LEASE AGREEMENT

THIS LEASE AGREEMENT, made and entered into by and between, SSMRT Bensenville Industrial Park (3), Inc. or its assigns, hereinafter referred to as "Landlord", and Burke Industries, Inc. hereinafter referred to as "Tenant";

WITNESSETH:

1. PREMISES AND TERM. In consideration of the mutual obligations of Landlord and Tenant set forth herein, Landlord leases to Tenant, and Tenant hereby takes from Landlord the Premises situated within the County of DUPAGE, State of ILLINOIS, more particularly described on EXHIBIT "A", commonly known as 870 THOMAS DRIVE, BENSENVILLE, ILLINOIS and outlined in red attached hereto and incorporated herein by reference, (the "Premises"), to have and to hold, subject to the terms, covenants and conditions in this Lease. The term of this Lease shall commence on the commencement date hereinafter set forth and shall end on the last day of the month that is 37 months after the commencement date.

A. EXISTING BUILDING. If no improvements are to be constructed to the Premises, the commencement date shall be ON OR ABOUT JUNE 1, 1996 BUT WILL BE NO LATER THAN JUNE 15, 1996. Tenant acknowledges that (i) it has inspected and accepts the Premises, (ii) the buildings and improvements comprising the same are suitable for the purpose for which the Premises are leased, (iii) the Premises are in good and satisfactory condition, and (iv) no representations as to the repair of the Premises, nor promises to alter, remodel or improve the Premises have been made by Landlord (unless otherwise expressly set forth in this Lease). If this lease is executed before the Premises become vacant or otherwise available and ready for occupancy, or if any present Tenant or occupant of the Premises holds over, and Landlord cannot, using good faith efforts, acquire possession of the Premises prior to the date above recited as the commencement date of this lease, Landlord shall not be deemed to be in default hereunder nor in any way liable to Tenant because of such failure, and Tenant agrees to accept possession of the Premises at such time as Landlord is able to tender the same, which date shall thenceforth be deemed to be the "commencement date"; and the term of this lease automatically shall be extended so as to include the full number of months herein before provided for, except that if the commencement date is other than the first day of a calendar month such term also shall be extended for the remainder of the calendar month in which possession is tendered. Landlord hereby waives payment of rent covering any period prior to such tendering of possession. After the commencement date, Tenant shall, upon demand, execute and deliver to Landlord a letter of acceptance of delivery of the Premises. LANDLORD SHALL MAKE THE TENANT IMPROVEMENTS OUTLINED IN EXHIBIT "A".

2. BASE RENT, SECURITY DEPOSIT AND ESCROW PAYMENTS.

A. Tenant agrees to pay to Landlord rent for the Premises, in advance, without demand, deduction or set off, at the rate of SIX THOUSAND NINE HUNDRED EIGHTY ONE AND 85/100 Dollars ($6,981.85) per month during the term hereof. One such monthly installment, plus the other monthly charges set forth in Paragraph 2C below shall be due and payable on the date hereof and a like monthly installment shall be due and payable on or before the first day of each calendar month succeeding the commencement date, except that all payments due hereunder for any fractional calendar month shall be prorated. TENANT WILL RECEIVE THE FIRST MONTH RENT FREE.

B. In addition, Tenant agrees to deposit with Landlord on the date hereof the sum of EIGHT THOUSAND ONE HUNDRED FORTY ONE AND 15/100 Dollars ($8,141. l 5) which shall be held by Landlord, without obligation for interest, as security for the performance of Tenant's obligations under this lease, it being expressly understood and agreed that this deposit is not an advance rental deposit or a measure of Landlord's damages in case of Tenant's default. Upon each occurrence of an event of default, Landlord may use all or part of the deposit to pay past due rent or other payments due Landlord under this Lease, and the cost of any other damage, injury, expense or liability caused by such event of default without prejudice to any other remedy provided herein or provided by law. On demand, Tenant shall pay Landlord the amount that will restore the security deposit to its original amount. The security deposit shall be deemed the property of Landlord, but any remaining balance of such deposit shall be returned by Landlord to Tenant when Tenant's obligations under this Lease have been fulfilled. LANDLORD WILL RETURN TO TENANT SECURITY DEPOSIT WITHIN 30 DAYS AFTER THE FINAL RECONCILIATION.

C. Tenant agrees to pay its proportionate share (as defined in Paragraph 22K below) of (i) Taxes (hereinafter defined) payable by Landlord pursuant to paragraph 3A below, (ii) the cost of utilities payable pursuant to paragraph 8 below, (iii) the cost of administering and maintaining any insurance pursuant to paragraph 9 below and (iv) the cost of any common area charges payable by Tenant in accordance with paragraph 4C. below. During each month of the term of this Lease, on the same day that rent is due hereunder, Tenant shall escrow with Landlord an amount equal to 1/12 of the estimated annual cost of its proportionate share of such items. Tenant authorizes Landlord to use the funds deposited with Landlord under this Paragraph 2C to pay such costs. The initial monthly escrow payments are based upon the estimated amounts for the year in question, and shall be increased or decreased annually to reflect the projected actual cost of all such items. If the Tenant's total escrow payments are less than Tenant's actual proportionate share of all such items, Tenant shall pay the difference to Landlord within ten (10) days after demand. If the total escrow payments of Tenant are more than Tenant's actual proportionate share of all such items, Landlord shall retain such excess and credit it against Tenant's next annual escrow payments. IF THERE IS AN INCREASE IN ESCROW COSTS TENANT WILL HAVE THE RIGHT TO REVIEW THE ESCROW CHARGES WITH LANDLORD. The amount of the monthly rental and the initial monthly escrow payments are as follows:

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