MANCHESTER TECHNOLOGIES INC
EX-10.5.U
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>leasebaltimore2003.txt
<DESCRIPTION>EX-10.5.U
<TEXT>
                                      -24-


c:\my documents\vtl\10k\baltimore lease 2003.doc;43213.034;v
Last Saved: 5/14/2003 5:16 PM
                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT (this "Lease") is made as of the first day of May,
2003, between FSP GATEWAY CROSSING LIMITED PARTNERSHIP, a Massachusetts limited
partnership ("Landlord"), and MANCHESTER TECHNOLOGIES, INC., a New York
corporation ("Tenant").

I.       LEASED PREMISES

         A. Location of Leased Premises. Landlord leases to Tenant and Tenant
leases from Landlord the "Leased Premises", containing, for all purposes of this
Lease, ten thousand five hundred seventy-nine (10,579) square feet in Building A
(the "Building") located at 7130 Columbia Gateway Drive, Columbia, Maryland
21046 in Gateway Crossing 95, an office/research and development complex located
in Columbia Gateway Corporate Park in Columbia, Howard County, Maryland. The
Building is located on Lot M-2 (the "Lot") in a project (the "Project") which is
comprised of five (5) one-story research and development buildings. The Leased
Premises are described more specifically in the attached Exhibit A. "Property",
when used in this Lease, means all five (5) buildings comprising the Project,
including the Building; the Lot and Lot H-7 upon which the buildings are
situated; and all fixtures, equipment and other improvements in or upon such
land and/or buildings, including sidewalks, areaways, parking areas, loading
areas, gardens and lawns. See Rider No. 1 - Right of First Refusal.

         B. Construction of the Leased Premises. Attached hereto as "Exhibit B"
and incorporated by reference herein is a copy of plans and specifications
("Plans and Specifications"), pursuant to which Landlord shall have the Leased
Premises finished. Landlord shall contribute up to One Hundred Nineteen Thousand
Five Hundred Forty-Two and 70/100 Dollars ($119,542.70) ($11.30 p.s.f.) toward
the cost of such improvements ("Landlord's Contribution"). All charges and
expenses incurred for work and material respecting the finishing of the Leased
Premises which are in excess of Landlord's Contribution ("Tenant's Portion"),
shall be deemed additional rent and shall be paid by Tenant contemporaneously
with the execution of this Lease. The itemized charges comprising Landlord's
Contribution and Tenant's Portion (other than those charges payable by Tenant
which are attributable to change orders), are set forth on the Charge Sheet (the
"Charge Sheet"), attached hereto and incorporated by reference herein as
"Exhibit C". All charges and expenses incurred in connection with any change
orders will be paid by Tenant at the time it executes such change order.

II.      LEASE TERM

         A. Lease Term. The Lease Term will be approximately sixty-six (66)
months, beginning on the "Commencement Date", which shall be the date on which
Landlord has substantially completed the work in the Leased Premises in
accordance with Exhibit B and the Leased Premises may be legally occupied by
Tenant, which date is estimated to be about sixty (60) days after execution of
this Lease and issuance of a building permit, and terminating at 11:59 p.m. on
the last day of the sixty-sixth (66th) full calendar month thereafter, unless
the Lease Term is renewed or terminated earlier in accordance with this Lease,
subject to the terms of Paragraph II.B. below. Unless specifically stated
otherwise in this Lease, the term "Lease Term" means the original term of
sixty-six (66) months and any and all renewal terms, whenever a renewal option
has been exercised. See Rider No. 2 - Option to Renew.
<PAGE>

         B. Possession. If for any reason, including construction delays,
Landlord cannot deliver possession of the Leased Premises on the estimated
Commencement Date, then this Lease will remain fully effective and Tenant may
not cancel or rescind it so long as possession is delivered within thirty (30)
days after the estimated Commencement Date. If Landlord does not deliver
possession of the Leased Premises within thirty (30) days after the estimated
Commencement Date, Tenant has the option of canceling this Lease by giving its
written notice of cancellation to Landlord within five (5) days after the
expiration of such 30-day period, in which event the Lease will be cancelled as
of the date of such written notice, and neither Landlord nor Tenant will have
any further liability to the other. Notwithstanding the foregoing, the 30-day
period described in the preceding sentence will be extended as described in
Paragraph X.N. below. In no event will Landlord be liable to Tenant for damages,
if any, sustained by Tenant as a result of Landlord's delay in delivering
possession of the Leased Premises. Landlord will be deemed to have delivered
possession of the Leased Premises to Tenant on the date on which Landlord's
construction, in accordance with Paragraph I.B. above, is substantially
completed. If Landlord and Tenant disagree as to when Landlord's construction
has been substantially completed, the decision of an architect mutually
acceptable to Landlord and Tenant will be final and binding on both Landlord and
Tenant. Landlord will use its reasonable efforts to give Tenant notice (which
may be verbal) in advance of the date on which Landlord expects to deliver
possession of the Leased Premises to Tenant.

                  If Landlord does not deliver possession of the Leased Premises
on the estimated Commencement Date, then the date on which possession is given
will be the date on which Tenant's liability for post-Commencement Date
obligations under this Lease will begin and that date will become the
Commencement Date. On the Commencement Date or such later date as Landlord may
request, Tenant shall promptly enter into a supplementary written agreement (the
"Lease Commencement Agreement") in substantially the form attached hereto as
"Exhibit D," or in such other form as Landlord shall prescribe, thereby
specifying the date as of which the Lease Term shall have begun, and as of which
the Lease Term shall end.

         C. Lease Year. The term "Lease Year" means each consecutive period of
twelve (12) successive calendar months during the Lease Term. Notwithstanding
the foregoing, if the Rent Commencement Date (as defined below) does not occur
on the first day of a month, the first Lease Year will include the twelve
calendar months following the Rent Commencement Date as well as the period from
the Commencement Date until the first day of the month following the Rent
Commencement Date (i.e., the first Lease Year will be approximately eighteen
months long) (for example, if the Commencement Date is March 20, 2003 and the
Rent Commencement Date, therefore, is September 15, 2003, the first lease year
would be March 20, 2003-September 30, 2004; thereafter the lease years would run
from September 1 to August 31 of each successive twelve month period).

         D. Acceptance of Leased Premises. Upon delivery by Landlord to Tenant
of the Leased Premises on the Commencement Date, Tenant will be deemed to have
accepted the Leased Premises. However, Landlord will remain responsible for the
completion of those "punchlist" items, if any, to which Landlord and Tenant have

                                       2
<PAGE>

agreed in writing within fifteen (15) days after Landlord delivers possession of
the Leased Premises.

         E. Landlord's Warranty. Landlord hereby agrees to and will assign to
Tenant at the termination of Landlord's Warranty Period (as defined below), to
the extent they are assignable, any and all written warranties and guarantees
from Landlord's contractors, subcontractors and suppliers of any materials and
labor to the tenant improvements as shown on Exhibit B for that portion, if any,
of the Lease Term that such warranties and guarantees are in effect. With
respect to construction of such tenant improvements, Landlord hereby warrants
("Landlord's Warranty") to Tenant that Landlord will be responsible for a period
("Landlord's Warranty Period") of six (6) months from the Commencement Date (the
"Warranty Date") with respect to latent defects, and three (3) months from the
Warranty Date for all other defects, to repair or to have repaired all defects
in such construction, to the extent such defects are not caused by the
negligence of Tenant or any of its agents, servants, employees or contractors
(in which event such defects will be repaired by Landlord at Tenant's sole
cost). To the extent that Landlord is obligated to make repairs pursuant to
Landlord's Warranty, Tenant will be relieved during Landlord's Warranty Period
of the obligations imposed upon it pursuant to this Lease to make or pay for
such repairs to the tenant improvements. Tenant agrees to and will give Landlord
prompt notice of the need for any such repairs.

III. RENT AND FINANCIAL MATTERS

         A. Security Deposit and Advance Rent. (i) Tenant shall deposit with
Landlord at the time of execution of this Lease a "Security Deposit" of Ten
Thousand Five Hundred Seventy-Nine Dollars ($10,579.00). The Security Deposit
shall be paid by Tenant to guarantee performance of its covenants in this Lease.
Landlord's receipt of the Security Deposit shall be confirmed by Landlord in the
Lease Commencement Agreement, and the Security Deposit shall not be deemed to
have been paid by Tenant unless and until Landlord's receipt thereof is so
confirmed. To the extent the Security Deposit has not been applied pursuant to
the terms of this Lease, it will be returned to Tenant following the termination
of this Lease. In addition to any and all other remedies available to Landlord
under this Lease, the Security Deposit may be used at any time by Landlord to
cure or compensate Landlord for any breaches of the Lease by Tenant. To the
extent Landlord makes any such use of the Security Deposit, Tenant will
immediately replenish it to its original amount. Landlord is not required to put
the Security Deposit into escrow or pay or accrue any interest on it. The
Security Deposit may not be used or applied by Tenant in lieu of Basic Annual
Rent.

         (ii) Tenant, contemporaneously with Tenant's execution of this Lease,
shall deposit with Landlord the sum of Ten Thousand Five Hundred Seventy-Nine
Dollars ($10,579.00) as advance rent (the "Advance Rent"). Landlord shall hold
the Advance Rent as advance rent and security hereunder and Landlord shall be
entitled to retain same, without limitation of any of its other remedies
hereunder, for any defaults of this Lease by Tenant occurring prior to the Rent
Commencement Date (as defined below) of this Lease. If no such defaults have
occurred by such date, the Advance Rent shall be applied by Landlord against the
first installments of Basic Annual Rent payable by Tenant hereunder.
                                       3
<PAGE>

         B. Rental Payments. Commencing on the date which is one hundred
seventy-nine (179) days after the Commencement Date (the "Rent Commencement
Date"), it being understood and agreed that Tenant will have and enjoy the
Leased Premises from the Commencement Date until the Rent Commencement Date (the
"Free Rent Period") without the obligation to pay Basic Annual Rent, Tenant
shall pay to Landlord during the Lease Term "Basic Annual Rent" as set forth
below:
<TABLE>
<CAPTION>
                                     Basic Annual     Monthly
          Lease Year                    Rent          Installment     Per Square Foot
------------------------------- ------------------------------------------------------

<S>                                  <C>             <C>                <C>
      1 (first 180 days)
                                      (abated)         ------            $12.00
------------------------------- ------------------------------------------------------

  1 (balance of first lease         $126,948.00       $10,579.00         $12.00
            year)
------------------------------- ------------------------------------------------------

              2                     $130,756.44       $10,896.37         $12.36
------------------------------- ------------------------------------------------------

              3                     $134,670.72       $11,222.56         $12.73
------------------------------- ------------------------------------------------------

              4                     $138,690.72       $11,557.56         $13.11
------------------------------- ------------------------------------------------------

              5                     $142,922.28       $11,910.19         $13.51
------------------------------- ------------------------------------------------------
</TABLE>

Basic Annual Rent shall be payable in equal  monthly  installments  as set forth
above, without any deductions or set-offs, and without demand, in advance on the
twenty-fifth  day of each and every month  preceding the month for which payment
is  applicable  (e.g.,  April's rent is due on or before March 25) or, if Tenant
elects to pay its rent by electronic transfer of funds to Landlord's  designated
account,  payment  shall be due as aforesaid on the first day of the  applicable
month;  provided,  however,  that if the Rent Commencement Date shall occur on a
day  other  than  the  first  day of a  month,  Tenant  shall  pay  on the  Rent
Commencement  Date for the fractional  part of such month, a prorated  amount of
one month's rent. Although Tenant has been given the Leased Premises free of the
obligation  to pay Basic Annual Rent during the Free Rent  Period,  Tenant shall
otherwise  observe,  perform  and  obey  all  other  obligations  on its part to
observe,  perform  and obey during such Free Rent  Period,  including  by way of
example, the payment of all sums deemed Additional Rent.

     All payments or installments of any rent hereunder, other than Basic Annual
Rent, and all sums  whatsoever due under this Lease  (including  attorneys' fees
and, in the event of Tenant's bankruptcy,  the unamortized portion of Landlord's
Contribution,  which  amortization  shall be determined on a straight line basis
over 60 months at 11% interest) shall be deemed  "Additional  Rent" and shall be
paid to Landlord at the address  designated for notice to Landlord herein, or as
otherwise  designated by Landlord.  If any Basic Annual Rent or Additional  Rent
(herein,  collectively,  the  "Rent")  is not paid  within ten days of when due,
Tenant shall pay a late charge equal to five percent (5%) of the  arrearage.  In
addition,  the arrearage  shall bear  interest  calculated at the rate of twelve
percent (12%) per annum for each day such sum is in arrears in  consideration of
Landlord's  additional  expense caused by such failure to pay. Such late charges
shall be payable simultaneously with the arrearage payment, without demand. Time
is of the essence with respect to Tenant's  monetary  obligations in this Lease.
Unless  otherwise  stated,  any such  Additional Rent shall be due within thirty
(30) days after the Landlord has submitted a written statement to Tenant showing
the amount due, and Tenant's  obligation to pay any such  Additional  Rent shall
survive the termination of this Lease.
                                       4
<PAGE>

     In the event of a default by Tenant under this Lease,  the entire amount of
Basic  Annual  Rent which has been abated  during the Free Rent Period  shall be
immediately  due and payable to  Landlord,  in addition to any other  rights and
remedies of Landlord as a result of such default.

         C. Rent Adjustments.

     1.  Definitions.  For  purposes of this Lease,  the  following  meanings or
definitions will  apply.

     (a) The "Rentable Area of the Project" is conclusively deemed to be 188,496
square feet, the total combined square footage of the five buildings  comprising
the Project and the "Rentable Area of the Building" is conclusively deemed to be
forty-six  thousand eight hundred forty (46,840) square feet. The "Rentable Area
of the Leased  Premises" is conclusively  deemed to be ten thousand five hundred
seventy-nine  (10,579)  square  feet.  Therefore,  "Tenant's  Portion"  of those
expenses payable in accordance with Paragraph III.C.2. is five and sixty-one one
hundredths percent (5.61%) (10,579/188,496),  computed on the basis of the ratio
of the Rentable Area of the Leased  Premises to the Rentable Area of the Project
or twenty-two and fifty-nine one hundredths percent (22.59%)  (10,579/46,840) as
to those of such costs which are applicable only to the Building.

     (b) The term "Common Area Expenses"  means all expenses paid or incurred by
Landlord in  connection  with  Landlord's  management  of the  Property  and the
maintenance,  operation  and  repair  of  the  common  areas  of  the  Property,
including,  but not  limited  to, (i)  keeping  the  driveways,  parking  areas,
sidewalks and steps free and clear of ice, snow and debris; (ii) maintaining all
grass and landscaping on the Property; (iii) maintaining the common areas of the
buildings of the Project  (including the Building),  including the utility rooms
and security systems, if any, and repair of normal wear and tear of the roof and
caulking;  (iv) trash removal from dumpsters on the Property, if any; (v) paving
the driveways and parking areas;  (vi) monitoring,  repairing and payment of all
common utilities,  including water, sewerage, unmetered or metered sprinkler and
exterior  electrical  utilities on the  Property;  (vii) the cost of all capital
improvements to the Project, amortized over the useful life of such improvements
as determined in  accordance  with  generally  accepted  accounting  principles,
together with the interest on the  unamortized  balance at a fluctuating  annual
rate  that is at all  times  equal to 1-1/2%  over the  prime  interest  rate as
determined from time to time by Citibank,  N.A.;  (viii)  management fees not to
exceed 3.5% of gross rents; (ix) the cost of maintaining  Insurance,  as defined
below;  and, (x) the HVAC Expense.  "Common Area  Expenses" does not include the
costs of work Landlord  performs for,  and/or at the expense of, any  particular
tenant (including Tenant), which costs will be billed directly to Tenant or such
other tenant, as the case may be.  Notwithstanding the foregoing,  Landlord will
be allowed reasonably to allocate the costs of trash removal based on actual use
of such service.

     (c) The term "Taxes" means any present or future federal, state, municipal,
local  and/or any other taxes  (including  gross  receipts  or business  license
taxes),  assessments,  levies,  benefit charges and/or other governmental and/or
private  impositions  (including  any business park charges),  imposed,  levied,
assessed  and/or  attributable  directly or  indirectly  to the  Property or any
portion of the  Property  or upon the Rent due and  payable  under  this  Lease,
                                       5
<PAGE>

whether now  customary  or within the  contemplation  of Landlord and Tenant and
whether extraordinary or ordinary,  general or special,  foreseen or unforeseen,
or similar or  dissimilar  to any of the  foregoing.  The term  "Taxes" does not
include any inheritance,  estate, succession,  income, profits or franchise tax.
If, however, at any time during the Lease Term the method of taxation prevailing
on the  Commencement  Date is altered or  eliminated  so that one or more of the
items listed in the first sentence of this subparagraph  C.1(c) is replaced by a
levy,  assessment  or  imposition,  wholly  or  partly  as a  capital  levy,  or
otherwise,  on the rents or income received from the Property  (provided the tax
on such income is not a tax levied on taxable income generally) wholly or partly
in place of an imposition on, a substitute  for, or an increase of, taxes in the
nature of real estate taxes issued against the Property,  the charge to Landlord
resulting from such altered or replacement  method of taxation will be deemed to
be within the  definition  of  "Taxes".  All  reasonable  expenses  incurred  by
Landlord (including  attorneys' fees and court costs) in contesting any increase
in Taxes or any increase in the  assessment  of the Property will be included as
an item of Taxes for the  purpose of  computing  Additional  Rent due under this
Lease.

     (d) The term  "Insurance"  means the cost of all  insurance  of  whatsoever
nature kept or caused to be kept in force by Landlord to protect  itself  and/or
its  mortgagee(s).  "Insurance"  includes,  but is not limited to,  coverage for
physical damage to owned or leased property,  loss of rents  insurance,  primary
and umbrella or excess liability  insurance,  boiler and machinery insurance and
workers compensation insurance.

     (e) The term "HVAC  Expense"  means all  expenses  incurred  by Landlord in
maintaining  service contracts on the heating,  ventilation and air conditioning
systems servicing the Project ("HVAC System").

     2. Rent Adjustment.  Tenant agrees to pay to Landlord,  in each year of the
Lease Term,  Tenant's  Portion of Common Area Expenses and Taxes  (collectively,
the  "Expenses").  Until the actual  amount of the  Expenses are  determined  by
Landlord,  Tenant agrees to pay to Landlord, as Additional Rent, with and at the
same time as the monthly payments of Basic Annual Rent, the following amounts:

     (a) One Thousand  Five Hundred  Eighty-Six  Dollars and  Eighty-Five  Cents
($1,586.85)  per month as  one-twelfth of Tenant's  estimated  Portion of Common
Area Expenses (calculated on the basis of $1.80 per square foot); and

     (b) One  Thousand  Four  Hundred  Fifty-Four  Dollars and  Sixty-One  Cents
($1,454.61)  per month as  one-twelfth  of Tenant's  estimated  Portion of Taxes
(calculated on the basis of $1.65 per square foot).

     At any time during a Lease Year,  Landlord  may revise its  estimate of the
Expenses  and  adjust  Tenant's  monthly  installments  to reflect  the  revised
estimates.  Landlord  will give  Tenant  prior  written  notice  of the  revised
estimates  and  the  amount  by  which  Tenant's  monthly  installments  will be
adjusted, and Tenant will pay the adjusted installments with each payment of the
Rent,  beginning  with the first  payment of the Basic  Annual  Rent to come due
after Tenant's receipt of such notice.
                                       6
<PAGE>

     Landlord  will deliver to Tenant  within one hundred  twenty (120) days (or
such longer time as is reasonable under the circumstances) after the end of each
accounting period for the applicable  Expenses,  a statement for such accounting
period (the "Statement"),  showing,  in reasonable  detail,  Tenant's Portion of
such Expenses.  Tenant will pay Landlord, within thirty (30) days of the receipt
of the Statement,  such amounts as may be necessary to adjust Tenant's  payments
of the estimated  Expenses for such preceding  period so that such payments will
equal the actual amount of the Expenses for such period. If the actual amount of
Tenant's  Portion of the  Expenses  is less than the  amounts  paid by Tenant as
installments of its Portion of the Expenses (including, for example, any amounts
received  as a result of a tax  refund),  then  Landlord  will  credit  Tenant's
account by the amount of the excess toward the next payments of Additional  Rent
coming due after such determination, or, if at the end of the Lease Term, refund
to Tenant the amount of the excess.  Unless Tenant gives Landlord written notice
of its  exception to any  Statement  for such  preceding  Operating  Year within
thirty  (30) days  after  delivery  thereof,  the same shall be  conclusive  and
binding on Tenant;  provided,  however, that in the event that Tenant shall give
Landlord  written notice of its exception to such  Statement  within such thirty
(30) day period,  Tenant shall  nevertheless  be obligated to pay the additional
rent.

     Failure of  Landlord to provide any  Statement  within the time  prescribed
will not relieve Tenant of its  obligations  under this Paragraph  III.C.2.,  if
same is delivered within thirty (30) days after request from Tenant therefor.

     3. Tax Adjustment. Tenant acknowledges that Landlord must pay the Taxes for
an entire tax year (i.e., July 1 - June 30) in advance. Therefore, within thirty
(30) days after the Commencement  Date, Tenant shall pay to Landlord a sum equal
to Tenant's  Portion of the pre-paid  Taxes paid by Landlord for the tax year in
which the Commencement Date occurs (the "Commencement Tax Year"), pro-rated from
the Commencement  Date to the end of the  Commencement Tax Year.  During the tax
year  immediately  following the  Commencement Tax Year (the "Second Tax Year"),
Tenant  shall  reimburse  Landlord,  upon  receipt of an invoice  therefor,  for
Tenant's  Portion of any  pre-paid  Taxes paid by Landlord  with  respect to the
Second  Tax Year,  after  subtracting  therefrom  the  amount  of any  estimated
payments  made by Tenant  pursuant to Section  III.C.2(b)  above with respect to
such Second Tax Year. Thereafter,  Tenant's estimated monthly amount of Tenant's
Portion of Taxes as set forth in Section  III.C.2(b)  above shall be adjusted to
reflect its Portion of such actual Taxes, which monthly amounts shall be applied
to the tax years  immediately  following the Second Tax Year and  succeeding tax
years, subject to further adjustment. Following termination of the Lease Term by
passage of time or for any reason other than Tenant's default of this Lease (the
"Termination Date"), Tenant shall be reimbursed by Landlord to the extent of any
Portion  of Taxes  which it has  pre-paid  as of such  Termination  Date for the
period beyond such Termination Date.

     4. Summary of Payments. The following is a list of the various payments and
installments  of Basic Annual Rent and Additional Rent under this Lease pursuant
to this Section 5 as of the Commencement Date. Some of these amounts will change
during the Lease Term.
                                       7
<PAGE>

<TABLE>
<CAPTION>

                                              Monthly        Annual s.f.
                                            Installments        Amount
                                            ------------        ------
<S>                                        <C>               <C>
Basic Annual Rent:

  Months 7-12 of Lease Term                 $10,579.00        $  12.00

Common Area Expenses (estimate)             $ 1,586.85        $   1.80

Taxes (estimate)                            $ 1,454.61        $   1.65
                                              --------        --------

TOTAL                                       $13,620.46        $  15.45
</TABLE>

     5. Utilities.  (a) Although certain  utilities on the Property are commonly
metered and the costs of those  utilities  are  included  within the Common Area
Expenses  described  above,  if Tenant's use is other than for normal office use
and/or  disproportionate  to other office tenants of the Project,  then Landlord
and Tenant each have the right,  at Tenant's  sole cost and  expense,  to have a
separate  meter  installed  upon the Leased  Premises.  If a  separate  meter is
installed upon the Leased Premises,  Tenant will pay to the utility company (or,
at Landlord's  request,  to Landlord) all charges for the Leased Premises on the
basis of such meter readings.

     (b) To the extent utilities are not commonly metered,  Tenant agrees to pay
promptly  to the  appropriate  supplier  all  charges  for  water,  gas,  steam,
electricity  or  other  power  source,  telephone  and  all  other  utility  and
communication  services used and/or  supplied in connection with Tenant's use of
the Leased Premises.

IV.      CONDITIONS OF TENANT'S OCCUPANCY AND POSSESSION

     A. Use  Restrictions  and Rules.  Tenant agrees to use the Leased  Premises
only for general office use and ancillary storage of goods and materials used in
connection with Tenant's business, and for no other purpose. In addition, Tenant
agrees to be bound by all laws, requirements,  rules, orders, ordinances, zoning
and  restrictive  covenants  applicable to the Property,  whether in force on or
after the  Commencement  Date, and by the Rules and  Regulations as announced by
Landlord   from  time  to  time,   including   those  set  forth  in  Exhibit  E
(collectively, the "Restrictions"). In particular, the Restrictions include (but
are not limited  to)  certain  covenants  and  restrictions,  referred to as the
General  Restrictions  and the Special  Restrictions,  to which the  Property is
subject  and  of  which  copies  have  been   provided  to  Tenant  by  Landlord
(collectively,  the "HRD Restrictions").  Tenant acknowledges receipt of the HRD
Restrictions  and that it is  cognizant of the terms and  provisions  of the HRD
Restrictions and agrees to be bound by them.  Landlord and Tenant agree that The
Howard Research and  Development  Corporation and its successors are third party
beneficiaries  to this  Paragraph  IV.A. and may remedy any violation of the HRD
Restrictions occasioned by Tenant's use and occupancy of the Leased Premises, in
the manner and to the extent provided in the HRD  Restrictions,  including,  but
not limited to,  bringing suit, at law or in equity,  directly  against  Tenant.
Landlord  represents that office use is a permitted use under applicable  zoning
laws.

     B. Improvements by Tenant.  After completion of the work to be performed by
Landlord in accordance  with the plans and  specifications  listed in Exhibit B,
Tenant will not make any further improvements,  alterations, or additions to the
Leased  Premises  (collectively,  the "Work") unless (1) it receives  Landlord's
                                       8
<PAGE>

prior written consent,  which will not be unreasonably withheld; (2) the Work is
performed  only by  licensed  and  bonded  contractors  approved  in  advance by
Landlord;  (3) the Work is carried out pursuant to properly  documented drawings
approved  in  advance by  Landlord  and  pursuant  to all  necessary  permits or
governmental  and/or other approvals,  the  responsibility and cost of obtaining
which will be borne  solely by Tenant;  (4) Tenant  pays all costs of such Work;
and (5) the quiet  enjoyment of other tenants in the Building is not  disturbed.
Notwithstanding the foregoing, Tenant, without Landlord's prior written consent,
may make  non-structural  changes to the Leased  Premises,  so long as the total
cost of such Work, in the aggregate, does not exceed $20,000, and such Work does
not affect the mechanical,  electrical,  or plumbing  systems or the roof of the
Leased  Premises or Building,  and Tenant  otherwise  complies with the terms of
this Section.  If Tenant  elects to use a contractor  other than Landlord or its
representative,  then the Work  performed by such  contractor  will be under the
general  supervision  of  Landlord,  and Tenant will pay  Landlord a  reasonable
supervisory  fee,  not to  exceed  five  percent  (5%)  of  the  costs  of  such
improvements.

     With  the  exception  of  movable  trade   fixtures  and   furniture,   all
alterations,  additions  and  improvements  made by, or on behalf of, Tenant are
hereby  deemed the  property  of  Landlord  and will remain a part of the Leased
Premises  upon this  Lease's  termination.  Landlord,  however,  may  request in
writing,  at the time it approves  such Work,  that Tenant  remove any or all of
such Work no later than the  termination  date of this  Lease.  In  response  to
Landlord's  request,  Tenant  promptly will perform such removal and restore the
Leased Premises to their original condition, all at Tenant's sole cost.

         C. Maintenance.

     1. Subject to Landlord's Warranty,  Tenant will, at its sole cost, keep the
Leased  Premises in good  condition  and repair and will permit no damage to the
Leased Premises or the fixtures,  improvements,  equipment and  appurtenances in
and to the Leased Premises. Tenant's responsibility under this Paragraph IV.C.1.
will include, but will not be limited to, maintenance and repair of all interior
and  exterior  windows  and  doors,  hardware,  locks,  light  fixtures,  pipes,
plumbing, electrical and sewer connections.

     2. As a Common Area  Expense,  Landlord  will  maintain the exterior  walls
(excluding the windows and doors),  downspouts and roof of the Leased  Premises,
as long as such  maintenance is not required because of the acts or omissions of
Tenant or its  representatives,  agents,  employees or visitors,  in which event
such maintenance will be done by Landlord at Tenant's sole cost.

     3.  Tenant  will not  commit or suffer  any waste of the  Leased  Premises.
Landlord  or  Landlord's  representatives  may enter the Leased  Premises at any
reasonable  time,  after reasonable prior notice (which may be verbal) to verify
Tenant's compliance with this Lease.

     4. Landlord represents that the HVAC System will be in good operating order
as of the Commencement  Date.  Landlord will secure and maintain a limited parts
and labor service contract on the HVAC System in the Leased  Premises,  the cost
of which will be paid by Tenant as the HVAC Expense as set forth above. Landlord
will make all necessary repairs or replacements to the HVAC System which are not
covered under such service contract (a copy of which was previously delivered to
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Tenant). All costs incurred which are not covered by such service contract shall
be paid for by Tenant  except for the cost of replacing or making any repairs of
a capital nature to the  compressor or heat  exchanger (the "Shared  Expenses"),
the cost of which  shall be shared  between  Tenant and  Landlord  as  described
below.  Tenant will pay that percentage of the cost of any Shared Expenses which
is equal to the ratio by which the  length of the  remaining  years of  Tenant's
Lease Term (without taking into  consideration any cancellation  options not yet
exercised by Tenant) bears to the useful life of such repair or replacement,  as
determined  in  accordance  with  generally  accepted   accounting   principles;
provided,  however, in no event may such percentage be greater than 100%. In the
event that any renewal  option is exercised  by Tenant,  then the length of such
renewal term shall be included for purposes of calculating  the remaining  years
of Tenant's Lease Term. Notwithstanding the foregoing, any maintenance or repair
to the HVAC System in the Leased  Premises  which is required as a result of any
acts or omissions of Tenant, or Tenant's agents,  employees or visitors, or as a
result of Tenant's use of such HVAC System in excess of the  customary use of 12
hours per day, six days per week, will be made by Landlord at Tenant's sole cost
and expense.

     5. At the expiration or  termination  of this Lease,  (a) Tenant will leave
the Leased  Premises clean and at least in the same good  condition  (reasonable
wear and tear excepted) as when the Lease Term began, and (b) Tenant will remove
all of its personal  property and possessions from the Leased Premises except to
the extent provided by Paragraph IV.B.  above. Any items of Tenant's  personalty
remaining in the Leased  Premises  after the  termination  of the Lease shall be
deemed   abandoned  by  Tenant  and  become  the  sole   property  of  Landlord.
Notwithstanding the foregoing,  any costs incurred by Landlord in storing and/or
disposing of such abandoned property shall remain the sole obligation of Tenant,
which obligation shall survive the termination of this Lease.

     D. Conduct on Leased  Premises.  Tenant will neither do, nor permit  anyone
else to do,  anything on the Leased  Premises which might or would (1) interfere
with the good  order of the  Property;  (2)  interfere  with the rights of other
tenants of the Property;  (3) increase any insurance rates charged Landlord with
respect to the Property; or (4) conflict with or invalidate any insurance policy
maintained by Landlord for the Property.  If the insurance  premiums of Landlord
are increased due to Tenant's use or occupancy of the Leased Premises,  then the
amount of such increase will be paid by Tenant to Landlord as Additional Rent as
it becomes due, and Landlord  will have the same right to collect such amount as
Landlord has under this Lease to collect Additional Rent.

     E.  Insurance.  Tenant will  purchase at its sole cost,  from an  insurance
company  licensed  to do  business  in the State of  Maryland  and  approved  by
Landlord,  a policy of public liability  insurance  covering the Leased Premises
and the  business  conducted by Tenant  there.  The policy will be kept in force
during the entire Lease Term.  The policy will have minimum  limits of liability
of (1)  $1,000,000  for  injuries  to or death of any one or more  persons  with
respect to any one  occurrence  and (2)  $3,000,000  with respect to the general
aggregate  limit of  liability.  The policy must name  Landlord and FSP Property
Mgmt. LLC and Manekin, LLC as additional insureds, and must contain an agreement
by the  insurer  not to cancel or change  the  insurance  without  first  giving
Landlord  thirty (30) days' prior written notice.  Tenant will furnish  Landlord

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with a certificate of insurance no later than the Commencement Date and on the
date of each policy renewal.

     Landlord and Tenant hereby  mutually waive all claims for recovery from the
other for any loss or damage to any of Landlord's or Tenant's  property  insured
under valid and collectible insurance policies to the extent of any recovery for
loss insured under those policies.  The parties agree that a mutual  subrogation
clause  will be  included  in each  insurance  policy  setting  forth  that  the
insurance  will not be  invalidated  in the  event  that the  insured  waives in
writing,  before any loss, any or all right of recovery  against the other party
for any insured loss.

     F. Liens. Tenant will not do anything, or permit anything to be done, which
subjects  all or any part of the Leased  Premises or Tenant's  interest in it to
any lien or  encumbrance.  This includes,  but is not limited to,  mechanics' or
materialmen's  liens.  If any such  lien is filed  purporting  to be for work or
material  furnished  to Tenant,  then Tenant must have such lien  discharged  or
bonded within ten (10) days of its filing.

         G. Environmental Assurances.

                  1. Covenants . Tenant covenants with Landlord:

     (a) that it shall  not  Generate  Hazardous  Substances  at, to or from the
Leased Premises unless the same is specifically  approved in advance by Landlord
in writing;

     (b)  to  comply  with  all  obligations  imposed  by  applicable  law,  and
regulations promulgated  thereunder,  and all other restrictions and regulations
upon the Generation of Hazardous  Substances  (whether or not at, to or from the
Leased Premises);

     (c) to deliver promptly to Landlord true and complete copies of all notices
received  by  Tenant  from  any  governmental  authority  with  respect  to  the
Generation by Tenant of Hazardous  Substances (whether or not at, to or from the
Leased Premises);

     (d) to complete fully,  truthfully and promptly any questionnaires  sent by
Landlord with respect to Tenant's use of the Leased  Premises and  Generation of
Hazardous Substances;

     (e) to permit  entry onto the Leased  Premises by  Landlord  or  Landlord's
representatives at any reasonable time (i.e. during customary business hours for
offices in the vicinity) upon  reasonable  prior notice (which may be verbal) to
verify and monitor Tenant's compliance with its representations,  warranties and
covenants set forth in this Paragraph; and

     (f) to pay to Landlord,  as Additional Rent, the costs incurred by Landlord
hereunder, including the costs of such monitoring and verification.

     2.  Tenant's  Indemnification.   Tenant  agrees  to  indemnify  and  defend
Landlord,  and its managers and agents (with legal counsel reasonably acceptable
to Landlord) from and against any costs,  fees or expenses  (including,  without
limitation,    environmental   assessment,   investigation   and   environmental
                                       11
<PAGE>

remediation expenses,  third party claims and environmental  impairment expenses
and  reasonable  attorneys'  fees and  expenses)  incurred  by  Landlord  or its
managers and agents, as the case may be, in connection with Tenant's  Generation
of Hazardous Substances at, to or from the Leased Premises or in connection with
Tenant's  failure to comply with its  representations,  warranties and covenants
set forth in this Section.  This indemnification by Tenant will remain in effect
after the termination or expiration of this Lease.

     3.  Landlord's  Indemnification.  Landlord  agrees to indemnify  and defend
Tenant (with legal counsel reasonably acceptable to Tenant) from and against any
costs, fees or expenses (including,  without limitation, cleanup expenses, third
party claims and  environmental  impairment  expenses and reasonable  attorneys'
fees and  expenses)  incurred by Tenant  solely in  connection  with  Landlord's
Generation of Hazardous Substances at the Leased Premises.  This indemnification
by Landlord shall survive termination or expiration of this Lease.

     4.  Definitions.  The term "Hazardous  Substance"  means (a) any "hazardous
waste" as defined by the  Resource  Conservation  and  Recovery  Act of 1976 (42
U.S.C.  ss.  6901 et  seq.),  as  amended  from  time to time,  and  regulations
promulgated  thereunder;  (b)  any  "hazardous  substance"  as  defined  by  the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C.  ss.  9601 et  seq.),  as  amended  from  time to time,  and  regulations
promulgated  thereunder;  (c) any "oil," as defined by the Maryland  Environment
Code  Ann.  ss.  4-401(g),  as  amended  from  time  to  time,  and  regulations
promulgated  thereunder;  (d) any "controlled hazardous substance" or "hazardous
substance"  as defined by the Maryland  Environment  Code Ann.,  ss.  7-201,  as
amended  from time to time,  and  regulations  promulgated  thereunder;  (e) any
"infectious  waste" as defined by the Maryland  Environment Code Ann. ss. 9-227,
as amended from time to time, and regulations  promulgated  thereunder;  (f) any
substance  the  presence of which on the  Property is  prohibited,  regulated or
restricted by any local law or regulation or any other law or regulation similar
to those set forth in this definition;  and (g) any other substance which by law
or  regulation  requires  special  handling  in its  Generation.  The  term  "To
Generate" means to use, collect,  generate, store, transport,  treat, release or
dispose of.

V.       LANDLORD'S RIGHTS AND RESPONSIBILITIES

     A. Access.  Landlord or its  authorized  agent or  representative  (e.g., a
mortgagee,  deed of trust holder, etc.) will have the right to enter and examine
the Leased Premises at any reasonable hour (i.e. during customary business hours
for offices in the vicinity) upon prior notice (which may be verbal or written),
or at any time (and without notice) in the event of an emergency, including, but
not limited to, showing the leased  premises to  prospective  tenants during the
last six (6) months of the Lease Term.

     B. Building Repairs.  Landlord may, but will not be obligated to, make such
repairs,  alterations or  improvements  as it or its authorized  representatives
deem necessary for the safety or  preservation  of the Building or for any other
reasonable purpose.  The Rent will not abate while Landlord is exercising any of
its rights under this  Paragraph  V.B.  Notwithstanding  the  foregoing,  if any
utility  service is suspended or interrupted  for more than five (5) consecutive
business  days  due to  Landlord's  negligence  or  misconduct,  and the  Leased
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Premises or any material  portion  thereof is rendered  untenantable as a result
thereof (as determined by Tenant in Tenant's  reasonable  discretion) and Tenant
in fact  ceases  operation  to such  extent  within the Leased  Premises or such
material portion thereof, then commencing on the sixth (6th) consecutive day and
continuing  until the earlier to occur of the  restoration  of the  suspended or
interrupted  utility or service,  or the date Tenant  recommences the use of the
Leased Premises (or the affected portion thereof), Tenant's Rent shall be abated
in proportion to the square  footage of the  untenantable  portion of the Leased
Premises as Tenant's sole remedy for such interruption of service.

     C. Performance of Tenant's Responsibilities by Landlord. If Tenant fails to
perform or  otherwise  comply  with any  covenant  or term in this  Lease,  then
Landlord may perform the  obligation  for Tenant at any time after ten (10) days
following   Landlord's  giving  Tenant  written  notice  of  such  failure.  Any
performance  by Landlord  under this Paragraph V.C. will be solely at the option
of  Landlord,  and  Landlord's  cost will be charged to Tenant.  Tenant will pay
Landlord all costs (plus interest at a rate of two (2)  percentage  points above
the prime rate as  announced by Citibank,  N.A.  from time to time)  incurred by
Landlord in performing Tenant's obligations. Such payment by Tenant will be made
within ten (10) days of  Landlord's  delivery to Tenant of a statement  for such
costs.  Landlord's rights provided in this Paragraph V.C. are in addition to any
other right Landlord has under this Lease.

     D. Loss,  Damage,  Injury.  Landlord will not be liable or  responsible  to
Tenant, or to any other person or entity, for any damage, injury, destruction or
death  due to or  arising  out of any cause  whatsoever  other  than  Landlord's
willful  misconduct or negligence.  This  limitation of liability will remain in
effect after the expiration or termination of this Lease.

     E. Mutual Indemnity. Landlord and Tenant agree that each will indemnify and
hold  harmless the other (and its managers and agents) for all losses,  damages,
liabilities,  costs, payments,  expenses and fines incurred by one party, or its
managers  or  agents  (the  "Indemnitee")  as a result  of any  claim or  action
(whether  or not such claim or action  proceeds  to final  judgment)  brought or
threatened  for any of the  following  acts or omissions of the other party (the
"Indemnitor"), and/or of the Indemnitor's servants, employees, agents, licensees
or invitees: (1) any breach,  violation and/or nonperformance of any covenant or
provision of this Lease  applicable  to such party and/or (2)  negligence or any
willful  misconduct of such party.  This  indemnification  will remain in effect
after the termination or expiration of this Lease.

VI.      DAMAGE AND DESTRUCTION

     If during the Lease  Term,  the Leased  Premises  or the  Building  becomes
damaged or  destroyed in whole or in part by fire,  other  casualty or any other
cause (except  condemnation),  Tenant will  immediately  notify Landlord of such
event.  This Lease will  remain in full force and  effect,  except that the Rent
will be abated  proportionately  to the extent and for the period  that all or a
portion of the Leased Premises are rendered untenantable.

     If  Landlord  determines,  in its  sole  discretion,  that  the  damage  or
destruction to the Leased  Premises  and/or to the Building is so extensive that
repair or restoration is uneconomical,  or if Landlord  otherwise decides not to

                                       13
<PAGE>

repair or restore the  Building,  either of which  determinations  shall be made
within sixty (60) days of the date that such casualty occurred,  then this Lease
will  terminate on the first day after  Landlord  gives Tenant written notice of
such  termination.  The Rent then will be  adjusted  and paid to the date of the
damage or destruction.  Tenant will immediately  vacate and surrender the Leased
Premises  upon such  termination.  Tenant,  however,  will not be released  from
liability  for any  damage  caused  by Tenant or its  agents  or  employees,  or
released from responsibility for any of its obligations under this Lease for the
period before such termination.

     If  Landlord  decides to repair or restore the Leased  Premises  and/or the
Building, it will do so with reasonable speed, subject to reasonable delays for:
(a) adjusting losses under insurance  policies;  (b) labor troubles;  or (c) any
other cause beyond Landlord's reasonable control. Notwithstanding the provisions
of this Section,  within sixty (60) days after the date of material  destruction
of the Leased  Premises,  Landlord  shall  obtain from  Landlord's  architect or
contractor  an  estimate of the time which will be required to repair the Leased
Premises.  Landlord shall promptly  communicate said estimate to Tenant.  In the
event that said  estimate of time exceeds one hundred  fifty (150) days from the
date of such destruction, then Tenant shall have the right, within ten (10) days
after  receipt of said  estimate,  to terminate  this Lease  without any further
liability  or  obligation  on the part of the  parties  hereto  for  obligations
thereafter accruing,  provided that Tenant shall give written notice to Landlord
within said ten (10) days and shall not be in breach or default of any  covenant
or  condition  by which  Tenant is  obligated  under this Lease.  Landlord  will
cooperate  with Tenant,  to the extent space is available  within the  Property,
temporarily relocate Tenant, at Tenant's expense, during any construction period
during which Tenant is unable to use the Leased Premises.

VII. CONDEMNATION

     This Lease will terminate  upon: (i) a taking or condemnation of the entire
Leased Premises for public purposes (i.e. the date of the actual taking); (ii) a
partial taking which prevents the Tenant from being  reasonably  able to use the
remainder of the Leased  Premises for the  purposes  intended by this Lease,  as
determined in good faith by Tenant; or (iii) upon Landlord's conveyance or lease
of the  Building  to any  condemning  authority  in  settlement  of a threat  of
condemnation or taking. The Rent will be adjusted to the date of termination due
to such taking, leasing or conveyance.

     In the event of a partial  taking for which  this Lease is not  terminated,
the Rent will abate in an amount which,  in the reasonable  judgment of Landlord
and Tenant, is proportionate to the area of the Leased Premises (or parking area
available to Tenant and other  tenants) so taken,  leased or  conveyed.  Tenant,
however,  will not have any claim against Landlord,  nor any claim for any award
from the condemning authority arising out of any such taking, lease,  conveyance
or condemnation  action nor in any way arising out of its leasehold  interest in
the Leased Premises,  but will have the right to pursue a separate claim against
the condemning authority for its own loss of business and moving expenses.
                                       14
<PAGE>

VIII. HOLDING OVER

     This Lease is for a specific  Lease  Term.  If Tenant,  without  Landlord's
specific written consent,  continues its possession of the Leased Premises after
the termination  date of this Lease,  then all of the following  conditions will
apply:  (i) Tenant will occupy the Leased Premises as a month to month tenant on
the terms of this Lease,  except that its occupancy  will be at 150% of the Rent
payable  during  the  last  year  of the  Lease  Term  and  will be  subject  to
termination on thirty (30) days' prior written notice from Landlord; (ii) Tenant
will be liable to  Landlord  for any damages  suffered  by Landlord  due to such
holding over,  including the loss of financial  benefits from another  potential
tenant occupying the Leased Premises;  and (iii) Tenant will indemnify  Landlord
for any losses or expenses  (including  reasonable  attorneys' fees) incurred by
Landlord  in  connection  with  claims  or  litigation  (e.g.,  due to a delayed
commencement date for a new tenant) arising because Tenant held over.

IX.      DEFAULT

     A. Events of Default.  Each of the following  constitutes a material breach
and a default by Tenant under this Lease, entitling Landlord to all remedies set
forth below or existing at law or in equity:

     1. Any of the following  legal  actions filed by or against  Tenant and not
bonded  or  discharged  within  thirty  (30) days of the date of  filing:  (a) a
petition  under  the  Federal  Bankruptcy  Code  (as  now or  later  amended  or
supplemented) or for reorganization,  arrangement or other rehabilitation within
the meaning of the Federal  Bankruptcy Code; or (b) any action or proceeding for
the  dissolution or liquidation of Tenant,  or for the appointment of a receiver
or trustee of the property of Tenant.

     2. Tenant's suspension of business for more than ten (10) consecutive days,
or any action by Tenant amounting to a business failure.

     3. Tenant's making an assignment for the benefit of creditors.

     4. The filing of a tax lien against any property of Tenant.

     5. Tenant's causing or permitting the Leased Premises to be vacant,  or its
abandoning or ceasing to do business  (for the purpose  specified in this Lease)
actively in the Leased Premises for a period in excess of five (5) days.

     6.  Tenant's  failure  to pay  Rent  or all or any  part of any  other  sum
(including  late  charges)  required  by this  Lease  within ten (10) days after
Landlord has given Tenant  notice that such payment is due,  provided,  however,
that no notice  shall be required to be given to Tenant,  and Tenant shall be in
immediate default if such payments are not made on the due date, if Landlord has
given such notice to Tenant two (2) times in the preceding twelve months.

     7.  Tenant's  failure to perform  any other  term,  covenant  or  condition
required  by this  Lease and  failure  to cure  within  fifteen  (15) days after
Landlord  has given  Tenant  written  notice of such  failure,  unless such cure
                                       15
<PAGE>

reasonably  requires  a longer  period of time and  Tenant  commences  such cure
within  such  fifteen  (15) day period and  thereafter  prosecutes  such cure to
completion.

For purposes of subparagraphs 1, 2, 3 and 4 of this Paragraph IX.A., the term
"Tenant" will include any guarantor of Tenant's obligations under this Lease.

     B. Effect of Default.  Landlord's rights and remedies under this Lease will
be cumulative. None will exclude any other right or remedy available at any time
under this Lease or under any law.

     Even if Landlord does not seek Tenant's strict performance of any provision
of this  Lease,  or does not  exercise  any right it has,  Landlord  will not be
construed as waiving its right to strictly enforce  Tenant's  performance in the
future.  Similarly,  if Landlord receives Rent with knowledge of Tenant's breach
of this Lease, then Landlord will not be construed as having waived such breach.

     There will be no waiver by Landlord of any Lease provision unless expressed
in writing and signed by Landlord.

     C. Termination of Lease and Possession of Leased Premises. Upon any default
set forth in Paragraph  IX.A.  above,  Landlord may then,  or at any later time,
without  further  notice to Tenant,  terminate  this Lease and Tenant's right to
possess the Leased  Premises.  Landlord may then (with formal court action) take
possession of the Leased Premises and remove Tenant or any other  occupant,  and
any property,  without  relinquishing any other rights Landlord may have against
Tenant.

     D. Damages. In the event of any Tenant default set forth in Paragraph IX.A.
above, Landlord will be entitled to receive from Tenant as damages, upon demand,
all expenses  which  Landlord  incurs as a result of such breach.  These damages
include,  but are not limited to, the  expenses  (such as real estate  brokerage
commissions and retrofit costs) of rerenting the Leased Premises,  together with
court costs and actual  attorneys' fees (and their actual expenses)  incurred at
the standard hourly rates for such attorneys (but in no event will such fees and
expenses be less than fifteen  percent (15%) of all of  Landlord's  expenses and
damages  relating to such  breach).  In addition to the damages set forth in the
preceding  sentences of this Paragraph IX.D., if Landlord  terminates this Lease
as set forth in Paragraph IX.C. above, Landlord will also be entitled to either:

                  1. Liquidated damages equal to the aggregate amount of Basic
Annual Rent and Additional Rent (computed on the basis of the Additional Rent
due during the preceding 12 months or, if the Lease Term has been less than a
total of 12 months, an annualized amount) due pursuant to this Lease for the
unexpired portion of the Lease Term from the date of termination. The amount of
such aggregate Rent will be discounted at the discount rate of the Federal
Reserve Bank in Baltimore, Maryland on the date of the computation; or

                  2. Damages for each month of the unexpired portion of the
Lease Term from the date of termination equal to the sum of (a) the aggregate
expenses (other than Additional Rent) paid by Landlord for items which this
Lease requires Tenant to pay for each applicable month; plus (b) the amount of
                                       16
<PAGE>

the installment of Basic Annual Rent which would have been payable by Tenant if
this Lease had not been terminated; plus (c) the monthly average of Additional
Rent paid in the Lease Year (or an annualized portion if the Lease Term has been
less than a total of 12 months to the date of termination) immediately preceding
the default, minus the rents, if any, collected by Landlord for each such month
through rerenting or through permitted subleases of the Leased Premises. The
damages under this subparagraph D.2. will be due in monthly installments, in
advance, on the first day of each calendar month following such termination and
will continue until the originally-intended expiration of the Lease Term.
Landlord's action to collect, or its collection of any damages for one month
will not prejudice its rights to bring actions to collect damages for subsequent
months.

         E. Mitigation. Landlord will use its reasonable efforts to mitigate its
damages hereunder, provided, however, that Landlord shall have no obligation to
attempt to relet the Leased Premises ahead of any other then vacant space in the
Project.

     If all amounts  required  to be paid by Tenant  under this Lease as damages
and liquidated damages are actually paid to and collected by Landlord,  then any
rent collected by Landlord with regard to the Leased  Premises from a subsequent
tenant  and  attributable  to the period  for which  Tenant has paid  liquidated
damages,  up to a maximum amount equal to the amount of rental paid by Tenant as
liquidated damages for such period,  shall be rebated to Tenant as and when such
amounts are actually collected by Landlord.  Additionally,  it is understood and
agreed  that if,  following  a default by Tenant or  termination  of this Lease,
Landlord is paid in full the Basic Annual Rent  otherwise  payable by Tenant for
the balance of the Lease Term,  then there  shall be no  unamortized  portion of
Landlord's Contribution  remaining;  that is, in no event shall Landlord recover
from Tenant damages in excess of the total amount payable by Tenant  pursuant to
Section 18(d)(1) above, less the unamortized balance of Landlord's Contribution.

     An acceptance of surrender of the Leased Premises must be in writing signed
by Landlord.  Tenant's  liability under this Lease will not be terminated by the
execution  of a lease with a new tenant for the Leased  Premises.  Landlord  may
bring separate  actions each month to recover  damages then due without  waiting
until the end of the Lease Term to compute the aggregate damages.

X.       LEGAL AND GENERAL PROVISIONS

     A. Assignment/Subletting. No Assignment of this Lease (as defined below) is
permitted  without  the prior  written  consent of  Landlord.  The  granting  or
withholding  of such  consent  will be given  solely  within the  discretion  of
Landlord.  Notwithstanding the foregoing, Landlord's consent to an Assignment of
the types described in clauses (1), (2) and (6) of the following paragraph shall
not be  unreasonably  withheld,  delayed or  conditioned so long as the proposed
assignee is creditworthy, and the proposed use (if other than for general office
use) is  acceptable  to Landlord,  in each instance as determined by Landlord in
its sole, but reasonable, discretion.

     The  foregoing  restriction  will  include,  but  not be  limited  to,  the
following  (all  of  which  will  be  deemed  to be an  "Assignment"):  (1)  any
assignment  of this  Lease  or a  subletting  of the  Leased  Premises;  (2) any
                                       17
<PAGE>

permission to a third party to use all or part of the Leased  Premises;  (3) any
mortgage or other  encumbrance of this Lease or of the Leased Premises;  (4) the
appointment  of a receiver or trustee of any of the Tenant's  property;  (5) any
assignment or sale in bankruptcy or insolvency; and (6) the transfer of majority
control of Tenant by any means,  including  operation  of law, to parties  other
than  those  maintaining  majority  control  on the date on which the last party
executes this Lease.

     Although an  Assignment  shall  include an  assignment  of the Lease to any
successor  entity  as a  result  of  merger,  consolidation  or sale of all,  or
substantially  all, of the assets of Tenant (a "Transfer") or to any subsidiary,
parent or  affiliate  corporation  of Tenant (a "Related  Company"),  Landlord's
consent  thereto  shall not be required  provided  such  Related  Company or the
entity resulting from the Transfer shall have a  creditworthiness  comparable to
that of  Tenant as of the date  hereof or  otherwise  reasonably  acceptable  to
Landlord  and  Tenant  shall have  complied  with all other  provisions  of this
Paragraph  X.A.  with respect to such  Assignment.  Tenant  shall give  Landlord
reasonable evidence that such  creditworthiness test has been met, together with
such other detail as Landlord may reasonably request.

     Even if Landlord  consents to an Assignment,  Tenant will remain  primarily
liable  under this  Lease.  Also,  Tenant will bear all  reasonable  legal costs
incurred  by  Landlord  in  connection  with  Landlord's   review  of  documents
concerning an  Assignment,  whether or not Landlord  consents to it.  Landlord's
consent to a specific  Assignment  does not waive  Landlord's  right to withhold
consent to any future or additional Assignment. Tenant will give Landlord notice
of its  intention to make an  Assignment at least thirty (30) days prior to such
Assignment,  which notice will  contain such details as Landlord may  reasonably
request.  If Tenant  intends to Assign this Lease,  Landlord may terminate  this
Lease by giving twenty (20) days prior written  notice to Tenant after  Landlord
has received written notice from Tenant of an intended  Assignment and the Lease
shall  thereupon  terminate as to all  obligations  thereafter  accruing  unless
Tenant elects to rescind its  Assignment  request  before the end of such twenty
(20) day period.

     If the  amount  of rent  and  other  sums  received  by  Tenant  under  any
Assignment  is more than the Rent due from Tenant under this Lease,  then Tenant
will pay  one-half  the amount of the excess to Landlord on a monthly  basis and
promptly upon Tenant's receipt of such excess amounts.

     If, without Landlord's  consent,  this Lease is Assigned,  or if the Leased
Premises are occupied or used by any party other than Tenant, then all resulting
expenses  (including  reasonable  attorneys'  and  brokerage  fees)  incurred by
Landlord  will be  immediately  due and  payable  by Tenant  upon  receipt of an
invoice.  If Tenant  defaults,  Landlord  may  collect  rent from the  assignee,
subtenant, occupant or user (the "Assignee") of the Leased Premises and apply it
towards the Rent due under this  Lease.  Such  collection  will not be deemed an
acceptance  of the Assignee as tenant,  will not waive or  prejudice  Landlord's
right to initiate legal action against Tenant to enforce Tenant's fulfillment of
its  obligations  under  this  Lease  and  will not  release  Tenant  from  such
obligations.

     B. Estoppel Certificates.  At any time during the Lease Term, and after ten
(10) days' prior written notice from Landlord, Tenant will deliver to Landlord a
properly  executed and  acknowledged  document,  generally  known as an estoppel
                                       18
<PAGE>

certificate.  Tenant  will  certify in the  estoppel  certificate,  among  other
matters,  that: (1) this Lease is in full force and effect and if modified,  the
extent  to which it is  modified;  (2) the  dates  to which  the Rent and  other
payments have been made; (3) to the best of its knowledge,  either  Landlord has
not breached this Lease or, if Landlord has breached  this Lease,  the nature of
the breach;  and (4) any other  matter  reasonably  requested by Landlord or its
lenders.  This  estoppel  certificate  may be relied  upon by any  third  party.
Tenant's failure to deliver such estoppel  certificate  within said period shall
be deemed a material default by Tenant under this Lease.

     C.  Subordination.  Tenant accepts this Lease,  and the tenancy it creates,
subject and  subordinate to any ground leases,  security  interests,  mortgages,
deeds  of  trust  or  other  financing  arrangements,   and/or  any  extensions,
modifications  or  amendments  to them,  which are or later  will be a lien,  or
affect or will affect all or any part of the Property. Tenant agrees to execute,
on  request,  any  instruments  which may be required  to  subordinate  Tenant's
interest to such financing  arrangement.  If applicable,  Landlord agrees to use
its  reasonable  efforts,  at Tenant's  cost and expense,  to obtain a so-called
subordination,  non-disturbance and attornment agreement for Tenant's benefit in
form and  substance  acceptable  to  Landlord's  lender (the  "SNDA").  Landlord
represents  that the Property is not currently  subject to a mortgage or deed of
trust,  grounds  leases,   security   interest,other   financing   arrangements.
Furthermore,  so long  as  Tenant  remains  a  public  company  with  comparable
financial  worth to that now existing or is a private  company  with  reasonable
creditworthiness,  it shall be a condition to Tenant's  agreement to subordinate
to any future financing that the SNDA be obtained for Tenant's benefit.

     D. Attornment.  Tenant agrees,  upon the termination of Landlord's interest
in the Leased Premises and upon request,  to attorn to the person or entity that
holds title to the reversion of the Leased Premises (the "Successor") and to all
subsequent Successors. Tenant also will pay to the Successor all rents and other
sums  required to be paid by Tenant,  and  perform  all of the other  covenants,
agreements  and terms  required of Tenant under this Lease;  provided,  however,
that Tenant  shall not be so  obligated  to attorn  unless,  if Tenant  shall so
request  in  writing,  such  Successor  will  execute  and  deliver to Tenant an
instrument  wherein such Successor  agrees (subject to such other standard terms
as such  Successor  may  require  in  such  instrument)  that so long as  Tenant
performs all of the terms,  covenants and conditions of this Lease,  on Tenant's
part to be performed,  Tenant's  possession  under the  provisions of this Lease
shall not be disturbed by such Successor.

         E. Landlord's Liability. In the event of any transfer of title to the
Property or Building (or an assignment or sublease of either), Landlord will be
entirely relieved of all covenants and obligations which arise after such
transfer, provided notice of such transfer is given to Tenant and all Security
Deposit then remaining is delivered to such transferee.

     Landlord  at the  time of this  Lease's  execution  is a  Maryland  limited
partnership.  No partner of such partnership, as it may be constituted now or in
the future, will have any personal liability to Tenant and/or to anyone claiming
under, by or through Tenant,  and as to Landlord,  recourse shall be had only to
the extent of Landlord's interest in the Building.
                                       19
<PAGE>

     F.  Authority.  Tenant  warrants to Landlord  that Tenant is a  corporation
organized and validly  existing in good standing  under the laws of the State of
New York and  qualified  to  transact  business  in the  State of  Maryland.  In
addition,  Tenant  warrants  to  Landlord  that  this  Lease  has been  properly
authorized and executed by Tenant and is binding upon Tenant in accordance  with
its terms.  Tenant's  resident agent's name and address in the State of Maryland
are Darrell R. Van Deusen, 20 South Charles Street,  Baltimore,  Maryland 21201.
Tenant  agrees to notify  Landlord in writing of any change with  respect to its
resident agent.

     G. Notices. Except as otherwise provided in this Lease, any requirement for
a notice,  demand or request under this Lease will be satisfied by a writing (a)
hand-delivered with receipt; (b) mailed by United States registered or certified
mail or Express Mail, return receipt requested,  postage prepaid; or (c) sent by
Federal Express or any other nationally  recognized  overnight  courier service,
and  addressed:   (i)  if  to  Landlord,  401  Edgewater  Place,  Wakefield,  MA
01880-6210,  Attn: George J. Carter, with a copy to Manekin,  LLC, 7061 Columbia
Gateway Drive, Columbia,  Maryland 21046, Attn: Director of Property Management,
and with a second copy to Ann Clary  Gordon,  Esquire c/o Shapiro  Sher Guinot &
Sandler,  36 South Charles Street,  Baltimore,  Maryland  21201;  and (ii) if to
Tenant,  to 50 Marcus Road,  Hauppage,  New York 11788 prior to the Commencement
Date and thereafter at the Leased  Premises,  with a copy to Kressel,  Rothlein,
Walsh & Roth, LLC, 684 Broadway,  Massapequa,  New York 11758.  All notices that
are sent in accordance  with this Paragraph X.G. will be deemed  received by the
other party on the earliest of the following  applicable time periods:  (a) five
(5) business days after being mailed in the aforesaid  manner;  (b) the date the
return  receipt is executed;  or, (c) on the date delivered as documented by the
overnight courier service or the hand delivery receipt.  All rental payments and
other  charges  payable by Tenant  under this  Lease  will be  delivered  to the
following  address:  c/o Manekin,  LLC, 7061 Columbia  Gateway Drive,  Columbia,
Maryland 21046, Attn: Accounting Department. Either party may designate a change
of address by written notice to the other party.

     H.  Severability,  Enforceability.  If any provision of this Lease,  or its
application to any person, is found invalid or  unenforceable,  the remainder of
this Lease or its application  will not be affected.  Each term and provision of
this Lease will be valid and enforceable to the fullest extent permitted by law.
Notwithstanding  any language in this Lease to the  contrary,  if the Lease Term
does not commence on or before  January 1, 2010,  this Lease will  automatically
terminate, and neither party will have any further liability to the other.

     I. Captions. All headings contained in this Lease are for convenience only.
They are not to be treated as a summary  construction of the provisions to which
they pertain.

     J.  Recordation.  If at any time, any lienholder or other party which has a
right to require  Landlord to do so,  requires  the  recordation  of this Lease,
Tenant will  execute  such  acknowledgements  as may be necessary to effect such
recordation. If Landlord requires, or is required, to record this Lease, it will
pay all recording fees, transfer taxes and/or documentary stamp taxes payable in
connection with the recordation.  If Tenant records this Lease, it will make all
such  payments.  Tenant  will not record  this Lease  without  Landlord's  prior
consent.
                                       20
<PAGE>

     K.  Successors  and  Assigns.   This  Lease  and  all  of  its  provisions,
individually  and  collectively,  will bind and inure to the benefit of Landlord
and Tenant, and their respective heirs, distributees, executors, administrators,
successors, personal and legal representatives and their permitted assigns.

     L. Commissions.  Tenant represents that Tenant has dealt directly with only
MANEKIN,  LLC and MACKENZIE  ONCOR  INTERNATIONAL  as brokers in connection with
this Lease and that,  insofar as Tenant knows,  no other broker  negotiated this
Lease or is entitled to any  commissions in connection with it. Tenant will hold
harmless and indemnify  Landlord from any costs incurred by Landlord arising out
of any other  broker's  claim that such other  broker has  assisted  Tenant with
respect to this Lease.

     M. Quiet  Enjoyment.  Landlord  covenants to Tenant that, so long as Tenant
pays the Rent and  performs all other  obligations  imposed on Tenant under this
Lease,  Tenant will peaceably hold and enjoy the Leased Premises  throughout the
Lease Term  without  hindrance or  impairment  from  Landlord or those  claiming
through Landlord.

     N. Force Majeure.  In the event that either party to this Lease is delayed,
hindered  or  prevented,  by  reason  of  strikes,  lock-outs,  labor  troubles,
inability  to produce  materials,  delays in  transportation,  failure of power,
restrictive governmental laws or regulations,  riots, insurrection, war, fire or
other  casualties,  acts of God, rain or other  weather  conditions or any other
reason  (excluding lack of funds) not reasonably within the control of the party
so  delayed,  hindered  or  prevented,  from  performing  work or doing  any act
required  under the terms of this Lease,  then  performance  of such act will be
excused for the period of the delay,  and the period of the  performance  of any
such act will be extended for a period equal to the period of such delay. Except
as otherwise  specifically  provided in this Lease,  the occurrence of any event
described in this  Paragraph  X.N. will not operate to excuse Tenant from prompt
payments of Rent, Additional Rent or any other payments required by this Lease.

     O. Waiver of Jury Trial.  Landlord and Tenant desire a prompt resolution of
any litigation  between them with respect to this Lease.  To that end,  Landlord
and  Tenant  waive  trial  by  jury  in  any  action,  suit,  proceeding  and/or
counterclaim  brought  by either  against  the other on any  matters  whatsoever
arising out of or in any way  connected  with this Lease,  the  relationship  of
Landlord and Tenant, Tenant's use or occupancy of the Leased Premises, any claim
of injury or damage  and/or any  statutory  remedy.  This  waiver is  knowingly,
intentionally and voluntarily made by Tenant.  Tenant  acknowledges that neither
Landlord   nor  any  person   acting  on  behalf  of   Landlord   has  made  any
representations  of fact to induce this waiver of trial by jury or in any way to
modify or nullify  its  effect.  Tenant  further  acknowledges  that it has been
represented  (or has had the  opportunity to be  represented)  in the signing of
this Lease and the making of this waiver by independent legal counsel,  selected
of its own free will, and that it has had the opportunity to discuss this waiver
with counsel.  Tenant further  acknowledges that it has read and understands the
meaning and ramifications of this waiver of jury trial.
                                       21
<PAGE>

         P. Miscellaneous.

     1. As used in this Lease, and where the context requires: (a) the masculine
will be deemed to include the  feminine and neuter and  vice-versa;  and (b) the
singular will be deemed to include the plural and vice-versa.

     2. This Lease is made in the State of Maryland  and will be governed in all
respects by the laws of the State of Maryland.

     3. Except as otherwise  specifically  provided in this Lease, no abatement,
refund, offset, counter-claim,  recoupment,  diminution or any reduction of Rent
or any other  payments  will be claimed  by or allowed to Tenant,  or any person
claiming under Tenant  (including  inconvenience,  discomfort,  interruption  of
business or otherwise),  because of any present or future  governmental  laws or
ordinances, or because of any other cause or reason whatsoever.

     4. Intentionally Omitted.

     5. All plats,  exhibits,  riders or other  attachments  to this Lease are a
part of this Lease and are incorporated by reference into this Lease.

     6. THIS LEASE  CONTAINS THE ENTIRE  AGREEMENT  BETWEEN  LANDLORD AND TENANT
REGARDING THE SUBJECT MATTER OF THIS LEASE.  THERE ARE NO PROMISES,  AGREEMENTS,
CONDITIONS,  UNDERTAKINGS,  WARRANTIES  OR  REPRESENTATIONS,  ORAL  OR  WRITTEN,
EXPRESS OR IMPLIED, BETWEEN THEM, RELATING TO THIS SUBJECT MATTER, OTHER THAN AS
SET FORTH IN THIS LEASE.  THIS LEASE IS INTENDED BY LANDLORD AND TENANT TO BE AN
INTEGRATION OF ALL PRIOR OR CONTEMPORANEOUS  PROMISES,  AGREEMENTS,  CONDITIONS,
NEGOTIATIONS  AND  UNDERTAKINGS  BETWEEN  THEM.  THIS LEASE MAY NOT BE  MODIFIED
ORALLY OR IN ANY MANNER OTHER THAN BY AN AGREEMENT IN WRITING SIGNED BY LANDLORD
AND  TENANT  OR THEIR  RESPECTIVE  SUCCESSORS  IN  INTEREST.  THIS  LEASE MAY BE
EXECUTED IN  COUNTERPARTS,  EACH OF WHICH WILL BE AN ORIGINAL,  BUT ALL OF WHICH
WILL CONSTITUTE ONE AND THE SAME LEASE.

     7. Two (2) riders are attached to this Lease and made a part of it.

     Q. Financial Statements. If Landlord desires to finance, refinance, or sell
the Building, the Property or any part thereof,  Tenant and all guarantors shall
deliver  to any  potential  lender or  purchaser  designated  by  Landlord  such
financial statements of Tenant and such guarantors as may be reasonably required
by such lender or  purchaser,  including  but not limited to Tenant's  financial
statements for the past three (3) years. All such financial  statements shall be
received by Landlord  and such lender or purchaser  in  confidence  and shall be
used only for the purpose herein set forth.
                                       22
<PAGE>

         IN WITNESS WHEREOF, Landlord and Tenant have respectively signed this
Lease Agreement under seal as of the date first above written.

WITNESS/ATTEST:            FSP GATEWAY CROSSING LIMITED
                             PARTNERSHIP

                           By:   FSP Holdings LLC, a Delaware limited liability
                                      company, General Partner


_________________________   By:_______________________(SEAL)
                            Name:_____________________
                            Title:____________________

                                                                 LANDLORD


                            MANCHESTER TECHNOLOGIES, INC.


_________________________  By:_________________________(SEAL)
                           Name:____________________________
                           Title:___________________________

                                                                TENANT


COMMONWEALTH OF MASSACHUSETTS
CITY/COUNTY OF ______________________,      TO WIT:

     I  HEREBY  CERTIFY  that on  this  1st day of May,  2003,  before  me,  the
subscriber,  a notary public of the jurisdiction aforesaid,  personally appeared
______________,  the  _____________  of FSP  Holdings  LLC, a  Delaware  limited
liability company, which limited liability company is the general partner of FSP
GATEWAY  CROSSING  LIMITED  PARTNERSHIP,  Landlord,  and s/he  acknowledged  the
foregoing Lease Agreement to be the act and deed of such limited partnership.

                                    --------------------------------------------
Notary Public
                  My Commission Expires:_______________________


STATE OF _________________________  )
                                                              ) TO WIT:
COUNTY OF ________________________  )

     I HEREBY  CERTIFY  that on this 15th day of April,  2003,  before  me,  the
subscriber, a Notary Public of the State of __________________, City/County of ,
personally   appeared   ____________________,   the   President  of   MANCHESTER
TECHNOLOGIES,  INC.,  Tenant,  and [she] [he]  acknowledged  the foregoing Lease
Agreement to be the act and deed of such corporation.

         WITNESS my hand and Notarial Seal.


                                    --------------------------------------------
                                   Notary Public
                  My Commission Expires:_______________________



                                       23
<PAGE>



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                                    EXHIBIT A

                         Description of Leased Premises




<PAGE>



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                                    EXHIBIT B

                            Plans and Specifications


<PAGE>



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                                    EXHIBIT C

                                  Charge Sheet


<PAGE>


                                    EXHIBIT D

                          LEASE COMMENCEMENT AGREEMENT


THIS LEASE COMMENCEMENT AGREEMENT,  made this __ day of _________,  200_, by and
between FSP GATEWAY  CROSSING  LIMITED  PARTNERSHIP  ("Landlord") and MANCHESTER
TECHNOLOGIES, INC. ("Tenant").

WITNESSETH:

WHEREAS, Landlord and Tenant have entered into that certain Lease Agreement
dated __________, 200_, (the "Lease") for a portion of the premises located at
7130 Columbia Gateway Drive, Columbia, Maryland (the "Leased Premises"); and

WHEREAS, Landlord and Tenant wish to set forth their agreements as to the term
of the Lease, as well as certain other matters, all as more particularly set
forth below.

NOW, THEREFORE, in consideration of the Leased Premises as described in the
Lease and the covenants set forth therein, Landlord and Tenant agree as follows:

         1. Tenant hereby accepts the Leased Premises as being in the condition
required under the Leased.

         2. The "Commencement Date" for all purposes of the Lease is
____________, 200_.

         3. The initial Lease Term shall expire on _________________, 200_.

         4. A Security Deposit was received from Tenant by Landlord in the
amount of $___________.

         5. [OTHER PROVISIONS, if any]


<PAGE>



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                                    EXHIBIT E

                              Rules and Regulations

     1.  The  delivery,   shipping,  loading  and  unloading  of  goods,  wares,
merchandise,  equipment,  supplies, fixtures and all other items to and from the
Leased  Premises  will be  subject  to the rules and  regulations  Landlord  may
promulgate from time to time with respect to deliveries and shipments.

     2. All garbage and refuse will be kept in the kind of  container  specified
by Landlord,  and will be placed  outside of the Building for  collection in the
manner, in such containers and at the times and places  reasonably  specified by
Landlord. Tenant will not burn any trash or garbage of any kind in or around the
Leased Premises.

     3. Tenant will prevent sounds emanating from the Leased Premises from being
heard  outside  the Leased  Premises or  otherwise  unreasonably  disturbing  or
annoying other tenants.

     4. The plumbing facilities will not be used for any purpose other than that
for which they are constructed.  No foreign substance of any kind will be thrown
into the plumbing  facilities.  The expense of any breakage,  stoppage or damage
resulting  from a violation of this  provision by Tenant or any of its servants,
agents, invitees, employees and/or licensees will be borne solely by Tenant.

     5.  Tenant  will not  place a load upon the  floor of the  Leased  Premises
exceeding  the floor  load per  square  foot area  which the floor of the Leased
Premises has been designed to carry.

     6.  Tenant  will not  permit  anyone to lodge,  sleep or cook in the Leased
Premises. Tenant is responsible for all persons whom it invites and/or admits to
the Leased Premises and will be liable to Landlord for all acts of such persons.

     7. Landlord  reserves to itself all rights not granted to Tenant under this
Lease,  including,  but not limited to, the following:  (a) the right to install
and maintain signs on the exterior of the Building;  (b) the exclusive  right to
use or  dispose  of the use of the roof of the  Building;  and (c) the  right to
grant to anyone the right to conduct any  particular  business or undertaking in
the Building.

     8. Tenant will not attach or place awnings,  antennas or other  projections
to the outside walls or any exterior portion of the Building,  without the prior
written  consent of Landlord.  No curtains,  blinds,  shades or screens shall be
attached to or hung in, or used in  connection  with,  any window or door of the
Leased  Premises,  which are visible from the exterior of the Building,  without
the prior written  consent of Landlord,  which consent shall not be unreasonably
withheld.

     9.  Tenant  will not pile or place or permit to be placed  any goods on the
sidewalks  or parking  lots in the front,  rear or sides of the Building or in a
place in any  manner so as to block said  sidewalks,  parking  lots and  loading
areas and/or not to do anything that  directly or indirectly  will take away any
of the rights of ingress or egress or of light from any other tenant of Landlord
in the Project.
<PAGE>

     10. Tenant, Tenant's servants, agents, invitees, employees and/or licensees
shall not park on, store on, or otherwise  utilize any parking or loading  areas
on the Real Property,  except as may be designated by Landlord from time to time
and then only in the parking places  designated by Landlord for such parking and
in accordance  with such rules and regulations as Landlord may from time to time
promulgate with respect thereto.

     11. No animals of any kind (other than an animal  assisting a person with a
disability) shall be brought into or kept in or about the Project.

     12.  Tenant  covenants  and agrees that it shall not  inscribe,  affix,  or
otherwise  display signs,  advertisements  or notices in, on, upon or behind any
windows or on any door,  partition  or other part of the interior or exterior of
the Building  without the prior written consent of Landlord.  If such consent be
given by Landlord, any such sign,  advertisement,  or notice shall be inscribed,
painted or affixed by Landlord, or a company approved by Landlord,  but the cost
of the same shall be charged to and be paid by Tenant,  and Tenant agrees to pay
the same promptly, on demand.


<PAGE>




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                                   Rider No. 1

                             Rider to Paragraph I.A.
                             -----------------------

                             Right of First Refusal
                             ----------------------

     Tenant shall have the right of first refusal (the "First Refusal Right") to
lease the approximately  eight thousand seven hundred  eighty-one (8,781) square
feet of space (the "Expansion  Space")  contiguous to the Leased Premises on the
terms and at a Basic Annual Rent equal to the price per square foot as is sought
to be leased on terms acceptable to Landlord by a bona fide  prospective  tenant
of the  Expansion  Space (the  "Offer").  The First  Refusal  Right shall not be
applicable  to the  exercise  by another  tenant of the Project of its rights of
renewal or expansion.

     Said rent shall be payable in equal  monthly  installments  (and  fractions
thereof),  at the times and subject to the terms and conditions as provided with
respect to, and in addition  to, the monthly  installments  of the Basic  Annual
Rent as set forth in Paragraph III.B. of this Lease.

     Tenant's  exercise of its First Refusal Right shall be effective  only upon
written  notification  (the  "Notice")  by  Tenant  to  Landlord  thereof.  Such
notification must be given to Landlord before the close of business on the fifth
(5th)  full  business  day  after   Tenant's   receipt  of  Landlord's   written
notification  to Tenant of the Offer.  Time is of the  essence  with  respect to
Tenant's  exercise of its rights under this Rider, and Tenant  acknowledges that
Landlord  requires strict adherence to the requirement that the Notice be timely
made and in writing.

     In the  event  Tenant  fails to so  notify  Landlord  within  said five (5)
business day period, Landlord shall be free to accept the Offer and Tenant shall
have no further rights hereunder.

     This First  Refusal  Right is personal to Tenant and shall not be separated
from the Lease or transferred by Tenant  independently of the leasehold interest
without the prior written consent of Landlord, which consent of Landlord will be
given solely within the discretion of Landlord.

     Notwithstanding any other provision hereof, the following  provisions shall
apply to the First Refusal Right and to Tenant's lease, if any, of the Expansion
Space:

     (i) Tenant shall not be entitled to exercise the rights  accorded to Tenant
in the first  paragraph,  unless at the date of such  exercise or at the date on
which  Tenant's  lease of the Expansion  Space becomes  effective,  Tenant is in
possession of the Leased Premises and Tenant is not in default in the payment of
any sums due hereunder or any other obligation imposed upon Tenant by the Lease;

     (ii) Tenant  shall have the right to lease and occupy the  Expansion  Space
commencing on the date set forth in the Offer (the "Expansion Space Commencement
Date"),  and terminating on the later of (a) the date set forth in the Offer, or
(b) the  expiration  of the Lease Term under this  Lease,  on such other  terms,
conditions, and provisions as are set forth in the Offer;
<PAGE>

     (iii) The Expansion Space shall be delivered to Tenant in "As Is" condition
unless otherwise stated in the Offer; and

     (iv) Except as otherwise  expressly provided in this Rider or in the Offer,
all of the covenants,  terms,  conditions and agreements set forth in this Lease
shall apply to the Expansion Space.

     (v) The Lease  shall be  amended,  as may be  appropriate,  to reflect  the
leasing of the Expansion Space.

     (vi) This  First  Refusal  Right  shall be  subordinate  to any  previously
granted  rights of any tenant in the  Project,  including,  without  limitation,
renewal rights, expansion rights, rights of refusal and rights of offer.





<PAGE>




c:\my documents\vtl\10k\baltimore lease 2003.doc;43213.034;v
Last Saved: 5/14/2003 5:16 PM
                                   RIDER NO. 2

                         Rider to Paragraph II.A. (Term)
                         -------------------------------


     Provided  (i) this Lease is then in full force and  effect,  (ii) Tenant is
not in default respecting any provision or condition of this Lease either on the
date Tenant  elects to renew or on the date the  renewal  term  commences,  and,
(iii) Tenant has not failed more than two times during the original term of this
Lease to make any payments  called for by this Lease on the date such payment is
due,  then  Tenant  shall have the right to renew this Lease for one (1) renewal
term of three (3) years  immediately  following  the  expiration of the original
term on the same  terms,  conditions,  and  provisions  as are set forth in this
Lease  with the same  force  and  effect  as though  this  Lease had  originally
provided for an eight and one half (8 1/2) year term save that:

     (i) there shall be no further right of renewal, after the renewal term, and

     (ii)  beginning  with  and as of the  first  day of the  renewal  term  and
continuing  throughout  the renewal  term,  the Basic  Annual Rent  payable with
respect to the Leased  Premises  shall be  adjusted  to reflect  the  prevailing
rental rate for comparable office space within a two mile radius of the Building
as of the commencement of the renewal term, as determined by Landlord, but in no
event shall the Basic Annual Rent during the renewal term be less than the Basic
Annual Rent due during the last year of the original term of this Lease; and

     (iii)  Landlord  shall  contribute  an amount not to exceed  Three  Dollars
($3.00)  per square  foot of the Leased  Premises  toward the costs of  Tenant's
refurbishing  the Leased  Premises in accordance  with plans and  specifications
therefor to be prepared by Tenant and  submitted to Landlord  for its  approval.
Such refurbishment shall occur within the first six months of the renewal term.

     Tenant  shall be deemed to have waived the right to exercise  this  renewal
option unless not less than six (6) months prior to the date of  termination  of
the  original  term Tenant shall have  notified  Landlord in writing of Tenant's
election to renew (the "Renewal Notice"). Time is of the essence with respect to
Tenant's  exercise of its rights under this Rider and Tenant  acknowledges  that
Landlord requires strict adherence to the requirement that the Renewal Notice be
timely made and in writing.

     Landlord shall give Tenant  written notice of its good faith  determination
of the prevailing rental rate  approximately  seven (7) months prior to the last
day of the original term of this Lease.





<PAGE>




                           TRIPLE NET LEASE AGREEMENT
                                       FOR
                          MANCHESTER TECHNOLOGIES, INC.


                                TABLE OF CONTENTS

Paragraph                                                               Page No.

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

         A. Location of Leased
         Premises............................................................1
         B. Construction of the Leased
         Premises............................................................1

II. LEASE
TERM.........................................................................1

         A.       Lease Term.................................................1
         B.       Possession.................................................2
         C.       Lease Year.................................................2
         D.       Acceptance of Leased Premises..............................2
         E.       Landlord's Warranty........................................3

III. RENT AND FINANCIAL
MATTERS......................................................................3

         A. Security Deposit and Advance Rent................................3
         B. Rental Payments..................................................4
         C. Rent Adjustments.................................................5
                  1.       Definitions.......................................5
                  2.       Rent Adjustment...................................6
                  3.       Tax Adjustment....................................7
                  4.       Summary of Payments...............................7
                  5.       Utilities.........................................8

IV. CONDITIONS OF TENANT'S OCCUPANCY AND POSSESSION..........................8

         A.       Use Restrictions and Rules........................... .... 8
         B.       Improvements by Tenant.....................................8
         C.       Maintenance................................................9
         D.       Conduct on Leased Premises................................10
         E.       Insurance.................................................10
         F.       Liens.....................................................11
         G.       Environmental Assurances..................................11
                  1.       Covenants........................................11
                  2.       Tenant's Indemnification.........................11
                  3.       Landlord's Indemnification.......................12
                  4.       Definitions......................................12

V. LANDLORD'S RIGHTS AND RESPONSIBILITIES...................................12

         A.       Access....................................................12
         B.       Building Repairs..........................................12
         C.       Performance of Tenant's Responsibilities by Landlord......13
         D.       Loss, Damage, Injury......................................13
         E.       Mutual Indemnity..........................................13

VI. DAMAGE AND DESTRUCTION..................................................13


VII. CONDEMNATION...........................................................14


VIII. HOLDING OVER..........................................................15


IX. DEFAULT.................................................................15

         A.       Events of Default.........................................15
         B.       Effect of Default.........................................16
                                      -i-
<PAGE>

         C.       Termination of Lease and Possession of Leased Premises....16
         D.       Damages...................................................16

X. LEGAL AND GENERAL PROVISIONS.............................................17

         A.       Assignment/Subletting.....................................17
         B.       Estoppel Certificates.....................................18
         C.       Subordination.............................................19
         D.       Attornment................................................19
         E.       Landlord's Liability......................................19
         F.       Authority.................................................20
         G.       Notices...................................................20
         H.       Severability, Enforceability..............................20
         I.       Captions..................................................20
         J.       Recordation...............................................20
         K.       Successors and Assigns....................................21
         L.       Commissions...............................................21
         M.       Quiet Enjoyment...........................................21
         N.       Force Majeure.............................................21
         O.       Waiver of Jury Trial......................................21
         P.       Miscellaneous.............................................22
         Q.       Financial Statements......................................22

Exhibit A - Description of Leased Premises
Exhibit B - Plans and Specifications
Exhibit C - Charge Sheet
Exhibit D - Lease Commencement Agreement
Exhibit E - Rules and Regulations

Rider No. 1 - Right of First Refusal
Rider No. 2 - Option to Renew


                                      -ii-

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</DOCUMENT>
