4  CONSTRUCTION. This Lease is made and executed in and is to be
construed under the laws of the State of Connecticut.

         30.5. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
agreements, conditions, covenants and terms herein contained shall, in every
case, apply to, be binding upon, and inure to the benefit of the respective
parties hereto and their respective heirs, administrators, executors, successors
and assigns, with the same force and effect as if specifically mentioned in each
instance where a party hereto is named.

         IN WITNESS WHEREOF, the parties hereto have hereunto set their names
and seals on the day and year first above written.

SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF:                                  ACME REALTY

_____________________________                        By:________________________
                                                        Edward Falkenberg
                                                        Its General Partner
_____________________________

                                                     SONICS & MATERIALS, INC.
_____________________________
                                                     By:________________________
                                                        Its
_____________________________

STATE OF CONNECTICUT       }
                           }  SS:
COUNTY OF FAIRFIELD        }

         On this the _____ day of ________________, 2001, before me the
undersigned officer, personally appeared, who acknowledged himself to be the of
Sonics & Materials, Inc., signer and sealer of the foregoing instrument, and
that he as such officer, being authorized so to do, acknowledged the execution
of the same to be his free act and deed as such officer and the free act and
deed of said corporation.

                                       21
<PAGE>
         IN WITNESS WHEREOF, I hereunto set my hand.

                                              __________________________________
                                              Commissioner of the Superior Court
                                              Notary Public
                                              My Commission Expires:

STATE OF CONNECTICUT       }
                           }  SS:
COUNTY OF FAIRFIELD        }

         On this the _____ day of ________________, 2001, before me the
undersigned officer, personally appeared Edward Falkenberg, who acknowledged
himself to be the general partner of Acme Realty, a New York general
partnership, signer and sealer of the foregoing instrument, and that he as such
partner, being authorized so to do, acknowledged the execution of the same to be
his free act and deed as such partner and the free act and deed of said
partnership. IN WITNESS WHEREOF, I hereunto set my hand.

                                              __________________________________
                                              Commissioner of the Superior Court
                                              Notary Public
                                              My Commission Expires:

                                       22

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