<SUBMISSION>
<ACCESSION-NUMBER>0000914317-00-000775
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>9
<PERIOD>20000930
<FILING-DATE>20001114
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BALTEK CORP
<CIK>0000009442
<ASSIGNED-SIC>2430
<IRS-NUMBER>132646117
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-07395
<FILM-NUMBER>764401
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>10 FAIRWAY CT
<STREET2>P O BOX 195
<CITY>NORTHVALE
<STATE>NJ
<ZIP>07647
<PHONE>2017671400
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>10 FAIRWAY COURT
<STREET2>P O BOX 195
<CITY>NORTHVALE
<STATE>NJ
<ZIP>07647
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>HKL CORP
<DATE-CHANGED>19730906
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 10-Q
<TEXT>




                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)
   [X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 2000

                                       OR

   [ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934


For the transition period from _____________ To ______________

Commission file number      2-44764


                               BALTEK CORPORATION
             (Exact name of registrant as specified in its charter)

                 Delaware                          13-2646117
     (State or other jurisdiction of            (I.R.S. Employer
      incorporation or organization)           Identification No.)

               10 Fairway Court, P.O. Box 195, Northvale, NJ 07647
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (201) 767-1400
              (Registrant's telephone number, including area code)

(Former  name,  former  address and formal  fiscal year,  if changed  since last
                                    report)

       Indicate by check mark whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]        No [ ]


   Common shares of stock outstanding as of November 8, 2000: 2,523,261 shares



<PAGE>



BALTEK CORPORATION and subsidiaries

TABLE OF CONTENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                                                 Page
<S>     <C>                                                                                         <C>
PART I.  FINANCIAL INFORMATION:

     ITEM 1.  FINANCIAL STATEMENTS:

        Consolidated Balance Sheets as of September 30, 2000 and December 31, 1999...................1

        Consolidated Statements of Income and Retained Earnings for the Three and Nine Months
           Ended September 30, 2000 and 1999.........................................................2

        Consolidated Statements of Cash Flows for the Nine Months
           Ended September 30, 2000 and 1999.........................................................3

        Notes to Consolidated Financial Statements...................................................4

     ITEM 2.  Management's Discussion and Analysis of Financial Condition
        and Results of Operations....................................................................7

PART II.  OTHER INFORMATION:

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.......................................................9

      SIGNATURES.....................................................................................10

</TABLE>

<PAGE>
                       BALTEK CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (Dollars in Thousands, except per share data)
 -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                             September 30,     December 31,
                                                                                 2000              1999
                                                                              (Unaudited)
<S>                                                                             <C>              <C>
 ASSETS

 CURRENT ASSETS:
  Cash and cash equivalents                                                     $ 1,552          $   967
  Accounts receivable, net                                                        9,927            9,285
  Inventories                                                                    19,261           18,478
  Prepaid expenses                                                                  579              551
  Other                                                                           1,426            1,185
                                                                                -------          -------

           Total current assets                                                  32,745           30,466

PROPERTY, PLANT AND EQUIPMENT, Net                                               12,849           13,565

TIMBER AND TIMBERLANDS                                                            8,299            8,200

OTHER ASSETS                                                                        712              674
                                                                                -------          -------

           Total assets                                                         $54,605          $52,905
                                                                                =======          =======

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Notes payable                                                                 $ 8,700          $ 8,079
  Accounts payable                                                                4,369            4,821
  Income tax payable                                                                 --              211
  Accrued salaries, wages and bonuses payable                                     1,021            1,211
  Accrued expenses and other liabilities                                            833              683
  Current portion of long-term debt                                                  42              199
  Current portion of obligation under capital lease                                 452              415
                                                                                -------          -------

           Total current liabilities                                             15,417           15,619

OBLIGATION UNDER CAPITAL LEASE                                                      199              547

LONG-TERM DEBT                                                                       56               44

UNION EMPLOYEE TERMINATION BENEFITS                                                 113               99
                                                                                -------          -------

           Total liabilities                                                     15,785           16,309
                                                                                -------          -------
STOCKHOLDERS' EQUITY:
  Preferred stock, $1.00 par; 5,000,000 shares authorized and unissued               --               --
  Common stock, $1.00 par; 10,000,000 shares authorized,
    2,523,261 shares issued and outstanding                                       2,523            2,523
  Additional paid-in capital                                                      2,157            2,157
  Retained earnings                                                              34,140           31,916
                                                                                -------          -------

           Total stockholders' equity                                            38,820           36,596
                                                                                -------          -------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $54,605          $52,905
                                                                                =======          =======
</TABLE>
          See notes to consolidated financial statements.
                                      -1-
<PAGE>




                       BALTEK CORPORATION AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
                  (Dollars in Thousands, except per share data)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                     Three Months                       Nine Months
                                                  Ended September 30,               Ended September 30,
                                                 2000           1999              2000              1999

<S>                                         <C>            <C>              <C>               <C>
NET SALES                                   $   22,213     $   23,724       $    67,349       $    64,750

COST OF PRODUCTS SOLD                           17,286         18,514            52,234            49,965

SELLING , GENERAL AND
  ADMINISTRATIVE EXPENSES                        3,661          3,496            10,866            10,558
                                            ----------     ----------       -----------       -----------

            Operating income                     1,266          1,714             4,249             4,227
                                            ----------     ----------       -----------       -----------

OTHER INCOME (EXPENSE):
   Interest expense                               (220)          (353)             (660)             (986)
   Foreign exchange loss                           (88)          (170)             (322)             (181)
   Other, net                                       (1)            --                 4                 3
                                            ----------     ----------       -----------       -----------

            Total                                 (309)          (523)             (978)           (1,164)
                                            ----------     ----------       -----------       -----------

INCOME BEFORE INCOME TAXES                         957          1,191             3,271             3,063

INCOME TAX PROVISION                               306            357             1,047               919
                                            ----------     ----------       -----------       -----------

NET INCOME                                         651            834             2,224             2,144

RETAINED EARNINGS,
  BEGINNING OF PERIOD                           33,489         30,410            31,916            29,100
                                            ----------     ----------       -----------       -----------

RETAINED EARNINGS,
  END OF PERIOD                             $   34,140     $   31,244       $    34,140       $    31,244
                                            ==========     ==========       ===========       ===========

AVERAGE SHARES OUTSTANDING                   2,523,261      2,523,261         2,523,261         2,523,261
                                            ==========     ==========       ===========       ===========

BASIC AND DILUTED
EARNINGS PER COMMON SHARE                   $     0.26     $     0.33       $      0.88       $      0.85
                                            ==========     ==========       ===========       ===========
</TABLE>


See notes to consolidated financial statements.

                                      -2-

<PAGE>
                       BALTEK CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (Dollars in Thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                        Nine Months
                                                                    Ended September 30,
                                                                     2000         1999
<S>                                                                <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                       $ 2,224      $ 2,144
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
    Depreciation and amortization                                    2,327        2,528
    Foreign exchange loss                                              322          181
    Deferred taxes                                                      --           37
    Changes in assets and liabilities, net of the effect of
     foreign currency translation and acquisition:
        Accounts receivable                                           (670)      (3,972)
        Inventories                                                   (783)      (4,161)
        Prepaid expenses and other current assets                      116          288
        Other assets                                                   (37)         (15)
        Accounts payable and accrued expenses                         (426)       1,282
        Income taxes payable                                          (593)        (202)
        Other                                                           27          (67)
                                                                   -------      -------

           Net cash provided by (used in) operating activities       2,507       (1,957)
                                                                   -------      -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net acquisitions of property, plant and equipment                   (982)      (1,895)
  Increase in timber and timberlands                                  (685)        (720)
  Acquisition of assets of seafood import business                      --         (491)
                                                                   -------      -------

           Net cash used in investing activities                    (1,667)      (3,106)
                                                                   -------      -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in notes payable, net                                       621        7,070
  Borrowings of long-term debt                                          --           --
  Payments of long-term debt                                          (199)        (776)
  Principal payments under capital lease                              (311)        (286)
                                                                   -------      -------

         Net cash provided by financing activities                     111        6,008
                                                                   -------      -------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                               (366)         (53)
                                                                   -------      -------
NET INCREASE IN
  CASH AND CASH EQUIVALENTS                                            585          892

CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD                                                  967        1,056
                                                                   -------      -------
CASH AND CASH EQUIVALENTS,
  END OF PERIOD                                                    $ 1,552      $ 1,948
                                                                   =======      =======

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the period for:
    Interest                                                       $   660      $   903
                                                                   =======      =======

    Income taxes                                                   $ 1,502      $ 1,051
                                                                   =======      =======
</TABLE>
See notes to consolidated financial statements.

                                      -3-
<PAGE>
BALTEK CORPORATION and subsidIaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------


1.    BASIS OF PRESENTATION

      The information  included in the accompanying interim financial statements
      is unaudited. In the opinion of management, all adjustments, consisting of
      normal recurring accruals necessary for a fair presentation of the results
      of operations,  financial  position and cash flows for the interim periods
      presented  have been reflected  herein.  The results of operations for the
      interim  periods  are not  necessarily  indicative  of the  results  to be
      expected for the entire year. The statements should be read in conjunction
      with  the  accounting   policies  and  notes  to  consolidated   financial
      statements included in the Company's 1999 Annual Report on Form 10-K.


2.    INVENTORIES

      Inventories are summarized as follows (amounts in thousands):

                                             September  30,       December 31,
                                                      2000               1999

       Raw materials                               $ 5,673            $ 5,260
       Work-in-process                               2,353              3,050
       Finished goods                               11,235             10,168
                                                  --------             ------

                                                   $19,261            $18,478
                                                 =========            =======


3.    NOTES PAYABLE

      The  Company's  domestic  credit  facility,  which by its  original  terms
      expired on September 30, 2000,  has been extended until December 31, 2000.
      All other terms and  conditions of the expired  facility  remain the same.
      The Company is currently  discussing  the terms of a new facility with its
      bank.

4.    LEASES

      During the quarter ended September 30, 2000, the Company signed leases for
      two plant  facilities in Northvale,  New Jersey.  The Company signed a new
      lease,  which expires in 2010, for its existing plant facility.  The lease
      commences in 2002 at the  expiration of the current lease  agreement.  The
      lease contains a five-year  renewal option, a fair market purchase option,
      and  provides  that the Company pay all real  estate  taxes,  maintenance,
      insurance and other costs related to the facility.

      The Company also signed a lease agreement for an 80,000 square foot office
      and plant  facility  located in Northvale, New Jersey.  The lease began in
      September  2000,  and expires in 2010.  The lease  contains two  five-year
      renewal options and provides that the Company pays facility-related  costs
      such as taxes, insurance, and maintenance.

                                      -4-

<PAGE>


5.    SEGMENT INFORMATION

      The  Company  and  its  subsidiaries   operate  in  two  segments,   as  a
      manufacturer   and  supplier  of  core  materials  to  various   composite
      industries,  and in the seafood  business as a shrimp producer and seafood
      importer.  The segments are managed and reported separately because of the
      difference  in products  they produce and markets they serve.  The Company
      evaluates   performance  based  on  operating  income,   i.e.  results  of
      operations  before  interest,  income taxes and foreign exchange gains and
      losses. There are no intersegment sales.

      Information  about the  Company's  operations by segment for the three and
      nine  months  ended  September  30,  2000  and  1999  is  as  follows  (in
      thousands):

<TABLE>
<CAPTION>

                                                Three Months                 Nine Months
                                             Ended September 30,         Ended September 30,

                                               2000        1999          2000            1999
<S>                                         <C>         <C>           <C>             <C>
     Net Sales to unaffiliated customers
     Core materials segment                 $ 15,600    $ 15,685      $ 48,045        $ 44,338
     Seafood segment                           6,613       8,039        19,304          20,412
                                            --------    --------      --------        --------
     Total net sales                        $ 22,213    $ 23,724      $ 67,349        $ 64,750
                                            ========    ========      ========        ========

     Operating Income
     Core materials segment                   $1,603     $ 1,668       $ 5,114         $ 3,030
     Seafood segment                           (337)          46         (865)           1,197
                                              ------     -------       -------         -------
     Total operating income                   $1,266     $ 1,714       $ 4,249         $ 4,227
                                              ======     =======       =======         =======
</TABLE>

6.       NEW ACCOUNTING STANDARDS

      Derivatives and Hedging Activities

      In June 1998,  the  Financial  Accounting  Standards  Board (FASB)  issued
      Statement of Financial  Accounting  Standards (SFAS) No. 133,  "Accounting
      for  Derivative   Instruments  and  Hedging  Activities."  This  statement
      requires that all  derivatives be measured at fair value and recognized as
      either assets or  liabilities  on our balance  sheet.  Changes in the fair
      values of derivative  instruments will be recognized in either earnings or
      comprehensive income, depending on the designated use and effectiveness of
      the instruments. The FASB amended this pronouncement in June 1999 to defer
      the effective  date of SFAS No. 133 for one year, and in June 2000 amended
      the standard to provide guidance on its implementation.

      Under the  amended  standard,  we must  adopt  SFAS No.  133 no later than
      January 1, 2001.  The  adoption of SFAS No. 133 is not  expected to have a
      material  effect on the  Company's  results  of  operations  or  financial
      condition.

                                      -5-
<PAGE>


      Revenue Recognition

      In December  1999,  the staff of the  Securities  and Exchange  Commission
      (SEC) issued Staff Accounting Bulletin (SAB) 101, "Revenue  Recognition in
      Financial  Statements."  SAB 101 outlines the basic  criteria that must be
      met to recognize revenue,  and provides  guidelines for disclosure related
      to  revenue  recognition  policies.   This  guidance  is  required  to  be
      implemented  in the fourth  quarter  of 2000.  The  company  is  currently
      reviewing   this  guidance  in  order  to  determine  the  impact  of  its
      provisions, if any, on the consolidated financial statements.

                                      -6-

<PAGE>


Item 2.  Management's Discussion and Analysis of Financial  Condition and
         Results of Operations.

Liquidity and Capital Resources

The primary  sources of  liquidity  historically  have been and are  expected to
continue to be cash flow  generated  from  operations  and available  borrowings
under short-term lines of credit.  The Company increased its borrowing  capacity
under its domestic line of credit to $12.5 million in December 1999. This credit
line,  which by its  original  terms  expired on September  30,  2000,  has been
extended to December  31,  2000.  The Company  also  continues  to have lines of
credit in Ecuador  and  Europe  totaling  approximately  $4.7  million.  Working
capital  and  borrowing  requirements  increased  in 1999  and are  expected  to
continue  to  increase  throughout  2000 as a result of the  Company's  expanded
operations as a seafood  importer as well as organic growth in its core material
business.  Capital  expenditures  are expected to be funded by a combination  of
cash generated from operations and outside financing, if necessary.

The Company's  financial  position  remains  strong.  At September 30, 2000, the
Company had working  capital of $17.3  compared to $14.8 million at December 31,
1999. For the  year-to-date  period,  both  inventories and accounts  receivable
increased  as a result  of the  Company's  growth  and  expansion  into  seafood
importing.


Results of Operations for the Three and Nine Months
Ended September 30, 2000 and 1999

Total sales decreased 6 % and increased 4 %, respectively,  during the three and
nine-month  periods  ended  September 30, 2000 as compared to the same period in
1999.

Core material sales were  $15,600,000 and $15,685,000 for the three months ended
September 30, 2000 and 1999,  respectively,  and $48,045,000 and $44,338,000 for
the nine months ended September 30, 2000 and 1999,  respectively.  The favorable
economy  continues to result in strong  demand in all  industries  that use core
materials,  including the largest customer group, the boating industry.  Many of
the Company's end user markets,  including boating, are highly cyclical.  Demand
within those  industries is dependent upon,  among other factors,  discretionary
income, inflation, interest rates and consumer confidence.  Fluctuating interest
rates and other  changes in economic  conditions  make it  difficult to forecast
short or long range trends. The increase in core material sales in 2000 compared
to 1999 was attributable principally to higher volume.

The Company's  revenues for the quarter and nine months ended September 30, 2000
were negatively affected by the fluctuation of foreign currencies,  particularly
those of its European subsidiaries, compared to the U.S. dollar.

Seafood  sales  were  $6,613,000  and  $8,039,000  for the  three  months  ended
September 30, 2000 and 1999,  respectively,  and $19,304,000 and $20,412,000 for
the nine months ended September 30, 2000 and 1999 respectively.  Sales increased
during the quarter and nine months from the  Company's  import  business,  which
began during the first quarter of 1999. These sales offset a decline in sales of
shrimp during the quarter and the nine-month period.

The overall gross margin as a percentage of sales  increased for the three-month
period and  decreased  for the  nine-month  period ended  September  30, 2000 as
compared to the same periods in 1999.  The typical  margin in the seafood import
business  is lower than the  Company's  historical  margins  realized  as a core
materials  manufacturer/distributor  and  shrimp  producer.  The  margin for the
Company's  core  products  increased in the three and  nine-month  periods ended
September  30, 2000 as compared to last year.  The margins  from  seafood  sales
decreased  in the three and  nine-month  periods  ended  September  30,  2000 as

                                      -7-

<PAGE>

compared to the same periods in 1999. The "White Spot" virus continued to affect
the  Company's  shrimp farms during the first nine months of 2000,  resulting in
significantly less revenues than historical levels. Lower revenues have resulted
in a lower gross margin for 2000 as compared to 1999.  The Company is taking all
possible  steps to mitigate the effect of this  disease on its farms,  but since
other farms in Latin America are affected,  no  determination  can be made as to
its longevity and effect on shrimp prices in the marketplace.

A decline in shrimp market prices during the quarter also adversely affected the
Company's margins from its seafood import business.

Selling,  general and  administrative  (S,G&A) expenses as a percentage of sales
declined  slightly  in the first nine  months of 2000 as  compared  to 1999.  In
dollar terms,  S,G&A  expenses have  increased  during the three and nine months
ended September 30, 2000 as a result of the Company's growth.  Further increases
in S,G&A expenses are anticipated, but as a percentage of sales are not expected
to change significantly.

Sales and expenses were affected in all periods by the different  exchange rates
applied  in  remeasuring  the  books  of  accounts  of  the  Company's   foreign
subsidiaries.

Interest expense decreased in the first nine months of 2000 as compared to 1999.
The Company's average borrowings for working capital purposes were lower in 2000
as compared to 1999.  Interest  rates in the U.S. were higher in 2000;  interest
rates on U.S. dollar  denominated loans in Ecuador were  substantially  lower in
2000 as compared to 1999.  The level of  borrowing  in all periods is related to
the Company's working capital needs and cash flows generated from operations.

The Company had a foreign  exchange  loss of $322,000 and $181,000 for the nine-
month periods ended September 30, 2000 and 1999, respectively. Translation gains
and losses  are  mainly  caused by the  relationship  of the U.S.  dollar to the
foreign  currencies in the countries where the Company operates,  and arise when
remeasuring  foreign  currency  balance  sheets into U.S.  dollars.  The Company
utilizes foreign exchange  contracts to hedge certain inventory  purchases.  The
Company  does not enter  into  foreign  currency  transactions  for  speculative
purposes.  Management is unable to forecast the impact of  translation  gains or
losses on future  periods  due to the  unpredictability  in the  fluctuation  of
foreign exchange.

The  provision  for  income  taxes  was at the  rate of 32%  and 30% of  pre-tax
earnings  for the three  and nine  months  ended  September  30,  2000 and 1999,
respectively.

Ecuador - Dollarization

The Ecuadorian  government  has completed its plans to adopt the U.S.  dollar as
its national  currency.  During the month of  September  2000,  the U.S.  dollar
officially  replaced the Sucre, and the Sucre was removed from  circulation.  In
accordance with the local regulations,  the Company has converted its accounting
and financial books and records from the Sucre to the U.S. dollar.

                                    * * * * *

Forward Looking Statements - Cautionary Factors

The  foregoing  discussion  and  analysis  contains  forward-looking  statements
regarding the Company.  Because such statements include risks and uncertainties,
actual  results may differ  materially  from those  expressed or implied by such
forward-looking  statements.  Factors that could cause actual  results to differ
materially  include,  but are not limited to, economic  conditions in the United
States, Europe and Ecuador that affect relative interest rates, foreign exchange
rates and other costs and prices related to the Company's businesses.


                                      -8-

<PAGE>



Item 6.   Exhibits and Reports on Form 8-K

(A)       Exhibits:

    10.1.1   -- First  Amendment  to Revolving  Loan and  Security  Agreement
                dated   September  30,  2000  between  Baltek   Corporation  and
                Crustacea  Corporation,  collectively,  as Borrower,  and Summit
                Bank, as Lender.

    10.1.2   -- Substitute  Revolving  Credit Note dated  September 30, 2000
                between   Baltek   Corporation   and   Crustacea    Corporation,
                collectively, as Borrower, and Summit Bank, as Lender.

    10.2     -- Lease  Agreement  dated  September  18,  2000  between  the
                Company, as Tenant, and Edro  Associates, as Landlord.

    10.3     -- Amendment  to Lease dated August 17, 2000 between the  Company,
                as Tenant,  and  Northvale 1997 Associates, L.L.C., as Landlord.

    10.4     -- Executive Employment Agreement dated June 1, 2000 between the
                Company and Ronald Tassello.

    10.5     -- Executive Employment Agreement dated June 1, 2000 between the
                Company and Thomas Preisel.

    10.6     -- Executive Employment Agreement dated June 1, 2000 between the
                Company and Antonio Diaz.

    11       -- An exhibit showing the  computation of per-share  earnings is
                omitted because the  computation can be clearly  determined from
                the material contained in this Quarterly Report on Form 10-Q.

    27       -- Financial Data Schedule.


 (B)      Reports on Form 8-K:

        No report has been filed  during the nine  months  ended  September  30,
2000.


                                      -9-

<PAGE>






                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                        BALTEK CORPORATION
                                        (Registrant)


Date:  November  13, 2000                /s/ Jacques Kohn
                                        --------------------------------
                                        Jacques Kohn
                                        President



Date:  November  13, 2000                /s/ Ronald Tassello
                                        -----------------------------------
                                        Ronald Tassello
                                        Chief Financial Officer and Treasurer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>REVOLVING LOAN AND SECURITY AGREEMENT
<TEXT>


            FIRST AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT

         THIS REVOLVING LOAN AND SECURITY AGREEMENT is dated as of September 30,
2000, and is by and among BALTEK CORPORATION,  a Delaware corporation having its
principal  executive  offices at 10 Fairway Court,  Northvale,  New Jersey 07647
("Baltek") and CRUSTACEA CORPORATION,a Delaware corporation having its principal
executive  offices  at  106  Stonehurst  Court,  Northvale,   New  Jersey  07647
("Crustacea")  (each a "Borrower" and  collectively  the "Borrowers") and SUMMIT
BANK, a banking  institution of the State of New Jersey having an office located
at 250 Moore Street, Hackensack", New Jersey 07602 (the "Bank").

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

         WHEREAS,  the Borrowers and the Bank entered into a Revolving  Loan and
Security Agreement dated as of December 21, 1999 (the "Loan Agreement"); and

         WHEREAS,  the Borrowers and the Bank have agreed to amend certain terms
of the Loan Agreement as more fully defined herein.

         NOW  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
covenants contained herein, and for other good and valuable  consideration,  the
receipt and sufficiency of which are hereby acknowledged,  the parties hereto do
hereby agree as follows:

         1. Definitions.  Except as otherwise  defined herein,  terms defined in
the Loan Agreement shall have the same meaning when used herein.

         2. Amendment of Loan Agreement. The Loan Agreement is hereby amended as
follows:

         (a).  Section 1.1 is hereby amended so that the definition of "Maturity
Date" is hereby amended to mean December 31, 2000.

         3. Substitute Note.  Concurrently  herewith, the Borrower shall execute
and deliver to the Bank a  Substitute  Revolving  Credit  Note (the  "Substitute
Note") which shall supersede, and be in substitution for, the original Revolving
Credit Note dated as of December  21, 1999 (the  "Original  Note")  executed and
delivered  pursuant to the  provisions of paragraph 2 of the Loan  Agreement and
shall be the "Note" as  defined  and  described  in the Loan  Agreement  for all
purposes.  It is  expressly  agreed  that the  execution  and  delivery  of such
Substitute Note shall not evidence or represent a refinancing, repayment, accord
or satisfaction or novation of the indebtedness evidenced by the Original Note.

         4. Representations and Warranties. In order to induce the Bank to enter
into this  Agreement  and amend  the Loan  Agreement  as  provided  herein,  the
Borrowers hereby represent and warrant to the Bank that:

<PAGE>

         (a) Except as otherwise  disclosed  in writing to the Bank,  all of the
representations  and warranties of the Borrowers set forth in the Loan Agreement
are true,  complete and correct in all  material  respects on and as of the date
hereof with the same force and at length herein.

         (b) No Default or Event of Default  presently  exists and is continuing
on and as of the date hereof.

         (c) Except as  otherwise  disclosed  in writing to the Bank,  since the
date of the Borrowers' most recent financial  statements  delivered to the Bank,
no material  adverse change has occurred in the business,  assets,  liabilities,
financial condition or results of operations of the Borrowers,  and no event has
occurred  or failed  to occur  which has had a  material  adverse  effect on the
business, assets,  liabilities,  financial condition or results of operations of
the Borrowers.

         (d) The Borrowers have full power and authority to execute, deliver and
perform any action or step which may be necessary to carry out the terms of this
Agreement  and all other  agreements,  documents  and  instruments  executed and
delivered by the  Borrowers to the Bank  concurrently  herewith or in connection
herewith (collectively,  the "Amendment Documents");  each Amendment Document to
which the  Borrowers  are a party has been duly  executed  and  delivered by the
Borrowers  and is the  legal,  valid and  binding  obligation  of the  Borrowers
enforceable in accordance with its terms, subject to any applicable  bankruptcy,
insolvency,  general  equity  principles  or other  similar laws  affecting  the
enforcement of creditor's rights generally.

         (e) The execution,  delivery and performance of the Agreement Documents
will not (i) violate any provision of any existing law, statute, rule regulation
or ordinance (ii) conflict  with,  result in a breach of or constitute a default
under (a) the  certificate of  incorporation  or by-laws of the Borrowers or (b)
any  order,  judgment,  award or decree of any  court,  governmental  authority,
bureau or agency,  or (c) any  mortgage,  indenture,  lease,  contract  or other
agreement  or  undertaking  to which the  Borrowers  are a party or by which the
Borrowers or any of their  properties or assets may be bound, or (iii) result in
the creation or imposition of any lien or other encumbrance upon or with respect
to any property or asset now owned or hereafter acquired by the Borrowers.

         (f)  No  consent,   license,  permit,  approval  or  authorization  of,
exemption by, notice to, report to, or registration,  filing or declaration with
any person is required in connection with the execution,  delivery,  performance
or validity of the Amendment Documents or the transactions contemplated thereby.

         (g) The  Borrowers  agree  to pay to the  Bank  the sum of  $750.00  in
reimbursement for all costs and expenses,  including  counsel fees,  incurred by
the  Bank in  connection  with  the  Amendment  Documents  and the  transactions
contemplated therein.

         5. No Change.  Except as expressly set forth  herein,  all of the terms
and provisions of the Loan Agreement shall continue in full force and effect.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly  authorized  officers as of
the day and year first above written.

ATTEST:                                     BALTEK CORPORATION


By:  /s/ Ronald Tassello            By:  /s/ Jacques Kohn
   ---------------------------         -----------------------------
                                         Name:  Jacques Kohn
                                         Title: President


ATTEST:                                     CRUSTACEA CORPORATION


By: /s/ Ronald Tassello             By:  /s/ Jacques Kohn
   ---------------------------         -----------------------------
                                          Name:  Jacques Kohn
                                          Title: President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1.2
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>SUBSTITUTE REVOLVING CREDIT NOTE
<TEXT>


                        SUBSTITUTE REVOLVING CREDIT NOTE

$12,500,000.00                                        As of September 30, 2000


         FOR VALUE RECEIVED,  the undersigned,  BALTEK  CORPORATION,  a Delaware
corporation and CRUSTACEA  CORPORATION,  a Delaware  corporation (each of Baltek
Corporation  and  Crustacea   Corporation  a  "Borrower"  and  collectively  the
"Borrowers"), hereby, jointly and severally,  unconditionally promises to pay on
or before December 31, 2000 (the "Maturity  Date"), to the order of SUMMIT BANK,
a banking  institution of the State of New Jersey (the "Bank"), at the office of
the Bank located at 250 Moore Street,  Hackensack,  New Jersey, or at such other
location as the Bank shall  designate,  in lawful money of the United  States of
America  and  in  immediately  available  funds,  the  principal  amount  of (i)
$12,500,000.00  or (ii) so much thereof (or any greater amount, if any) as shall
have been advanced (the "Advances") by the Bank to the Borrower pursuant to that
certain  Revolving  Loan and  Security  Agreement  dated  as of the date  hereof
between the  Borrowers  and the Bank,  as may be amended  from time to time (the
"Agreement").  Terms defined in the  Agreement  shall have the same meaning when
used herein.

         The Borrowers  jointly and  severally  further agree to pay interest in
like money at such  office on the unpaid  principal  amount  hereof from time to
time as  hereinafter  provided.  The unpaid  principal  amount hereof shall bear
interest  commencing with the date hereof at a fluctuating  rate per annum equal
to the Base  Rate  minus  three-quarters  of one  percent  (3/4 of 1%).  As used
herein, the term "Base Rate" shall mean the rate of interest announced from time
to time by the Bank as its  "base  rate" or "base  lending  rate".  This rate of
interest is determined  from time to time by the Bank as a means of pricing some
loans to its  customers  and is neither tied to any external rate of interest or
index nor does it  necessarily  reflect  the lowest  rate of  interest  actually
charged by the Bank to any  particular  class or  category of  customers  of the
Bank.

         Interest  shall be  calculated  on the basis of a 360-day  year for the
actual  number of days  elapsed  and shall be adjusted  automatically  as of the
opening  of  business  on each  day on which  any  change  in the  Base  Rate is
announced by the Bank at its principal office.

         Installments  of accrued  interest only shall be due and payable hereon
monthly,  with the first such installment being due and payable on the first day
of the first month following the date hereof,  and the remainder of such monthly
installments  of  interest  being due and  payable  on the first day of each and
every month thereafter until this Note shall have been paid in full.

         Notwithstanding   anything  contained  herein  to  the  contrary,   the
Borrowers  shall  have  the  option,  in  accordance  with  Section  2.1  of the
Agreement,  to  convert  all or any part of its Base Rate Loans (as such term is
defined in the  Agreement) to LIBOR Based Rate Loans (as such term is defined in
the Agreement),  and upon doing so shall, jointly and severally, pay interest on
the  unpaid  principal  amount of this Note from time to time  outstanding  on a
monthly basis.

                                       1
<PAGE>



         All advances made by the Bank to the  Borrowers  hereunder may be noted
by a Bank on the Schedule to be annexed  hereto,  and the Bank is  authorized to
make such notations which shall be prima facie evidence of the principal  amount
outstanding  hereunder at any time; provided,  however, that any failure to make
such a notation (or any error in notation)  shall not limit or otherwise  affect
the obligation of the Borrowers hereunder which is and shall remain absolute and
unconditional.

         In the event that any payment due under this Note shall not be received
by Bank  within ten (10) days of the due date,  Borrowers  shall,  to the extent
permitted  by law,  pay Bank a late charge of five  percent  (5%) of the overdue
payment (but in no event more than  $2,500.00) as compensation to Bank. Any such
late charge  shall be in addition to all other rights and remedies to which Bank
may be entitled and shall be immediately due and payable.  Borrowers acknowledge
that (i) such late  charge is a  material  inducement  to Bank to make the loan,
(ii) Bank would not have made the loan in the  absence of the  agreement  of the
Borrowers to pay such late  charge,  and (iii) such late charge is not a penalty
and  represents  a  reasonable  estimate of the cost to Bank in  allocating  its
resources (both personnel and financial) to the additional  review,  monitoring,
administration and collection of the loan.

         All payments received  hereunder may be applied first to the payment of
any expenses or charges payable hereunder and accrued interest,  and the balance
only applied to principal.

         This Note may be prepaid, in whole or in part, at one time or from time
to time, without premium or penalty.

         This Note is a replacement of the Revolving  Credit Note dated December
21, 1999,  referred to in the  Agreement  and this Note is the  Substitute  Note
referred to in the  Amendment to Revolving  Loan and Security  Agreement of even
date herewith,  is secured by the Collateral  described in the Agreement and the
Guaranty Agreement.

         The Bank may declare this Note to be immediately due and payable if any
of the following events shall have occurred:

         (1)  Failure  by the  Borrowers  to make any  payment of  principal  or
interest on this Note when due; or

         (2) An Event of Default shall have occurred  under the Agreement or any
of the other Loan  Documents  (including  any grace periods  provided  herein or
therein).

         To the extent permitted by law,  whenever there is any Event of Default
under this Note, the RATE of interest on the unpaid principal  balance shall, at
the option of the Bank, be 5% in excess of the RATE of interest provided herein.
Borrowers acknowledge that: (i) such additional rate is a material inducement to
Bank to make the loan;  (ii) Bank would not have made the loan in absence of the
agreement of the Borrowers to pay such  additional  rate;  (iii) such additional
rate represents  compensation  for increased risk to Bank that the loan will not
be  repaid;  and (iv) such rate is not a penalty  and  represents  a  reasonable
estimate of (a) the cost to Bank in allocating its resources (both personnel and
financial) to the on-going review, monitoring,  administration and collection of
the  loan  and (b)  compensation  to Bank  for  losses  that  are  difficult  to
ascertain.

                                       2
<PAGE>

         This  Note  may not be  changed  orally,  but only by an  agreement  in
writing,  signed by the party against whom  enforcement  of any waiver,  change,
modification or discharge is sought.

         Should the indebtedness  represented by this Note or any part hereof be
collected  at law or in equity,  or in  bankruptcy,  receivership,  or any other
court  proceeding,  or should this Note be placed in the hands of attorneys  for
collection  upon  default,  the  Borrower  agrees  to pay,  in  addition  to the
principal  and  interest  due  and  payable  hereon,  all  reasonable  costs  of
collecting or attempting to collect this Note, including  reasonable  attorneys'
fees and expenses.

         This Note  shall be and  remain in full  force and effect and in no way
impaired  until the  actual  payment  thereof  to the Bank,  its  successors  or
assigns.

         Anything herein to the contrary notwithstanding, the obligations of the
Borrower  under this Note shall be subject to the  limitation  that  payments of
interest shall not be required to the extent that receipt of any such payment by
the Bank would be contrary to provisions of law  applicable to the Bank limiting
the maximum rate of interest which may be charged or collected by the Bank.

         Each of the Borrowers  and all  endorsers  and  guarantors of this Note
hereby waive presentment,  demand for payment, protest and notice of dishonor of
this Note.

         This Note is binding upon the Borrowers and its  successors and assigns
and shall inure to the benefit of the Bank and its successors and assigns.

         This Note and the rights and obligations of the parties hereto shall be
subject to and governed by the laws of the State of New Jersey.

         IN WITNESS  WHEREOF,  the undersigned has caused this Revolving  Credit
Note to be duly executed by its authorized officers as of the day and year above
written.

                                          BALTEK CORPORATION



                                          By:   /s/ Jacques Kohn
                                             -------------------------------
                                              Jacques Kohn, President

                                          CRUSTACEA CORPORATION



                                          By:   /s/ Jacques Kohn
                                             -------------------------------
                                              Jacques Kohn, President


                                       3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>LEASE AGREEMENT
<TEXT>


                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT between EDRO ASSOCIATES,  a New Jersey partnership
having its principal place of business at 300 Jacksonville  Road, P. 0. Box 117,
Pompton  Plains,  Morris  County,  New Jersey  07444,  as  Landlord;  and BALTEK
CORPORATION,  a New Jersey  Corporation having a place of business at 10 Fairway
Court, P.O. Box 195, Northvale, New Jersey 07647, as Tenant.

                                  WITNESSETH:

         The Landlord does hereby let unto the Tenant and the Tenant does hereby
hire from the  Landlord  the Premises  located at 108 Fairway  Court,  Northvale
Township,  Bergen County,  New Jersey (Tax Lot 13, Block 1101) containing 80,000
square  foot   office/warehouse/commercial   building   together  with  parking,
landscape and other site improvements.

         1. TERM

         1.1 The  initial  term of this lease shall be five and  one-half  (5.5)
months  beginning  on  September  15, 2000  ("Commencement  Date") and ending on
February 28, 2001. During this initial term, Tenant shall occupy only 54,400 sq.
ft.  of the  building  (See  attached  Exhibit  A) at $5.00 per  square  foot or
$22,666.67 per month, and Hasbro, Inc. will occupy the additional 25,600 sq. ft.
as  co-tenant.  All other  charges  (taxes/C.A.M./etc.)  shall be paid 66.75% by
Tenant Baltek and 33.25% by co-tenant Hasbro, Inc. during this five and one-half
month initial term.

         1.1.1 If Hasbro,  Inc. is not out of the  building  and delivery of the
entire  premises is not effected by March 1, 2001 or if  Landlord's  work is not
concluded  by that date,  rent and all other  charges for the  additional  space
shall be abated until those items are  completed  and rent for the initial space
shall be reduced by 50% for every day of delay.

         1.2 The main term of this lease  shall be nine (9) years  beginning  on
March 1, 2001 and  ending  at 11:59  p.m.  on  February  28,  2010  (subject  to
extension,  the "Termination  Date"),  during which term Tenant will then be the
sole  tenant  and will pay rent and other  charges  based on the  entire  80,000
square feet.

         The  Tenant  shall  have  the  right  to renew  the  lease  for two (2)
additional  five (5) year terms to commence at the  expiration  of the main term
provided the tenant has satisfied all of the following conditions:


                                      - 1 -

<PAGE>

                  1.2.1  Delivered  written  notice  to the  Landlord,  at least
twelve  (12)  months  prior to  expiration  of the main  term,  of its intent to
exercise such option,  by certified  mail return  receipt  requested and regular
mail at the  address  noted  hereinabove  or any  address  to which  Tenant  may
hereinafter be directed.

                  1.2.2 Tenant  shall not then be in default  under the terms of
this lease beyond applicable notice and cure periods as stated herein.

         1.3 At the  signing  of this  lease,  Tenant  shall  provide  proof  of
insurance, corporate resolution, post security and pay the first months rent.

         1.4 Unless otherwise  indicated herein, the premises shall be leased in
"as is" condition and the Tenant,  by the execution of this lease,  acknowledges
that it has inspected the premises and accepts them.

         2. USE

         2.1 The  premises  shall be used and  occupied  by the  Tenant  for the
following uses and purposes: offices,  warehouse,  assembly and manufacturing as
permitted  by local zoning  ordinance.  It shall be Tenant's  responsibility  to
obtain the necessary municipal approvals for occupancy.

         2.2 Quiet Enjoyment  Landlord covenants that Tenant, on paying the rent
and performing  its  obligations  under this lease,  shall and may peaceably and
quietly have, hold and enjoy the Premises for the term.

         3. RENTAL

         The Tenant shall pay to the Landlord  triple net rent,  which  payments
may be arranged by wire transfer from Tenant to Landlord, which shall be subject
to a five (5%) percent late charge if not received by the 5th of each month,  as
follows:

         3.1 Initial  Term.  Beginning  on the  Commencement  Date and ending on
February 28, 2001, during this initial term, Tenant shall occupy only 54,400 sq.
ft.  of the  building  (See  attached  Exhibit  A) at $5.00 per  square  foot or
$22,666.67  per month.  September 2000 rent and other charges shall be pro-rated
on a daily basis.

         3.2 Main Term.

                  3.2.1 Years 1 - 4. The sum of $5.00 per square foot  annually,
or $400,000.00 per year,  payable in equal monthly  installments each in the sum
of  $33,333.33,  hereinafter  referred to as base rent, on


                                      - 2 -

<PAGE>

the first day of each and every month in advance without notice.

                  3.2.2 Years 5 - 9. Base rent plus CPI increases.

         3.3 Renewal Term.

         The  Tenant  shall  have  the  right  to renew  the  lease  for two (2)
additional  five (5) year terms to commence at the  expiration  of the main term
provided the tenant has satisfied all of the following conditions:

                  3.3.1  Delivered  written  notice  to the  Landlord,  at least
twelve (12) months prior to expiration  of the main term or the first  extension
term,  as the case may be, of its intent to exercise  such option,  by certified
mail return receipt  requested and regular mail at the address noted hereinabove
or any address to which Tenant may hereinafter be directed.

                  3.3.2 Tenant  shall not then be in default  under the terms of
this lease beyond applicable notice and cure periods as stated herein.

         3.4  C.P.I.  Adjustment.  The base rent for  years 5-9 and the  renewal
option rent shall be subject to annual upwards (but not downwards)  readjustment
on the annual anniversary date of the lease, based upon the Consumer Price Index
(All urban consumers,  all items, New York Metropolitan Area, U.S. Department of
Labor,  Bureau of Labor Statistics  (based upon the differential in the index at
the inception of the main term or renewal term and the index then  prevailing on
the adjustment  date of the term).  The main term shall use March 1, 2001 as the
base year for all annual  increases.  Each renewal term shall use March 1 of the
first year of such term as the base year for  annual  increases  (i.e.  March 1,
2010 and March 1, 2015).

                  3.4.1  Rent  for  Renewal  Terms.  Tenant  shall  have two (2)
options,  exercisable  by notice  to  Landlord  at least 12 months  prior to the
expiration of the then  remaining  Term, to extend the Term for two (2) separate
periods  of five (5)  years  each  upon the same  terms  and  conditions  as are
contained  in this  Lease,  except that the base rent  payable  during the first
twelve  months of any  extension  period shall be equal to the Fair Market Rent,
subject to  increases  during each twelve  month  period  thereafter  during the
renewal term determined by adjusting the base rent based on the increases in the
CPI as of the beginning of each subsequent twelve month period.

     Fair Market  Rent.  If the parties  cannot agree upon the Fair Market Rent,
then the  Tenant


                                     - 3 -
<PAGE>

shall select an M.A.I.  appraiser familiar with commercial rentals in the Bergen
County, New Jersey area to establish a Fair Market Rent for the leased premises.
If  Landlord  does not agree with this  rent,  Landlord  shall  select an M.A.I.
appraiser familiar with commercial rentals in the Bergen County, New Jersey area
to  establish  a Fair Market  Rent for the leased  premises.  If Tenant does not
agree with this rent, then the Tenant's appraiser and Landlord's appraiser shall
select a third M.A.I.  appraiser  familiar with commercial rentals in the Bergen
County, New Jersey area to establish a Fair Market Rent for the leased premises,
which Fair Market Rent shall not be higher than the higher  appraisal  nor lower
than the lower  appraisal,  and which Fair Market  Rent shall be  binding.  Each
party will pay its own  appraiser and the cost of the third  appraiser  shall be
shared equally.

                  3.5  Additional  Rent.  Except  as noted  in Par.  1.1 for the
initial term,  for the main term and  thereafter,  in addition to the rent noted
herein, the Tenant shall be responsible for the payment of the following:

                           3.5.1    Real Estate Taxes;
                           3.5.2    Real Estate Assessments;
                           3.5.3    Water Rents;
                           3.5.4    Meter Charges;
                           3.5.5    Sewer Charges;
                                    3.5.5.1 All taxes,  sewer and water  charges
                                    and other charges  imposed against or levied
                                    upon the premises  shall be  apportioned  as
                                    between   Landlord   and   Tenant   at   the
                                    Commencement Date and the Termination Date.
                           3.5.6    Heating and utility charges including gas
                                    and electric;
                           3.5.7    Liability, fire and casualty insurance as
                                    hereinafter provided;
                           3.5.8    Repair  or  replacement  of minor  and major
                                    parts or  components  of heating,  plumbing;
                                    air  conditioning  and  electrical  systems;
                                    except  that if a major part or unit of HVAC
                                    equipment  requires  replacement  during the
                                    first   two   years    after   the   initial
                                    commencement   date,   Landlord   shall   be
                                    responsible. Tenant shall be responsible for
                                    repair  or  replacement  of  minor  parts or
                                    components for these two years;
                           3.5.9    Interior and exterior building and grounds
                                    maintenance;
                           3.5.10   Snow plowing and ice removal;
                           3.5.11   Lawn Maintenance;
                           3.5.12   Interior maintenance - decorating, cleaning
                                    and janitorial;
                           3.5.13   Sprinkler System Maintenance (cost of
                                    monitoring same).
                           3.5.14   Yearly Roof Maintenance.  Landlord shall
                                    replace the roof with a new roof prior to
                                    February 28, 2001 which roof shall include a
                                    fifteen (15) year warranty.

         3.6 If the  Tenant  fails  to pay any of the  items  noted  in 3.5 in a
timely  fashion,  Landlord  shall give  Tenant ten (10) days  notice in writing,
certified mail return receipt requested, and regular mail at the leased premises
of its  default.  If Tenant  fails to abate its default in any item within those
ten days, in addition to all other remedies  provided for herein or as permitted
by law,  Landlord  shall have the right to establish a monthly escrow

                                     - 4 -

<PAGE>

charge and to require  Tenant to pay, in addition to the rent noted in Par. 3, a
monthly sum to insure payment of those items noted in Par. 3.5.

     3.7 Permitted Contests. Tenant, at its expense, may contest, by appropriate
legal  proceedings  conducted  in good faith and with due  diligence,  any legal
requirement  with which  Tenant is required to comply  pursuant to this lease or
the amount or validity or application,  in whole or in part, of any tax or other
charge which Tenant is obligated to pay or any lien,  encumbrance  or charge not
permitted by this lease,  provided that (a) the commencement of such proceedings
shall suspend the enforcement of collection thereof against or from Landlord and
against or from the  premises,  (b) neither the premises nor any rent  therefrom
nor any part thereof or interest  therein  would be in any danger of being sold,
forfeited,  attached or lost, (c) Tenant shall have furnished such security,  if
any, as may be required in the proceedings and as may be reasonably  required by
Landlord,  and (d) if such contest be finally  resolved  against Tenant,  Tenant
shall  promptly pay the amount  required to be paid,  together with all interest
and  penalties   accrued  thereon.   Landlord  shall  complete  and  return  all
information  forms to taxing  authorities  on a timely  basis and,  at  Tenant's
expense,  shall  execute  and  deliver to Tenant  such  authorization  and other
documents  as  reasonably  may be required in any such  contest  and, so long as
Tenant has paid  Tenant's  share of taxes,  Landlord  shall  keep taxes  current
during such  proceedings.  Tenant shall  indemnify  and save  Landlord  harmless
against  any cost or expense of any kind that may be imposed  upon  Landlord  in
connection with any such contest and any loss resulting therefrom.  Tenant shall
not be in  default  hereunder  in  respect  to the  compliance  with  any  legal
requirement  with which Tenant is obligated to comply  pursuant to this lease or
in respect to the payment of any tax or other  charge  which Tenant is obligated
to pay or any lien,  encumbrance  or charge not  permitted  by this lease  which
Tenant is in good faith contesting.

         4. REPAIRS AND RENOVATIONS

         The Landlord shall be responsible for the renovations and other work as
set forth in Exhibit B, if any, prior to the commencement date.

                  4.1 Otherwise,  the Tenant,  on commencement of the main term,
shall take good care of the  premises,  and at its own cost and expense  conduct
all ordinary  maintenance and repairs and  replacements to the leased  premises.
The  costs of all  construction  for  Tenants  requirements  shall  be  Tenant's
exclusive  responsibility.

                                     - 5 -

<PAGE>

The Tenant shall advise  Landlord in writing of all work to be done.  The Tenant
agrees at the end or other  expiration  of this  lease to  deliver  the  demised
premises  in the  condition  in which  Tenant  is  required  to  maintain  same,
reasonable  wear and tear,  damage by fire and other  insurable  casualties  and
action by the elements excepted.

                  4.2 Landlord  shall have the right to demand that  Tenant,  at
its cost, restore the premises to the condition at the commencement of the lease
unless  otherwise  agreed to in writing at the  commencement of the renovations,
subject to reasonable wear and tear,  Landlord's work and Tenant's work approved
by  Landlord.  Landlord  approves  the  Tenant's  work  identified  in Exhibit C
attached hereto.

                  4.3 All  repairs,  renovations  shall  conform to all building
code   requirements   and  Tenant  shall  be   responsible   for  all  municipal
approvals/permits  and to insure that, where required,  Tenant's work is done by
persons holding appropriates licenses.

         5. SECURITY DEPOSIT

                  5.1 The Tenant  shall  deposit  with the  Landlord  the sum of
$66,666.66  or two (2)  months  rent as  security  for the  payment  of the rent
hereunder and the full and faithful  performance  by the Tenant of the covenants
and conditions on the part of the Tenant to be performed. Such security shall be
payable upon  execution of this  leasehold  agreement.  If Tenant  exercises the
renewal  option  as set forth in  Section  3.3  herein,  the  security  shall be
increased,  if the rent increases, to equal two (2) months of the increased base
rent. The security shall be refunded to the Tenant, without interest,  after the
expiration of the term hereof, but not later than 60 days following  termination
of the Lease,  provided that the Tenant has fully and  faithfully  performed all
such  covenants  and  conditions,  is not in arrears in rent,  or  otherwise  in
default/breach of the lease.

                  5.2 The Landlord may, if the Landlord so elects, have recourse
to such security,  for any purpose,  including  Landlord's use of such funds for
its own purposes  subject to its  obligation  to make  repayment  thereof to the
Tenant  pursuant to the terms of this lease.  The  Landlord  may also,  if it so
elects, have recourse to such security,  to make good any default by the Tenant,
then in such event the Tenant shall, on demand,  promptly  restore said security
to its original amount, which must be paid by the next rent due date.

                  5.3  Liability to repay said  security to the Tenant shall run
with the reversion and title to said  premises,  whether any change in ownership
thereof be voluntary  alienation or as the result of judicial sale,

                                     - 6 -

<PAGE>

foreclosure or other proceedings,  or the exercise of a right of taking or entry
by any  mortgagee.  The Landlord  shall assign or transfer said  security,  with
notice to the Tenant,  for the benefit of the Tenant, to any subsequent owner or
holder of the  reversion or title to said  premises,  in which case the assignee
shall  become  liable  for the  repayment  thereof as herein  provided,  and the
assignor  shall  thereby be released by the Tenant from all  liability to return
such security.  This provision shall be applicable to every alienation or change
in title and shall in no way be deemed to  permit  the  Landlord  to retain  the
security  after  termination  of the  Landlord's  ownership of the  reversion or
title.

                  5.4 The  Tenant  shall not  otherwise  mortgage,  encumber  or
assign said security.

         6. COMPLIANCE

         Tenant  represents  and warrants to Landlord that the demised  premises
shall be used,  occupied and maintained in full  compliance  with all New Jersey
and Federal environmental laws, present and future, including but not limited to
the New Jersey Spill  Compensation  and Control Act, the  Environmental  Cleanup
Responsibility  Act,  and all rules and  regulations  of NJDEPE and its  various
divisions. Notwithstanding any other provisions of this lease, Landlord shall be
and remain responsible for environmental conditions existing on the Commencement
Date  and  arising  thereafter  not due to the act or  omission  of this  Tenant
("Landlord's Environmental Obligations").

                  6.1 At the expiration of the term of this lease,  prior to the
return of any security,  the Tenant shall apply for and shall have received from
the  Bureau of  Industrial  Site  Evaluation  of the New  Jersey  Department  of
Environmental   Protection  ("NJDEP")  or  any  successors  thereto,   either  a
Non-Applicability  Letter or a Negative Declaration or an Administrative Consent
Order  ("ACO") or other  administrative  approval  with  respect to the  demised
premises,  for which Tenant  shall have  applied for pursuant to the  Industrial
Site  Recovery  Act  N.J.S.A.   13:1K-6  et  seq.  and  regulations  promulgated
thereunder ("ISRA") now or then in effect under this or successor legislation to
effectuate the terms of this provision.

                  6.2  Landlord  agrees  to  cooperate  in  the  filing  of  all
necessary  documents  required  to obtain  such  Letter  of Non-  Applicability,
Negative Declaration or ACO. The Landlord shall not be required to accept an ACO
in satisfaction of Tenants  responsibilities  under this subsection,  unless (i)
such ACO  permits  the  re-letting  of the  leased  premises;  (ii)  such ACO is
reasonably  acceptable to Landlord's mortgages (whether such mortgagee currently
holds a mortgage  against  the leased  premises or not) and (iii)  Tenant  shall
effectuate  cleanup  or

                                     - 7 -

<PAGE>

detoxification or, alternately,  at the option of the Landlord,  post a suitable
Performance  Bond  therefore.  Application  for a  Non-Applicability  Letter  or
Negative Declaration shall be made by Tenant, not less than six (6) months prior
to the  expiration of the term of this Lease and Tenant shall  furnish  Landlord
with true and  complete  copies of all  correspondence,  documents,  reports and
submissions  between  Tenant and ISRA and any successors  thereto.  Tenant shall
deliver such Non-Applicability  Letter,  Negative Declaration or ACO to Landlord
on the  expiration  date of this  Lease and in  default  thereof  the  following
consequences shall issue:

                  6.2.1 If Tenant's failure to comply with this section prevents
Landlord from re-renting the leased premises,  then Tenant shall be obligated to
continue to make monthly  payments in the sum equivalent to the monthly  payment
for the last month of the term,  until  delivery of a  NonApplicability  Letter,
Negative  Declaration,  ACO  or  other  written  determination  by  ISRA  or any
successors  thereto,  that  the  Tenant  and  the  demised  premises  are not in
violation  of the  Environmental  Cleanup  Responsibility  Act or any  successor
legislation enacted.

                  6.2.2 In the event  Tenant's  rental  obligation  continues in
accordance with sub paragraph  6.2.1 above,  the Tenant shall have the option of
remaining  in  possession  of the leased  premises  until the rental  obligation
expires or Tenant may, at its option, vacate the leased premises.

                  6.2.3  Rental  security  shall be  retained  by the  Landlord,
pending  Tenant's  compliance.  Landlord shall have the right during the term of
the Lease to inspect and undertake  sampling at the premises,  for which purpose
Tenant shall allow owner and owner's agent reasonable access.  Should Landlord's
sampling reveal that there has been a spill or discharge of hazardous substances
or wastes by the Tenant at the leased  premises  and  should  Tenant,  following
written  notice  first  given by the  Landlord,  fail to  correct  such spill or
discharge within a reasonable period of time, then Landlord shall have the right
to void this  agreement  on notice to Tenant but Tenant shall not be relieved of
costs  necessary  to make the  Landlord  whole.  Landlord's  use of the Tenant's
security to  remediate  shall not relieve the Tenant of  restoring  the security
during the term of the lease if Landlord does not exercise its right to void the
lease.

                  6.3 The  parties  shall,  with  respect  to  their  respective
environmental  obligations,  promptly  execute  and  comply  with all  statutes,
ordinances,  rules, orders,  regulations and requirements of the Federal,  State

                                     - 8 -

<PAGE>

and  Municipal  Governments  and of any and all their  Departments  and  Bureaus
applicable to, said premises,  for the  correction,  prevention and abatement of
nuisances,  violations  or other  grievances  in,  upon or  connected  with said
premises  during said term; and shall also promptly  comply with and execute all
rules,  orders and  regulations  of the New Jersey  Department of  Environmental
Protection Agency and the Board of Fire  Underwriters,  at the Tenant's own cost
and expense.

                  6.4 The  Tenant's  responsibility  above set forth shall apply
except insofar as said nuisances and violations or other  grievances or breaches
were or are included in Landlord's Environmental Obligations.

                  6.5 Tenant  presently  leases a portion of the leased premises
as a subtenant.  Tenant has no responsibility for environmental  problems except
those it  created  either as a  subtenant  or  during  this  lease  term and its
extension as a direct tenant.

                  6.6 Landlord's  Indemnity.  Landlord shall be fully and solely
responsible  for the  existence  and  remediation  of any  Regulated  Substances
affecting the premises as of the Commencement  Date and those arising during the
term  from  sources  outside  of the  premises,  unless  caused  by the  acts or
omissions  of  Tenant  or  those  acting  by  or  through  Tenant   ("Landlord's
Environmental Obligations"). Landlord hereby agrees to save, defend with counsel
reasonable  satisfactory  to Tenant,  indemnify and hold harmless Tenant and its
principals,  officers,  directors,  trustees,  agents  and  employees,  from and
against any and all claims, losses, liabilities, damages and expenses (including
reasonable  cleanup costs and attorneys fees arising under this indemnity) which
may arise  directly  or  indirectly  from any use or any  release  of  regulated
substances on or under the premises  resulting from Landlord's failure to comply
strictly  with  the  provisions  of this  section  with  respect  to  Landlord's
Environmental Obligations.

         7. FAILURE TO COMPLY

         In case the Tenant  shall fail or neglect to comply with the  aforesaid
statutes, ordinances, rules orders, regulations and requirements or any of them,
or in case the Tenant shall fail or neglect to make any necessary repairs, which
failure or neglect  continues  for a period of ten days after notice  thereof in
writing or in the event such repair cannot be reasonably accomplished within the
period set forth therein and any extension granted, and Tenant fails to commence
such repair within the period set forth  therein and any  extension  granted and
diligently

                                     - 9 -

<PAGE>

pursues same to completion,  then the Landlord or the Landlord's agent may enter
said  premises  and make said  repairs  and comply  with any and all of the said
statutes,  ordinances,  rules, orders, regulations or requirements,  at the cost
and expense of the Tenant;  and in case of the Tenant's  failure to pay therefor
the said cost and expense shall be added to the next month's rent and be due and
payable as such, of the Landlord may deduct the same from the balance of any sum
remaining in the Landlord's hands.

         8. ASSIGNMENT AND SUBLETTING

         The  Tenant  shall  not have the  right to  assign  this  agreement  or
under-let or underlease  the premises or any part  thereof,  without the written
consent of the Landlord,  which consent shall not be unreasonably  withheld. Any
assignment/sub-lease  shall include an  acknowledgment by the sub- tenant of its
acceptance  of the terms of this lease and shall not exceed the calendar term of
this lease.  Acceptance of a subtenant or assignee  shall not relieve the Tenant
of any obligation  hereinunder unless specifically stated in a writing signed by
the Landlord.  Tenant shall be  responsible  for any breach of this lease by its
assignees/subtenant unless relieved of this obligation in writing.

         9. INSPECTION OF PREMISES

         Tenant  agrees  that the  Landlord  and  Landlord's  agents,  and other
representatives  shall have the right to enter into and upon said  premises,  or
any part thereof,  at all reasonable hours,  provided Landlord  coordinates such
inspection with the Tenant, so as to not interfere with the Tenant's operations,
for the purpose of examining  the same,  or making such  repairs or  alterations
therein as may be necessary for the safety and preservation thereof.

         10. SHOWING PREMISES

         Tenant also agrees to permit the Landlord or  Landlord's  agent to show
the premises  during regular  business hours to persons  wishing to purchase the
same;  provided  Landlord  coordinates such inspection with the Tenant, so as to
not interfere with the Tenant's operations, and also to show the premises during
regular  business  hours to  persons  willing  to hire the same  after  Tenant's
failure to timely  exercise an option and the Tenant  further agrees that during
the six  months  next  prior to the  expiration  of the term,  the  Landlord  or
Landlord's  agent  shall  have the right to place  notices  on the front of said
premises,  or any part thereof,  offering the promises "To Let",  and the Tenant
hereby  agrees  to permit  the same.  to remain  thereon  without  hindrance  or
molestation.

         11. OBSTRUCTING SIDEWALKS


                                     - 10 -

<PAGE>


         The Tenant shall neither  encumber,  nor obstruct the sidewalk in front
of said  premises,  nor allow the same to be  obstructed  or  encumbered  in any
manner.

         12. SIGNS

         The  Tenant  shall not place or cause or allow any sign to be placed on
the roof of these premises  without the express written consent of the Landlord,
which  consent  shall  not be  unreasonably  withheld;  however,  any  municipal
approvals required for the sign shall be at Tenant's sole cost and expense.

         13. DAMAGE TO PERSONAL PROPERTY

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

         14. SUBORDINATION

         This  instrument  shall  not be a lien  against  the said  premises  in
respect to any  mortgage or  mortgages  now on or that  hereafter  may be placed
against said premises and the recording of such mortgage or mortgages shall have
preference  and be superior and prior in lien to this lease,  regardless  of the
date of recording,  and the Tenant agrees to execute any instrument which may be
deemed necessary or desirable to further effect the  subordination of this lease
to any such mortgage or mortgages.

                  14.1  Should  the  Landlord  default  in  the  payment  of any
installment or installments due on any mortgage, or in any of the other terms of
such  mortgage or mortgages  which would permit the mortgage to  foreclose,  the
Tenant  shall  have the right to pay such sum or sums and  deduct  the same from
subsequent rents to be paid to the Landlord.

                  14.2 As a  condition  to the  occurrence  of the  Commencement
Date,  Landlord  will  arrange  with the holder of all  existing  mortgages  and
thereafter  with  any  future  mortgagee  for  an  agreement  that  foreclosure,
dispossess or other  forfeiture of title,  shall not result in a disturbance  of
the possession use or enjoyment of the leased premises by Tenant provided Tenant
is not in violation of the lease terms. Landlord will obtain the non-disturbance
agreement from the existing lender within sixty (60) days from the  commencement
date of the initial

                                     - 12 -

<PAGE>

term. Any  subordination  provision  contained in the lease,  relating either to
ground leases or mortgages,  is subject to the express  condition that if Tenant
is not in material  default under the Lease, (a) Tenant will not be made a party
in any action or  proceeding  brought by any person  having  rights  superior to
Tenant to recover possession of the premises or to foreclose any mortgage or for
any other relief south, and (b) Tenant's possession under the lease shall not be
disturbed.  Landlord  agrees to  deliver  to Tenant  letters  from any holder or
rights superior to Tenant, including mortgagees and ground lessors,  recognizing
Tenant's  rights  hereunder,  such  deliver to take place within sixty (60) days
following  the  commencement  date of the  initial  term of the lease.  Landlord
agrees to  indemnify  and save  harmless  Tenant from any and all damages  which
Tenant  may  sustain as a result of (i) any action to  foreclose  any  mortgages
encumbering  the real property and (ii) any  termination of the ground lease, if
any, resulting from Landlord's default thereunder.

                  14.3 At Tenant's request,  Landlord shall provide consents and
waivers of lien in favor of Tenant and Tenant's  lenders,  equipment vendors and
equipment  lessees with respect to the  equipment,  trade  fixtures and personal
property installed in or used at the premises.

         15. DEFAULT

         It is  expressly  understood  and  agreed,  except as herein  otherwise
provided, that in case the demised premises shall be deserted or vacated, and if
default  be made in the  payment  of the  rent or any  part  thereof  as  herein
specified  or, if,  without the consent of the  Landlord  the Tenant shall sell,
assign or mortgage this lease,  or if default be made in the  performance of any
of the covenants and agreements in this lease by Tenant,  or if the Tenant shall
file a petition in bankruptcy or  arrangement,  or be  adjudicated a bankrupt or
make an  assignment  for the  benefit of  creditors,  or take  advantage  of any
insolvency  act,  and if any  such  failure  or  default  continues  for 10 days
following  notice to Tenant if the  failure or default  relates to payment or 30
days  following  notice to Tenant for other defaults or failures  unless,  other
than payment, the obligation is the Tenant's under the Lease, then, the Landlord
may, if it so elects,  terminate this lease and any remaining term thereof, upon
giving  to the  Tenant  ten (10)  days'  notice  in  writing  of the  Landlord's
intention  so to do; and upon the giving of such  notice this lease and the term
thereof  shall  terminate,  expire  and come to an end on the date fixed in such
notice  as if said  date were the date  originally  fixed in this  lease for the
termination or expiration thereof

                                     - 12 -

<PAGE>

                  15.1 It is further  agreed that there shall be no  enforceable
default  against the Tenant or any  objection  to the  exercise of any option or
right  granted to the Landlord  under any provision of the lease in the event of
default or  omission by the Tenant,  unless  notice of such  default or omission
shall have been given to the Tenant by certified and regular  mail,  said notice
specifying  the default or  omission  complained  of; and the Tenant  shall have
twenty  (20) days after the  actual  receipt  of such  notice to comply  with or
remedy such default or omission of if such default or omission  shall be of such
a nature that the same cannot be  completely  remedied or corrected  within such
twenty-day  period,  Tenant shall advise  Landlord of same in writing and shall,
with  reasonable  diligence and in good faith,  proceed to correct or remove the
default complained of.

         16. NOTICES

         All  notices  required  to be  given  to the  Tenant  may be  given  by
certified and regular mail  addressed to the Tenant at 10 Fairways  Court,  P.O.
Box 195,  Northvale,  New Jersey  07647,  directed  to the  attention  of Ronald
Tassello, with a copy to Lowenstein Sandler PC, 65 Livingston Avenue,  Roseland,
New Jersey 07068, Attn: R. Barry Stiger,  Esquire, or to such other person, firm
or  corporation  or addresses as the Tenant may notify the Landlord by notice as
provided below.
         All  notices  required  to be  given  to the  Landlord  may be given by
certified  mail  addressed to the Landlord at 300  Jacksonville  Road, P. 0. Box
117, Pompton Plains, New Jersey, or to such other person, firm or corporation or
addresses as the Landlord may notify the Tenant in writing by notice as provided
above.
         17. STRICT PERFORMANCE

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

         18. LANDLORD'S RE-ENTRY

         In the event that the  relation of the  Landlord  and Tenant  ceases or
terminates  by  reason  of the  re-entry  of the  Landlord  under  the terms and
covenants  contained in this lease or by the  ejectment of the Tenant by summary
proceedings  or  otherwise,  or after the  abandonment  of the  premises  by the
Tenant, it is hereby agreed that the

                                     - 13 -

<PAGE>

Tenant  shall  remain  liable and shall pay in monthly  payments  the rent which
accrues  subsequent  to the reentry by the  Landlord,  and the Tenant  expressly
agrees to pay as damages for the breach of the covenants herein  contained,  the
difference  between the rent reserved and the rent  collected  and received,  if
any, by the Landlord during the remainder of the unexpired term, such difference
or deficiency  between the rent herein reserved and the rent collected,  if any,
shall  become due and payable in monthly  payments  during the  remainder of the
unexpired term, as the amounts of such difference or deficiency  shall from time
to time be  ascertained.  Notwithstanding  the foregoing,  Landlord shall make a
good faith effort to mitigate  Tenant's  damages,  by  attempting  to re-let the
leased premises.

         19. LIABILITY INSURANCE

                  19.1 The Tenant shall,  at its own cost and expense,  take out
and  maintain  in force at all times for the  benefit  of the  Landlord  and the
Tenant, in a solvent insurance company or companies authorized to do business in
the State of New  Jersey,  a present or future  standard  policy or  policies of
general  liability  insurance  as generally  issued,  covering all of the leased
premises in the amount of $2,000,000 in the event of a single  accident,  injury
or  disaster;  and in the  amount of  $4,000,000  in the event of any  accident,
injury or disaster to any number of persons arising out of one accident;  and in
an amount of $2,000,000  for damages or injury to property and provide  Landlord
with continuous  proof of same annually on the  anniversary  date of this lease.
Failure of the Tenant to obtain such  insurance  or to pay any and all  premiums
shall  constitute  a default  hereunder  for which the  Landlord  shall have all
remedies for defaults as in the case of failure to pay rent.

                  19.2 The  policy  shall  name the  Landlord  as an  additional
"insured" and shall contain an appropriate  provision  exculpating  the Landlord
from any liability of obligation to the Tenant and the insurance carrier.

                  19.3 The Tenant shall, at its own costs and expense,  take out
and maintain contents insurance.

         20. FIRE INSURANCE

         The Tenant shall, at its own cost and expense, take out and maintain in
force at all times for the benefit of the Landlord and the Tenant,  in a solvent
insurance  company  authorized  to do  business  in the State of New  Jersey,  a
present  or  future  standard  policy of fire  insurance  as  generally  issued,
covering all of the leased  premises

                                     - 14 -

<PAGE>

in the amount of  $4,000,000 in the event of a single  occurrence.  Tenant shall
insure  the  premises  including  Landlord's  loss of rent and  Additional  Rent
against  the perils  covered by standard  fire and  extended  coverage  all risk
policies,  including  burglary,  malicious  mischief and  vandalism,  sprinkler,
insurance,  boiler and pressure vessel and  miscellaneous  equipment  insurance,
including pressure pipes, air conditioning systems,  electric motors, air-tanks,
compressors  and pumps,  demolition and increased cost of  construction  in such
amount  as  Landlord  may  reasonably  require.  In the  event  that it shall be
impossible to obtain fire and extended  coverage  insurance on the buildings and
improvements  on the  premises,  in the form and with fire  insurance  companies
reasonably  acceptable  to  Landlord,  because of any reason due to or connected
with the  occupancy of the Tenant,  the Landlord may at its option,  at any time
thereafter terminate this Lease and the term thereof by giving the Tenant thirty
(30) days notice in writing of its intent to do so.

                  20.1 Tenant  shall  provide  Landlord  with proof of insurance
annually and notify Landlord of any claims made thereunder.

                  20.2  Waivers  of  Subrogation.   Each  party  agrees  to  use
reasonable  efforts to include in each of its policies  insuring  against  loss,
damage or destruction by fire or other insured  casualty  either (a) a waiver of
the  insurer's  right of  subrogation  against the other party (and,  in case of
Tenant's policies,  against any additional insured) or (b) should such waiver be
unobtainable (i) an express  agreement that such policy shall not be invalidated
if the insured  waives or has waived  before the  casualty the right of recovery
against any party  responsible for a covered  casualty or (ii) any other form of
permission from the insurer for the release of such  responsible  party. If such
waiver,  agreement or  permission  shall not be  obtainable  without  additional
charge or at all, the insured party shall so notify the other party promptly. If
such waiver,  agreement or permission shall be obtainable at additional  charge,
then the insured party agrees to pay such charge.

         21. FIRE LOSS

                  21.1 If the leased  building or premises is partially  damaged
by fire or other insured risk and such damage can be repaired within  forty-five
(45) days after the date of such fire,  then (1) this lease shall remain in full
force  and  effect;  (2) the  Landlord  shall  promptly  repair  such  damage at
Landlord's expense; and (3) there shall be a proportionate abatement of rent for
so much of the leased premises as may be untenantable  during the

                                      - 15 -

<PAGE>

period of such repair.

                  21.2 If the leased  building or premises is  destroyed by fire
or other casualty to such extent as to make it substantially  untenantable  (25%
or more of the leased premises), and if the Landlord within forty-five (45) days
after such occurrence (1) shall decide not to rebuild,  or (2) shall not rebuild
(with the same facilities and appurtenances existing before such occurrence) and
(3) if Tenant does not elect to rebuild  (utilizing the insurance proceeds to do
so) and continue the payment of rent without  abatement  during such rebuilding;
then this lease  shall  terminate  at the option of the  Landlord or Tenant upon
written  notice given by either party to the other party within ninety (90) days
after  such  casualty.  Upon the  expiration  of  twenty  (20) days  after  such
termination (1) the Tenant shall surrender said premises and all of the Tenant's
interest therein to the Landlord; (2) there shall be a proportionate adjustment,
refund and abatement of rent computed as at and to the date of such  occurrence;
(3) there  shall be a refund of any rent paid in  advance as at the time of such
occurrence;  and (4) the Landlord may re-enter and  repossess  the premises thus
discharged from this lease and remove all parties therefrom.

                  21.3 Tenant shall  immediately  notify the Landlord in case of
fire or other damage to the premises.

         22. MECHANIC'S LIENS

         In the event the Tenant  shall do any acts or make any  contract  which
may create or be the  foundation  for any lien upon the premises or other estate
or reversion of the Landlord in the premises herein demised or upon the building
or improvements  thereon, or should any such lien be filed by reason of any such
acts or contracts made by the Tenant, then the Tenant shall post a bond insuring
the  discharge  of same or otherwise  discharge  the same within sixty (60) days
after written notice and demand therefor on the part of the Landlord.

         23. EMINENT DOMAIN:

                  23.1 If the land and premises  leased herein,  or of which the
leased  premises are a part,  or any portion  thereof which  materially  affects
Tenant's  use  of  the  premises,   shall  be  taken  under  eminent  domain  or
condemnation proceedings, or if suit or other action shall be instituted for the
taking  or  condemnation  thereof,  or if in  lieu  of any  formal  condemnation
proceedings  or actions but under threat  thereof,  the Landlord  shall grant an
option to purchase and or shall sell and convey the said premises or any portion
thereof,  to the governmental or

                                     - 16 -

<PAGE>

other public  authority,  agency,  body or public utility,  seeking to take said
land and premises or any portion thereof which  materially  affects Tenant's use
of the premises, then this Lease shall terminate,  and the term hereof shall end
as of such date as the terminating party shall fix by notice in writing; and the
Tenant  shall have no claim or right or be entitled to any portion of any amount
which may be  awarded  as  damages  or paid as the  result of such  condemnation
proceedings or paid as the purchase price for such option, sale or conveyance in
lieu of  formal  condemnation  proceedings;  and all  rights  of the  Tenant  to
damages, if any, are hereby assigned to the Landlord.

The Tenant agrees to execute and deliver any instruments,  at the expense of the
Landlord,  as may be deemed  necessary or required to expedite any  condemnation
proceedings or to effectuate a proper transfer of title to such  governmental or
other public  authority,  agency,  body or public  utilities  seeking to take or
acquire the said lands and premises or any portion thereof. The Tenant covenants
and agrees to vacate the said  premises,  remove  all of the  Tenant's  personal
property  therefrom and deliver up peaceable  possession thereof to the Landlord
or to such other party designated by the Landlord in the aforementioned  notice.
Failure by the Tenant to comply with any provisions in this clause shall subject
the Tenant to such costs, expenses, damages and losses as the Landlord may incur
by reason of the Tenant's breach hereof.

                  23.2 Nothing  stated in Par.  23.1 shall be construed to limit
the  Tenant's  right  to  relocation  costs  or  recovery  for the  costs of its
equipment,  trade fixtures and other  installations,  as otherwise  permitted by
law.
                  23.3 If a  condemnation  or taking  shall  make  access to the
premises or Tenant's use of the premises unfeasible for Tenant's operations then
Tenant  shall  have the  right to  terminate  this  Lease.  If the  Lease is not
terminated by either Landlord or Tenant as permitted under this Article 23, then
after  any  taking  or a  part  of the  premises,  the  rent  shall  be  reduced
proportionately.

         24. QUIET ENJOYMENT

         The Landlord does covenant that the said Tenant on paying the said rent
and  performing  the  covenants  aforesaid,  shall and may peaceably and quietly
have, hold and enjoy the said demised premises for the term aforesaid.

         25. BINDING

         The covenants and agreements  contained in this entire instrument shall
inure to the  benefit  of and be  binding

                                     - 17 -

<PAGE>

upon the  parties  hereto  and  their  respective  assigns,  heirs,  successors,
executors and administrators.

         26. PLACE OF PAYMENT

         All  payments  required  to be made by the  Tenant to the  Landlord  in
pursuance  of any of the  provisions  of this lease may be made by the Tenant in
cash or by certified  check, or by Tenant's  regular  business account check, by
mailing same to the Landlord at 300  Jacksonville  Road, P. 0. Box 117,  Pompton
Plains,  New Jersey,  or to such other address or to such other person,  firm or
corporation  as the  Landlord  may  direct  by giving  notice  to the  Tenant in
writing.

                  26.1 If any of the  Tenant's  checks  are  dishonored  for any
reason, all future payments shall be by certified check.

         27. AUTHORITY TO EXECUTE

         If any party to this Lease is a corporation, the parties executing this
Lease on behalf of the  corporation  represent  that they have been  granted the
authority  to  execute  this  Lease by the  corporation,  by a  validly  adopted
Corporate Resolution. In the event any party to this Lease is a Partnership, the
parties  executing this Lease on behalf of the  Partnership  represent that they
are authorized by the Partnership Agreement to bind the Partnership to the terms
of this Lease Agreement.

         28. ISSUANCE OF CERTIFICATE OF OCCUPANCY - CONTINGENCY

         Landlord and Tenant shall work promptly to obtain all permits necessary
for occupancy but it shall be the Tenant's  responsibility  to apply for same at
its  cost.  Failure  to do so  shall  not  relieve  the  Tenant  of  any  rental
obligations.

         29.  REALTOR'S  COMMISSION.  The parties  represent that no Real Estate
Broker has been  involved in this  transaction  and that the party that violates
this  representation  shall  be  responsible  for  payment  of any  real  estate
commission that lawfully becomes due and payable.

         30. ESTOPPEL CERTIFICATES.

                  30.1  Tenant,  upon  twenty  (20)  days  prior  request,  will
execute,  acknowledge  and  deliver  to  Landlord  a  statement  executed  by an
appropriate  officer of Tenant,  certifying that this lease is unmodified and in
full force and effect (or, if there have been modifications,  that this lease is
in full force and effect as modified and

                                     - 18 -

<PAGE>

setting  forth  such  modifications)  and the  dates  to which  the  base  rent,
additional  rent and other sums payable  hereunder  have been paid,  and stating
that to the knowledge of the signatory to such  certificate  no default of which
the signatory may have knowledge shall have occurred (or, if Landlord's  default
shall have  occurred and be  continuing,  stating the nature of such  Landlord's
default).  Such statement by Tenant may be relied upon by any mortgage holder or
by prospective purchaser of the premises.

                  30.2  Landlord,  upon  twenty  (20) days prior  request,  will
execute,   acknowledge  and  deliver  to  Tenant  a  statement  executed  by  an
appropriate officer of Landlord, certifying that this lease is unmodified and in
full force and effect (or, if there have been modifications,  that this lease is
in full force and effect as modified and setting forth such  modifications)  and
the  dates to which  the base  rent,  additional  rent and  other  sums  payable
hereunder  have been paid, and stating that to the knowledge of the signatory to
such certificate, which knowledge may be limited to the financial aspects of the
lease,  no default of which the signatory may have knowledge shall have occurred
(or, if Tenant's  default  shall have  occurred and be  continuing,  stating the
nature of such Tenant's default).  Such statement by Landlord may be relied upon
by  any  mortgage  holder  or by  prospective  assignees  or  subtenants  of the
premises.

         31. RIGHT OF FIRST REFUSAL.

                  31.1 Right of First  Refusal.  During  the term,  as it may be
extended  hereunder,  Tenant shall have a right of first refusal to purchase the
premises  on the  following  terms  and  conditions.  If  Landlord  receives  an
acceptable offer ("Offer") to purchase the premises, which Offer shall be in the
form of a fully  executed,  contingent  contract,  then Landlord shall provide a
copy of the Offer to Tenant,  which  shall have 15 days to elect to enter into a
contract on the same terms and conditions  described in the Offer, TIME BEING OF
THE ESSENCE FOR  TENANT'S  ELECTION.  If Tenant  fails to exercise  its right of
first refusal hereunder and Landlord shall fail to close an actual sale with the
prospect  in  substantial  conformity  with the  Offer  within  180  days  after
providing Tenant with a copy thereof,  then Tenant's rights with respect to such
prospect's Offer shall be reinstated.

                  31.2  Estate  Planning  Exceptions.  Tenant's  right  of first
refusal  under section 31.1 shall apply to the sale of  controlling  interest in
Landlord, but shall not apply to transfers, whether voluntary or by

                                     - 19 -

<PAGE>

operation of law, by will, trust, bequest or otherwise,  between partners of the
Landlords or from such partners to members of their immediate families (for this
purpose  meaning the spouse and  children  of Robert E.  Fazekas  and/or  Edward
Jaffy),  or trusts,  partnerships  or other  entities for their benefit or which
they control, but shall apply to any transfer thereafter.

         32.  Landlord  represents and warrants that (a) the property is in full
compliance with applicable laws, (b) contains no underground  storage tanks, (c)
is not the subject of any  environmental  remediation or  investigation,  (d) is
otherwise  in  compliance  with  all  environmental  laws,  including  ISRA,  in
connection with their  activities and termination of operations at the property.
Landlord will obtain from Hasbro,  Inc. all DEP clearances prior to its vacating
the premises on February 28, 2001 and provide Tenant with a copy of same.

                  IN WITNESS WHEREOF, the parties have set their hands and seals
or caused  these  presents to be signed by their proper  corporate  officers and
caused their proper corporate seals to be hereunto affixed, this
18TH   day of September, 2000.

Signed, Sealed and Delivered

ATTEST:                                              BALTEK CORPORATION


 /s/ Harold Gutman                          BY  /s/ Ronald Tassello
--------------------------------               ---------------------------------
                                               RONALD TASSELLO,



WITNESS:                                       EDRO ASSOCIATES


 /s/ Neleda Caraballo                      BY   /s/ Robert E. Fazekas
--------------------------------               ---------------------------------
                                               ROBERT E. FAZEKAS, Partner


                                     - 20 -

<PAGE>


                                   EXHIBIT A



                 [PLAYSKOOL BABY PLANT FLOOR PLAN APPEARS HERE]


<PAGE>


                                   EXHIBIT B

                                                                     1 OF 3
August 17, 2000

Dear Bob,

This memo will confirm our  discussion  of 8/16 and 8/17 at which time we agreed
to the following:  I made the changes to the original memo sent to you on August
4th so you  would  not have to refer to two  memo's.  Anything  new added to the
original has been underlined

Section 10 (Alterations) in the agreement,  states the following, "all additions
and  improvements  made by the  Tenant  shall  belong  to the  Landlord,  unless
otherwise agreed in writing."

I  mention  the above  section  because  many of the items you have  asked us to
remove  would fall under that section and we do not want to be  responsible  for
removing anything that belongs to you.

The items that fall into this category are as follows.
1    The three cinder block rooms,  including  the lighting that goes with them.
     We agree to remove the sample room only,  including  the lighting that goes
     with it. It amounts to removing 2 cinder block walls.
2.   Any permanent  office that was erected,  including the ones you asked us to
     take down. You agreed.
3.   Any wiring, conduit, or distribution panels. We will remove the wiring form
     the production equipment to the distribution panels.

As for the landscape around the stream. Our environmental  person Kevin England,
has deemed  this as  wetland.  He feels if he goes to the agency who  determines
this, they  will rule it that way. What we are  willing  to do is have you get a
quote to cut the brush back. If the quote is reasonable we will allow you to get
it done. You, as the owner of the building,  will have to accept  responsibility
if any government  agency challenges the work. We will pay you when you issue us
a bill and a copy of your contractors  invoice.  We will clean any obvious trash
that was dumped into the stream, if any, prior to vacating the premise.  You can
have DePaola do this job. Is included in their quote for $2.385. See 1 below.

The following list contains the Items we will take care of:

1    Cut  back the  trees at the  comer  of the  building  so that  they are not
     touching the building. Part of DePaola job. $2.385 total job.
2    Remove the posts and chain in the front of the building. Done
3    Repair or replace missing or damaged curb at the back of the building only.
     Any other damaged curb is considered normal wear and tear over the 21 years
     we occupied the building.  We will pay you $6.000 toward all curb repair or
     replacement.
4    Remove the Hasbro/Playskool signs on the outside of the building and patch
     any holes make in the structure of the building. Done
5    Re-paint or replace all parking sings on the outside of the building. Ok
6    Repair the cracks in the parking lot. Ok
7    We will have a general  contractor  replace the  caulking on the windows in
     the front of the  building,  repair  cracks in walls near the  dumpster and
     repair cracks in the walls near the docks caused by trucks backing in. They
     will not repair stress cracks. Ok
8    Repair the last canopy,  number 6 in our  drawing.  Also repair the tear in
     the side of the canopy identified during our walk through. Done
9    Make sure all exterior lighting is in working condition. Ok
10   Replace the bumpers at the docks. Ok

<PAGE>


                                                                     2 OF 3


11   Remove the frailer in back of the building and repair the  indentations  it
     made in the lot. Ok
12   Remove the 3 large and 1 small condensers from the back of the building and
     patch the holes made in the structure of the building. Will also remove the
     interior  units,  wiring and  plumbing.  Shah is using one of the units and
     wants to keep it in until he moves  out.  At that time he will  remove  the
     last unit
13   Remove all wad signs and  pictures on the inside of the  building and patch
     holes. Ok
14   Remove all loose wires that the landlord identifies for us to remove. These
     are  wires  that are not  connected  to  anything.  (Providing  we put them
     there.) Ok
15   Repair the floor where a wiring pipe was sticking out, as identified during
     our walk through. Ok
16   Repair the sheet rock around the columns in the building. Done
17   Remove the  portable in plant  office and patch any holes  made.  One done.
     Will use the second  one for his tool room and remove it upon  termination.
     Cannot locate the third unit.
18   Replace all non-functional bulbs and or ballast's inside building.  Ok. Add
     offices, bathroom and bathroom exhaust fans.
19   Make sure all emergency exit lights and signs are repaired. Ok
20   Work with ADT to terminate our contract and turn it over to Baltek. Ok
21   Have Wells Fargo remove their system. Done
22   Replace all stained ceiling tiles. Ok
23   Repair the sliding door at the closet as described during our walk through.
     Dope
24   Service  the 6 roof top HVAC  units.  (Tri  County has quoted this job at a
     total cost of S994.00. They can do the lob.) You will have TC do the job.
25   Service the conference  room air  conditioner.  (Tri County has quoted this
     job at a total cost of  $616.00.  They can do the job.) You will have TC do
     the Job.
26   Repair heating and cooling unit on the second floor. (Tri County has quoted
     this job at a total cost of $474.00. They can do the job.) You will have TC
     do the Job
27   Repair the computer room air  conditioner  system.  You will have TC do the
     job for a total cost of $1144.26.
28   Service 6  warehouse  heater  units.  (Tri  County has quoted this job at a
     total cost of $698.00 They can do the job.) You will have TC do the job.
29   Repair the thermostat at the loading dock.  (Tri County has quoted this job
     and 30 below for a total  cost of  $521.00.  They can do the job.) You will
     have TC do the Job.
30   Service the tubular infra heaters at the loading docks. You will have TC do
     the job

We feel all of these item can be done prior to August 31, 2000. Certainly all of
the items on the  inside of the  building,  which  will allow your new tenant to
move in on September 1st.

We do not intend to replace  anything  identified  as being  replaced in the Tri
County AC Company proposal dated 6/2/00.  These items are beyond repair and have
outlived their usefulness over the 21 years we occupied the building.

Note 1.: You will have Tri County  quote  repairing  the above  items.  You will
submit the quote to us for approval It is my understanding  that Baltek wants to
keep  the  Modular  furniture  in  place.  At  termination  we will  remove  all
equipment, including exhaust stacks and repair all penetrations.

Best Regards.

Bill Esposito


Your items A thru J

     A.   4 Warehouse unit heaters. See note 1 above.
     B.   2 Loading Dock heaters. See note 1 above.


<PAGE>


                                                                     3 OF 3


     C.   1 heater in Compressor room and 1 in SS room. See note 1 above
     D.   Re-stripe parking lot. We will pay you $400 toward re-striping.
     E.   Paint exterior doors and railing. Will not do.
     F.   Shampoo rugs and paint. Will not do.
     G.   Clean and check  louvers,  ceiling fans and exhaust fans in warehouse.
          OK
     H.   Repair sprinkler blow out conduits. Ok
     I.   Replace hot water heater. Ok
     J.   Replace concrete curbing. See 3 above.
     K    Total property clean UP. See 1 above.
     L.   Will not do.

I think that covers everything Bob


Best Regards.

/s/ Bill

Bill

<PAGE>

                                    Exhibit C

                                  Tenant's Work




     1.   Widening loading dock door from 9' wide to 10' wide.

     2.   Widening door from loading area to warehouse from 8' to 10'

     3.   Put in a drive in overhead door in warehouse


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>AMENDMENT TO LEASE
<TEXT>


                               AMENDMENT TO LEASE


                This Amendment to Lease ("Amendment") dated , August 17, 2000 by
and between  Northvale 1997 Associates,  L.L.C., a New Jersey limited  liability
company,  with its address at 235 Moore  Street,  Hackensack,  New Jersey  07601
("Landlord") and Baltek Corporation, a Delaware corporation,  having its offices
at 10 Fairway Court, Northvale, New Jersey 07647 ("Tenant").


                                R E C I T A L S:

               A.  Landlord's  predecessors  and Tenant and/or its  predecessors
have  executed  and  delivered a certain  Lease  dated June 11, 1969  ("Original
Lease"),  as  amended  by a Lease  Amendment  dated  February  13,  1974  and an
Amendment  to Lease  dated May 20,  1992  (together  "Amendments")  for  certain
Demised Premises located at, and commonly known as, 10 Fairway Court, Northvale,
Bergen County,  New Jersey.  The Original  Lease and Amendments are  hereinafter
together referred to as "Lease".

               B.  Landlord  and  Tenant  desire  to amend  the  Lease to modify
certain provisions.

               Now, therefore,  in consideration of the mutual agreements herein
contained  and other good and  valuable  consideration,  the receipt of which is
hereby acknowledged, it is mutually agreed as follows:

               1. The Recitals set forth above are hereby incorporated into this
Amendment with the same force and effect as if they had been set forth herein at
length.  The words and  phrases  as  defined  in the Lease  shall  have the same
meaning in this Amendment.

               2.  Paragraph  2 of the  Original  Lease,  captioned  "Term",  as
previously  amended in the  Amendments  are hereby deleted in their entirety and
the following is inserted in its place and stead:

                        "The Lease  commenced on January 1, 1970  ("Commencement
                   Date"),  and the term of the Lease is hereby  extended  until
                   February  28, 2010  ("Termination  Date"),  on which date the
                   Lease shall terminate unless otherwise extended."

               3.  A new Paragraph 2.3 is hereby added to the Lease as follows:

                        "2.3  Upon  expiration  of the term of the  Lease as set
                   forth in Paragraph 2 (February 28,  2010),  Tenant shall have
                   the right and  option to extend the term of the Lease for one
                   period of five (5) years  ending on February  28,  2015.  The
                   right and  option to  extend  the term of the Lease  shall be
                   subject  to  and  contingent  upon  each  and  every  of  the
                   conditions set forth  hereinafter.  Tenant's right and option
                   to  extend  the term of the  Lease  shall be  exercisable  by
                   Tenant giving written notice of the exercise of the right and
                   option to Landlord before November 30, 2008. In the event

<PAGE>

                   Tenant  fails to give  written  notice  of its  intention  to
                   exercise  its right  and  option  as  provided  above and its
                   notice of  acceptance  of the rent  within  the  stated  time
                   periods,  Tenant's right and option to extend the term of the
                   Lease shall  (upon the date by which  written  notice  should
                   have been received by Landlord) be deemed to have been waived
                   by Tenant and shall be of no further force or effect.  In the
                   event  Tenant  exercises  its right and option in  accordance
                   with the  provisions  hereof  the term of the Lease  shall be
                   extended  accordingly,  and all  references  contained in the
                   Lease to the Termination  Date shall be construed to refer to
                   February 28, 2015. Unless otherwise expressly provided to the
                   contrary,  the  extended  term of the Lease shall be upon the
                   same  terms,  conditions  and  covenants  as set forth in the
                   Lease  except that there shall be no further  right or option
                   to extend the term of the Lease.  It is important to Landlord
                   that it know  whether or not the  options  are  exercised  by
                   Tenant so that it may seek a replacement tenant to avoid loss
                   of rent, and, therefore, the time within which the option and
                   acceptance  of the rent must be  exercised  is hereby made of
                   the  essence.  The right and option to extend the term of the
                   Lease shall be subject to and contingent  upon each and every
                   one of the following conditions:

                        (i) The Lease is in full force and effect;

                        (ii) Tenant shall not be in material  default  under any
                   of the terms,  provisions,  covenants  and  conditions of the
                   Lease; and

                        (iii) In lieu of the sums set forth in  Article 2 of the
                   Lease,  the monthly  installments  of base rent to be paid by
                   Tenant  monthly during the option period shall be the greater
                   of fair market rent or $37,380.44,  but in no event shall the
                   monthly rental be less than $37,380.44,  notwithstanding that
                   fair market rent shall be lower.  Rent shall be determined as
                   follows:

                        Within twenty (20) days after Landlord receives Tenant's
                   notice,  Landlord  shall  submit to Tenant,  in writing,  its
                   determination of fair market rent. Within ten (10) days after
                   Tenant  receives the fair market rental figure,  Tenant shall
                   have the right to dispute the rent by written notice received
                   by Landlord  within the ten (10) day time period.  Failure by
                   Tenant to dispute  the rent in this  manner  shall be deemed,
                   automatically  and  conclusively,  an acceptance by Tenant of
                   the rent  submitted.  Within  ten (10)  days  after  Landlord
                   receives  Tenant's  notice  disputing the rent,  Landlord and
                   Tenant  shall  each  designate  an   independent,   qualified
                   commercial  real estate  appraiser or expert,  who  regularly
                   conducts  business in Bergen  County and who is familiar with
                   Bergen County industrial  rentals,  for the purpose of having
                   them agree on the then fair market rent


                                        2

<PAGE>

                   for the Demised Premises which shall be the rental then being
                   collected  by owners of other  properties  for new  leases of
                   space reasonably comparable in type, size, location and usage
                   to the Demised Premises within Bergen County, New Jersey, for
                   a term  of  approximately  five  years  with  similar  tenant
                   expense assumptions and contributions.  In the event that the
                   two  designees  cannot  agree  upon  one  figure,   then  the
                   designees   shall  select  a  third  person  with  comparable
                   qualifications,  and  the  agreement  of  two  of  the  three
                   designees shall prevail,  or if two cannot agree, the average
                   of their three rents shall prevail. Landlord and Tenant shall
                   each pay the fees and  expenses  of their own  designee,  and
                   they  shall  share,  equally,  the fees and  expenses  of the
                   third;  and the greater of $37,380.44 or the fair market rent
                   so  determined  shall be the  fixed  minimum  rental  payable
                   monthly for the entire five-year option term. If Tenant gives
                   notice of the exercise of its option before November 1, 2008,
                   then  Landlord  shall have until  November 20, 2008 to submit
                   its determination of fair market rent.

                        (iv)  Within  seven (7) days after  Tenant has  received
                   written  notice  from  Landlord  of the fair  market  rent as
                   determined  pursuant to the preceding paragraph (iii), Tenant
                   shall  notify  Landlord,  in  writing,  whether or not Tenant
                   accepts  the  determination  that the base  rent  will be the
                   greater of the fair market rent so determined or  $37,380.44.
                   If Tenant so  accepts,  then the term shall be  extended  for
                   five (5) years at a monthly base rent equal to the greater of
                   the fair market rent so determined or  $37,380.44.  If Tenant
                   declines to accept or gives no notice at all, then the option
                   to extend will become null and void,  automatically,  and the
                   Lease  will   continue  in  full  force  and  effect  to  the
                   Termination  Date of  February  28,  2010.  If the  option to
                   extend becomes null and void, Tenant will pay to Landlord, as
                   additional  rent,  on the  first  day of the  next  following
                   month,  an  amount  equal to  Landlord's  share  of  expenses
                   incurred   and/or  owing  to   appraisers   and  experts  and
                   Landlord's reasonable attorney fee and related expenses.

                        (v) The Landlord and Tenant shall execute and deliver to
                   each other a written  statement  of the rent for the extended
                   term when determined as herein provided.

               4.  Paragraph  3.1 of the Original  Lease  captioned  "Rent",  as
                   previously  amended  by  the  Amendments  is  hereby  further
                   amended to add the following:

                        "Commencing  as of March 1, 2002,  Tenant  covenants and
                   agrees to pay the Landlord,  as and for the base rent for the
                   Demised Premises, in equal monthly installments,  in advance,
                   as set forth below,  on the first day of each and every month
                   of the term hereof:


                                        3

<PAGE>

                      Period of Term Lease            Monthly Rent
                      ------------------------------------------------
                      March 1, 2002 -                  $35,600.42
                       February 28, 2006

                      March 1, 2006 -                  $37,380.44
                       February 28, 2010

               5.  Paragraph 5.1 of the Lease, as previously amended, is further
                   amended to read as follows:

                        "5.1 Tenant may use and occupy the Demised  Premises for
                   any  use  permitted  by  the  ordinances  of the  Borough  of
                   Northvale,   with  Landlord's   consent  which  will  not  be
                   unreasonably withheld or delayed; provided, however, Landlord
                   will not be  required  to give its consent to a use which (i)
                   involves the  production,  use and/or  storage of substantial
                   amounts  of  hazardous  substances  or  hazardous  wastes  as
                   defined  in  federal,   state  or  local   laws,   rules  and
                   regulations,  and/or (ii) the use can be reasonably  expected
                   to cause extraordinary  destruction,  wear and/or tear to all
                   or part of the Demised Premises."

               6.  A new Paragraph 11.3 is hereby added to the Lease as follows:

                        "11.3  Notwithstanding  anything  contained in Paragraph
                   11.1 to the contrary, in the event that it becomes reasonably
                   necessary to replace the roof and/or its  covering,  in whole
                   or in part,  Landlord will do so at its own cost and expense,
                   and,  prior  to any  such  replacement  and  after  any  such
                   replacement,  Tenant will be  responsible  for all repairs to
                   the roof covering (except for the replacement  which shall be
                   Landlord's  obligation) as provided in Paragraph 11.1 of this
                   Lease.  If the  parties  cannot  agree upon the need for roof
                   replacement, then each party will designate a representative,
                   and  the  representatives  together  will  select  either  an
                   engineer or a recognized roofing contractor to make the final
                   determination which will be final and binding on the parties.
                   A  replacement  roof  will  be what is  commonly  known  as a
                   "twelve year roof with a twelve year warranty".

               7.  Tenant  acknowledges  that it accepts the Demised Premises in
                   its "as is" condition and will continue to be responsible for
                   all  repairs  as  provided  in  Paragraph  11.1 of the Lease,
                   except for  Landlord's  obligation to replace the roof and/or
                   its  covering as provided in  Paragraph 6 of this  Amendment.
                   Paragraph  9 of the  Amendment  dated May 28,  1992 is hereby
                   amended to add the following:

                        "(9) If Landlord has reasonable  cause to believe that a
                   spill  or   discharge   has   occurred   which  is   Tenant's
                   responsibility pursuant to Paragraph 9.A. hereof and Landlord
                   makes written demand to Tenant setting forth the

                                        4

<PAGE>

                   basis of its cause,  Tenant will obtain,  at its own expense,
                   and furnish to Landlord,  without charge,  within thirty (30)
                   days   after   receipt  of   Landlord's   demand  a  Phase  I
                   environmental  report prepared by a recognized  environmental
                   engineer  which will show the status of the Demised  Premises
                   with  regard to all  environmental  conditions.  In the event
                   that  the  report   shows  or   indicates   the  presence  or
                   possibility  of the presence of any  environmental  condition
                   which violates the laws, rules,  regulations or ordinances of
                   the State of New Jersey or the United  States of America  and
                   which are  Tenant's  responsibility  under this  Lease,  then
                   Tenant will obtain such additional  inspections,  reports and
                   tests as may be required to determine the nature and scope of
                   the  environmental  condition  and what will be  required  to
                   remedy the  condition and the cost  thereof.  Tenant,  at its
                   expense,  will remediate the  environmental  condition to the
                   satisfaction of all  governmental  agencies,  etc. and to the
                   reasonable satisfaction of Landlord."

               8.  Paragraph  15.1 A. of the  Lease,  as  previously  amended is
                   further amended to change "twenty-five (25) business days" to
                   "ten (10) business days".

               9.  Paragraph  18, the subject of which is a Renewal  Option,  is
                   hereby  deleted in its entirety and nothing is substituted in
                   its place.

               10. Paragraph  22 of the  Amendment  dated May 28, 1992 is hereby
                   deleted in its  entirety  as Landlord is now the owner of the
                   fee interest in the Demised Premises.

               11. Paragraph  23 of the  Amendment  dated May 28, 1992 is hereby
                   amended to delete  Edward S.  Gordon  Company of New  Jersey,
                   Inc. as the broker and to  substitute  Charles  Klatskin  and
                   Company and James E. Hanson,  Inc.,  (together the "Broker").
                   Landlord will pay the  commissions  due to the Broker arising
                   from  this  Amendment,  the sale of the  Premises  to  Tenant
                   pursuant to Section 15 of this Amendment and/or the extension
                   of the term pursuant to Section 3 of this Amendment  pursuant
                   to their  separate  agreement.  Landlord  will save,  defend,
                   indemnify  and hold  harmless  Tenant  from and  against  any
                   liability  to any other  broker with whom  Landlord has dealt
                   relative to this Lease and this  Amendment,  except Edward S.
                   Gordon  Company of New Jersey,  Inc.  Landlord  represents to
                   Tenant that Landlord has not entered into any agreement with,
                   nor assumed any agreement  with,  Edward S. Gordon Company of
                   New Jersey,  Inc.  relative to this Lease and this Amendment,
                   and the indemnity set forth in the next preceding sentence of
                   this   paragraph   will   apply   to  any   breach   of  this
                   representation  by  Landlord.   Tenant  will  save,   defend,
                   indemnify  and hold  harmless  Landlord  from and against any
                   liability  to any other  broker  (other than the Broker) with
                   whom Tenant has dealt  relative to this  Amendment or to whom
                   Tenant has any  contractual  obligation  with  respect to the
                   Lease.

                                        5

<PAGE>



               12. A new Paragraph is hereby added to the Lease as follows:

                        "Anything in this Lease to the contrary notwithstanding,
                   Tenant  agrees that Tenant shall look solely to the estate of
                   Landlord in the  property  in which the  Demised  Premises is
                   located,  and subject to the prior rights of any mortgagee of
                   the  property,  for the  collection of any judgment (or other
                   judicial process)  requiring the payment of money by Landlord
                   in the  event of any  default  or  breach  by  Landlord  with
                   respect to any of the terms, covenants and conditions of this
                   lease to be observed  and/or  performed by  Landlord,  and no
                   other assets of Landlord nor its partners, members, managers,
                   trustees, officers, directors,  stockholders or beneficiaries
                   shall be  subject  to levy,  execution  or other  enforcement
                   procedure for the satisfaction of Tenant's remedies."

               13. A new Paragraph is hereby added to the Lease as follows:

                        "Each  party  agrees  at any time and from  time to time
                   upon not less than ten (10) days'  prior  notice by the other
                   party or any mortgagee to execute, acknowledge and deliver to
                   the requesting  party or such mortgagee,  as the case may be,
                   or any other party specified by the requesting  party or such
                   mortgagee,  a statement in writing certifying that this lease
                   is unmodified  and in full force and effect (or if there have
                   been modifications, that the same is in full force and effect
                   as modified and stating the  modifications)  and the dates to
                   which the rent and other  charges  have been paid in advance,
                   if any, and stating  whether or not to the best  knowledge of
                   the  signer  of such  certificate  Tenant or  Landlord  is in
                   default  in  performance   of  any  covenant,   agreement  or
                   condition  contained  in this lease,  and, if so,  specifying
                   each such default of which the signer may have knowledge,  it
                   being intended that any such statement  delivered pursuant to
                   this paragraph may be relied upon by any prospective assignee
                   of this Lease,  purchaser of the fee or any mortgagee thereof
                   or any assignee of any mortgage.  However,  Landlord will not
                   be  obligated  to give such  statement  to Tenant  and/or its
                   designee more than once in any twelve (12) month period."

               14. The following is hereby added to the Lease:

                        "In the event  Tenant  requests  from  Landlord  and its
                   mortgagees  consents,  waivers and/or  subordination of liens
                   with respect to Tenant's furniture,  fixtures,  equipment and
                   personal  property   installed  or  located  in  the  Demised
                   Premises,  Landlord's  consent  and/or  agreement will not be
                   unreasonably withheld or delayed. However, if Tenant requests
                   Landlord   to   obtain   such   consents,    waivers   and/or
                   subordinations from its mortgagee, Landlord will cooperate by
                   submitting such requests to its mortgagee, but Landlord makes
                   no  representation or agreement that its mortgagee will

                                        6
<PAGE>

                   grant such request.  In the event  Landlord's  mortgagee does
                   not grant such  request,  such event will not be a default by
                   Landlord  pursuant  to this  Lease  nor  terminate  or modify
                   Tenant's  obligations pursuant to this Lease, and Tenant will
                   have no further right or recourse against  Landlord  relating
                   to such requested  consents,  waivers  and/or  subordination.
                   Tenant  will be  responsible  for the payment of all fees and
                   expenses to the mortgagee and will reimburse Landlord for its
                   reasonable attorney's fees incurred."

               15. The following is hereby added to the Lease:

                        "A.  Landlord  (hereinafter  referred  to as "Seller" in
                   this Section) hereby grants, bargains and extends unto Tenant
                   (hereinafter  referred to as  "Purchaser"  in this  Section),
                   their  successors and assigns but subject to the  limitations
                   on the right of assignment  as provided in this Section,  the
                   exclusive  right,  privilege and option to purchase,  for the
                   consideration   and  subject  to  the  terms  and  conditions
                   hereinafter  set forth,  all of Landlord's  right,  title and
                   interest in and to the  Demised  Premises  together  with the
                   building  machinery,  equipment  and fixtures of the Landlord
                   located  thereon  or used in the  operation  thereof  (all of
                   which  is  hereinafter   collectively   referred  to  as  the
                   "Premises"), and together with all right, title and interest,
                   if any,  of Seller in and to any land lying in the bed of any
                   street, road or avenue opened or proposed, public or private,
                   in front of or adjoining  the  Premises and all right,  title
                   and  interest  of Seller in and to any  awards  made or to be
                   made in lieu  thereof,  and in and to any  unpaid  award  for
                   damage  to the  Premises  by reason of change of grade of any
                   street; and Seller will execute and deliver to Purchaser,  on
                   closing  of title,  or  thereafter,  on  demand,  all  proper
                   instruments   for  the  conveyance  of  such  title  and  the
                   assignment and collection of any such award.

                        B.  This  option  shall  begin  as of the  date  of this
                   Amendment,  and  shall  extend  for a period  ending  at five
                   o'clock in the evening on August 15, 2007,  unless  exercised
                   or extended as hereinafter provided.

                        C.  Purchaser  will not have the right to exercise  this
                   option if it is then in default of any material  provision of
                   this Lease.

                        D.  Exercise  of the option  shall be by written  notice
                   given  by  Purchaser  to  Seller  in the  manner  hereinafter
                   provided  and  received by Seller not  earlier  than June 15,
                   2007 nor later  than  August 15,  2007.  Time shall be of the
                   essence  with regard to the dates during which the option may
                   be exercised and the acceptance of the Purchase Price.

                        E. Upon  timely  and  proper  exercise  of the option as
                   herein provided,  the purchase and sale of the Premises shall

                                        7
<PAGE>


                   be  consummated  not less  than ten (10)  days nor more  than
                   forty-five  (45) days next  following  the date of receipt by
                   Seller of the  notice of  acceptance  of the  Purchase  Price
                   (defined  in  Paragraph  G.1.a.  hereof),  upon  such date as
                   Purchaser  shall  designate  in the  notice  of  exercise  of
                   option,  at the place and time  hereinafter set forth in this
                   Agreement.

                        F. During the period of this Agreement,  Seller will not
                   permit any lien or encumbrance on the Premises except (i) the
                   granting  of  utility  easements  for  the  sole  purpose  of
                   servicing the Premises or (ii) the extension, modification or
                   refinancing of the presently existing first mortgage provided
                   that the principal amount will not exceed $5,250,000.00.

                        G. Upon exercise of the option, the sale and purchase of
                   the  Premises  shall be made  upon the  following  terms  and
                   conditions:

                                1. Purchase  Price.  a. The purchase  price (the
                   "Purchase  Price") for the  Premises  shall be the greater of
                   $5,250,000.00  or its fair market  value at time of exercise,
                   which Purchase Price  Purchaser  agrees to pay at the closing
                   good  federal  bank  funds  transferred  by wire to  Seller's
                   account.

                                        b. Within fifteen (15) days after Seller
                   receives Purchaser's notice of exercise,  Seller shall submit
                   to Purchaser,  in writing,  its  determination of fair market
                   value. Within ten (10) days after Purchaser receives the fair
                   market  value  figure,  Purchaser  shall  have  the  right to
                   dispute  the fair  market  value  figure  by  written  notice
                   received  by  Seller  within  the ten (10)  day time  period.
                   Failure by  Purchaser to dispute the fair market value figure
                   in  this   manner   shall  be   deemed,   automatically   and
                   conclusively,  an  acceptance by Purchaser of the fair market
                   value  figure  submitted.  Within five (5) days after  Seller
                   receives  Purchaser's  notice disputing the fair market value
                   figure,   Seller  and  Purchaser   shall  each  designate  an
                   independent,  qualified  commercial real estate  appraiser or
                   expert,  who regularly conducts business in Bergen County and
                   who is  familiar  with  Bergen  County  industrial  sales and
                   values, for the purpose of having them agree on the then fair
                   market value for the  Premises  which shall be the value then
                   being  received  by  sellers  of  other  properties  for real
                   property  reasonably  comparable in type, size,  location and
                   usage to the Premises  within Bergen County,  New Jersey.  In
                   the  event  that  the two  designees  cannot  agree  upon one
                   figure,  then the designees  shall select a third person with
                   comparable  qualifications,  and the  agreement of two of the
                   three  designees shall prevail,  or if two cannot agree,  the
                   average of their  three fair  market  values  shall  prevail.
                   Seller and Purchaser  shall each pay the fees and expenses of

                                       8
<PAGE>

                   their own designee,  and they shall share,  equally, the fees
                   and expenses of the third.

                                        c. Within ten (10) days after  Purchaser
                   has received written notice from Seller of the  determination
                   of the  Purchase  Price in  accordance  with this  paragraph,
                   Tenant  shall  notify  Landlord,  in writing,  whether or not
                   Tenant accepts the Purchase  Price.  If Tenant  accepts,  the
                   sale and purchase of the Premises  will proceed to a closing.
                   If Tenant  declines to accept or gives no notice at all, then
                   the  option  to   purchase   will   become   null  and  void,
                   automatically,  and the Lease will continue in full force and
                   effect to the  Termination  Date,  subject  to  extension  as
                   provided  in  Paragraph  2.3 of the  Lease.  If the option to
                   purchase  becomes null and void,  the Lease will  continue in
                   full force and effect to the Termination Date of February 28,
                   2010 or February 28, 2015,  as  applicable.  If the option to
                   purchase becomes null and void,  Tenant will pay to Landlord,
                   as additional  rent,  on the first day of the next  following
                   month,  an  amount  equal to  Landlord's  share  of  expenses
                   incurred   and/or  owing  to   appraisers   and  experts  and
                   Landlord's reasonable attorney fee and related expenses.

                                2. Permitted  Exceptions.  The Premises are sold
                   subject only to the following (the "Permitted Exceptions"):

                                        a. Such state of facts that may be shown
                   by an accurate  survey or personal  inspection  made prior to
                   the closing hereunder may disclose, provided the latter facts
                   do not render title unmarketable;

                                        b.  This  Lease   between   Seller,   as
                   landlord, and Purchaser,  as tenant, for the entire Premises;
                   and

                                        c. The easements,  agreements, covenants
                   and  restrictions  as set  forth  on  Schedule  "A"  which is
                   attached  hereto  and made a part  hereof  and  such  utility
                   easements as may  hereinafter  be granted by Landlord  solely
                   for the purpose of servicing the Premises.

                                3. The  Closing.  The  closing  (the  "Closing")
                   shall take place at the  offices of  Purchaser's  attorney or
                   title insurance  company in Bergen County,  New Jersey at the
                   time and on the date set  forth in  Purchaser's  notice  (the
                   "Closing Date").  Time shall be of the essence with regard to
                   the Closing Date.

                                4.  Apportionment.   The  following  are  to  be
                   apportioned  as the  Closing  as of  11:59  P.M.  on the  day
                   immediately  preceding the date on which Seller  receives the
                   proceeds of the Purchase Price before 2:00 P.M.

                                        a.  Rental  payments  pursuant  to  this
                   Lease; and


                                        9
<PAGE>

                                        b. Taxes (as  hereinafter  defined),  to
                   the extent not included in Rents  pursuant to paragraph a. of
                   this paragraph 4, if any, on the basis of the fiscal year for
                   which assessed,  except if the Closing shall occur before the
                   tax rate is fixed,  the  apportionment of Taxes shall be upon
                   the basis of one  hundred ten percent of the tax rate for the
                   immediately  preceding  fiscal  year  applied  to the  latest
                   assessed  valuation and there shall be a  readjustment  after
                   Closing when the final tax bill for the current year has been
                   received. The term "Taxes" shall mean all taxes,  assessments
                   (except as otherwise  provided in this paragraph b.), use and
                   occupancy  taxes,  water and sewer charges,  rates and rents,
                   charges for public utilities,  excises,  levies,  license and
                   permit fees assessed,  levied, charged,  confirmed or imposed
                   upon or  payable  out of or which  have  become a lien on the
                   Premises or any part thereof,  the  appurtenances  thereto or
                   the sidewalks,  streets, or vaults adjacent thereto;  but the
                   term  "Taxes"  shall  not  include  any  municipal,  state or
                   federal  income  taxes,   assessed  against  Seller,  or  any
                   municipal, state or federal capital levy, estate, succession,
                   inheritance  or transfer  taxes of Seller,  or any  franchise
                   taxes  imposed upon any corporate  owner of the Premises,  or
                   any part  thereof,  or any income,  profits or revenues  tax,
                   assessment  or charge  imposed upon the rent received as such
                   by Seller with respect to the Premises.  Notwithstanding  the
                   foregoing, if at the time of the Closing, any ordinance, rule
                   or law is in existence which provides for  improvements to be
                   constructed,  the cost of which will be  assessed in whole or
                   in part against the  Premises,  or the  Premises  shall be or
                   shall have been  affected by any  assessment  which is or may
                   become payable in installments then, for the purposes of this
                   Agreement,  all unpaid  installments of any such assessments,
                   including those which are to become due and payable after the
                   Closing, shall not be deemed to be due and payable and not to
                   be liens upon the Premises  affected thereby and shall not be
                   paid  and   discharged   by  Seller  upon   delivery  of  the
                   Instruments of Conveyance (as hereinafter defined),  but will
                   be assumed by Purchaser without adjustment;

                                        c.  Seller will be  responsible  for the
                   payment of any realty  transfer fee or other tax on the deed;
                   and

                                        d. Other  costs,  expenses  and  charges
                   usually  involved  and  adjusted  with regard to similar type
                   property.

                                To the  extent  that  the  adjustments  in  this
                   paragraph  are not based on final  figures  at  Closing,  the
                   applicable provisions of this paragraph shall survive Closing
                   of title.

                                       10
<PAGE>

                                5. Additional  Conditions.  Seller and Purchaser
                   agree to perform  and comply  with the  following  additional
                   conditions:

                                        a. Title.  At the  Closing,  Seller will
                   deliver to  Purchaser  such good and  sufficient  Bargain and
                   Sale  Deed with  covenants  against  grantor's  acts and such
                   other  instruments   (collectively   called  "Instruments  of
                   Conveyance")  as shall be  reasonably  required  to convey to
                   Purchaser  good  and  marketable  fee  simple  title  to  the
                   Premises   (together  with  any  easements  or  other  rights
                   appurtenant to the Premises) free and clear of all mortgages,
                   liens,   or   right   to   liens,   charges,    encumbrances,
                   encroachments,  easements, conditions and right of reentry or
                   forfeiture and other defects of title,  except such as appear
                   as Permitted Exceptions under paragraph 2 hereof.

                                        b. The  Lease.  At the  Closing,  Seller
                   will deliver to Purchaser an assignment (the "Assignment") of
                   all  right,  title and  interest  of  Seller  under the Lease
                   together with any advance  rental  deposits paid or deposited
                   by the tenant  thereunder  and Seller's  original copy of the
                   Lease.  Purchaser  shall  assume the  landlord's  obligations
                   under said Lease.  The Assignment  shall contain a release of
                   Seller,  as  landlord,  by the then  tenant and all  previous
                   tenants under the Lease for any and all liability,  claims or
                   causes of action existing or thereafter  arising  pursuant to
                   the Lease.

                                        c.  Title   Insurance.   Purchaser   may
                   obtain, at Purchaser's cost and expense,  a current survey of
                   the  Premises  and an  interim  title  insurance  report  and
                   commitment  to  issue an ALTA  Form  owners  title  insurance
                   policy ("title policy") issued by the title insurance company
                   which insured  Seller's  title when it acquired  title to the
                   Premises and reasonably satisfactory in substance and form to
                   Purchaser's  attorney  insuring  Purchaser's  interest as the
                   holder of good and marketable  indefeasible  title in and fee
                   simple, insurable by a title insurance company licensed to do
                   business in the State of New Jersey at regular rates, subject
                   only to the Permitted  Exceptions under Section 2 hereof. The
                   survey  and  interim  title  insurance  commitment  shall  be
                   obtained by  Purchaser's  attorney not later than twenty (20)
                   days prior to the Closing.  If the Purchaser  finds the title
                   and survey do not  conform to the  provisions  of this Lease,
                   the  Purchaser  or its  attorney  shall  notify the Seller in
                   writing within said twenty-day period, specifying the defects
                   and the Seller  shall have  thirty  days from the  receipt of
                   such notice to cure the defects so specified. However, Seller
                   shall  pay in full and  discharge  at or before  Closing  all
                   judgments which it is not appealing and all mortgages  and/or
                   mechanics'  liens  created  by Seller  which are shown on the

                                       11
<PAGE>

                   interim title insurance commitment and on the continuation at
                   Closing,  except those which are  Permitted  Exceptions,  and
                   Seller  shall  be  permitted  to use a  portion  of the  cash
                   proceeds to be received at Closing to pay the same.  The cost
                   of the  interim  title  insurance  commitment  and the owners
                   title  insurance  policy and the survey  shall be paid by the
                   Purchaser.

                                        d.  Violations.  At the Closing,  Seller
                   shall  not be  required  to  comply  with and  discharge  any
                   notices of violations of law or municipal ordinances,  orders
                   or requirements  received by it and issued by the Departments
                   of Buildings,  Fire, Labor, Health or other federal, state or
                   municipal   departments   having   jurisdiction   against  or
                   affecting  the  Premises  at the  date  of  closing,  and the
                   Premises  shall  be  conveyed  subject  to the  same  without
                   adjustment between the parties.

                                        e.  Certificates.  Prior to the Closing,
                   Purchaser  will  obtain  and  deliver  (i) a  Certificate  of
                   Occupancy   or   Continued   Use,   (ii)  a  smoke   detector
                   certificate, and (iii) other permits and approvals if any one
                   or more are  required by the Borough  because of the transfer
                   of title.  Purchaser  will be  responsible  for any  repairs,
                   replacements  or   installations   required  to  obtain  such
                   certificates, permits and approvals.

                                        f.  Condition  of the  Premises.  At the
                   Closing,  the  Premises  shall  be in the  condition  as then
                   exists.

                                        g.  Affidavit of Title.  At the Closing,
                   Seller shall  execute and deliver to Purchaser  and its title
                   insurance company an affidavit of title in customary form but
                   with  representations  and  warranties  limited  to  Seller's
                   actions  during the period of its ownership and with recourse
                   for any matters  contained in the affidavit limited to Seller
                   and not the affiant personally.

                                        h.  Other  Documents.  At  the  Closing,
                   Seller shall deliver to Purchaser and to the title  insurance
                   company  satisfactory  evidence that all necessary company or
                   other  action  on the  part of  Seller  has been  taken  with
                   respect to the execution  and delivery of this  Agreement and
                   the  consummation of the transaction  contemplated  hereby so
                   that all of said  documents  are or will be validly  executed
                   and delivered and will be binding upon the Seller.

                                        i. Foreign  Investment  in Real Property
                   Tax Act ("FIRPTA") Compliance.

                                            (a) At  the  Closing,  Seller  shall
                   deliver to Purchaser a Certification  of Non-foreign  Status,
                   duly executed and containing such other information as may be

                                       12
<PAGE>

                   required  by  Internal  Revenue  Code  Section  1445  and the
                   regulations issued thereunder.

                                            (b) Anything herein contained to the
                   contrary  notwithstanding,  in the  event  that  Seller  is a
                   "foreign person" (as defined in Internal Revenue Code Section
                   1445) or in the event that Seller fails or refuses to deliver
                   the Certification of Non-foreign  Status as aforesaid,  or in
                   the  event   that   Purchaser   receives   notice   from  any
                   Seller-transferor's  agent  or  Purchaser-transferee's  agent
                   (each as defined in Internal  Revenue  Code  Section 1445 and
                   the  regulations  issued  thereunder)  that, or Purchaser has
                   actual knowledge that, said Certification is false, Purchaser
                   shall deduct and withhold from the purchase  price under this
                   Contract  a tax equal to ten  percent  (10%)  thereof or such
                   other  amount,  as required by Internal  Revenue Code Section
                   1445.  In  the  event  of  any  such  withholding,   Seller's
                   obligation to deliver title hereunder shall not be excused or
                   otherwise  affected,  Purchaser  shall pay over such withheld
                   amount to the Internal  Revenue Service  together with filing
                   such form as may be required thereby, and Seller in the event
                   of any claimed over-withholding shall be limited solely to an
                   action against the Internal Revenue Service for a refund, and
                   hereby  waives  any  right of  action  against  Purchaser  on
                   account of such withholding. The provisions of this paragraph
                   shall survive the Closing.

                                6. Representations and Warranties of Seller. For
                   the purpose of inducing  Purchaser to accept this option, and
                   to consummate the transactions  contemplated  hereby pursuant
                   to the terms and  conditions  hereof,  Seller  represents and
                   warrants to Purchaser as follows:

                                        (a) Except  for the Lease,  there are no
                   agreements  of any nature  with any tenant,  whether  oral or
                   written, affecting the Premises;

                                        (b)  Seller  has not  entered  into  any
                   management,  service,  supply and maintenance  contracts with
                   respect  to the  Premises  which  will not be  terminated  by
                   Seller at the Closing.

                                        (c) Seller has the full right, power and
                   authority  to sell and convey the  Premises to  Purchaser  as
                   provided herein and to carry out its obligations hereunder.

                                        The  representations  and  warranties as
                   set forth in this Agreement  shall be continuing and shall be
                   true and correct on and as of the closing  date with the same
                   force and  effect  as if made at that time and shall  survive
                   Closing for a period of six (6) months.

                                7.  Condition  of  Premises.   Seller  makes  no
                   representations or warranties with regard to the condition of


                                       13
<PAGE>

                   the  Premises  or  its  components,  including  environmental
                   conditions  and matters.  Purchaser has occupied the Premises
                   as a tenant and has been given the opportunity to examine the
                   Premises. Purchaser will conduct such inspections,  tests and
                   investigations,  including  those  related  to  environmental
                   matters and  conditions,  as Purchaser  may want prior to its
                   exercise  of the  option to  purchase,  and there  will be no
                   conditions  to the  closing  of title  as a  result  thereof.
                   Purchaser's  sole  remedy  if it is not  satisfied  with  the
                   results of its inspections,  test and investigations  will be
                   to refuse to  exercise  its option to  purchase.  It shall be
                   conclusive evidence, as against Purchaser, that Purchaser has
                   accepted  the  Premises in "as is"  condition  on the Closing
                   Date,  and  that  the  Premises  and  its  components  are in
                   satisfactory  condition.  In the event  Purchaser  causes any
                   inspections  to be made,  Purchaser  will furnish Seller with
                   copies of all reports, without charge.

                                8.  Eminent  Domain or  Casualty.  If, after the
                   exercise of the option and prior to the  Closing,  all or any
                   portion of the Premises is taken by eminent domain (or is the
                   subject of a pending  or  contemplated  taking  which has not
                   been  consummated)  or damaged or  destroyed by fire or other
                   casualty and Purchaser has the right to terminate  this Lease
                   as a result thereof, Purchaser shall have the right to either
                   (i) terminate  this Lease and its  obligation to purchase the
                   Premises, or (ii) take title in such condition as then exists
                   without  any  obligation  on the part of  Seller  to  repair,
                   restore or rebuild the Premises. In the event that the damage
                   or taking is not  sufficient  to permit  Tenant to  terminate
                   this  Lease,  Purchaser  will  complete  the closing of title
                   without  adjustment  in the  Purchase  Price.  In  the  event
                   Purchaser elects to complete the purchase,  there shall be no
                   adjustment  in the  Purchase  Price  and  Purchaser  shall be
                   entitled  to  receive  all of the  proceeds  of the taking by
                   eminent domain or the insurance proceeds.

                                9.   Compliance   with   ISRA   Purchaser,    at
                   Purchaser's   expense,   will  comply  with  the  New  Jersey
                   Industrial  Site Recovery Act or such other law then existing
                   which  relates to  environmental  approvals  upon the sale of
                   real  property  and/or the  cessation of business  operations
                   (together "ISRA") as it applies to this sale.  Purchaser will
                   apply for and diligently  pursue the issuance of either (i) a
                   Letter of  Non-Applicability,  (ii) a  Negative  Declaration,
                   (iii) a No Further  Action  Letter or (iv) such  other  final
                   approvals as may then be required. Seller will cooperate with
                   Purchaser by furnishing  information  reasonably required and
                   will sign the application,  if required.  In the event of the
                   failure to obtain a Letter of  Non-Applicability,  a Negative
                   Declaration,  a No Further  Action  Letter or other  required
                   final  approval  prior to the Closing  Date,  (time is hereby
                   made of the essence  with regard to such time  period),  then
                   the right to purchase

                                       14
<PAGE>

                   will  be  deemed  null  and  void   absolutely  and  forever,
                   automatically,  and the remainder of this Lease will continue
                   in full and effect.

                                10.    Notices.    All    notices    and   other
                   communications  hereunder  shall be in  writing  and shall be
                   delivered or mailed by registered or certified  mail,  return
                   receipt  requested,  postage  prepaid  or by public  courier,
                   delivery charges prepaid,  addressed (a) if to Seller, at the
                   address hereinabove set forth and (b) if to Purchaser, at the
                   address  hereinabove  set forth.  Notices  shall be effective
                   only upon receipt or refusal of delivery by addressee. Either
                   party  may by  notice  as  aforesaid  designate  a  different
                   address for notices or other communications  intended for it.
                   Any  notice  given  under  this  Agreement  shall  also,  for
                   information purposes only, be sent to Purchaser's  attorneys,
                   Lowenstein  Sandler PC, 65 Livingston Avenue,  Roseland,  New
                   Jersey 07068-1791,  Attention:  R. Barry Stiger, Esq., and to
                   Seller's  attorneys,  Poley & Rich,  Esqs., 235 Moore Street,
                   Hackensack,  New Jersey  07601,  Attention:  M. Robert Poley,
                   Esq.

                                11. Brokerage.  Except for the Broker, Purchaser
                   and Seller  represent  that they have not dealt with any real
                   estate  broker or other party who may claim or be entitled to
                   a commission in connection with the sale contemplated hereby.
                   Seller will be responsible  for payment of commissions to the
                   Broker  pursuant  to their  separate  agreement.  Each  party
                   agrees to indemnify  and hold harmless the other from any and
                   all claims for any such brokerage commissions,  finder's fees
                   or the like made by any other broker or entity with whom such
                   party  dealt.  It is agreed that if any claims for  brokerage
                   commissions or fees are ever made against Seller or Purchaser
                   in connection with this transaction, all such claims shall be
                   handled  and paid by the party  whose  alleged  actions  were
                   alleged  commitments  for the  basis of such  claim,  and the
                   party whose alleged actions or alleged  commitments  form the
                   basis of such claim shall  indemnify  and hold  harmless  the
                   other from and against  any and all such claims and  demands,
                   including  reasonable  attorney's  fees incurred in defending
                   the same,  with  respect  to any  brokerage  fees or  agent's
                   commissions  or other  compensation  asserted  by any person,
                   firm  or  corporation  in  connection  with  this  option  to
                   purchase  or  the  transactions   contemplated   hereby.  The
                   provisions of this paragraph shall survive closing of title.

                                12.  Specific  Performance.  In the event either
                   party  hereto fails to comply with any of the  provisions  of
                   this Agreement, then, in addition to all other legal remedies
                   to which the other party hereto is entitled, such other party
                   shall have the right to specific performance.

                                       15
<PAGE>

                                13. Breach by Purchaser.  In the event Purchaser
                   shall fail to  consummate  the  purchase of the  Premises and
                   Purchaser  being in  default  and Seller not being in default
                   herein,  and Seller  having  complied  or being  prepared  to
                   comply at Closing with all conditions herein, Seller shall be
                   entitled  to  payment  of an amount  equal to its  reasonable
                   attorneys fees and other actual costs relating to the sale of
                   the Premises by  Purchaser  and any  penalties,  late charges
                   and/or  extension fees paid to its mortgagee,  such sum being
                   agreed  upon  as  liquidated   damages  for  the  failure  of
                   Purchaser to perform the duties, liabilities, and obligations
                   imposed  upon  it  by  the  terms  and   provisions  of  this
                   Agreement,  and Seller  agrees to accept and take said amount
                   as total damages and as Seller's sole remedy in such event.

                                14. Deed Tax.  Seller will pay all deed transfer
                   taxes and  documentary  stamps  and  similar  taxes,  without
                   reimbursement from Purchaser.

                                15. Like-Kind Exchange.  Purchaser  acknowledges
                   that Seller may desire to exchange  the Premises as part of a
                   like-kind  exchange  transaction  that  would  qualify  under
                   Sections  1031 and/or 1033 of the  Internal  Revenue Code for
                   non-recognition  treatment.  At Seller's election,  Purchaser
                   agrees,  at Seller's  expense and provided such exchange does
                   not cause the  acquisition of the Premises by Purchaser to be
                   delayed in any way, to  cooperate  with Seller in effecting a
                   qualifying  like-kind exchange through a trust or other means
                   determined  by  Seller,  and  Purchaser  shall  execute  such
                   documents as may be reasonably requested by Seller, provided:
                   (i) Purchaser  shall have no liability  under such documents,
                   and (ii) such  documents  contain no language  or  provisions
                   which  would cause  Purchaser  to become part of the chain of
                   title with respect to any other property which is part of the
                   exchange.   Purchaser  makes  no  representations  to  Seller
                   regarding  qualification  of the exchange under Sections 1031
                   and/or 1033 of the Internal Revenue Code, and Purchaser shall
                   not be  liable  to Seller  in any  manner  whatsoever  if the
                   exchange  completed in accordance with this paragraph  should
                   not qualify for any reasons  under  Sections 1031 and/or 1033
                   of the Internal  Revenue Code.  Seller  reserves the right to
                   assign  its rights but not its  obligations,  hereunder  to a
                   Qualified   Intermediary  as  provided  in  IRC  Reg.  1.1031
                   (k)-l(G)(4) on or before the Closing.

                                16.  Miscellaneous.   This  Agreement  shall  be
                   binding  upon and inure to the benefit of and be  enforceable
                   by  the  respective  parties  hereto  and  their  successors,
                   executors,  administrators,   personal  representatives,  and
                   assigns.  Purchaser  shall not have the right to assign  this
                   Agreement or any interest  herein  without the prior  written
                   consent  of Seller;  however,  Seller  will not  unreasonably

                                       16
<PAGE>

                   withhold  its  consent to an  assignment  (i) to a  permitted
                   assignee of the Lease or (ii) an assignment of only the right
                   to purchase  the  Premises to an entity  which is  affiliated
                   with  Purchaser  made after the option has been exercised and
                   prior to the Closing Date.  This Agreement shall be construed
                   in  accordance  with and governed by the laws of the State of
                   New Jersey.  No waiver by any party of any breach  under this
                   option  section  shall be  deemed a  waiver  of any  other or
                   subsequent breach."

        16. Tenant hereby affirms the validity of the Lease and confirms
that the Lease remains  enforceable  and in full force and effect as of the date
of execution of this Amendment.

               17. The  obligations  of  Landlord  and Tenant  pursuant  to this
Amendment  are  conditioned  upon the  Landlord  obtaining  the  consent  of its
mortgagee and the execution of a Subordination,  Non-Disturbance  and Attornment
Agreement with regard to this Amendment in the form required by the mortgagee on
or before thirty (30) days after Landlord has received a fully executed original
of this Amendment. Landlord will each pay to the mortgagee all fees and expenses
charged by the  mortgagee,  its attorneys  and a rating  agency  related to such
consent,  without  reimbursement by Tenant.  In the event this condition has not
been satisfied,  this Amendment will terminate automatically,  and the Lease, as
previously amended, will continue in full force and effect as originally stated.

               18.  Except as otherwise  provided  herein,  all of the terms and
provisions of the Lease shall continue in full force and effect. In the event of
any  conflict  between  the  provisions  of this  Amendment  and the Lease,  the
provisions of this Amendment shall govern and prevail.

               19.  This  Amendment  shall be binding  upon and shall be for the
benefit of the parties hereto and their respective successors and assigns.

               The parties have executed this  Amendment on the date first above
written.

Witness:                                       Landlord:

                                               Northvale 1997 Associates, L.L.C.
                                               By: NV Northvale Management
                                                    Corp., a New Jersey
                                                    corporation, its Manager

 /s/ Sara Jane Wilson                       By:  /s/ Jon F. Hansen, Pres.
--------------------------------               ---------------------------
     Sara Jane Wilson                                Jon F. Hansen, Pres.



Witness:                                       Tenant:

                                               Baltek Corporation

 /s/ Harold Gutman                          By:  /s/ Ronald Tassello
---------------------------------              -----------------------------
Harold Gutman                                  Ronald Tassello
Vice President of Manufacturing                Chief Financial Officer


                                       17
<PAGE>

                                   Exhibit "A"




     1.   Facts shown on survey of the  property  dated July 28, 1997 by Kenneth
          J. Job, Licensed Professional Land Surveyor.

     2.   Right-of-way grant in Deed Book 5236 at page 265.

     3.   Right-of-way grant in Deed Book 5830 at page 313.




                                       18
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT FOR RONALD TASSELLO
<TEXT>


                         EXECUTIVE EMPLOYMENT AGREEMENT

         EXECUTIVE EMPLOYMENT AGREEMENT made as of the 1st day of June, 2000, by
and  between  BALTEK  CORPORATION,  a Delaware  corporation  with  offices at 10
Fairway Court, Northvale, New Jersey 07647 (the "Company"), and Ronald Tassello,
residing at 6 Daisy Court, Suffern, New York 10901 (the "Executive").

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

         WHEREAS,  the  Executive  has been  employed  by the  Company  as Chief
Financial Officer; and

         WHEREAS,  the  Company  desires  to  continue  the  employment  of  the
Executive as Chief Financial Officer and the Executive desires to continue to be
so employed by the  Company,  upon the terms and subject to the  conditions  set
forth in this Agreement;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  contained in this  Agreement,  the Executive and the Company agree as
follows:

         1.  Employment.  The Company agrees to continue to employ the Executive
as Chief Financial Officer,  and the Executive agrees to continue  employment by
the Company in such  capacity,  upon and subject to the terms and conditions set
forth in this Agreement.

         2. Term. The Executive's  employment  under and in accordance with this
Agreement shall commence on June 1, 2000 and shall continue until  terminated by
either party upon not less than twenty- four (24) months  written  notice to the
other  party  (the   period  from June 1, 2000  until the date this Agreement is
terminated  pursuant to such notice being hereinafter  referred to as the "Term"
of this Agreement).

         3. Duties.

         (a) During the Term of this Agreement,  the Executive shall be employed
as Chief  Financial  Officer of the Company,  shall  utilize his best efforts to
enhance the  business  of the Company  and,  subject to the  supervision  of the
Company's  President and Chief  Executive  Officer (the "CEO") and the Company's
Board of  Directors  (the  "Board"),  shall be  responsible  for the general and
supervisory  duties normally and  customarily  attendant to such position at the
Company and its divisions and subsidiaries.

         (b) During the Term of this Agreement, unless the Board shall otherwise
consent in writing, the Executive will, during the regular business hours of the
Company, devote his full time, energies, labor and skills to the business of the
Company and to the duties and  responsibilities  specified in subsection  (a) of
this paragraph 3.

         4. Compensation. In full consideration for all services to be performed
by the  Executive  for the Company and pursuant to this  Agreement,  the Company
shall pay to the Executive, and the Executive agrees to accept, an annual salary
of one hundred seventy thousand ($170,000) dollars (or such higher amount as may
be approved from time to time by the Board),  payable in monthly installments in
accord ance with the Company's  customary payroll  practices.  The Company shall
annually  review  the Executive's  salary to  determine  whether,  and  to  what
extent,  if any, such salary shall be adjusted.  Any increase in the Executive's
salary shall be in the sole discretion of the Company. In addition,  the Company
shall  reimburse  the  Executive  for all  expenses  reasonably  incurred by the
Executive in connection  with the performance of his duties under this Agreement
and the business of the Company, in accordance with the Company's usual policies
and practices for expense reimbursement.


                                       -1-

<PAGE>

         5. Vacation.  The Executive shall be entitled to four (4) weeks of paid
vacation  during  each  twelve (12) month  period of his  employment  under this
Agreement,  to be taken at times  mutually  agree able to the  Executive and the
Company.  Any  vacation  not taken  during the twelve (12) month period in which
such  vacation  is earned  may not be taken in any  subsequent  period,  but the
Executive  shall be  entitled  to be paid for up to two (2) weeks of any  earned
vacation  which is not taken during any twelve (12) month  period.  In the event
the Executive's  employment is terminated for any reason, the Executive shall be
paid for accrued vacation time, if any, which has not been taken,  calculated on
a pro-rata  basis,  but in no event shall such amount  exceed more than four (4)
weeks' salary.

         6. Benefits. Throughout the Term of this Agreement, the Executive shall
be eligible to  participate  in any  pension,  profit-sharing,  stock  option or
similar plan or program of the Company now existing or hereafter established and
maintained for the benefit of the Company's  employees or executives  generally,
to the extent  that the  Executive  is  eligible  under the  general  provisions
thereof.  The  Executive  shall also be  entitled  to  participate  in any group
insurance,  hospitalization,  medical,  health,  accident, disability or similar
plan or program of the Company now  existing or  hereafter  established  for the
benefit of the Company's employees or executives  generally,  to the extent that
the Executive is eligible under the general provisions thereof. In the event the
employment of the Executive with the Company is terminated for any reason,  such
benefits shall be continued,  at the expense of the Company,  to such extent and
for such period of time as may be required under the Consolidated Omnibus Budget
Reconciliation Act of 1985 and the regulations  issued thereunder,  as in effect
at the time of such termination of employment.

         7.  Company  Car.  To permit the  Executive  to perform his duties more
effectively,  the Company shall,  during the term of the Executive's  employment
pursuant to this Agreement  [and if the employment of the Executive  pursuant to
this  Agreement  is  terminated  under  any of the  circumstances  described  in
subparagraph  (f) of paragraph 8 of this Agreement,  for a period of twelve (12)
months after such termination of such employment],  lease a suitable  automobile
for the use of the  Executive,  and reimburse the Executive for all expenses of
operating  and  maintaining  such  automobile,  including,  without  limitation,
comprehensive and liability insurance, in accordance with the Company's policies
and practices for executive company cars.

         8. Termination of Executive's Employment.

         (a)  Notwithstanding  any provisions to the contrary  contained in this
Agreement, the Executive's employment may be terminated  by the Company upon the
Executive's  death or  disability  (as  defined  below) or for Cause (as defined
below),  and the  Executive may  terminate  his  employment  for Good Reason (as
defined below) upon sixty (60) days' prior written notice to the Company.

         (b) For purposes of this Agreement, "disability" shall mean that, for a
period of one hundred twenty (120)  consecutive days or more, or for one hundred
eighty (180) days or more (even though not consecutive) within any three hundred
sixty (360) day period,  the  Executive  is  mentally  or  physically  unable to
perform the essential  duties of his position as Chief Financial  Officer of the
Company (notwithstanding  reasonable accommodation by the Company as required by
law), as evidenced by the written  certification of a qualified physician agreed
to by the Company and the Executive or, in the absence of such  agreement,  by a
qualified  physician selected by the agreement of a qualified physician selected
by the Company and a qualified physician selected by the Executive.


                                       -2-

<PAGE>


         (c) For  purposes  of  this  Agreement,  "Cause"  shall  mean:  (i) the
conviction  of the  Executive  for a  felony  by a  federal  or  state  court of
competent  jurisdiction;  or (ii) the Executive's failure either (A) to follow a
direct substantive written order, within the reasonable scope of the Executive's
duties,  from the CEO, pursuant to authority from the Board, or (B) to adhere to
any written policy or guideline established by the Company from time to time, if
such  failure to follow such order or adhere to such policy or guideline is not
cured within thirty (30) days after written  notice to the Executive  specifying
such failure.

         (d) For purposes of this Agreement, "Good Reason" shall mean any of the
following:  (i) the  assignment by the Company to the  Executive of  substantial
duties  significantly  below  the  level of the  Executive's  position  as Chief
Financial  Officer of the Company,  as set forth in  paragraph  3 of this Agree-
ment; or (ii) the failure of the Company to assign to the Executive  substantial
duties  and  responsibilities  consistent  with  such  position;  or  (iii)  any
reduction by the Company of the  Executive's  salary or benefits as set forth in
paragraphs 4 or 6 of this  Agreement  (it being  understood  that a reduction of
benefits applicable to all executives of the Company  (including the Executive)
shall not be deemed a reduction of the Executive's benefits for purposes of this
definition.

         (e) In the event that the Executive's  employment  under this Agreement
is terminated as a result of death,  disability or for Cause by the Company,  or
without  Good Reason by the  Executive,  then the Company  shall have no further
obligation or liability to the  Executive  under this  Agreement,  such that all
salary  and  benefits   provided   for  in  this   Agreement   shall   terminate
simultaneously  with the termination of the Executive's  employment,  except for
salary and benefits earned and accrued through the date of such termination.

         (f) In the event that the  Company  terminates  the  employment  of the
Executive  pursuant  to this  Agreement  prior  to the  end of the  Term of this
Agreement,  other  than  for  Cause,  death  or  disability,  or  the  Executive
terminates his employment  with the Company with Good Reason prior to the end of
the Term of this Agreement (i) the Company shall pay to the  Executive,  in each
month following such  termination,  until the end of the Term of this Agreement,
an amount equal to one-twelfth of the Executive's annual salary in effect on the
date of termination,  and (ii) if such termination  shall occur ninety (90) days
or less prior to the end of a fiscal year of the Company,  the Company shall, in
accordance  with any executive  compensation or incentive plan of the Company in
effect at the time of such termination,  pay to the Executive any bonus and make
on behalf of the  Executive  any  profit  sharing  plan  contribution  which the
Company would  otherwise  have paid or made if the Executive had remained in the
employ of the Company through the end of such fiscal year.

         9. Covenants of the Executive.

         (a) The Executive  acknowledges  that his employment by the Company has
brought him and will throughout his employment  continue to bring him into close
contact with many  confidential  affairs of the Company,  including  information
about  costs,  profits,   markets,  sales,  key  personnel,   pricing  policies,
operational  methods  and  other  business  affairs,  methods  and  information,
including  plans for future developments,  not readily  available or generally
known to the public. The Executive further  acknowledges that the services to be
performed by him under this Agreement are of a special,  unique,  unusual, extra
ordinary and intellectual character,  and that the Company currently competes or
intends  to  compete  with other  organizations  that are  located in all of the
states of the United States.  In  recognition  of the foregoing,  the Executive
covenants and agrees that:


                                       -3-

<PAGE>


                  (i) he will not  during  his  employment  with the  Company or
         following the  expiration of this  Agreement or the  termination of his
         employment with the Company for any reason (the date of such expiration
         or termination being hereinafter referred to as the "Termination Date")
         divulge,  disclose,  publish or use (other  than for the benefit of the
         Company)  any matter  relating  to the  Company  which is not  publicly
         available and generally known and will not intentionally  disclose such
         matter to anyone  (other than to executives or employees of the Company
         who are  required to have  knowledge of such  matter),  except that the
         Executive may make such disclosure as may be required by law,  provided
         the  Company is notified by the  Executive  in writing of such require-
         ment  not  less  than ten (10)  business  days  prior to the date  such
         disclosure  is so required and the Company has not obtained an order or
         ruling to prevent such disclosure;

                  (ii) he will deliver promptly to the Company at the end of the
         Term of  this  Agreement,  or at any  other  time  the  Company  may so
         request,  all memoranda,  notes,  records,  reports and other documents
         (and all copies thereof)  relating to the business of the Company which
         he obtained while employed by or otherwise  serving or acting on behalf
         of,  the  Company,  and  which he may then  possess  or have  under his
         control;

                  (iii)  during the Term of this  Agreement  and any  additional
         period  during  which the  Executive  may be  employed  by the  Company
         (whether  or  not  such  employment  shall  be  pursuant  to a  written
         agreement),  he will not, unless the Board shall  otherwise  consent in
         writing,  alone or together with any other person,  firm,  partnership,
         corporation  or  other  entity  whatsoever   (except  a  subsidiary  or
         affiliate  of the  Company),  directly  or  indirectly,  whether  as an
         officer,  director,   stockholder,   partner,  proprietor,   associate,
         employee,    representative,    public    relations   or    advertising
         representative,  management consultant or otherwise, engage in, or have
         any material  financial or monetary  interest in, or have any financial
         or monetary  association  with, any other person,  corporation,  firm,
         partnership  or other  entity  engaged in, the  composite  materials or
         seafood  business or any other business  which is competitive  with any
         business conducted or contemplated by the Company; and

                  (iv) for a period of  twenty-four  (24) months  following  the
         Termination Date, he will not:

                           (A)  solicit,  or attempt to  solicit,  any person or
                  entity who or which is a customer of  the  Company  (as of the
                  Termination  Date or at any time prior  thereto) as a customer
                  for any person or entity engaged in the composite materials or
                  seafood  business,  or any other business which is competitive
                  with any business conducted or contemplated by the Company; or

                           (B) otherwise  disrupt or interfere  with, or attempt
                  to disrupt or interfere with, the Company's relations with any
                  actual  or  potential   customer  or  supplier  or  any  other
                  relationship of the Company.

         (b) The Executive  recognizes that the territorial and time limitations
in this  paragraph 9 are  reasonable  and  properly  required  for the  adequate
protection  of the business of the Company,  and that in the event that any such
territorial  or time  limitation  is  deemed  to be  unreasonable  by a court of
competent  jurisdiction,  the  Executive  agrees  to a  reduction  of said  such
territorial  or time  limitation,  as the case may be, to such area or period as
such  court  deems  reasonable.  In the  event  that the  Executive  shall be in
violation  of any of the  covenants  contained  in this  paragraph  9,  the time
limitation thereof shall be extended for a period of time equal to the period of
time during which such breach or breaches should exist.


                                       -4-

<PAGE>


         (c) The Executive  further agrees that the remedy at law for any breach
or threatened breach of any of the covenants  contained in this paragraph 9 will
be inadequate and that the Company, in addition to such other remedies as may be
available  to it, at law or in equity,  shall be entitled to  injunctive  relief
without bond or other  security.  This paragraph 9 constitutes  independent and
severable  covenants and, if any or all of the provisions of this paragraph 9 is
or are held to be invalid or  unenforceable  for any reason,  such invalidity or
unenforceability shall not in any way invalidate or affect the remainder of this
paragraph 9 or the remainder of this Agreement,  as the case may be, which shall
remain in full force and effect.

         10. Governing Law. This Agreement shall be construed in accordance with
and  governed  by the laws of the State of New Jersey  applicable  to  contracts
executed in and to be performed solely within such state.

         11.  Notices.  All notices  required or permitted to be given by either
party pursuant to this Agreement,  including notice of change of address,  shall
be in writing and delivered by hand, or mailed,  postage  prepaid,  certified or
registered mail, return receipt requested, to the other party as follows:

              If to the Company:       Baltek Corporation
                                       10 Fairway Court
                                       Northvale, New Jersey 07047

                                       Attention:
                                       President and Chief Executive Officer

              If to the Executive:     Ronald Tassello
                                       6 Daisy Court
                                       Suffern, New York  10901


         12.      Miscellaneous.

         (a) Entire Agreement.  This Agreement  constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior oral or written  agreements  and  understandings  relating  to the
employment  of the  Executive  by the  Company.  There  are  no  oral  promises,
representations,  understandings,  interpretations  or  terms  of  any  kind  as
conditions or inducements to the execution this Agreement by the Executive or in
effect between the parties.  This Agreement may not be amended, and no provision
hereof  shall be  waived,  except by a writing  signed  by the  Company  and the
Executive (or in the case of a waiver of a provision of this  Agreement,  by the
party waiving compliance  therewith),  which states that it is intended,  as the
case may be, to amend this  Agreement  or waive a provision of this  Agreement.
Any waiver of any right or failure to act in a specific  instance  shall  relate
only to such  instance  and shall not be  construed as an agreement to waive any
right or failure to act in any other instance, whether or not similar.

         (b)  Severability.  Should any provision of this Agreement be held by a
court of competent  jurisdiction to be unenforceable or prohibited by applicable
law, this Agreement shall be considered  divisible as to such provision,  which
shall be  inoperative,  and the remainder of this  Agreement  shall be valid and
binding as if such provision were not included in this Agreement.


                                       -5-

<PAGE>


         (c) Successors and Assigns.  This Agreement  shall inure to the benefit
of, and be binding upon, the Company and any corporation  with which the Company
merges or consolidates or to which the Company sells all or substantially all of
its assets, and upon the Executive and his executors, administrators, heirs and
legal representatives.

         (d) Headings.  All headings in this Agreement are for convenience  only
and are not intended to affect the meaning of any provision hereof.

         (e)  Counterparts.  This  Agreement  may be executed in two (2) or more
counterparts  with the same effect as if the signatures to all such counterparts
were upon the same instrument,  and all such  counterparts  shall constitute but
one instrument.

         IN WITNESS  WHEREOF,  the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized  officer
as of the day and year first above written.

                                 BALTEK CORPORATION




                                 By:     /s/ Jacques Kohn
                                     -------------------------------------------
                                       Jacques Kohn
                                       President and Chief Executive Officer



                                             /s/ Ronald Tassello
                                     -------------------------------------------
                                               Ronald Tassello


                                       -6-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>7
<FILENAME>0007.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT FOR THOMAS PREISEL
<TEXT>



                         EXECUTIVE EMPLOYMENT AGREEMENT

         EXECUTIVE EMPLOYMENT AGREEMENT made as of the 1st day of June, 2000, by
and  between  BALTEK  CORPORATION,  a Delaware  corporation  with  offices at 10
Fairway Court, Northvale, New Jersey 07647 (the "Company"),  and Thomas Preisel,
residing at 16 Lexington Road, New City, New York 10956 (the "Executive").

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

         WHEREAS,  the  Executive  has  been  employed  by the  Company  as Vice
President, Operations & Sales/Marketing; and

         WHEREAS,  the  Company  desires  to  continue  the  employment  of  the
Executive as Vice  President,  Operations &  Sales/Marketing  and the  Executive
desires to continue to be so employed by the Company, upon the terms and subject
to the conditions set forth in this Agreement;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants con tained in this  Agreement,  the Executive and the Company agree as
follows:

         1.  Employment.  The Company agrees to continue to employ the Executive
as Vice President,  Operations &  Sales/Marketing,  and the Executive  agrees to
continue  employment  by the Company in such  capacity,  upon and subject to the
terms and conditions set forth in this Agreement.

         2.  Term. The Executive's employment  under and in accordance with this
Agreement  shall commence on June 1, 2000 and shall continue until terminated by
either party upon not less than  twenty-four  (24) months  written notice to the
other  party  (the  period  from June 1, 2000 until the date this  Agreement  is
terminated  pursuant to such notice being hereinafter  referred to as the "Term"
of this Agreement).

         3. Duties.

         (a) During the Term of this Agreement,  the Executive shall be employed
as Vice President,  Operations & Sales/Marketing  of the Company,  shall utilize
his best  efforts to enhance the  business of the  Company  and,  subject to the
supervision of the Company's  President and Chief Executive Officer (the "CEO")
and the Company's Board of Directors (the "Board"), shall be responsible for the
general and  supervisory  duties  normally  and  customarily  attendant  to such
position at the Company and its divisions and subsidiaries.

         (b) During the Term of this Agreement, unless the Board shall otherwise
consent in writing, the Executive will, during the regular business hours of the
Company, devote his full time, energies, labor and skills to the business of the
Company and to the duties and  responsibilities  specified in subsection  (a) of
this paragraph 3.

         4. Compensation. In full consideration for all services to be performed
by the  Executive  for the Company and pursuant to this  Agreement,  the Company
shall pay to the Executive, and the Executive agrees to accept, an annual salary
of two hundred fifteen thousand ($215,000) dollars (or such higher amount as may
be approved from time to time by the Board), payable in monthly installments in
accordance with the Company's  customary  payroll  practices.  The Company shall
annually review the Executive's salary to determine whether, and to what extent,
if any, such salary shall be adjusted.


                                       -1-

<PAGE>

Any increase in the  Executive's  salary shall be in the sole  discretion of the
Company. In addition, the Company shall reimburse the Executive for all expenses
reasonably  incurred by the Executive in connection  with the performance of his
duties under this Agreement and the business of the Company,  in accordance with
the Company's usual policies and practices for expense reimbursement.

         5. Vacation.  The Executive shall be entitled to four (4) weeks of paid
vacation  during  each  twelve (12) month  period of his  employment  under this
Agreement,  to be taken at times  mutually  agreeable to the  Executive  and the
Company.  Any  vacation  not taken  during the twelve (12) month period in which
such  vacation  is earned  may not be taken in any  subsequent  period,  but the
Executive  shall be  entitled  to be paid for up to two (2) weeks of any  earned
vacation  which is not taken during any twelve (12) month  period.  In the event
the Executive's  employment is terminated for any reason, the Executive shall be
paid for accrued vacation time, if any, which has not been taken, calculated on
a pro-rata  basis,  but in no event shall such amount  exceed more than four (4)
weeks' salary.

         6. Benefits. Throughout the Term of this Agreement, the Executive shall
be eligible to  participate  in any  pension,  profit-  haring,  stock option or
similar plan or program of the Company now existing or hereafter established and
maintained for the benefit of the Company's employees or executives  generally,
to the extent  that the  Executive  is  eligible  under the  general  provisions
thereof.  The  Executive  shall also be  entitled  to  participate  in any group
insurance,  hospitalization,  medical, health,  accident,  disability or similar
plan or program of the Company now  existing or  hereafter  established  for the
benefit of the Company's employees or executives  generally,  to the extent that
the Executive is eligible under the general provisions thereof. In the event the
employment of the Executive with the Company is terminated for any reason,  such
benefits shall be continued,  at the expense of the Company,  to such extent and
for such period of time as may be required under the Consolidated Omnibus Budget
Reconciliation Act of 1985 and the regulations  issued thereunder,  as in effect
at the time of such termination of employment.

         7.  Company  Car.  To permit the  Executive  to perform his duties more
effectively,  the Company shall,  during the term of the Executive's  employment
pursuant to this Agreement  [and if the employment of the Executive  pursuant to
this  Agreement  is  terminated  under any of the circumstances  described  in
subparagraph  (f) of paragraph 8 of this Agreement,  for a period of twelve (12)
months after such termination of such employment],  lease a suitable  automobile
for the use of the  Executive,  and  reimburse the Executive for all expenses of
operating  and  maintaining  such  automobile,  including,  without  limitation,
comprehensive and liability insurance, in accordance with the Company's policies
and practices for executive company cars.

         8. Termination of Executive's Employment.

         (a)  Notwithstanding  any provisions to the contrary  contained in this
Agreement,  the Executive's employment may be terminated by the Company upon the
Executive's  death or  disability  (as  defined  below) or for Cause (as defined
below),  and the  Executive may  terminate  his  employment  for Good Reason (as
defined below) upon sixty (60) days' prior written notice to the Company.

         (b) For purposes of this Agreement, "disability" shall mean that, for a
period of one hundred twenty (120)  consecutive days or more, or for one hundred
eighty (180) days or more (even though not consecutive) within any three hundred
sixty (360) day period, the Executive is mentally orphysically unable to perform
the  essential  duties of his  position as Vice  President,  Operations & Sales/
Marketing  of  the  Company  (notwithstanding  reasonable  accommodation  by the
Company as required by law),  as  evidenced  by the written  certification  of a
qualified  physician  agreed  to by the  Company  and the  Executive  or, in the
absence of such agreement, by a qualified physician selected by the agreement of
a qualified physician selected by the Company and a qualified physician selected
by the Executive.


                                       -2-

<PAGE>


         (c) For  purposes  of  this  Agreement,  "Cause"  shall  mean:  (i) the
conviction  of the  Executive  for a  felony  by a  federal  or  state  court of
competent  jurisdiction;  or (ii) the Executive's failure either (A) to follow a
direct substantive written order, within the reasonable scope of the Executive's
duties,  from the CEO, pursuant to authority from the Board, or (B) to adhere to
any written policy or guideline established by the Company from time to time, if
such  failure to follow such order or adhere to such policy or  guideline is not
cured within thirty (30) days after written  notice to the Executive  specifying
such failure.

         (d) For purposes of this Agreement, "Good Reason" shall mean any of the
following:  (i) the  assignment by the Company to the  Executive of  substantial
duties  significantly  below  the  level  of the  Executive's  position  as Vice
President,  Operations  &  Sales/Marketing  of  the  Company,  as set  forth  in
paragraph 3 of this  Agreement;  or (ii) the failure of the Company to assign to
the  Executive  substantial  duties and  responsibilities  consistent  with such
position;  or (iii) any  reduction by the Company of the  Executive's  salary or
benefits  as  set  forth  in  paragraphs  4 or 6 of  this  Agreement  (it  being
understood  that a reduction of benefits  applicable  to all  executives  of the
Company  (including  the  Executive)  shall  not be  deemed a  reduction  of the
Executive's benefits for purposes of this definition.

         (e) In the event that the Executive's  employment  under this Agreement
is terminated as a result of death,  disability or for Cause by the Company,  or
without  Good Reason by the  Executive,  then the Company  shall have no further
obligation or liability to the  Executive  under this  Agreement,  such that all
salary  and  benefits   provided   for  in  this   Agreement   shall   terminate
simultaneously  with the termination of the Executive's  employment,  except for
salary and benefits earned and accrued through the date of such termination.

         (f) In the event that the  Company  terminates  the  employment  of the
Executive  pursuant  to this  Agreement  prior  to the  end of the  Term of this
Agreement,  other  than  for  Cause,  death  or  disability,  or  the  Executive
terminates his employment  with the Company with Good Reason prior to the end of
the Term of this Agreement (i) the Company shall pay to the  Executive,  in each
month following such  termination,  until the end of the Term of this Agreement,
an amount equal to one-twelfth of the Executive's annual salary in effect on the
date of termination,  and (ii) if such termination  shall occur ninety (90) days
or less prior to the end of a fiscal year of the Company,  the Company shall, in
accordance  with any executive  compensation or incentive plan of the Company in
effect at the time of such termination,  pay to the Executive any bonus and make
on behalf of the  Executive  any  profit  sharing  plan  contribution  which the
Company would  otherwise  have paid or made if the Executive had remained in the
employ of the Company through the end of such fiscal year.

         9. Covenants of the Executive.

         (a) The Executive  acknowledges  that his employment by the Company has
brought him and will throughout his employment  continue to bring him into close
contact with many  confidential  affairs of the Company,  including  information
about  costs,  profits,   markets,  sales,  key  personnel,   pricing  policies,
operational  methods  and  other  business  affairs,  methods  and  information,
including  plans for future  developments,  not readily  available  or generally
known to the public.


                                       -3-

<PAGE>

The  Executive  further  acknowledges  that the  services to be performed by him
under  this  Agreement  are of a special,  unique,  unusual,  extraordinary  and
intellectual  character,  and that the Company currently  competes or intends to
compete  with other  organizations  that are located in all of the states of the
United States.  In recognition  of the  foregoing,  the Executive  covenants and
agrees that:

                           (i) he  will  not  during  his  employment  with  the
                  Company or following the  expiration of this  Agreement or the
                  termination of his employment  with the Company for any reason
                  (the date of such expiration or termination  being hereinafter
                  referred  to as the  "Termination  Date")  divulge,  disclose,
                  publish or use (other than for the benefit of the Company) any
                  matter relating to the Company which is not publicly available
                  and generally known and will not  intentionally  disclose such
                  matter to anyone (other than to executives or employees of the
                  Company who are required to have  knowledge  of such  matter),
                  except that the Executive  may make such  disclosure as may be
                  required  by law,  provided  the  Company is  notified  by the
                  Executive  in  writing of such  requirement  not less than ten
                  (10)  business  days prior to the date such  disclosure  is so
                  required  and the Company has not  obtained an order or ruling
                  to prevent such disclosure;

                           (ii) he will  deliver  promptly to the Company at the
                  end of the Term of this  Agreement,  or at any other  time the
                  Company may so request, all memoranda, notes, records, reports
                  and other documents (and all copies  thereof)  relating to the
                  business of the Company which he obtained while employed by or
                  otherwise  serving or acting on behalf of,  the  Company,  and
                  which he may then possess or have under his control;

                           (iii)  during  the  Term  of this  Agreement  and any
                  additional  period  during which the Executive may be employed
                  by the  Company  (whether  or not  such  employment  shall  be
                  pursuant  to a written  agreement),  he will not,  unless  the
                  Board shall  otherwise  consent in writing,  alone or together
                  with any other person, firm, partnership, corporation or other
                  entity  whatsoever  (except a  subsidiary  or affiliate of the
                  Company),  directly  or  indirectly,  whether  as an  officer,
                  director,   stockholder,   partner,   proprietor,   associate,
                  employee,  representative,  public  relations or advertising
                  representative, management consultant or otherwise, engage in,
                  or have any  material  financial  or monetary  interest in, or
                  have any  financial or monetary  association  with,  any other
                  person, corporation, firm, partnership or other entity engaged
                  in, the composite  materials or seafood  business or any other
                  business which is competitive  with any business  conducted or
                  contemplated by the Company; and

                           (iv)  for  a  period  of   twenty-four   (24)  months
                   following the Termination Date, he will not:

                                    (A)  solicit,  or  attempt to  solicit,  any
                           person or entity  who or which is a  customer  of the
                           Company  (as of the  Termination  Date or at any time
                           prior thereto) as a customer for any person or entity
                           engaged  in  the  composite  materials  or  seafood
                           business,  or any other business which is competitive
                           with any business conducted or  contemplated  by the
                           Company; or


                                       -4-

<PAGE>



                                    (B) otherwise  disrupt or interfere with, or
                           attempt to disrupt or interfere  with,  the Company's
                           relations  with any actual or  potential  customer or
                           supplier or any other relationship of the Company.

         (b) The Executive  recognizes that the territorial and time limitations
in this  paragraph 9 are  reasonable  and  properly  required  for the  adequate
protection  of the business of the Company,  and that in the event that any such
territorial  or time  limitation  is  deemed  to be  unreasonable  by a court of
competent  jurisdiction,  the  Executive  agrees  to a  reduction  of said  such
territorial  or time  limitation,  as the case may be, to such area or period as
such  court  deems  reasonable.  In the  event  that the  Executive  shall be in
violation  of any of the  covenants  contained  in this  paragraph  9,  the time
limitation thereof shall be extended for a period of time equal to the period of
time during which such breach or breaches should exist.

         (c) The Executive  further agrees that the remedy at law for any breach
or threatened breach of any of the covenants  contained in this paragraph 9 will
be inadequate and that the Company, in addition to such other remedies as may be
available  to it, at law or in equity,  shall be entitled to  injunctive  relief
without bond or other  security.  This paragraph 9 constitutes  independent  and
severable  covenants and, if any or all of the provisions of this paragraph 9 is
or are held to be invalid or  unenforceable  for any reason,  such invalidity or
unenforceability shall not in any way invalidate or affect the remainder of this
paragraph 9 or the remainder of this Agreement,  as the case may be, which shall
remain in full force and effect.

         10. Governing Law. This Agreement shall be construed in accordance with
and  governed  by the laws of the State of New Jersey  applicable  to  contracts
executed in and to be performed solely within such state.

         11.  Notices.  All notices  required or permitted to be given by either
party pursuant to this Agreement,  including notice of change of address,  shall
be in writing and delivered by hand, or mailed,  postage  prepaid,  certified or
registered mail, return receipt requested, to the other party as follows:

              If to the Company:        Baltek Corporation
                                        10 Fairway Court
                                        Northvale, New Jersey 07047

                                        Attention:
                                        President and Chief Executive Officer

              If to the Executive:      Thomas Preisel
                                        16 Lexington Road
                                        New City, New York 10956

         12. Miscellaneous.


         (a) Entire Agreement.  This Agreement  constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior oral or written  agree  ments and  understandings  relating to the
employment  of the  Executive  by the  Company.  There  are  no  oral  promises,
representations,  understandings,  interpretations  or  terms  of  any  kind  as
conditions or inducements to the execution this Agreement by the Executive or in
effect between the parties.


                                       -5-

<PAGE>


This  Agreement  may not be amended,  and no  provision  hereof shall be waived,
except by a writing signed by the Company and the Executive (or in the case of a
waiver  of a  provision  of this  Agreement,  by the  party  waiving  compliance
therewith),  which states that it is intended, as the case may be, to amend this
Agreement  or waive a provision  of this  Agreement.  Any waiver of any right or
failure to act in a specific  instance  shall  relate only to such  instance and
shall not be  construed  as an agreement to waive any right or failure to act in
any other instance, whether or not similar.

         (b)  Severability.  Should any provision of this Agreement be held by a
court of competent  jurisdiction to be unenforceable or prohibited by applicable
law, this Agreement shall be considered  divisible as to such  provision,  which
shall be  inoperative,  and the remainder of this  Agreement  shall be valid and
binding as if such provision were not included in this Agreement.

         (c) Successors and Assigns.  This Agreement  shall inure to the benefit
of, and be binding upon, the Company and any corporation  with which the Company
merges or consolidates or to which the Company sells all or substantially all of
its assets, and upon the Executive and his executors,  administrators, heirs and
legal representatives.

         (d) Headings.  All headings in this Agreement are for convenience  only
and are not intended to affect the meaning of any provision hereof.

         (e)  Counterparts.  This  Agreement  may be executed in two (2) or more
counterparts  with the same effect as if the signatures to all such counterparts
were upon the same instrument,  and all such  counterparts  shall constitute but
one instrument.

         IN WITNESS  WHEREOF,  the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized  officer
as of the day and year first above written.

                              BALTEK CORPORATION


                              By:       /s/ Jacques Kohn
                                  ---------------------------------------------
                                       Jacques Kohn
                                       President and Chief Executive Officer


                                               /s/ Thomas Preisel
                                  ---------------------------------------------
                                                Thomas Preisel



                                       -6-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>8
<FILENAME>0008.txt
<DESCRIPTION>EMPLOYMENT AND CONSULTATION AGREEMENT
<TEXT>


                      EMPLOYMENT AND CONSULTATION AGREEMENT

         EMPLOYMENT AND  CONSULTATION  AGREEMENT made as of the 1st day of June,
2000, by and between BALTEK CORPORATION,  a Delaware corporation with offices at
10 Fairway Court, Northvale, New Jersey 07647 (the "Company"),  and Antonio Diaz
("Diaz"), residing at 15 Pennsylvania Avenue, Valley Cottage, New York 10989.

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

         WHEREAS,  Diaz has been  employed  by the  Company as Vice  President -
Latin American Operations; and

         WHEREAS,  the Company and Diaz desire Diaz to continue  his  employment
with the Company as Vice  President - Latin American  Operations  until December
31, 2001 and  thereafter to act as a consultant  to the Company,  for the period
from  January 1, 2002 to December  31,  2003,  upon the terms and subject to the
conditions set forth in this Agreement;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants contained in this Agreement, Diaz and the Company agree as follows:

         1.  Employment.  The Company  agrees to continue to employ Diaz as Vice
President  - Latin  American  Operations  for the  period  from  June 1, 2000 to
December 31, 2001 (the " Employment  Period") and thereafter to retain Diaz as a
consultant  for the  period  from  January  1, 2002 to  December  31,  2003 (the
"Consultation Period"), and Diaz agrees to continue in the employ of the Company
as Vice President - Latin American  Operations during the Employment Period, and
thereafter to act as a consultant to the Company during the Consultation Period,
all upon and subject to the terms and conditions set forth in this Agreement. By
mutual written agreement of Diaz and the Company, the Consultation Period may be
extended beyond December 31, 2003.

         2.  Term.  This  Agreement  shall  commence  on June 1,  2000 and shall
terminate  on December  31,  2003,  unless  this  Agreement  is extended  beyond
December  31, 2003 by mutual  written  agreement  of Diaz and the  Company  (the
period  from  June 1,  2000  until  the date  this  Agreement  terminates  being
hereinafter referred to as the "Term" of this Agreement).

         3. Duties.

         (a) During  the  Employment  Period,  Diaz  shall be  employed  as Vice
President - Latin American  Operations,  of the Company,  shall utilize his best
efforts to enhance the business of the Company and,  subject to the  supervision
of the  Company's  President  and Chief  Executive  Officer  (the "CEO") and the
Company's Board of Directors (the "Board"), shall be responsible for the general
and supervisory  duties  normally and customarily  attendant to such position at
the Company and its divisions and  subsidiaries.  During the Employment  Period,
unless the Board  shall  otherwise  consent in  writing,  Diaz will,  during the
regular business hours of the Company, devote his full time, energies, labor


                                       -1-

<PAGE>


and skills to the business of the Company and to the duties and responsibilities
specified in this subparagraph (a) of this paragraph 3.

         (b) During the Consultation  Period,  Diaz will consult with the Board,
the CEO and the other officers of the Company on a regular basis with respect to
the Latin  American  Operations of the Company,  will render such other services
relating to the Latin American Operation of the Company as may from time to time
be  requested  of him by the Board or the CEO and will  devote such time to such
consultation and other services as may be necessary.  The consultation and other
services to be performed by Diaz during the Consultation Period may generally be
performed by Diaz from his residence in New York or Florida.  Diaz may, however,
from time to time during the  Consultation  Period,  be required by the Board or
the CEO to  travel  to the  offices  of the  Company,  or to  Latin  America  or
elsewhere, in connection with the business of the Company.

         4. Compensation.  (a) In full consideration for all services to be per-
formed  by Diaz for the  Company  and  pursuant  to this  Agreement  during  the
Employment  Period, the Company shall pay to Diaz, and Diaz agrees to accept, an
annual salary of two hundred fifteen thousand ($215,000) dollars (or such higher
amount as may be approved  from time to time by the  Board),  payable in monthly
installments in accordance with the Company's  customary payroll practices.  The
Company shall annually  review Diaz's salary to determine  whether,  and to what
extent,  if any,  such salary shall be adjusted.  Any increase in Diaz's  salary
shall be in the sole  discretion of the Company.  In addition to Diaz's  salary,
the Company,  as a special  bonus to Diaz (the  "Special  Bonus")  shall,  as of
December 31, 2001, cancel the present indebtedness of Diaz to the Company in the
amount of twenty-five thousand ($25,000) dollars (the "Diaz Indebtedness").

         (b) In full  consideration for all services to be performed by Diaz for
the Company and pursuant to this Agreement during the Consultation  Period,  the
Company shall pay to Diaz,  during the Consultation  Period,  and Diaz agrees to
accept,  a consultation  fee of nine thousand five hundred  ($9,500) dollars per
month. During the Consultation Period Diaz will be an independent contractor and
not an employee of the Company,  and will be solely  responsible for the payment
of all income,  FICA and other taxes  payable with respect to such  consultation
fee and the filing of all required tax returns.

         (c) In  addition  to the salary and  consultation  fee  referred  to in
subparagraphs (a) and (b) of this paragraph 4, the Company shall reimburse Diaz
for all expenses  reasonably incurred by Diaz in connection with the performance
of his  duties  under  this  Agreement  and  the  business  of the  Company,  in
accordance   with  the  Company's  usual  policies  and  practices  for  expense
reimbursement.  In the event  Diaz is  required  to travel  on  business  of the
Company  during the  Consultation  Period,  as provided in  subparagraph  (b) of
paragraph  3,  Diaz may  travel by air in  business  class and may stay in first
class hotels during such travel period.

         5. Vacation.  Diaz shall be entitled to four (4) weeks of paid vacation
during each twelve (12) months of the  Employment  Period,  to be taken at times
mutually  agreeable to Diaz and the  Company.  Any vacation not taken during the
twelve  (12)  months in which  such  vacation  is earned may not be taken in any
subsequent period, but Diaz shall be entitled to be paid for up to two (2) weeks
of any earned vacation which is not taken during any twelve (12) month period.


                                       -2-

<PAGE>


In the event Diaz's  employment is terminated for any reason prior to the end of
the  Employment  Period,  Diaz shall be paid for accrued  vacation time, if any,
which has not been taken,  calculated on a pro-rata basis, but in no event shall
such amount exceed more than four (4) weeks' salary.

         6. Benefits.  Throughout the Employment Period,  Diaz shall be eligible
to participate in any pension,  profit-sharing,  stock option or similar plan or
program of the Company now existing or hereafter  established and maintained for
the benefit of the Company's  employees or executives  generally,  to the extent
that Diaz is eligible under the general provisions  thereof.  Diaz shall also be
entitled to  participate  during the Employment Period in any group  insurance,
hospitalization,  medical,  health,  accident,  disability  or  similar  plan or
program of the Company now existing or hereafter established for the benefit of
the  Company's  employees or  executives  generally,  to the extent that Diaz is
eligible under the general provisions thereof.  During the Consultation  Period,
Diaz, as well as his wife,  will  continue to be covered,  at the expense of the
Company, under any hospitalization or medical plan maintained by the Company for
its  employees,  to such extent and for such period of time as may be  permitted
under  the  Consolidated  Omnibus  Budget  Reconciliation  Act of  1985  and the
regulations issued thereunder, as in effect at such time.

         7. Company Car. To permit Diaz to perform his duties more  effectively,
the Company  shall,  during the Term of this Agreement [and if this Agreement is
terminated  under any of the  circumstances  described  in  subparagraph  (f) of
paragraph 8 of this Agreement, until the end of the Consultation  Period]  lease
a suitable  automobile  for the use of Diaz, and reimburse Diaz for all expenses
of operating and maintaining such  automobile,  including,  without  limitation,
comprehensive and liability insurance, in accordance with the Company's policies
and practices for executive company cars.

         8. Termination of Agreement.

         (a)  Notwithstanding  any provisions to the contrary  contained in this
Agreement, this Agreement may be terminated by the  Company upon Diaz's death or
disability  (as  defined  below) or for Cause (as defined  below),  and Diaz may
terminate  this Agree ment for Good  Reason (as  defined  below) upon sixty (60)
days' prior written notice to the Company.

         (b) For purposes of this Agreement, "disability" shall mean that, for a
period of one hundred twenty (120)  consecutive days or more, or for one hundred
eighty (180) days or more (even though not consecutive) within any three hundred
sixty (360) day period,  Diaz is  mentally or  physically  unable to perform the
essential  duties of his position as Vice  President - Latin America  Operations
(notwithstanding reasonable accommodation by the Company as required by law), or
as a consultant to the Company,  as the case may be, as evidenced by the written
certification of a qualified physician agreed to by the Company  and Diaz or, in
the  absence  of  such  agreement,  by a  qualified  physician  selected  by the
agreement  of a  qualified  physician  selected  by the  Company and a qualified
physician selected by Diaz.


                                       -3-

<PAGE>


         (c) For  purposes  of  this  Agreement,  "Cause"  shall  mean:  (i) the
conviction  of Diaz for a  felony  by a  federal  or  state  court of  competent
jurisdiction;  or (ii) Diaz's failure either (A) to follow a direct  substantive
written  order,  within the  reasonable  scope of Diaz's  duties,  from the CEO,
pursuant to authority from the Board,  or (B) to adhere to any written policy or
guideline  established  by the  Company  from time to time,  if such  failure to
follow  such order or adhere to such  policy or  guideline  is not cured  within
thirty (30) days after written notice to Diaz specifying such failure.

         (d) For purposes of this Agreement, "Good Reason" shall mean any of the
following:  (i) the  assignment  by the Company to Diaz,  during the  Employment
Period, of substantial duties  significantly  below the level of Diaz's position
as Vice  President - Latin American  Operations of the Company,  as set forth in
subparagraph  (a) of paragraph 3 of this  Agreement;  or (ii) the failure of the
Company to assign to Diaz, during the Employment Period,  substantial duties and
responsibilities  consistent  with such position;  or (iii) any reduction by the
Company during the  Employment  Period of Diaz's salary or benefits as set forth
in  subparagraph  (a) of paragraphs 4 or paragraph 6 of this Agreement (it being
understood  that a reduction of benefits  applicable  to all  executives  of the
Company (including Diaz) shall not be deemed a reduction of  Diaz's benefits for
purposes of this definition.

         (e) In the event that Diaz's  employment under this Agreement is termi-
nated during the Employment Period as a result of death, disability or for Cause
by the Company,  or without Good Reason by Diaz,  then the Company shall have no
further  obligation  or liability  to Diaz under this  Agreement,  such that all
salary  and  benefits  provided  for  in  this  Agreement  (including,   without
limitation,   the  Special  Bonus)  shall  terminate  simultaneously  with  such
termination,  except for salary or fees and benefits  earned and accrued through
the date of such termination.

         (f) In the event that during the  Employment  Period the Company termi-
nates the  employment of Diaz pursuant to this  Agreement  other than for Cause,
death or disability,  or Diaz  terminates his employment with the Company during
the  Employment  Period with Good Reason (i) the Company  shall pay to Diaz,  in
each month following such termination,  until the end of the Employment  Period,
an amount equal to  one-twelfth of Diaz's annual salary in effect on the date of
termination,  (ii) the Company shall cancel the Diaz Indebtedness,  and (iii) if
such  termination  shall  occur  ninety  (90) days or less prior to the end of a
fiscal year of the Company, the Company shall, in accordance with any exe cutive
compensation  or  incentive  plan of the  Company  in effect at the time of such
termination, pay to Diaz any bonus and make on behalf of Diaz any profit sharing
plan  contribution  which the Company would  otherwise have paid or made if Diaz
had remained in the employ of the Company through the end of such fiscal year.

         (g) In the event that during the Consultation Period Diaz is terminated
as a consultant to the Company as a result of death,  disability or for Cause by
the  Company,  or Diaz fails to act as a  consultant  to the Company at any time
during the Consultation Period for any other reason, then the Company shall have
no further  obligation or liability to Diaz under this Agreement,  such that all
fees and benefits provided for in this Agreement shall terminate  simultaneously
with such termination or failure to act, except for fees and benefits earned and
accrued through the date of such termination or failure to act.


                                       -4-

<PAGE>

         (h) In the event that during the Consultation Period Diaz is terminated
as a consultant  to the Company for any reason other than death,  disability  or
for  Cause by the  Company  (i) the  Company  shall pay to Diaz,  in each  month
following such termination, until the end of the Consultation Period, the amount
of the monthly fee specified in subparagraph (b) of paragraph 4.

         9. Covenants of Diaz.

         (a) Diaz  acknowledges  that his  employment by the Company has brought
him and will  throughout the Term of this  Agreement  continue to bring him into
close  contact  with  many  confidential  affairs  of  the  Company,   including
information  about  costs,  profits,  markets,  sales,  key  personnel,  pricing
policies,   operational   methods  and  other  business  affairs,   methods  and
information,  including plans for future developments,  not readily available or
generally known to the public. Diaz further acknowledges that the services to be
performed  by him  under  this  Agreement  are of a  special,  unique,  unusual,
extraordinary  and  intellectual  character,  and  that  the  Company  currently
competes or intends to compete with other  organizations that are located in all
of the  states of the United  States.  In  recognition  of the  foregoing,  Diaz
covenants and agrees that:

                           (i) he will not during the Term of this  Agreement or
                  following the expiration of this Agreement or the  termination
                  of this Agreement for any reason (the date of such  expiration
                  or   termination   being   hereinafter   referred  to  as  the
                  "Termination Date") divulge,  disclose,  publish or use (other
                  than for the benefit of the  Company)  any matter  relating to
                  the Company  which is not  publicly  available  and  generally
                  known  and will not  intentionally  disclose  such  matter  to
                  anyone  (other than to  executives or employees of the Company
                  who are  required to have  knowledge of such  matter),  except
                  that Diaz may make such  disclosure as may be required by law,
                  provided  the  Company is  notified by Diaz in writing of such
                  requirement  not less than ten (10) business days prior to the
                  date such  disclosure  is so required  and the Company has not
                  obtained an order or ruling to prevent such disclosure;

                           (ii) he will  deliver  promptly to the Company at the
                  end of the Term of this  Agreement,  or at any other  time the
                  Company may so request, all memoranda, notes, records, reports
                  and other documents (and all copies  thereof)  relating to the
                  business of the Company which he obtained while employed by or
                  otherwise  serving or acting on behalf of, the  Company,  as a
                  consultant or otherwise, and which he may then possess or have
                  under his control;

                           (iii)  during  the  Term  of this  Agreement  and any
                  additional  period  during  which  Diaz  may  be  employed  or
                  retained by the Company as a consultant or otherwise  (whether
                  or not such  employment  or  retention  shall be pursuant to a
                  written  agreement),  he will  not,  unless  the  Board  shall
                  otherwise consent in writing, alone or together with any other
                  person,  firm,   partnership,   corporation  or  other  entity
                  whatsoever (except a subsidiary or affiliate of the Company),


                                       -5-

<PAGE>

                  directly  or  indirectly,  whether  as an  officer,  director,
                  stockholder,   partner,   proprietor,   associate,   employee,
                  representative,     public     relations    or     advertising
                  representative, management consultant or otherwise, engage in,
                  or have any  material  financial  or monetary  interest in, or
                  have any  financial or monetary  association  with,  any other
                  person, corporation, firm, partnership or other entity engaged
                  in, the composite  materials or seafood  business or any other
                  business which is competitive  with any business  conducted or
                  contemplated by the Company; and

                           (iv)  for  a  period  of   twenty-four   (24)  months
                  following the Termination Date, he will not:

                                    (A)  solicit,  or  attempt to  solicit,  any
                           person or entity  who or which is a  customer  of the
                           Company  (as of the  Termination  Date or at any time
                           prior thereto) as a customer for any person or entity
                           engaged  in  the   composite   materials  or  seafood
                           business,  or any other business which is competitive
                           with any business  conducted or  contemplated  by the
                           Company; or

                                    (B) otherwise  disrupt or interfere with, or
                           attempt to disrupt or interfere  with,  the Company's
                           relations  with any actual or  potential  customer or
                           supplier or any other relationship of the Company.

         (b) Diaz recognizes  that the territorial and time  limitations in this
paragraph 9 are reasonable and properly required for the adequate protection of
the business of the Company,  and that in the event that any such territorial or
time   limitation  is  deemed  to  be  unreasonable  by  a  court  of  competent
jurisdiction,  Diaz  agrees  to a  reduction  of said such  territorial  or time
limitation,  as the case may be,  to such area or  period  as such  court  deems
reasonable. In the event that Diaz shall be in violation of any of the covenants
contained in this  paragraph 9, the time  limitation  thereof shall be extended
for a period of time equal to the  period of time  during  which such  breach or
breaches should exist.

         (c) Diaz  further  agrees  that the  remedy  at law for any  breach  or
threatened breach of any of the covenants contained in this paragraph 9 will be
inadequate  and that the Company,  in addition to such other  remedies as may be
available  to it, at law or in equity,  shall be entitled to  injunctive  relief
without bond or other  security.  This paragraph 9 constitutes  independent  and
severable  covenants and, if any or all of the provisions of this paragraph 9 is
or are held to be invalid or  unenforceable  for any reason,  such invalidity or
unenforceability shall not in any way invalidate or affect the remainder of this
paragraph 9 or the remainder of this Agreement,  as the case may be, which shall
remain in full force and effect.


                                       -6-

<PAGE>



         10. Governing Law. This Agreement shall be construed in accordance with
and  governed  by the laws of the State of New Jersey  applicable  to  contracts
executed in and to be performed solely within such state.

         11.  Notices.  All notices  required or permitted to be given by either
party pursuant to this Agreement,  including notice of change of address,  shall
be in writing and delivered by hand, or mailed,  postage  prepaid,  certified or
registered mail, return receipt requested, to the other party as follows:

              If to the Company:         Baltek Corporation
                                         10 Fairway Court
                                         Northvale, New Jersey 07047

                                         Attention:
                                         President and Chief
                                         Executive Officer

              If to Executive:           Antonio Diaz
                                         15 Pennsylvania Avenue
                                         Valley Cottage, New York 10989

         12. Miscellaneous.

         (a) Entire Agreement.  This Agreement  constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior oral or written  agreements  and  understandings  relating  to the
employment  of Diaz by the Company or the  retention of Diaz as a consultant  to
the  Company.  There  are no  oral  promises,  representations,  understandings,
interpretations  or  terms  of any  kind as  conditions  or  inducements  to the
execution  this  Agreement  by Diaz  or in  effect  between  the  parties.  This
Agreement may not be amended, and no provision hereof shall be waived, except by
a writing signed by the Company and Diaz (or in the case of a waiver of a provi-
sion of this Agreement, by the party waiving compliance therewith), which states
that it is  intended,  as the case may be, to amend  this  Agreement  or waive a
provision  of this  Agreement.  Any  waiver of any right or  failure to act in a
specific  instance shall relate only to such instance and shall not be construed
as an  agreement  to waive any right or  failure  to act in any other  instance,
whether or not similar.

         (b)  Severability.  Should any provision of this Agreement be held by a
court of competent  jurisdiction to be unenforceable or prohibited by applicable
law, this Agreement shall be considered  divisible as to such  provision,  which
shall be  inoperative,  and the remainder of this  Agreement  shall be valid and
binding as if such provision were not included in this Agreement.


                                       -7-

<PAGE>


         (c) Successors and Assigns.  This Agreement  shall inure to the benefit
of, and be binding upon, the Company and any corporation  with which the Company
merges or consolidates or to which the Company sells all or substantially all of
its assets,  and upon Diaz and his  executors,  administrators,  heirs and legal
representatives.

         (d) Headings.  All headings in this Agreement are for convenience  only
and are not intended to affect the meaning of any provision hereof.

         (e)  Counterparts.  This  Agreement  may be executed in two (2) or more
counterparts  with the same effect as if the signatures to all such counterparts
were upon the same instrument,  and all such  counterparts  shall constitute but
one instrument.

         IN WITNESS  WHEREOF,  Diaz has executed this  Agreement and the Company
has caused this  Agreement to be executed by its duly  authorized  officer as of
the day and year first above written.

                                 BALTEK CORPORATION



                                 By:     /s/ Jacques Kohn
                                     -------------------------------------------
                                          Jacques Kohn, President and
                                          Chief Executive Officer


                                                /s/ Antonio Diaz
                                     -------------------------------------------
                                                   Antonio Diaz



                                       -8-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>9
<FILENAME>0009.txt
<DESCRIPTION>FINANCIAL DATA SCHEDULE
<TEXT>

<TABLE> <S> <C>


<ARTICLE>                     5
<LEGEND>
This schedule contains summary information extracted from Baltek Corporation and
subsidiaries consolidated financial statements and related exhibits for the nine
months ended September 30, 2000 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER>                          1,000

<S>                                    <C>
<PERIOD-TYPE>                         9-MOS
<FISCAL-YEAR-END>                     DEC-30-2000
<PERIOD-END>                          SEP-30-2000
<CASH>                                  1,552,000
<SECURITIES>                                    0
<RECEIVABLES>                          10,201,000
<ALLOWANCES>                              274,000
<INVENTORY>                            19,261,000
<CURRENT-ASSETS>                       32,745,000
<PP&E>                                 37,474,000
<DEPRECIATION>                         24,625,000
<TOTAL-ASSETS>                         54,605,000
<CURRENT-LIABILITIES>                  15,417,000
<BONDS>                                         0
<PREFERRED-MANDATORY>                           0
<PREFERRED>                                     0
<COMMON>                                2,523,000
<OTHER-SE>                             36,297,000
<TOTAL-LIABILITY-AND-EQUITY>           54,605,000
<SALES>                                67,349,000
<TOTAL-REVENUES>                       67,349,000
<CGS>                                  52,234,000
<TOTAL-COSTS>                          63,100,000
<OTHER-EXPENSES>                          978,000
<LOSS-PROVISION>                          130,000
<INTEREST-EXPENSE>                        660,000
<INCOME-PRETAX>                         3,271,000
<INCOME-TAX>                            1,047,000
<INCOME-CONTINUING>                     2,224,000
<DISCONTINUED>                                  0
<EXTRAORDINARY>                                 0
<CHANGES>                                       0
<NET-INCOME>                            2,224,000
<EPS-BASIC>                                  0.88
<EPS-DILUTED>                                0.88



</TABLE>
</TEXT>
</DOCUMENT>
</SUBMISSION>
