<PAGE>

                                 LEASE AGREEMENT

                             Basic Lease Information

Lease Date:                JANUARY 1, 2000

Lessor:                    PTF for Operating Engineers, LLC (Member: BNY Western
                           Trust Company, as Corporate Co-Trustee for the
                           Pension Trust Fund for Operating Engineers).

Lessor's Address:          340 El Camino Real South, Salinas, CA  93901

Lessee:                    MONTEREY PASTA COMPANY, A DELAWARE CORPORATION

Lessee's Address:          1528 MOFFETT STREET
                           SALINAS, CA 93905

Premises:                  Approximately 18,000 square feet of warehouse space
                           and approximately 1,845 square feet of office space
                           as shown on EXHIBIT A to this Lease

Premises Address:          340 El Camino Real South, Salinas, CA  93901

                           Building: SPACE 38
                           Park:     Firestone Business Park

Commencement Date:         JANUARY 1, 2000

Termination Date:          DECEMBER 31, 2004

Option To Extend Term:     NONE

Base Rent:                 YEAR 1: SIX THOUSAND SIX HUNDRED DOLLARS ($6,600)
                           YEAR 2: SIX THOUSAND SEVEN HUNDRED NINETY-EIGHT
                           DOLLARS ($6,798)
                           YEAR 3: SEVEN THOUSAND TWO DOLLARS ($7,002)
                           YEAR 4: SEVEN THOUSAND TWO HUNDRED TWELVE DOLLARS
                           ($7,212)
                           YEAR 5: SEVEN THOUSAND FOUR HUNDRED TWENTY-EIGHT
                           DOLLARS ($7,428)

Security Deposit:          SIX THOUSAND SIX HUNDRED DOLLARS ($6,600)

Lessee's Share of Jointly Billed or Metered Utilities: NONE

Permitted Uses:            WAREHOUSING AND DISTRIBUTION OF LESSEE'S PRODUCTS AND
                           ASSOCIATED OFFICE USE.

Insurance Amount:          Bodily injury limit of not less than $1 million per
                           occurrence. Property damage limit of not less than $1
                           million per occurrence.

Parking Spaces:            TEN (10)_undesignated parking spaces

Exhibits:                  Exhibit A - Premises
                           Exhibit B - Landlord's Work
                           Exhibit C - Rules and Regulations
                           Exhibit D - Estoppel Certificate

Addenda:                   None


                                       1
<PAGE>

                                 LEASE AGREEMENT



DATE:             This Lease is made and entered into as of the Lease Date
                  defined on Page 1. The Basic Lease Information set forth on
                  Page 1 and this Lease are and shall be construed as a single
                  instrument.

1.       PREMISES: Lessor hereby leases to Lessee upon the terms and conditions
         contained herein the Premises. Lessee shall have the non-exclusive
         right to use common areas of the Park designated by Lessor from time to
         time for the use of all tenants of the Park ("Common Areas").

2.       TERM: The term of this Lease shall commence on the Commencement Date
         set forth on Page 1 and shall end on the Termination Date set forth on
         Page 1. If Lessor cannot deliver possession of the Premises on the
         Commencement Date, Lessor shall not be subject to any liability nor
         shall the validity of the Lease be affected; provided the Lease term
         and the obligation to pay Rent shall commence on the date possession is
         tendered and the Termination Date shall be extended by a period of time
         equal to the period computed from the Commencement Date to the date
         possession is tendered. In the event that Lessor permits Lessee to
         occupy the Premises prior to the Commencement Date, such occupancy
         shall be subject to all the provisions of this Lease.

3.       RENT: Lessee agrees to pay Lessor, without prior notice or demand, the
         Base Rent described on Page 1, payable in advance at Lessor's address
         shown on Page 1 on the first day of each month throughout the term of
         the Lease. In addition to the Base Rent set forth on Page 1, Rent also
         includes Lessee's share of Jointly Billed or Metered Utilities as
         specified in Paragraph 7 of this Lease, and the term "Rent" whenever
         used herein refers to all these amounts. Upon execution of this Lease
         by Lessor and Lessee, Lessee shall pay to Lessor the Base Rent for the
         first month of the Lease Term.

4.       ERISA CERTIFICATION: The pension trusts defined as "Lessor" in this
         Lease are governed by, and subject to, regulation under the Employee
         Retirement Income Security Act of 1974 ("ERISA"). ERISA prohibits
         pension trusts, such as Lessor, from leasing their property to certain
         persons defined in ERISA as "parties-in-interest." (See section 3(14)
         of ERISA). In order for Lessor to lease the Premises, the Lessee must
         not have any of the following relationships with any one or more of the
         pension trusts comprising Lessor:

                  (a) Fiduciary, administrator, officer, trustee or custodian;

                  (b) Counsel;

                  (c) Employee;

                  (d) Service provider;

                  (e) Contributing employer;

                  (f) Union, any of whose members are covered by a pension
         program of the pension trusts;

                  (g) Fifty percent (50%) or more owner, directly or indirectly,
         of any such employer or union;

                  (h)      Spouse, ancestor, lineal descendant or spouse of
         lineal descendant of any of the above;

                  (i) Corporation, partnership, trust or estate of which fifty
         percent (50%) or more is owned or held, directly or indirectly, by any
         of the above; or


                                       2
<PAGE>

                  (j) Employee, officer, director, individual with powers or
         responsibilities similar to those of officers or directors, a ten
         percent (10%) or more shareholder, directly or indirectly, or a ten
         percent (10%) or more partner or joint venture, directly or indirectly,
         of any of the above.

         Lessee hereby covenants, warrants and represents that it does not have
         any of the above relationships with the Lessor pension trusts, and the
         Lessor pension trusts will rely thereon in completing this Lease.

5.       SECURITY DEPOSIT: Upon Lessee's execution of this Lease, Lessee shall
         deposit with Lessor as a Security Deposit for the performance by Lessee
         of its obligations under this Lease the amount described on Page 1. If
         Lessee is in default, Lessor may use the Security Deposit, or any
         portion thereof, to cure the default or to compensate Lessor for all
         damage sustained by Lessor resulting from Lessee's default. Lessee
         shall immediately on demand pay to Lessor a sum equal to the portion of
         the Security Deposit so applied so as to maintain the Security Deposit
         in the sum initially deposited with Lessor. As soon as practicable
         after the termination of this Lease, Lessor shall return the Security
         Deposit to Lessee, less such amounts as are reasonably necessary to
         remedy Lessee's defaults. Lessor shall not be required to keep the
         Security Deposit separate from other funds and, unless otherwise
         required by law, Lessee shall not be entitled to interest on the
         Security Deposit.

6.       LANDLORD'S WORK: PRIOR to the Commencement Date Lessor shall install
         the improvements on the Premises described as "Landlord's Work" in
         EXHIBIT B, which is attached and incorporated herein by this reference,
         in accordance with the criteria set forth therein.

7.       UTILITIES: Lessee shall pay the cost of all water, sewer use and
         connection fees, gas, heat, electricity, telephone and utilities billed
         or metered separately to Lessee. For utility fees or use charges that
         are not billed separately to Lessee, Lessee shall pay the amount which
         is attributable to Lessee's use of the Premises as set forth on Page 1
         as "Lessee's Share of Jointly Billed or Metered Utilities."

8.       LATE CHARGES: Lessee acknowledges that late payment by Lessee to Lessor
         of Rent, expenses, utility costs or other sums due hereunder, will
         cause Lessor to incur costs not contemplated by this Lease and the
         exact amount of such costs are extremely difficult and impracticable to
         fix. Such costs include, without limitation, processing and accounting
         charges, and late charges that may be imposed on Lessor by the terms of
         any note secured by any encumbrance against the Premises. Therefore, if
         any installment of Rent or other sums due from Lessee is not received
         by Lessor when due, Lessee shall pay to Lessor a sum equal to ten
         percent (10%) of such overdue amount as a late charge. The parties
         agree that this late charge represents a fair and reasonable estimate
         of the costs that Lessor will incur by reason of late payment by
         Lessee. Acceptance of any late charge shall not constitute a waiver of
         Lessee's default with respect to the overdue amount, nor prevent Lessor
         from exercising any of the other rights and remedies available to
         Lessor.

9.       USE OF PREMISES: The Premises are to be used for the uses stated on
         Page 1 and for no other purposes without Lessor's prior written
         consent, which shall not be unreasonably withheld. Lessor may withhold
         its consent to any change of use on any commercially reasonable
         grounds, including, but not limited to, the following grounds which are
         hereby deemed by Lessee to be reasonable:

                  (a) if the proposed changed use will conflict or be
         incompatible with other uses in the Park;

                  (b) if such proposed changed use would impact the Common Areas
         or result in increased requirements for services or utilities furnished
         by Lessor;

                  (c) if such proposed changed use would cause unusual wear and
         tear on the Premises or overload or overburden the structure or create
         undue vibration;


                                       3
<PAGE>

                  (d) if such proposed changed use would require the use of
         heavy machinery and equipment on or about the Premises;

                  (e) if such proposed changed use would require the use by
         Lessee on the Premises of Hazardous Materials at a level which creates
         more risk than the use of Hazardous Materials by Lessee in its business
         as of the date of this Lease; or

                  (f) if such proposed changed use creates inappropriate or
         dangerous uses of the of the Premises.

         Lessee shall not do or permit anything to be done in or about the
         Premises nor keep or bring anything therein which will in any way
         increase the existing rate of or affect any policy of fire or other
         insurance upon the Building or any of its contents, or cause a
         cancellation of any insurance policy. Lessee shall not do or permit
         anything to be done in or about the Premises which will in any way
         obstruct or interfere with the rights of other tenants or occupants of
         the Building or other buildings in the Park or injure or annoy other
         tenants or use or allow the Premises to be used for any improper,
         immoral, unlawful or objectionable purpose, nor shall Lessee cause,
         maintain or permit any nuisance in, on or about the Premises. Lessee
         shall not damage or deface or otherwise commit or suffer to be
         committed any waste in or upon the Premises. Lessee shall honor the
         terms of all recorded covenants conditions and restrictions relating to
         the property on which the Premises are located. Lessee shall honor the
         rules and regulations attached to and made a part of this Lease as
         EXHIBIT C and any other reasonable regulations of the Lessor related to
         parking and the operation of the Park. Lessee shall, at Lessee's
         expense, faithfully observe and comply with all Municipal, State and
         Federal statutes, rules, regulations, ordinances, requirements, and
         orders, pertaining to the Premises of Lessee's use thereof, including
         without limitation, all statutes, rules, regulations, ordinances,
         requirements, or orders affecting the Premises, the Building or the
         Park now in force or which may hereafter be in force; provided,
         however, that Lessee shall not be required to make structural changes
         to the Premises not related to Lessee's specific use of the Premises
         unless the requirement for such changes is imposed as a result of any
         improvements or additions made or proposed to be made at Lessee's
         request.

10.      ALTERATIONS AND ADDITIONS: Lessee shall not install any signs, fixtures
         or improvements to the Premises without the prior written consent of
         Lessor, which consent shall not be unreasonably withheld or delayed.
         Lessee shall keep the Premises and the property on which the Premises
         are situated free from any liens arising out of any work performed,
         materials furnished or obligations incurred by or on behalf of Lessee.
         Lessee shall give Lessor ten (10) days' prior written notice of any
         improvements by Lessee, together with a statement of the cost thereof,
         to give Lessor the opportunity to post and record a notice of
         non-responsibility. As a condition to Lessor's consent to the
         installation of any fixtures or improvements, Lessor may require Lessee
         to post a completion bond for up to 150% of the cost of the work. Upon
         termination of this Lease, Lessee shall remove any improvements made by
         Lessee and repair any damage caused by the installation or removal of
         such signs, fixtures, furniture, furnishings and improvements and leave
         the Premises in as good condition as they were in at the time of the
         commencement of this Lease, except for reasonable wear and tear,
         casualty damage and condemnation.

         Any work performed at the Building or on the Premises by Lessee or
         Lessee's contractor in connection with improvements shall be subject to
         the following additional requirements:

         (a)      Such work shall not proceed until Lessor has approved (which
                  approval shall not be unreasonably withheld or delayed) in
                  writing: (i) Lessee's contractor, (ii) the amount and coverage
                  of public liability and property damage insurance, with the
                  Lessor named as an additional insured, carried by Lessee's
                  contractor, (iii) complete and detailed plans and
                  specifications for such work, and (iv) a schedule for the
                  work.

         (b)      All work shall be done in conformity with a valid permit when
                  required, a copy of which shall be furnished to Lessor before
                  such work is commenced. In any case, all such work shall be
                  performed in accordance with all applicable laws.



                                       4
<PAGE>

                  Notwithstanding any failure by Lessor to object to any such
                  work, Lessor shall have no responsibility for Lessee's failure
                  to comply with applicable laws.

         (c)      All work by Lessee or Lessee's contractor shall be done with
                  union labor in accordance with all union labor agreements
                  applicable to the trades being employed.

11.      REPAIRS AND MAINTENANCE: Lessee shall, at Lessee's sole cost and
         expense, maintain the Premises and adjacent areas in good, clean and
         safe condition and repair to the satisfaction of the Lessor any damage
         caused by Lessee or its employees, agents, invitees, licensees or
         contractors. Without limiting the generality of the foregoing, Lessee
         shall be solely responsible for maintaining and repairing all plumbing,
         electrical wiring and equipment, lighting and interior walls, and
         maintaining the heating, ventilation and air conditioning system
         ("HVAC") serving the Premises. Lessee shall keep and maintain and
         provide Lessor with a copy of a service contract for the maintenance of
         the HVAC system.

         Except for repairs rendered necessary by the negligence of Lessee, its
         agents, customers, employees and invitees, Lessor shall keep in good
         repair the structural portions of the roof, foundations and exterior
         walls of the Premises [exclusive of glass and exterior doors) and
         underground utility and sewer pipes outside the exterior walls of the
         Building.

         Except for normal maintenance and repair of the items outlined above,
         Lessee shall have no right of access to or install any device on the
         roof of the Building nor make any penetrations of the roof of the
         Building without the express prior written consent of Lessor.

         Notwithstanding the provisions of the Lease to the contrary, any costs
         incurred by Lessor in providing auxiliary aids or services or in
         undertaking barrier removal efforts as defined in and pursuant to the
         Americans with Disabilities Act of 1990 and the regulations promulgated
         thereunder, as the same may be amended or supplemented from time to
         time, or in any similar federal, state or local law or ordinance which
         are directly attributable to or arise primarily from Lessee's use or
         occupancy of the Premises or improvements made to the Premises by
         Lessee shall be deemed additional rent, and shall be paid in full by
         Lessee within thirty (30) days after Lessor gives Lessee written notice
         that such cost has been incurred by Lessor.

12.      INSURANCE: Lessee shall at all times during the term of this Lease, and
         at its sole cost and expense, maintain worker's compensation insurance
         with not less than the minimum limits required by law and "broad form"
         commercial general liability insurance against liability for bodily
         injury and property damage with liability limits as set forth on Page 1
         with such insurance naming Lessor as an additional insured and
         including such endorsements as may be required by the Lessor. In no
         event shall the limits of said policy or policies be considered as
         limiting the liability of Lessee under this Lease.

         Lessee shall maintain in full force and effect on all of its personal
         property, furniture, furnishings, trade or business fixtures and
         equipment on the Premises a policy or policies of fire or extended
         coverage insurance. Lessor will not carry insurance on Lessee's
         personal property.

         All insurance shall be with companies licensed to do business with the
         Insurance Commissioner of the State of California rated A:X or better
         in Best's Key Rating Guide. Such commercial general liability policy or
         policies shall be issued as primary policies and not contributing with
         or in excess of coverage that Lessor may carry. A certificate in form
         ACORD 27 of such liability insurance shall be delivered to the Lessor
         prior to the Commencement Date of this Lease, and as requested by
         Lessor thereafter over the term of the Lease, which shall certify that
         the policy names Lessor as an additional insured and that the policy
         shall not be canceled or altered without thirty (30) days' prior
         written notice to Lessor.

13.      LIMITATION OF LIABILITY AND INDEMNITY: Except for damage resulting from
         the sole active negligence of Lessor or its authorized representatives,
         Lessee agrees to save and hold Lessor harmless and indemnify Lessor
         from and against all claims, losses,


                                       5
<PAGE>

         proceedings, damages, causes of action, liabilities, costs, or expenses
         (including attorneys' fees, costs of court and expenses necessary in
         the prosecution or defense of any litigation) by reason of injury to
         person or property, from whatever cause, while in or on the Premises,
         or in any way connected with the Premises or with the improvements or
         personal property therein, including any liability for injury to person
         or property of Lessee, its agents or employees or third party persons.

         Except for damage resulting from the sole active negligence of Lessor
         or its authorized representatives, Lessor shall not be liable to Lessee
         for any damage to Lessee or Lessee's property, for any injury to or
         loss of Lessee's business or for any damage or injury to any person
         from any cause.

14.      ASSIGNMENT AND SUBLEASING: Lessee shall not assign or transfer this
         Lease nor sublet all or any portion of the Premises without the written
         consent of Lessor, which shall not be unreasonably withheld. If Lessee
         seeks to sublet or assign all or any portion of the Premises, a copy of
         the proposed sublease or assignment agreement and all agreements
         collateral thereto, shall be delivered to Lessor at least thirty (30)
         days prior to the commencement of the sublease or assignment (the
         "Proposed Effective Date"). In the event of an assignment or in the
         event of a sublease where the sublease (1) by itself or taken together
         with prior or other sublease(s) covers or totals, as the case may be,
         more than twenty-five percent (25%) of the rentable square feet of the
         Premises or (2) is for a term which by itself or taken together with
         prior or other subleases is greater than fifty percent (50%) of the
         period remaining in the term of this Lease as of the time of the
         Proposed Effective Date, then Lessor shall have the right, to be
         exercised by giving written notice to Lessee, to recapture the space
         described in the sublease or the entire Premises in the event of an
         assignment. If such recapture notice is given, it shall serve to
         terminate this Lease with respect to the proposed sublease space, or,
         if the proposed sublease space covers all the Premises or in the event
         of an assignment, it shall serve to terminate the entire Lease, in
         either case as of the Proposed Effective Date. However, no termination
         of this Lease with respect to part or all of the Premises shall become
         effective without the prior written consent, where necessary, of the
         holder of each deed of trust encumbering the Premises or any part
         thereof. If this Lease is terminated pursuant to the foregoing with
         respect to less than the entire Premises, the Rent shall be adjusted on
         the basis of the proportion of square feet originally demised and this
         Lease as so amended shall continue thereafter in full force and effect.
         Each permitted assignee or sublessee shall assume and be deemed to
         assume this Lease and shall be and remain liable jointly and severally
         with Lessee for payment of Rent and for the due performance of, and
         compliance with all the terms, covenants, conditions and agreements
         herein contained on Lessee's part to be performed or complied with, for
         the term of this Lease. In the event of any sublease or assignment of
         all or any portion of the Premises where the Rent reserved in the
         sublease or assignment exceeds the Rent or pro rata portion of the
         Rent, as the case may be, for such space reserved in the Lease, Lessee
         shall pay Lessor monthly, as additional Rent, at the same time as the
         monthly installments of Rent hereunder, one-half (1/2) of the excess of
         the Rent reserved in the sublease over the Rent reserved in this Lease
         applicable to the sublease space.

15.      SUBROGATION: Subject to the approval of their respective insurers,
         Lessor and Lessee hereby mutually waive their respective rights of
         recovery against each other from loss or damage to any of their
         property located on or about the Premises that is caused by or results
         from perils covered by property insurance carried by the respective
         parties, to the extent of the proceeds of such insurance actually
         received with respect to such loss or damage. Each party shall obtain
         any special endorsements, if required by their insurer, to evidence
         compliance with the aforementioned waiver.

16.      AD VALOREM TAXES: Lessee shall pay before delinquent all taxes assessed
         against the personal property of the Lessee and all taxes attributable
         to any leasehold improvements made by Lessee.

I7.      SUBORDINATION: Lessee shall, upon request of the Lessor, execute any
         instrument necessary or desirable to subordinate this Lease and all its
         rights contained hereunder to any and all encumbrances now or hereafter
         in force against the Park and the Building.


                                       6
<PAGE>

         In the event any proceedings are brought for foreclosure or in the
         event of the exercise of the power of sale under any deed of trust made
         by Lessor covering the Premises or a deed in lieu of foreclosure
         thereunder, Lessee shall attorn to the purchaser upon any such
         foreclosure or sale and recognize as the Lessor under this Lease any
         such purchaser or such transferee who acquires the Premises by deed in
         lieu of foreclosure.

18.      RIGHT OF ENTRY: Lessee grants to Lessor or its agents the right to
         enter the Premises at all reasonable times for purposes of inspection,
         exhibition, repair or alteration. Lessor shall at all times have and
         retain a key with which to unlock all the doors in, upon and about the
         Premises, excluding Lessee's vaults and safes, and Lessor shall have
         the right to use any and all means Lessor deems necessary to enter the
         Premises in an emergency. Lessor shall also have the right to place
         "for rent" and/or "for sale" signs on the outside of the Premises.
         Lessee hereby waives any claim for any of the foregoing arising out of
         the negligent acts or omissions of Lessor or its authorized
         representatives.

19.      ESTOPPEL CERTIFICATE: Lessee shall execute and deliver to Lessor, upon
         not less than five (5) days' prior written notice, a statement in the
         form attached as EXHIBIT D certifying that this Lease is unmodified and
         in full force and effect (or, if modified, stating the nature of such
         modification) and the date to which the Rent and other charges are paid
         in advance, if any, and acknowledging that there are not, to Lessee's
         knowledge, any uncured defaults on the part of Lessor hereunder or
         specifying such defaults as are claimed. Any such statement may be
         conclusively relied upon by any prospective purchaser or encumbrancer
         of the Premises. Lessee's failure to deliver such statement within such
         time shall be conclusive upon the Lessee that (1) this Lease is in full
         force and effect, without modification except as may be represented by
         Lessor; (2) there are no uncured defaults in the Lessor's performance;
         and (3) not more than one month's rent has been paid in advance.

20.      LESSEE'S DEFAULT: The occurrence of any one or more of the following
         events shall constitute a default and breach of this Lease by Lessee:

         (a)      The vacation or abandonment of the Premises by the Lessee.

         (b)      The failure by Lessee to make any payment of Rent or any other
                  payment required hereunder on the date said payment is due.

         (c)      The failure of Lessee to observe, perform or comply with any
                  of the conditions or provisions of this Lease for a period,
                  unless otherwise noted herein, of ten (10) days after written
                  notice.

         (d)      The Lessee becoming the subject of any bankruptcy (including
                  reorganization or arrangement proceedings pursuant to any
                  bankruptcy act) or insolvency proceeding whether voluntary or
                  involuntary.

         (e)      The Lessee using or storing Hazardous Materials on the
                  Premises other than as permitted by the provisions of
                  Paragraph 29 below, or the release of any hazardous substance,
                  or failure to notify Lessor or appropriate federal, state, or
                  local agencies of any such release.

         (f)      The Lessee entering any of the relationships listed in
                  Paragraph 4 above (ERISA Certification) with the Pension Trust
                  Fund comprising the Lessor.

21.      REMEDIES FOR LESSEE'S DEFAULT: In the event of Lessee's default or
         breach of the Lease, Lessor may terminate Lessee's right to possession
         of the Premises by any lawful means, in which case this Lease shall
         terminate and Lessee shall immediately surrender possession of the
         Premises to Lessor. In addition, the Lessor shall have the immediate
         right of re-entry, and if this right of re-entry is exercised following
         abandonment of the Premises by Lessee, Lessor may consider any personal
         property belonging to Lessee and left on the Premises to also have been
         abandoned.

         If Lessee breaches this Lease and abandons the Premises before the end
         of the term, or if Lessee's right to possession is terminated by Lessor
         because of a breach of the Lease, then in either such case, Lessor may
         recover from Lessee all damages suffered by Lessor


                                       7
<PAGE>

         as a result of Lessee's failure to perform its obligations hereunder,
         including, but not restricted to, the worth at the time of the award
         (computed in accordance with paragraph (3) of the subdivision (a) of
         Section 1951.2 of the California Civil Code) of the amount by which the
         Rent then unpaid hereunder for the balance of the Lease term exceeds
         the amount of such loss of Rent for the same period which the Lessee
         proves could be reasonably avoided by Lessor and in such case, Lessor,
         prior to the award, may relet the Premises for the purpose of
         mitigating damages suffered by Lessor because of Lessee's failure to
         perform its obligations hereunder; provided, however, that even though
         Lessee has abandoned the Premises following such breach, this Lease
         shall nevertheless continue in full force and effect for as long as the
         Lessor does not terminate Lessee's right of possession, and until such
         termination, Lessor may enforce all its rights and remedies under this
         Lease, including the right to recover the Rent from Lessee as it
         becomes due hereunder. The "worth at the time of the award" within the
         meaning of Subparagraphs (a)(l) and a)(2) of Section 1951.2 of the
         California Civil Code shall be computed by allowing interest at the
         rate of ten percent (10%) per annum.

         The foregoing remedies are not exclusive; they are cumulative in
         addition to any remedies now or later allowed by law or to any
         equitable remedies Lessor may have, and to any remedies Lessor may have
         under bankruptcy laws or laws affecting creditor's rights generally.
         The waiver by Lessor of any breach of any term of this Lease shall not
         be deemed a waiver of such term or of any subsequent breach thereof.

22.      HOLDING OVER: If Lessee holds possession of the Premises after the term
         of this Lease with Lessor's consent, Lessee shall become a tenant from
         month to month upon the terms specified at a monthly Rent of 150% of
         the Base Rent due on the last month of the Lease term, payable in
         advance on or before the first day of each month. All other sums due as
         Rent hereunder shall be paid by Lessee and all other provisions of this
         Lease shall remain in effect. All options, if any, granted under the
         terms of this Lease shall be deemed terminated and be of no effect
         during said month to month tenancy. Lessee shall continue in possession
         until such tenancy shall be terminated by either Lessor or Lessee
         giving written notice of termination to the other party at least thirty
         (30) days prior to the effective date of termination.

23.      LESSOR'S DEFAULT: Lessee agrees to give holder of a deed of trust
         encumbering the Premises ("Trust Deed Holders"), by certified mail, a
         copy of any notice of default served upon the Lessor by Lessee,
         provided that prior to such notice Lessee has been notified in writing
         (by way of Notice of Assignment of Rents and Leases, or otherwise) of
         the address of such Trust Deed Holder. Lessee further agrees that if
         Lessor shall have failed to cure such default within the time, if any,
         provided for in this Lease, then the Trust Deed Holders shall have an
         additional thirty (30) days within which to cure such default or if
         such default cannot be cured within that time, then such additional
         time as may be necessary, if within such thirty (30) days, the Trust
         Deed Holder has commenced and is diligently pursuing the remedies
         necessary to cure such default (including, but not limited to,
         commencement of foreclosure proceedings, if necessary, to effect such
         cure), in which event this Lease shall not be terminated while such
         remedies are being so diligently pursued.

24.      PARKING: Lessee shall have the use of the number of undesignated
         parking spaces set forth on Page 1. Lessor shall exercise its best
         efforts to insure that such spaces are available to Lessee for its use,
         but Lessor shall not be required to enforce Lessee's right to use the
         same.

25.      SALE OF PREMISES: In the event of any sale of the Premises by Lessor,
         Lessor shall be and is hereby released from its obligation to perform
         under this Lease and the purchaser at such sale or any subsequent sale
         of the Premises shall be deemed, without any further agreement between
         the parties or their successors in interest or between the parties and
         any such purchaser, to have assumed and agreed to carry out any and all
         of the covenants and obligations of the Lessor under this Lease.

26.      WAIVER: No delay or omission in the exercise of any right or remedy of
         Lessor or any default by Lessee shall impair such a right of remedy or
         be construed as a waiver.


                                       8
<PAGE>

         The subsequent acceptance of Rent by Lessor after breach by Lessee of
         any covenant or term of this Lease shall not be deemed a waiver of such
         breach, and shall not prevent Lessor from maintaining an unlawful
         detainer or other action based on such breach.

         No payment by Lessee or receipt by Lessor of a lesser amount than the
         monthly Rent and other sums due hereunder shall be deemed to be other
         than on account of the earliest Rent or other sums due, nor shall any
         endorsement or statement on any check or accompanying any check or
         payment be deemed an accord and satisfaction and Lessor may accept such
         check or payment without prejudice to Lessor's right to recover the
         balance of such Rent or other sum or pursue any other remedy provided
         in this Lease.

27.      CASUALTY DAMAGE: If the Premises or any part thereof shall be damaged
         by fire or other casualty, Lessee shall give prompt written notice
         thereof to Lessor. In case the Building shall be so damaged by fire or
         other casualty that substantial alteration or reconstruction of the
         Building shall, in Lessor's reasonable opinion, be required (whether or
         not the Premises shall have been damaged by such fire or other
         casualty), Lessor may, at its option, terminate this Lease by notifying
         Lessee in writing of such termination within sixty (60) days after the
         date of such damage, in which event the Rent shall be abated as of the
         date of such damage. If Lessor does not elect to terminate this Lease,
         Lessor shall within ninety (90) days after the date of such damage
         commence to repair and restore the Building and shall proceed with
         reasonable diligence to restore the Building (except that Lessor shall
         not be responsible for delays outside its control) to substantially the
         same condition in which it was immediately prior to the happening of
         the casualty, except that Lessor shall not be required to rebuild,
         repair. or replace any part of Lessee's furniture, furnishings or
         fixtures and equipment removable by Lessee or any improvements
         installed by Lessee under the provisions of this Lease. Lessor shall
         not in any event be required to spend for such work an amount in excess
         of the insurance proceeds actually received by Lessor as a result of
         the fire or other casualty. Lessor shall not be liable for any
         inconvenience or annoyance to Lessee, injury to the business of Lessee,
         loss of use of any part of the Premises or the Lessee's personal
         property resulting in any way from such damage or the repair thereof,
         except that, subject to the provisions of the next sentence, Lessor
         shall allow Lessee a fair diminution of Rent during the time and to the
         extent the Premises are unfit for occupancy. If the Premises or any
         other portion of the Building be damaged by fire or other casualty
         resulting from the fault or negligence of Lessee or any of Lessee's
         agents, employees, or invitees, the Rent shall not be diminished during
         the repair of such damage and Lessee shall be liable to Lessor for the
         cost and expense of the repair and restoration of the Building caused
         thereby to the extent such cost and expense of the repair and
         restoration of the Building caused thereby is not covered by insurance
         proceeds.

         Except as otherwise provided in this Paragraph 27, Lessee hereby waives
         the provisions of Sections 1932(2), 1933(4), 1941 and 1942 of the
         California Civil Code.

28.      CONDEMNATION: If twenty-five percent (25%) or more of the Premises is
         taken for any public or quasi-public purpose of any lawful governmental
         power or authority or sold to a governmental entity to prevent such
         taking, the Lessee or the Lessor may terminate this Lease as of the
         date when physical possession of the Premises is taken by the taking
         authority. Lessee shall not because of such taking assert any claim
         against the Lessor or the taking authority for any compensation because
         of such taking, and Lessor shall be entitled to receive the entire
         amount of any award without deduction for any estate of interest or
         interest of Lessee. If a substantial portion of the Building or the
         Park is so taken, Lessor at its option may terminate this Lease. If
         Lessor does not elect to terminate this Lease, Lessor shall, if
         necessary, promptly proceed to restore the Premises or the Building to
         substantially its same condition prior to such partial taking, allowing
         for the reasonable effects of such taking, and a proportionate
         allowance shall be made to Lessee for the Rent corresponding to the
         time during which, and to the part of the Premises of which, Lessee is
         deprived on account of such taking and restoration. Lessor shall not be
         required to spend funds for restoration in excess of the amount
         received by Lessor as compensation awarded.

29.      HAZARDOUS MATERIALS: The Lessee, at its sole cost and expense, shall
         comply with all laws, ordinances, regulations, and standards regulating
         or controlling hazardous wastes or hazardous substances, including,
         without limitation, the Comprehensive Environmental


                                       9
<PAGE>

         Response, Compensation, and Liability Act of 1980, as amended, 42
         U.S.C. 9601, et seq., the Hazardous Material Transportation Act, 49
         U.S.C. 1801, et seq., the Resource Conservation and Recovery Act, 42
         U.S.C. 6901, et seq., the Carpenter-Presley-Tanner Hazardous Substance
         Account Act, Health and Safety Code section 25300, et seq., the
         Underground Storage of Hazardous Substance Act, Health and Safety
         section 25280, et seq., the Safe Drinking Water and Toxic enforcement
         Act of 1986 (Health and Safety Code section 25249.S, et seq., and the
         Hazardous Waste Control Law, Health and Safety Code section 25100, et
         seq. (collectively, the "Environmental Laws"). The Lessee hereby
         indemnifies and at all times shall indemnify and hold harmless the
         Lessor, the Lessor's trustees, directors, officers, employees,
         investment manager(s), attorneys, agents, and any successors to the
         Lessor's interest in the chain of title to the Property, their
         trustees, directors, officers, employees, and agents from and against
         any and all claims, suits, demands, response costs, contribution costs,
         liabilities, losses, or damages, directly or indirectly arising out of
         the existence, use, generation, migration, storage, transportation,
         release, threatened release, or disposal of Hazardous Materials
         (defined below) in, on, or under the Property or in the groundwater
         under the Property and the migration or transportation of Hazardous
         Materials to or from the Property or the groundwater underlying the
         Property. This indemnity extends to the costs incurred by the Lessor or
         its successors to reasonably repair, clean up, dispose of, or remove
         such Hazardous Materials in order to comply with the Environmental
         Laws, provided the Lessor gives the Lessee not less than thirty (30)
         days' advance written notice of its intention to incur such costs. The
         Lessee's obligations pursuant to the foregoing indemnification and hold
         harmless agreement shall survive the termination of this Lease. The
         subtenants, contractors, agents, or invitees of the Lessee shall not
         use, generate, manufacture, store, transport, release, threaten
         release, or dispose of Hazardous Materials in, on, or about the Park
         unless the Lessee shall have received the Lessor's prior written
         consent therefore, which the Lessor may withhold or revoke at any time
         in its reasonable discretion, and shall not cause or permit the release
         or disposal of Hazardous Materials from the Park except in compliance
         with applicable Environmental Laws. The Lessee shall not permit any
         person, including its subtenants, contractors, agents, or invitees to
         use, generate, manufacture, store, transport, release, threaten
         release, or dispose of Hazardous Materials in, on, or about the Park or
         transport Hazardous Materials from the Park unless the Lessee shall
         have received the Lessor's prior written consent therefore, which the
         Lessor may hold or revoke at any time in its reasonable discretion and
         shall not cause or permit the release or disposal of Hazardous
         Materials. The Lessee shall promptly deliver written notice to the
         Lessor if it obtains knowledge sufficient to infer that Hazardous
         Materials are located on the Park that are not in compliance with
         applicable Environmental Laws or if any third party, including without
         limitation, a governmental agency, claims a significant disposal of
         Hazardous Materials occurred in the Park or is being or has been
         released from the Park, or any such party gives notice of its intention
         to declare the Park to be Border Zone Property (as defined in section
         25117.4 of the California Health and Safety Code). Upon reasonable
         written request of the Lessor, the Lessee, through its professional
         engineers and at its cost, shall thoroughly investigate suspected
         Hazardous Materials contamination of the Park. The Lessee, using duly
         licensed and insured contractors, shall promptly commence and
         diligently complete the removal, repair, clean-up, and detoxification
         of any Hazardous Materials from the Park as may be required by
         applicable Environmental Laws.

         Notwithstanding anything to the contrary in this Lease, nothing herein
         shall prevent the Lessee from using materials other than Hazardous
         Materials on the Premises as would be used in the ordinary course of
         the Lessee's business as contemplated by this Lease. The Lessee does
         not in the course of the Lessee's current business use Hazardous
         Materials. If during the term of this Lease, the Lessee contemplates
         utilizing such materials (or subleases/assigns this Lease to a
         subtenant or assignee who utilizes Hazardous Materials), the Lessee
         shall obtain prior written approval from the Lessor, which approval
         shall not be unreasonably withheld. The Lessor, at its option, and at
         the Lessee's expense, may cause an engineer selected by the Lessor, to
         review (a) the Lessee's operations, including materials used,
         generated, stores, disposed, and manufactured in the Lessee's business
         and (b) the Lessee's compliance with the terms of this paragraph. The
         Lessee shall provide the engineer with such information reasonably
         requested by the engineer to complete the review. The first such review
         may occur prior to or shortly following commencement of the term of
         this Lease. Thereafter, such review shall not occur more frequently
         than once each year unless cause exists for some other review schedule.
         One-


                                       10
<PAGE>

         half (1/2) of the fees and costs of the engineer shall be paid promptly
         by the Lessee to the Lessor upon receipt of written notice of such fees
         and costs.

         "Hazardous Materials" means any hazardous waste or hazardous substance
         as defined in any federal, state, county, municipal, or local statute,
         ordinance, rule, or regulation applicable to the Property, including,
         without limitation, the Environmental Laws. "Hazardous Materials" shall
         also include asbestos or asbestos-containing materials, radon gas,
         petroleum or petroleum fractions, urea formaldehyde foam insulation,
         transformers containing levels of polychlorinated biphenyls greater
         than 50 parts per million, and chemicals known to cause cancer or
         reproductive toxicity, whether or not defined as a hazardous waste or
         hazardous substance in any such statute, ordinance, rule, or
         regulation.

30.      FINANCIAL STATEMENTS: Within ten (10) days after Lessor's request,
         Lessee shall deliver to Lessor the then current audited financial
         statements of Lessee (including interim periods following the end of
         the last fiscal year for which annual statements are available) which
         statements shall be prepared or compiled by a certified public
         accountant and shall present fairly the financial condition of Lessee
         at such dates and the result of its operations and changes in its
         financial positions for the periods ended on such dates.

31.      REPRESENTATIONS AND WARRANTIES OF LESSEE: If Lessee is a partnership,
         corporation or limited liability company, Lessee hereby makes the
         following representations and warranties, each of which is material and
         being relied upon by Lessor, is true in all respects as of the date of
         this Lease, and shall survive the expiration or termination of the
         Lease.

                  (a) Lessee is duly organized, validly existing and in good
         standing under the laws of the state of its organization and the
         persons executing this Lease on behalf of Lessee have the full right
         and authority to execute this Lease on behalf of Lessee and to bind
         Lessee without the consent or approval of any other person or entity.
         Lessee has full power, capacity, authority and legal right to execute
         and deliver this Lease and to perform all of its obligations hereunder.
         This Lease is a legal, valid and binding obligation of Lessee,
         enforceable in accordance with its terms.

                  (b) Lessee has not (1) made a general assignment for the
         benefit of creditors, (2) filed any voluntary petition in bankruptcy or
         suffered the filing of an involuntary petition by any creditors, (3)
         suffered the appointment of a receiver to take possession of all or
         substantially all of its assets, (4) suffered the attachment or other
         judicial seizure of all or substantially all of its assets, (5)
         admitted in writing its inability to pay its debts as they come due, or
         (6) made an offer of settlement, extension or composition to its
         creditors generally.

32.      GENERAL PROVISIONS:

                  (a) TIME. Time is of the essence in this Lease and with
         respect to each and all of its provisions in which performance is a
         factor.

                  (b) SUCCESSORS AND ASSIGNS. The covenants and conditions
         herein contained, subject to the provisions as to assignment, apply to
         and bind the heirs, successors, executors, administrators and assigns
         of the parties hereto.

                  (c) RECORDATION. Lessee shall not record this Lease or a short
         form memorandum hereof without prior written consent of the Lessor.

                  (d) LESSOR'S PERSONAL LIABILITY. The liability of Lessor
         (which, for purposes of this Lease, shall include Lessor and the owner
         of the Building if other than the Lessor) to Lessee for any default by
         Lessor under the terms of this Lease shall be limited to the actual
         interest of Lessor and its present or future partners in the Building
         and Lessee agrees to look solely to Lessor's or Lessor's present or
         future partners' actual interest in the Building for the recovery of
         any judgment against Lessor, it being intended that Lessor shall not be
         personally liable for any judgment or deficiency. The liability of
         Lessor under this Lease is limited to its actual period of ownership of
         title to the Building, and Lessor shall be released from liability upon
         transfer of title to the Building.


                                       11
<PAGE>

                  (e) SEPARABILITY. Any provisions of this Lease which shall
         prove to be invalid, void or illegal shall in no way affect, impair or
         invalidate any other provisions hereof and such other provision shall
         remain in full force and effect.

                  (f) CHOICE OF LAW. This Lease shall be governed by the laws of
         the State of California.

                  (g) ATTORNEYS' FEES. In the event any legal action is brought
         to enforce or interpret the provisions of this Lease, the prevailing
         party therein shall be entitled to recover all costs and expenses
         including reasonable attorneys' fees.

                  (h) ENTIRE AGREEMENT. This Lease supersedes any prior
         agreements and contains the entire agreement of the parties on matters
         covered. No other agreement, statement or promise made by any party
         that is not in writing and signed by all parties to this Lease shall be
         binding. This Lease shall not be construed to create any form of
         partnership or joint venture between Lessor and Lessee.

                  (i) WARRANTY OF AUTHORITY. Each person executing this
         agreement on behalf of a party represents and warrants that (1) such
         person is duly and validly authorized to do so on behalf of the entity
         it purports to so bind, and (2) if such party is a partnership,
         corporation or trustee, that such partnership, corporation or trustee
         has full right and authority to enter into this Lease and perform all
         of its obligations hereunder.

                  (j) NOTICES. All notices and demands required or permitted to
         be sent to the Lessor or Lessee shall be in writing and shall be sent
         by United States mail, postage prepaid, certified or by personal
         delivery or by overnight courier, addressed to Lessor at Firestone
         Business Park, 340 El Camino Real South, Salinas, California 93901, or
         to Lessee at the address listed on Page 1 prior to the Commencement
         Date and following the Commencement Date at the Premises, or to such
         other place as such party may designate in a notice to the other party
         given as provided herein. Notice shall be deemed given upon the earlier
         of actual receipt or the third day following deposit in the United
         States mail.

                  (k) INTERLINEATION. The use of underlining or strikeouts
         within the Lease is for reference purposes only. No other meaning or
         emphasis is intended by this use, nor should any be inferred.

33.      BLANKET ENCUMBRANCE: Lessee is aware of the fact that the lot on which
         the Premises are located may be subject to a deed of trust, mortgage,
         or other lien known as a "Blanket Encumbrance." According to California
         law, Lessee could lose its interest through foreclosure of the Blanket
         Encumbrance or other legal process even though Lessee is not delinquent
         in Lessee's payments or other obligations under the Lease.

         IN WITNESS WHEREOF, this Lease is executed on the date and year first
written above.

LESSEE: MONTEREY PASTA COMPANY

By:      /S/                                 By:      /S/
   -------------------------------              -------------------------------
         Stephen L. Brinkman                          R. Lance Hewitt
Its:     Chief Financial Officer             Its:     Chief Executive Officer
   -------------------------------              -------------------------------

LESSOR:  PTF for Operating Engineers, LLC (Member: BNY Western Trust Company, as
         Corporate Co-Trustee for the Pension Trust Fund for Operating
         Engineers).

By:      McMorgan & Company
Its:     Investment Manager

By:      /S/
         -----------------------------
         Patrick Murray
Its:     Vice President


                                       12
<PAGE>

                                    EXHIBIT A

                                    PREMISES


                                       13
<PAGE>

                                    EXHIBIT B

                                 LANDLORD'S WORK

1.       LESSEE EXCEPTS PREMISES IN "AS IS" CONDITION.


                                       14
<PAGE>

                                    EXHIBIT C

                             FIRESTONE BUSINESS PARK
                              RULES AND REGULATIONS

PURPOSE:
     In a business park setting, it is imperative that certain activities be
     prohibited because they represent a threat to good order and discipline
     which directly impact on the health, safety or welfare of our lives. These
     Rules and Regulations are for the mutual benefit and protection of all
     current and future lessees with Firestone Business Park. Accordingly, each
     lessee agrees to accept these Rules and Regulations.

Furthermore, Firestone Business Park will enforce these provisions according to
     its business judgment in its sole discretion. It is agreed and understood
     that Firestone Business Park shall not be subject to any claim of any kind
     for damages or losses suffered as a result of a breach of these Rules and
     Regulations by another party, or the alleged failure of the Firestone
     Business Park to enforce the provisions of these Rules and Regulations.

EFFECTIVE DATE:

These Rules and Regulations are effective as of January 15, 1992 and hereby
     supersede all previous Rules and Regulations.

CONTROLLED SUBSTANCES:

     It is strictly forbidden to enter the Firestone Business Park under the
     influence of any controlled substance, or to transport, carry, consume or
     use any intoxicants, narcotics, stimulants, depressants or hallucinogens.
     The giving, selling or delivering of any controlled substance to any other
     person on the premises or trafficking for the sale or delivery of such
     items is forbidden and is illegal. Ethical pharmaceutical drugs on a
     doctor's prescription and over-the-counter drugs are allowed.

SPEED LIMITS:

     A 25 MPH speed limit is in effect for safety reasons and it will be
     strictly enforced. Flagrant abusers of the speed limit or repeat violators
     will be prohibited from driving in the Firestone Business Park. This
     prohibition extends to both employees and to trucking or transportation
     companies servicing your business.

PARKING:

     All parking shall be in designated parking areas only. Illegally parked
     vehicles, improperly parked vehicles taking two or more spaces, or those
     parked in undesignated areas will be removed at the expense of the lessee.

VEHICULAR STORAGE:

     Due to insurance liability limitations, there shall be no storage of vans,
     cars, trucks, trailers, boats or other vehicles of any sort outside of the
     lessee's leased space.

OUTSIDE STORAGE:

     There shall be no outside storage of wares, goods, materials, containers,
     boxes or pallets. Such material is a fire hazard that threatens safety and
     is absolutely prohibited.


                                       15
<PAGE>

LOADING AND STAGING:

     All loading and unloading must be conducted entirely at the lessee's
     loading docks or interior lease space. Staging is the term applied to the
     preparation, presentation or stacking of merchandise for shipping in a
     convenient, ready-to-load location. All staging of materials must be
     accomplished within each lessee's space.

REFUSE AND TRASH:

     Each lessee is responsible for the safe storage and removal of trash and
     refuse generated by its respective business. Trash containers shall not be
     allowed to overflow and, in wind conditions, trash containers must be
     tarped to prevent the blowing of trash around the Firestone Business Park
     and into other leased spaces.

VEHICULAR MAINTENANCE AND REPAIR:

     There shall be no maintenance or repairs performed on any automobile,
     truck, cab, van, trailer or other vehicle, whether it is parked on
     concrete, asphalt, blacktop, dirt or any other surface in Firestone
     Business Park. With the exception of such minor repairs or assistance such
     as jump-starting dead batteries, all vehicles must be removed from the
     Firestone Business Park for servicing. This prohibition also applies to oil
     changes, filter changes and lubrication.

POLLUTION AND NUISANCE:

     Any type of activity or business application that produces offensive noise,
     dirt, smoke, odor or other nuisance is strictly prohibited. This
     prohibition extends to the running of gasoline or diesel engines inside
     warehousing or other enclosed spaces. Firestone Business Park management
     has the sole discretion to determine whether any business activity that
     produces noise, dirt, smoke, odor or other nuisances is of a nature that
     should be prohibited.

SAFETY AND SECURITY:

     The personnel of the Safety and Security Force may not be utilized to halt
     shipments, stop trucking or engage in other activities resulting from
     internal labor-management disputes. The Safety and Security Force is
     authorized to act in the event there has been a criminal act committed and
     to provide safety-related services.

ANIMALS:

     No animals shall be brought or kept upon the Firestone Business Park,
except seeing eye dogs.


                                       16
<PAGE>

                                    EXHIBIT D

                              ESTOPPEL CERTIFICATE

LEASE DATED:      JANUARY 1, 2000

BETWEEN: PTF for Operating Engineers, LLC (Member: BNY Western Trust Company, as
         Corporate Co-Trustee for the Pension Trust Fund for Operating
         Engineers). as "Lessor"

AND:     MONTEREY PASTA COMPANY, A DELAWARE CORPORATION
         as "Lessee", demising premises located and addressed as:
         Space:   38
                  340 EL CAMINO REAL SOUTH
                  SALINAS, CA  93901

Ladies and Gentlemen:

The undersigned Lessee hereby certifies with respect to the above described
Lease as follows:

1.     All space and improvements leased by Lessee pursuant to the Lease have
       been completed and furnished in accordance with the provisions of the
       Lease, and Lessee has accepted and taken possession of the Premises. All
       obligations of Lessor to Lessee with respect to improvements to the
       Premises have been performed;

2.     Lessor has satisfied all commitments made to induce Lessee to enter into
       the Lease, and Lessor is not in any respect in default in the performance
       by Lessor of its obligations under the Lease;

3.     Lessee is not in any respect in default under the Lease and has not
       assigned, consigned, sublet, transferred or hypothecated its interest or
       any part thereof under the Lease;

4.     The Lease (including any option or renewal term) is for a total term of
       approximately FIVE (5) years commencing JANUARY 1, 2000 "Commencement
       Date") and ending DECEMBER 31, 2004. The Lease is in full force and
       effect and has not been modified, altered or amended and contains the
       entire agreement between Lessor and Lessee except:

       NONE

5.     Rental under the Lease has been paid through JANUARY 31, 2000 and was
       payable from the Commencement Date: JANUARY 1, 2000;

6.     The Base Rent is $6,600 (SIX THOUSAND SIX HUNDRED DOLLAR) per month at
       this time;

7.     There are no offsets or credits against Rent payable under the Lease, and
       Lessee has made no payment to Lessor as a security deposit or advance or
       prepaid rental except: (i) payments expressly provided for in the Lease
       or in an amendment or modification to the Lease described above; and (ii)
       payments made no earlier than ten (10) days prior to the date upon which
       such payments are due;

8.     Except as expressly provided in the Lease or in an amendment or
       modification to the Lease which is described above, Lessee does not have
       any right to renew or extend the term of the Lease nor any option or
       preferential right to purchase all or any part of the Premises or all or
       any part of the building of which the Premises are a part, nor any right,
       title or interest with respect to the Premises other than as Lessee under
       the Lease;

9.     Lessee acknowledges that this certificate is a material inducement to
       prospective lenders and/or purchasers to incur financial obligation in
       respect hereof, and that such lenders or purchasers will rely upon the
       statements contained herein;


                                       17
<PAGE>

10.    That the above described Lease represents the entire agreement between
       the parties as to said leasing.

       The undersigned hereby agrees:

       (a)    To disclaim all right, title or interest in said Premises except
              the rights granted by said Lease;

       (b)    To send a copy of any notice or demand given or made to the Lessor
              pursuant to the provisions of said Lease, by certified mail to the
              owner and holder of any first mortgage on the demised Premises, or
              its assignee upon being notified in writing of such mortgagee's or
              assignee's name and address; and

       (c)    To give to the holder of said mortgage or its assignee the same
              right as the Lessor has to cure any default complained of in said
              notice or demand.

Executed this 2nd day of February , 2000.


______________________________

______________________________


By: /s/ R. Lance Hewitt
    --------------------------

Its: President and CEO
    --------------------------


By: /s/ Stephen L. Brinkman
    --------------------------

Its: CFO
    --------------------------


                                       18


<PAGE>

                                                                     EXHIBIT A


                         [MAP OF FIRESTONE BUSINESS PARK]