<PAGE>
 
                               COMMERCIAL LEASE
                               ----------------

     This Lease is entered into between CHIPPEWA CORPORATION, an Indiana
corporation ("Landlord") and AM GENERAL CORPORATION , a Delaware corporation
("Tenant").

     1.   Agreement to Lease.  Subject to all the provisions of this Lease,
          ------------------
Landlord leases to Tenant and Tenant leases from the Landlord the land located
at 801 West Chippewa, South Bend, Indiana ("Property"), the legal description of
which is attached hereto and incorporated herein as Exhibit A.
                                                    ---------

     2.   Term.  This Lease shall be for a term of one (1) year beginning on
          ----
November 6, 1997 ("Lease Commencement Date") through November 5, 1998, and shall
be automatically renewed for additional one (1) year periods unless and until it
is terminated by Landlord or Tenant by written notice provided to the other of
termination, provided at least thirty (30) days prior to the lease termination
date or an applicable anniversary thereof. Landlord shall deliver actual vacant
possession of the Property to Tenant on the Lease Commencement Date.

     3.   Use.  Tenant shall use the Property for on-road and off-road testing
          ---
of vehicles and any related or incidental purpose.

     4.   Rent.  As rent for use of the Property, Tenant shall pay Forty
          ----
Thousand Dollars ($40,000.00) per year, which shall be due in equal installments
of Ten Thousand Dollars ($10,000.00) payable in advance on each November 6,
February 6, May 6 and August 6, until the termination of this Lease.

     5.   Additional Expenses.  This is a net lease with the Tenant paying the 
          -------------------
following expenses:

          a.   Utilities.  All utility bills, including water, sewage, gas,
               ---------
     electricity, telephone and similar services shall be paid by Tenant
     directly to the proper utility company. Tenant shall not install any
     equipment which shall exceed the capacity of any utility, facilities
     furnished by Landlord. If any equipment desired by Tenant requires
     additional utility facilities, the same shall be installed at Tenant's
     expense in compliance with all applicable code requirements and with
     Landlord's prior written approval, which shall not be unreasonably withheld
     or delayed. Further, Landlord shall not be liable to Tenant in damages or
     otherwise for any utilities or services, whether or not furnished by
     Landlord hereunder, which are interrupted or terminated for any reason,
     including repairs, installations, improvements, energy emergency or
     shortage unless resulting from the gross negligence or willful misconduct
     of Landlord, its agents, employees, contractors, licensees or invitees.

          b.   Taxes and Assessments.  Tenant shall pay all real estate taxes,
               ---------------------
     assessments and other governmental charges which become due during the term
     of this Lease.

<PAGE>
 
          c.   Upkeep and Repairs. Tenant shall pay for all repairs and Property
               ------------------
     upkeep, including window and glass replacement, snow removal, trash
     removal, lawn care and similar expenses.

          d.   Insurance. Tenant shall be responsible for fire, windstorm,
               ---------
     extended coverage and all risks insurance on all Property improvements.
     Tenant shall be responsible for obtaining and maintaining insurance
     policies covering Tenant's personal property. Tenant may obtain business
     interruption insurance if Tenant wishes to be protected from this risk.
     Tenant agrees not to keep or use anything on the Property which is
     prohibited by the standard policy form of fire insurance. The insurance
     policies shall be issued by insurers authorized to do business in the State
     of Indiana. These policies shall provide that they not be cancelled without
     at least ten (10) days' prior written notice to Tenant and further that any
     losses shall be payable notwithstanding any act or negligence of Tenant
     which might otherwise result in forfeiture of the insurance.

     6.   Acceptance of Premises. By occupying the premises, Tenant acknowledges
          ----------------------
that the Property has been examined and is in good order and repair ("Original 
Condition"). Tenant acknowledges that no representations as to the condition of 
repair have been made by Landlord. At the expiration of this Lease or any 
extension thereof, Tenant shall return the Property to Landlord in its Original 
Condition, reasonable wear and tear excepted.

     7.   Alterations. All structural changes or alterations shall become a part
          -----------
of the Property and remain thereon as Landlord's property at the termination of 
the Lease.

     8.   Assignment and Subletting. Tenant shall not assign, pledge, mortgage, 
          -------------------------
or otherwise encumber either this Lease or the Property, provided Tenant may 
assign, pledge, mortgage or otherwise encumber with the prior written consent of
Landlord. Tenant shall not sublet all or any part of the Property without the 
Landlord's prior written consent, such consent not to be unreasonably withheld. 
However, no permitted subletting shall relieve Tenant or Tenant's obligations 
under this Lease. Tenant shall continue to be liable as a principal and not as a
guarantor or surety to the same extent as though no subletting had been made.

     9.   Condemnation. If some or all of the Property is taken for any public 
          ------------
or quasi-public use under any law or any right of eminent domain (or by private 
purchase in lieu thereof) so as to make the Property unsuitable to Tenant for 
the purpose herein leased, Tenant shall have the option to terminate this Lease 
by giving written notice to Landlord which shall be effective on the date the 
acquiring public body takes possession of the Property. All damages that must be
awarded for the taking of the Property shall belong to Landlord except any part 
awarded to the Tenant expressly for loss of business or for the unamortized cost
of any improvements paid for by Tenant.

     10.  Default of Tenant. The occurrence of any one or more of the following 
          -----------------
events shall be considered a default by Tenant:

                                      -2-
<PAGE>
 
          a.   Failure of Tenant to perform any requirement under this Lease
     within thirty (30) days after written notice of default is received from
     Landlord, except Tenant's failure to make rental payments within three (3)
     days after written notice of default is received from Landlord.
     
          b.   The assignment by Tenant of Tenant's assets for the benefit of 
     creditors.

          c.   The levying of a Writ of Execution or Attachment against Tenant's
     property if not released or discharged within ninety (90) days thereafter.

          d.   The commencement in a court of competent jurisdiction of
     proceedings for Tenant's: reorganization; liquidation; involuntary
     dissolution; adjudication as a bankrupt; insolvency, or for the appointment
     of a receiver of the Tenant's assets, if such proceedings are not dismissed
     and any receiver, trustee or liquidator appointed therein discharged within
     ninety (90) days after the institution of the proceedings.

          e.   The placement of a mechanic's lien or other claim against the
     Property for which Tenant has no legal or equitable defense, if the lien or
     claim is not released or Landlord is not indemnified to its satisfaction
     within thirty (30) days after written notice of lien or claim is first
     given to Tenant. Any lien or claim upon the Property arising from any act
     or omission of Tenant shall accrue only against Tenant's rights under this
     Lease and shall be subject and subordinate to Landlord's rights in and
     title to the Property.

     11.  Remedies of Landlord. If Tenant defaults in payment of rent, expenses
          -------------------- 
or any other agreements contained in this Lease beyond applicable notice and the
cure period, Tenant will promptly deliver peaceable possession of the Property
to Landlord. If Tenant fails to do so, Landlord may re-enter the Property. In
the event Landlord elects to re-enter the Property, Landlord may either declare
the Lease term ended for all or any part of the Property or, without terminating
the Lease, may from time to time make such alterations or repairs as may be
necessary to relet the Property. Landlord may then relet all or any part of the
Property for such rent and other conditions as Landlord in Landlord's sole and
reasonable discretion deems advisable. All rentals received by Landlord from
such reletting shall be applied first to the payment of any indebtedness other
than rent due from Tenant to Landlord, next to the payment of any costs or
expenses of such reletting (including brokerage fees and reasonable attorney
fees and the costs of such alterations and repairs), and finally to the payment
of rent and additional charges due unpaid under this Lease together with
interest at the rate of eighteen percent (18%) per year. The residue, if any,
shall be held by Landlord and applied to the payment of future rent as it may
become due and payable under this Lease. Upon such re-entry, Landlord with due
process of lay may remove Tenant or any persons occupying the Property using
such force as may be reasonably necessary to do so and may then relet without
waiving any remedies which otherwise might be used for rental arrearage or
breach of the Lease provisions. The
                                      -3-

<PAGE>
 
acceptance of rent by Landlord, whether in a single instance or repeatedly or 
after any knowledge of Tenant's breach of payment, shall not be construed as a 
waiver of any of Landlord's rights to proceed under the remedies provided by 
this Lease.

     12.  Landlord's Default. If Landlord does not perform any conditions 
          ------------------
required under this Lease, Tenant may either cure the breach and deduct the 
costs thereof from subsequent rent payments or may elect to terminate this Lease
after giving at least thirty (30) days written notice to Landlord of its 
intention to do so, unless a shorter period is required by law or an emergency 
exists which could reasonably be expected to have a material adverse effect on 
the Property. In such event, this Lease shall terminate upon the date fixed in 
that notice unless Landlord cures such default prior to the expiration of the 
notice.

     13.  Signs. The Tenant may install appropriate signs on the Property. At 
          -----
the termination of this Lease, such signs shall be removed at Tenant's expense. 
Any damage to the Property caused by the erection, maintenance or removal of 
such signs shall be paid for by the Tenant.

     14.  Liability and Indemnification. Landlord shall not be liable to Tenant 
          -----------------------------
for any damage or injury to Tenant or Tenant's property or for any claim or 
liability arising out of or in any way related to the condition of the Property 
existing at the date hereof. Tenant is relying solely on Tenant's own 
examination of the Property. Notwithstanding any other provision of this Lease, 
this Lease shall not imply any warranty that the Property or any improvement 
thereon is habitable, is of any particular quality of construction or condition,
or is suitable for any particular use or purpose. Tenant shall indemnify and 
hold Landlord harmless against all liabilities, losses, claims, costs, expenses
and judgments of any nature arising from or in connection with injuries to
persons or damage to property or for any other claim or liability arising from
or connected with Tenant's use of the Property, unless resulting from the gross
negligence or willful misconduct of Landlord, its agents, employees,
contractors, licensees or invitees. Landlord shall indemnify and hold Tenant
harmless against all liabilities, losses, claims, costs, expenses, and judgments
of any manner arising from, or in connection with, the gross negligence or
willful misconduct of Landlord, its agents, Employees, contractors, licensees or
invitees arising from or related to Landlord's use of the property.

     15.  Holding Over.
          ------------

          (a)  Without Consent. At the termination of this Lease, by lapse of 
               ---------------
     time or otherwise, Tenant will yield up immediate possession to Landlord.

          (b)  With Consent. If without the execution of a new Lease, Tenant
               ------------
     remains in possession of the Property with Landlord's consent after the
     Lease term has expired and Landlord accepts rent form Tenant, such
     occupancy and payment shall be construed as an extension of this Lease for
     one (1) month at a time (a month-to-month lease) unless the terms of the
     extension are in writing and signed by the Landlord and the Tenant. If such
     month-to-month lease extension does so occur, and thereafter either
     Landlord or Tenant desires to terminate the occupancy at the end of

                                      -4-
<PAGE>
 
any month, the party so desiring termination shall give the other party at least
thirty (30) days written notice to that effect. Failure on the part of Tenant to
give such notice shall obligate Tenant to pay rental for an additional calendar 
month following the calendar month the Property is vacated.

          Landlord shall be deemed to have consented to occupancy after the
expiration of the term of this Lease unless Landlord notifies Tenant in writing
that consent is not given and that liquidated damages are being charged.

16.  Miscellaneous.
     -------------

     a.   Quiet Enjoyment. So long as Tenant performs and observes all the
          ---------------
provisions of this Lease, Landlord covenants and promises that Tenant shall have
peaceful enjoyment of the Property.

     b.   Entry and Inspection. Landlord shall have the right to enter and
          --------------------
inspect the Property at reasonable time and upon prior notice unless an
emergency exists.

     c.   Attorney Fees. Tenant shall pay all reasonable costs, reasonable 
          -------------
attorney and paralegal fees and expenses that may be incurred by Landlord in the
enforcement of the terms of this Lease, including any expenses incurred on 
appeal.

     d.   Severability. If any provision of this Lease becomes invalid or 
          ------------
unenforceable, the remainder of the Lease shall not be affected and the balance 
of the Lease provisions shall be valid and enforceable to the fullest extent 
permitted by law.

     e.   Successors. The provisions of this Lease shall be binding upon the 
          ----------
successors in interest of both Landlord and Tenant.

     f.   Memorandum of Lease. Landlord and Tenant agree to execute a short form
          -------------------
memorandum of Lease in recordable form simultaneously with the execution hereof,
and Landlord acknowledges that Tenant at its cost and expense shall have the 
memorandum recorded in St. Joseph County, Indiana.

                                      -5-

<PAGE>
 
     Landlord and Tenant now sign this Lease in duplicate to be effective the
6th day of November, 1997.


LANDLORD                           TENANT 

CHIPPEWA CORPORATION               AM GENERAL CORPORATION


    /s/ Rick R. Smith                   /s/ Paul J. Cafiero  
BY:--------------------------      By:---------------------------------  
    Rick R. Smith, President           Paul J. Cafiero, Vice President



STATE OF INDIANA       )
                       )SS:
COUNTY OF ST. JOSEPH   )


     Before me, a Notary public for said county and state personally appeared
Rick R. Smith, who certifies that he is the President of Chippewa Corporation,
the Landlord herein, that he has been duly authorized and empowered to execute
this Lease and who affirms the truth of the statements contained herein.

     In witness whereof, I have hereunto subscribed my name and affixed my
official seal this 6th day of November, 1997.

                                               /s/ Sharon K. Eberhard
                                            ------------------------------------
 [SEAL APPEARS HERE]                        SHARON K. EBERHARD, Notary Public
                                            Residing in ST. JOSEPH County
                                            My commission expires: JUNE 15, 2000

                                      -6-

<PAGE>
 
STATE OF INDIANA         )
                         ) SS: 
COUNTY OF ST. JOSEPH     )

     Before me, a Notary Public for said county and state personally appeared 
Paul J. Cafiero, who certifies that he is a vice President of AM General 
Corporation, the Tenant herein, that he has been duly authorize and empowered to
execute this Lease and who affirms the truth of the statements contained herein.

     In witness whereof, I have hereunto subscribed my name and affixes my 
official seal this 6th day of November, 1997.

                                            /s/ Sharon K. Ebernard
                                            ------------------------------------
                                            SHARON K. EBERNARD, Notary Public
                                            Residing in St. Joseph, County
                                            My commission expires: June 15, 2000


                                                             [SEAL APPEARS HERE]



This instrument prepared by Timothy D. Hernly (Atty. No. 11030-98), Barnes &
Thornburg, 600 1st Source Bank Center, 100 North Michigan, South Bend, Indiana 
46601.

                                      -7-


<PAGE>
 
                                   EXHIBIT A
                                   ---------
                                 (Page 1 of 2)

Situated in Portage Township, St. Joseph County, Indiana and being a part of 
Section 23, Township 37 North, Range 2 East, and being the same as that land 
described in Instrument #9352596, conveyed therein to Mishawaka/South Bend Trust
by Quitclaim Deed; the subject tract being more particularly described as 
follows:

Commencing at a PK nail found (located December 1996) at the Northeast Corner of
said section, thence westerly along the North line of said section, SOUTH 89 
degrees 31'20" EAST a distance of 167.71 feet to PK nail found, said PK nail 
being the point of beginning; thence SOUTH 08 degrees 45'11" EAST a distance of 
627.28 feet to a 5/8" rebar found; thence SOUTH 86 degrees 55'49" WEST a 
distance of 232.54 feet to a 5/8" rebar found; thence SOUTH 89 DEGREES 09'43" 
WEST a distance of 249.16 feet to a 5/8" rebar found; thence SOUTH 00 degrees 
29'44" WEST a distance of 769.53 feet to a 5/8" rebar found; thence NORTH 89 
degrees 18'23" WEST a distance of 46.22 feet to a 5/8" rebar found; thence SOUTH
01 degrees 50'09" WEST a distance of 32.57 feet to a 5/8" rebar found; thence 
NORTH 89 degrees 27'58" WEST a distance of 197.87 feet to a 5/8" rebar found; 
thence SOUTH 00 degrees 35'13" WEST a distance of 1194.82 feet to a railroad 
spike found on the South line of the Northeast Quarter of said section; thence 
westerly along said South line, NORTH 89 degrees 36'32" WEST a distance of 
862.16 feet to a pk nail found; thence northerly perpendicular to said South 
line, NORTH 00 degrees 23'28" EAST a distance of 40.00 feet to a point, thence 
westerly parallel to said South line, NORTH 89 degrees 36'32" WEST a distance of
80.00 feet to a point; thence southerly perpendicular to the South line, SOUTH 
00 degrees 23'28" WEST a distance of 40.00 feet to a pk nail found on said South
line; thence westerly along said South line, NORTH 89 degrees 36'32" WEST a 
distance of 150.00 feet to a 5/8" rebar found; thence SOUTH 00 degrees 28'17" 
WEST a distance of 1884.90 feet to a 5/8" rebar found; thence NORTH 89 degrees 
31'21" WEST a distance of 576.63 feet to a 5/8" rebar found; thence SOUTH 00 
degrees 28'39" WEST a distance of 752.87 feet to a railroad spike found on the 
South line of the Southeast Quarter of said section; thence westerly along said 
South line, NORTH 89 degrees 58'28" WEST a distance of 178.42 feet to a 1/8" rod
found at the Southwest Corner of the Southeast Quarter of said section; thence 
westerly along the South line of the Southwest Quarter of said section, NORTH 89
degrees 35'25" WEST a distance of 2649.02 feet to a monument found at the 
Southwest Corner of the Southwest Quarter of said section; thence northerly 
along the West line of said Southwest Quarter, NORTH 00 degrees 34'30" EAST a 
distance of 2636.11 feet to pk nail found at the Northwest Corner of said 
Southwest Quarter; thence easterly along the North line of said Southwest 
Quarter, SOUTH 89 degrees 37'56" EAST a distance of 2640.97 feet to a 1" iron 
pipe found at the Northeast Corner of Southwest Quarter of said section; thence 
northerly along the West line of the Northeast Quarter of said section, NORTH 00
degrees 28'02" EAST a distance of 2638.61 feet to a pk nail set at the Northwest
Corner of the Northeast Quarter of said section; thence easterly along the North
line of the Northeast Quarter of said section, SOUTH 89 degrees 31'20" EAST a 
distance of 2478.99 feet to the point of beginning.

Containing 322.394 acres as geometrically described herein.
<PAGE>
 
                                   EXHIBIT A
                                   ---------
                                 (Page 2 of 2)

              EXCEPTING THEREFROM THE FOLLOWING CARVE-OUT PARCEL:
              --------------------------------------------------

Situated in Portage Township, St. Joseph County, Indiana and being part of
Section 23, Township 37 North, Range 2 East, and being the same as that land
described in Instrument #9352596, conveyed therein to Mishawaka/South Bend Trust
by Quitclaim Deed; the subject tract being more particularly described as
follows:

Commencing at a monument found (located December 1996) at the Southwest Corner
of the Southwest Quarter of said section, thence northerly along the West line
of said Southwest Quarter, NORTH 00 degrees 34'30" EAST a distance of 1417.48
feet to a pk nail found, said pk nail being the point of beginning; thence
continuing northerly along said West line, NORTH 00 degrees 34'30" EAST a
distance of 1218.63 feet to a pk nail found at the Northwest Corner of said
Southwest Quarter, thence easterly along the North line of said Southwest
Quarter, SOUTH 89 degrees 37'56" EAST a distance of 660.00 feet to a 1" iron
pipe found; thence southerly, parallel with the West line of said Southwest
Quarter, SOUTH 00 degrees 34'30" WEST a distance of 1218.63 feet to a 1" iron
pipe found; thence westerly, parallel with the North line of said Southwest
Quarter, NORTH 89 degrees 37'56" WEST a distance of 660.00 feet to the point of
beginning.

Containing 18.464 acres as geometrically described herein.

                                      -2-