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                                                                  EXHIBIT 10.1
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                               COMMERCIAL LEASE


CHATTEM, INC., INC. hereafter referred to as Lessee, hereby offers to Lease 
from KENCO GROUP, INC., hereafter referred to as Lessor, the Premises 
situated in the city of Chattanooga, county of Hamilton, state of Tennessee, 
described as 100,000 Sq. Ft. of warehouse space located in that certain 
building owned by Lessor located at 4309 Distribution Avenue, Chattanooga, 
TN, (the "Premises") upon the following TERMS and CONDITIONS:

     1.  TERM:  The term hereof shall commence on or about April 1, 1998 and 
         expires July 1, 1998 (the "Initial Term"); provided, however, Lessee 
         shall have the right to terminate this Lease at anytime upon 30 days 
         prior written notice thereof to Lessor. In the event the Lease is 
         not terminated prior to expiration of the initial term or if Lessee 
         does not deliver written notice to Lessor of its election not to 
         renew this Lease, the term thereof shall automatically renew on a 
         month-to-month basis upon expiration of the initial term subject to 
         the terms hereof, and subject to the right of either party 
         thereafter to terminate the Lease subject to 30 days prior written 
         notice. Rent for partial month shall be prorated.

     2.  RENT:  Rent shall be a gross payment of $25,000 per month calculated 
         a $0.25 per S.F. times 100,000 S.F. per month, which shall include 
         all real estate taxes, insurance and all other charges except as 
         provided in paragraph 11 and paragraph 12. All rents shall be paid 
         to Owner or his authorized agent, at the following address: P.O. Box 
         1607, Chattanooga, Tennessee 37401, or at such other places as may 
         be designated by Owner from time to time.

     3.  USE:  Distribution shall be defined as warehousing, light assembly 
         and product distribution.

     4.  USE PROHIBITED:  Lessee shall not use any portion of the Premises 
         for purposes other than those specified hereinabove, and no use 
         shall be made or permitted to be made upon the Premises, nor acts 
         done, which will increase the existing rate of insurance upon the 
         Premises, or cause cancellation of insurance policies covering said 
         Premises. Lessee shall not conduct or permit any sale by auction on 
         the Premises.

     5.  ASSIGNMENT AND SUBLETTING:  Lessee shall not assign this Lease or 
         sublet any portion of the Premises without prior written consent of 
         the Lessor, which shall not be unreasonably withheld. Any such 
         assignment or subletting without consent shall be void and, at the 
         option of the Lessor, may terminate this Lease.

         "Notwithstanding the foregoing; Lessor in executing this Lease 
         acknowledges that Lessee has assigned or may assign its right, title 
         and

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         interest under this Lease as security for financing provided to 
         Lessee by one or more lenders. Notwithstanding any other provisions 
         contained in this Lease, Lessor consents to the collateral 
         assignment of this Lease to such lenders or their agents, for the 
         benefit of the lenders. Unless and until such lenders give notice to 
         the undersigned of their intention to succeed to the rights of Lease 
         under this Lease, the lenders shall not be obligated to perform any 
         of the obligations of Lessee under the Lease."

     6.  ORDINANCES AND STATUTES:  Lessee shall comply with all statutes, 
         ordinances and requirements of all municipal, state and federal 
         authorities now in force, or which may hereafter be in force, 
         pertaining to the Premises, and the use thereof by Lessee. The 
         commencement of pendency of any state or federal court abatement 
         proceeding affecting the use of the Premises shall, at the option of 
         the Lessor, by deemed a breach thereof.

     7.  MAINTENANCE, REPAIRS, ALTERATIONS:  Lessee acknowledges that the 
         Premises are in good order and repair, unless otherwise indicated 
         herein, Lessee shall, at its own expense and at all times, maintain 
         the Premises in good and safe condition, normal wear and tear 
         expected, including plate glass, electrical wiring, plumbing and 
         heating installations and any other system or equipment which serves 
         solely the Premises and shall surrender the same, at termination 
         hereof, in as good condition as received, normal wear and tear 
         expected. Lessee shall be responsible for all repairs required for 
         the Premises as specified herein, excepting the rood, exterior 
         walls, structural foundations, which shall be maintained by Lessor 
         and any repairs to the Premises required due to the negligence or 
         willful misconduct of Lessor or Lessor's Employees or Agents or 
         which result due to the failure of Lessor to comply with its 
         obligation pursuant hereto. Lessee shall also maintain in good 
         condition such portions adjacent to the Premises, such as sidewalks, 
         driveways, lawns and shrubbery, which would otherwise be required to 
         be maintained by Lessor. All other maintenance obligations not 
         otherwise assumed by Lessee shall be the responsibility of Lessor.

         No improvement or alteration of the Premises shall be made without 
         the prior written consent of the Lessor which consent shall not be 
         unreasonably withheld. Prior to the commencement of any substantial 
         repair, improvement, or alteration, Lessee shall give Lessor at 
         least two (2) days written notice in order that Lessor may post 
         appropriate notices to avoid any liability for liens.

         Lessee shall not commit any waste upon the Premises, or any nuisance 
         or act which may disturb the quiet enjoyment of any Lessee in the 
         building.

     8.  ENTRY AND INSPECTION:  Lessee shall permit Lessor or Lessor's agents 
         enter upon the Premises at reasonable times and upon reasonable 
         notice, for the purpose of inspecting the same, and will permit 
         Lessor at any time within sixty (60) days prior to the expiration of 
         this Lease, to place upon the Premises any usual "To Let" or "For 
         Lease" signs, and permit persons

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         desiring to Lease the same to inspect the Premises thereafter.

     9.  INDEMNIFICATION OF LESSOR:  Lessor shall not be liable for any 
         damage or injury to Lessee, or any other person, or to any Premises, 
         occurring on the Premises or any part thereof, and Lessee agrees to 
         hold Lessor harmless from any claims for damages; provided however, 
         such indemnification obligations shall not apply to claims for 
         damages or injuries which are attributed to the act or negligence of 
         Lessor or Lessor's Agents or Employees.

    10.  POSSESSION:  If Lessor is unable to deliver possession of the 
         Premises at the commencement hereof, Lessor shall not be liable for 
         any damage caused thereby, nor shall this Lease be void or 
         voidable, but Lessee shall not be liable for any rent until 
         possession is delivered. Lessee may terminate this Lease at anytime 
         if possession is not delivered within 1 days of the commencement of 
         the term hereof without further obligations hereunder.

    11.  INSURANCE:  Lessee, at its expense, shall maintain plate glass and 
         public liability insurance including bodily injury and Premises 
         damage insuring Lessee and Lessor with minimum coverage as follows:
         $1,000,000.00

         Lessee shall provide Lessor with a Certificate of Insurance showing 
         Lessor as additional insured. The Certificate shall provide for a 
         ten-day written notice to Lessor in the event of cancellation or 
         material change of coverage.

         To the maximum extent permitted by insurance policies which may be 
         owned by Lessor or Lessee, Lessee and Lessor, for the benefit of 
         each other, waive any and all rights of subrogation which might 
         otherwise exist.

    12.  UTILITIES:  Lessor shall be responsible for all gas and water 
         service utilities. Lessee shall be responsible for all electricity 
         service which shall be paid by Lessor and billed back to Lessee 
         without additional charges. Lessee shall pay a quarterly fee for 
         fire service charged by Tennessee-American Water Company for the 
         Premises on a pro rata share of such fee based upon the square 
         footage of the Premises. The fire service charge will be paid to 
         Tennessee-American Water Company by Lessor and billed back to Lessee 
         without additional charges. Lessor will complete installation of 
         burglary protection by ADT at Lessor's expense and Lessee will pay 
         monthly charges for ADT service.

    13.  SIGNS:  Lessor reserves the exclusive right to the roof, side and 
         rear walls of the Premises.  Lessee shall not construct 
         any projecting sign or awning without the prior written consent of 
         Lessor which consent shall not be unreasonably withheld.

    14.  ABANDONMENT OF PREMISES:  Lessee shall not vacate or abandon the

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         Premises at any time during the term hereof, and if Lessee shall 
         abandon or vacate the Premises, or be dispossessed by process, of 
         law, or otherwise, any personal Premises belonging to Lessee left 
         upon the Premises shall be deemed to be abandoned at the option of 
         Lessor.

    15.  CONDEMNATION:  If any part of the Premises shall be taken or 
         condemned for public use, and a part thereof remains which is 
         susceptible of occupation hereunder, this Lease shall, as to the 
         part taken, terminate as of the date the condemnor acquires 
         possession, and thereafter Lessee shall be required to pay such 
         proportion of the rent for the remaining term as the value of the 
         Premises remaining bears to the total value of the Premises at the 
         date of condemnation; provided however, the Lessor may at its 
         option, terminate this Lease as of the date the condemnor acquires 
         possession. In the even that the deemed Premises are condemned in 
         whole, or that such portion is condemned that the remainder is not 
         susceptible for use hereunder, this Lease shall terminate upon the 
         date of such taking. All sums which may be payable on account of any 
         condemnation shall belong to the Lessor, and Lessee shall not be 
         entitled to any part thereof, provided however, that Lessee shall be 
         entitled to retain any amount awarded to it or its trade fixtures or 
         moving expenses.

    16.  TRADE FIXTURES:  Any and all improvements made to the Premises 
         during the term hereof shall belong to the Lessor, except trade 
         fixtures of the Lessee. Lessee may, upon termination hereof remove 
         all his trade fixtures, but shall repair or pay for all repairs 
         necessary for damages to the Premises occasioned by removal, normal 
         wear and tear expected.

    17.  DESTRUCTION OF PREMISES:  In the event of a partial destruction of 
         the Premises during the term hereof, from any cause, Lessor shall 
         forthwith repair the same, provided that such repairs can be made 
         within thirty (30) days under existing governmental laws and 
         regulations, but such partial destruction shall not terminate this 
         Lease, except that Lessee shall be entitled to a proportionate 
         reduction of rent while such repairs are being made, based upon the 
         extent to which the making of such repairs shall interfere with the 
         business of Lessee on the Premises. If such repairs cannot be made 
         within said sixty (60) days, Lessor, at its option, may make the 
         same within a reasonable time, this Lease continuing in effect with 
         the rent proportionately abated as aforesaid, and in the event that 
         Lessor shall not elect to make such repairs which cannot be made 
         within thirty (30) days, this Lease may be terminated at the option 
         of either party.

         In the event that the building in which the Premises may be situated 
         is destroyed to an extent of not less than one-third of the 
         replacement costs thereof, Lessor may elect to terminate this Lease 
         whether the Premises be injured or not. A total destruction of the 
         building in which the Premises may be situated shall terminate this 
         Lease.

    18.  INSOLVENCY: In the event a receiver is appointed to take over the 
         business

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         of Lessee, or in the event Lessee makes a general assignment for the 
         benefit of creditors, or Lessee takes or suffers any action under 
         any insolvency or bankruptcy act, the same shall constitute breach of 
         this Lease by Lessee.

    19.  REMEDIES OF OWNER ON DEFAULT:  In the event of any breach of this 
         Lease by Lessee, Lessor may, at its option, terminate the Lease and 
         recover from Lessee: (a) the worth at the time of award of the 
         unpaid rent which was earned at the time of termination; (b) the 
         worth at the time of award of the amount by which the unpaid rent 
         which would have been earned after termination until the time of the 
         award exceeds the amount of such rental loss that the Lessee proves 
         could have been reasonably avoided: and (c) the worth at the time of 
         award of the amount by which the unpaid rent for the balance or the 
         term after the time of award exceeds the amount of such rental loss 
         that Lessee proves could be reasonably avoided.

         Lessor may, in the alternative, continue this Lease in effect, as 
         long as Lessor does not terminate Lessee's right to possession, and 
         Lessor may enforce all his rights and remedies under the Lease, 
         including the right to recover the rent as it becomes due under the 
         Lease.  If said breach of Lease continues, Lessor may, at any time 
         thereafter, elect to terminate the Lease.

         Nothing contained herein shall be deemed to limit any other rights 
         or remedies which Lessor may have.

    20.  SECURITY:  The security deposit set forth above, if any, shall 
         secure the performance of the Lessee's obligations hereunder Lessor 
         may, but shall not be obligated to apply all or portions of said 
         deposit on account or Lessee's obligations hereunder. Any balance 
         remaining upon termination shall be returned to Lessee. Lessee shall 
         not have the right to apply the Security Deposit in payment of the 
         last month's rent.

    21.  DEPOSIT REFUNDS:  The balance of all deposits shall be refunded 
         within two weeks from date possession is delivered to Owner or 
         authorized Agent, together with a statement showing any charges made 
         against such deposits by Owner.

    22.  ATTORNEY'S FEES:  In case suit should be brought for recovery or the 
         Premises, or for any sum due hereunder, or because of any act which 
         may arise out of the possession of the Premises, by either party, 
         the prevailing party shall be entitled to all costs incurred in 
         connection with such action, including a reasonable attorney's fee.

    23.  WAIVER:  No failure of Lessor to enforce any term hereof shall be 
         deemed to be a waiver.

    24.  NOTICES:  Any notice which either party may or is required to give, 
         shall be

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         given by mailing the same, postage prepaid, to Lessee at the 
         Premises, or Lessor at the address shown below, or at such other 
         places as may be designated by the parties from time to time.

    25.  TIME:  Time is of the essence of this Lease.

    26.  HEIRS, ASSIGNS, SUCCESSORS:  This Lease is binding upon and inures 
         to the benefit of the heirs, assigns and successors in interest to 
         the parties.

    27.  SALES TAX:  In the event that any federal, state or local law is 
         passed during the term of this Lease on any extension or extensions 
         thereof, requiring the payment of a sales tax based on the amount 
         of rent to be paid by the Lessee under this Lease or in any manner 
         subjecting the rent provided in this Lease to any form of sales tax 
         by whatever name it may be designated such tax shall be the 
         obligation of and shall be paid Lessee as specified in this Lease.

    28.  LESSOR'S LIABILITY:  The term "Lessor", as used in this paragraph, 
         shall mean only the owner of the real Premises or a Lessee's 
         interest in a ground Lease of the Premises. In the event of any 
         transfer of such title or interest, the Lessor named herein (or the 
         grantor in case of any subsequent transfers) shall be relieved of 
         all liability related to Lessor's obligations to be performed after 
         such transfer. Provided, however, that any funds in the hands of 
         Lessor or Grantor at the time of such transfer shall be delivered to 
         Grantee. Lessor's aforesaid obligations shall be binding upon 
         Lessor's successors and assigns only during their respective periods 
         of ownership.

    29.  ESTOPPEL CERTIFICATE:

         (a) Lessee shall at any time upon not less than ten (10) days' prior 
         written notice from Lessor execute, acknowledge and deliver to 
         Lessor a statement in writing (1) certifying that this Lease is 
         unmodified and in full force and effect (or, if modified, stating 
         the nature of such modification and certifying that this Lease, as 
         so modified, is in full force and effect), the amount of any 
         security deposit, and the date to which the rent and other charges 
         are paid in advance, if any, and (2) acknowledging that there are 
         not, to Lessee's knowledge, any uncured defaults on the part of 
         Lessor hereunder, or specifying such defaults if any are claimed. 
         Any such statement may be conclusively relied upon by any 
         prospective purchaser or encumbrance to the Premises.

         (b) At Lessor's option, Lessee's failure to deliver such statement 
         within such time shall be a material breach of this Lease or shall 
         be conclusive upon Lessee (1) that this Lease is in full force and 
         effect, without modification except as may be represented by Lessor, 
         (2) that there are no uncured defaults in Lessor's performance, and 
         (3) that not more than one month's rent has been paid in advance or 
         such failure may be considered by Lessor as a default by Lessee 
         under this Lease.

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    30.  HAZARDOUS MATERIALS - LESSOR'S PRIOR CONSENT:
         Notwithstanding anything contained in this Lease to the contrary, 
         Lessee shall not cause or permit any Hazardous Materials to be 
         brought upon, kept, stored, discharged, released or used in, under 
         or about the Premises by Lessee, its agents, employees, contractors, 
         subcontractors, licensees or invitees, unless Hazardous Materials 
         are used, and stored in a manner that complies with all OSHA 
         regulations concerning handling and storage of hazardous materials.

    31.  Lessee shall have quiet enjoyment of the Premises during term of 
         this Lease provided all covenants of the Agreement are adhered to.

    32.  Lessor shall indemnify and hold Lessee harmless from and against all 
         claims, liabilities, damages, penalties and fines attributable or 
         arising out of the presence of environmental contamination at the 
         Premises or the property upon which the Premises are located which is 
         the result of the activities, actions or negligence of parties 
         other than Lessee or which results from the violation of any 
         federal, state or local statute, regulation or ordinances applicable 
         to the environment (The "Environment Laws") by a party other than 
         Lessee. Lessor represents and warrants that it is unaware of the 
         presence of any environmental contamination at the Premises or the 
         property upon which the Premises is located or the violation of any 
         Environment Laws.

    ENTIRE AGREEMENT:  The foregoing constitutes the entire agreement between 
    the parties and may be modified only by a writing signed by both parties. 
    The parties' execution hereof:


                                   ACCEPTANCE


Chattem, Inc.                                 Kenco Group, Inc.

By: /s/ A. ALEXANDER TAYLOR                   By: /s/ SAM SMART
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Title: Pres.                                  Title: V.P./Sec
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                                                       522 N. 31st St
Address: 1715 W 38th St.                      Address: P.O. Box 1607
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         Chattanooga, TN 37409                          Chattanooga, TN 37401
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Phone: (423) 821-2037 x 281                   Phone: 423-757-7574
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