<PAGE>
 
                                                                   EXHIBIT 10.14

[Net Lease]

                                LEASE AGREEMENT

  THIS LEASE AGREEMENT is made this 24 day of September, 1997, between SCI North
Carolina Limited Partnership, ("Landlord"), and the Tenant named below.

TENANT:                         Channell Commercial Corporation

TENANT'S REPRESENTATIVE,        Mr. Charlie Frye
ADDRESS, AND PHONE NO.:         10901-A South Commerce Blvd.
                                Charlotte, NC 28273
                                704-588-4008

PREMISES:                       That portion of the Building, containing 
                                approximately 43,900 rentable square feet, 
                                as determined by Landlord, as shown on 
                                Exhibit A.

PROJECT:                        Commerce Business Park (805,434 s.f.)

BUILDING:                       Commerce Park 6 (178,442 s.f.)

TENANT'S PROPORTIONATE SHARE    
OF PROJECT:                     5.5%

TENANT'S PROPORTIONATE SHARE
OF BUILDING:                    25%

LEASE TERM:                     Beginning on the Commencement Date and ending 
                                on the last day of the 36th full calendar 
                                month thereafter.

COMMENCEMENT DATE:              February 1, 1998

INITIAL MONTHLY BASE RENT:                                          $11,999.00
                                                                    
INITIAL ESTIMATED MONTHLY       1. Utilities:       $Tenant's        
OPERATING EXPENSE PAYMENTS:                          Responsibility  
(estimates only and subject to  2. Common Area                       
adjustment to actual costs         Charges:         $   915.00       
and expenses according to the   
provisions of this Lease)       3. Taxes:           $ 1,098.00        
                                                    
                                4. Insurance:       $   146.00        
                                                    
                                5. Others:          $     0.00        
INITIAL ESTIMATED MONTHLY                           
OPERATING EXPENSE PAYMENTS:                                          $ 2,159.00 
                                                                    
INITIAL MONTHLY BASE RENT AND
OPERATING EXPENSE PAYMENTS:                                          $14,158.00
                                                                    
SECURITY DEPOSIT:               $14,158,000
                                
BROKER:                         Kirco Carolina Interest

ADDENDA:                        Addendum One & Exhibit A


  1.   GRANTING CLAUSE. In consideration of the obligation of Tenant to pay rent
as herein provided and in consideration of the other terms, covenants, and 
conditions hereof, Landlord leases to Tenant, and Tenant takes from Landlord, 
the Premises, to have and to hold for the Lease Term, subject to the terms, 
covenants and conditions of this Lease.

  2.   ACCEPTANCE OF PREMISES. Subject to the terms of Addendum One, Section 
III, Tenant shall accept the Premises in its condition as of the Commencement 
Date, subject to all applicable laws, ordinances, regulations, covenants and 
restrictions. Landlord has made no representation or warranty as to the 
suitability of the Premises for the conduct of Tenant's business, and Tenant 
waives any implied warranty that the Premises are suitable for Tenant's intended
purposes. Except as provided in Paragraph 10, in no event shall Landlord have 
any obligation for any defects in the Premises or any limitation on its use. 
The taking of possession of the Premises shall be conclusive evident that Tenant
accepts the Premises and that the Premises were in good condition at the time 
possession was taken except for items that are Landlord's responsibility under
Paragraph 10 and any punch list items agreed to in writing by Landlord and
Tenant.



<PAGE>
 
          3.      USE. The Premises shall be used only for the purpose of
receiving, storing, shipping and selling (but limited to wholesale sales)
products, materials and merchandise made and/or distributed by Tenant and for
such other lawful purposes as may be incidental thereto; provided, however, with
Landlord's prior written consent, Tenant may also use the Premises for light
manufacturing. Tenant shall not conduct or give notice of any auction,
liquidation, or going out of business sale on the Premises. Tenant will use the
Premises in a careful, safe and proper manner and will not commit waste,
overload the floor or structure of the Premises or subject the Premises to use
that would damage the Premises. Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the
Premises, or take any other action that would constitute a nuisance or would
disturb, unreasonably interfere with, or endanger Landlord or any tenants of the
Project. Outside storage, including without limitation, storage of trucks and
other vehicles, is prohibited without Landlord's prior written consent. Tenant,
at its sole expense, shall use and occupy the Premises in compliance with all
laws, including, without limitation, the Americans With Disabilities Act,
orders, judgments, ordinances, regulations, codes, directives, permits,
licenses, covenants and restrictions now or hereafter applicable to the Premises
(collectively, "Legal Requirements"). The Premises shall not be used as a place
of public accommodation under the Americans With Disabilities Act or similar
state statutes or local ordinances or any regulations promulgated thereunder,
all as may be amended from time to time. Tenant shall, at its expense, make any
alterations or modifications, within or without the Premises, that are required
by Legal Requirements related to Tenant's use or occupation of the Premises.
Tenant will not use or permit the Premises to be used for any purpose or in any
manner that would void Tenant's or Landlord's insurance, increase the insurance
risk, or cause the disallowance of any sprinkler credits. If any increase in the
cost of any insurance on the Premises or the Project is caused by Tenant's use
or occupation of the Premises, or because Tenant vacates the Premises, then
Tenant shall pay the amount of such increase to Landlord. Any occupation of the
Premises by Tenant prior to the Commencement Date shall be subject to all
obligations of Tenant under this Lease.

          4.      BASE RENT. Tenant shall pay Base Rent in the amount set forth
above. The first month's Base Rent, the Security Deposit, and the first monthly
installment of estimated Operating Expenses (as hereafter defined) shall be due
and payable on the date hereof, and Tenant promises to pay to Landlord in
advance, without demand, deduction or set-off, monthly installments of Base Rent
on or before the first day of each calendar month succeeding the Commencement
Date. Payments of Base Rent for any fractional calendar month shall be prorated.
All payments required to be made by Tenant to Landlord hereunder shall be
payable at such address as Landlord may specify from time to time by written
notice delivered in accordance herewith. The obligation of Tenant to pay Base
Rent and other sums to Landlord and the obligations of Landlord under this Lease
are independent obligations. Tenant shall have no right at any time to abate,
reduce, or set-off any rent due hereunder except as may be expressly provided in
this Lease. If Tenant is delinquent in any monthly installment of Base Rent or
of estimated Operating Expenses for more than 10 days, Tenant shall pay to
Landlord on demand a late charge equal to 5 percent of such delinquent sum. The
provision for such late charge shall be in addition to all of Landlord's other
rights and remedies hereunder or at law and shall not be construed as a penalty.

          5.      SECURITY DEPOSIT. The Security Deposit shall be held by 
Landlord as security for the performance of Tenant's obligations under this 
Lease. The Security Deposit is not an advance rental deposit or measure of 
Landlord's damages in case of Tenant's default. Upon each occurrence of an Event
of Default (hereinafter defined), Landlord may use all or part of the Security 
Deposit to pay delinquent payments due under this Lease, and the cost of any 
damage, injury, expense or liability caused by such Event of Default, without 
prejudice to any other remedy provided herein or provided by law. Tenant shall 
pay Landlord on demand the amount that will restore the Security Deposit to its 
original amount. Landlord's obligation respecting the Security Deposit is that 
of a debtor, not a trustee; no interest shall accrue thereon. The Security 
Deposit shall be the property of Landlord, but shall be paid to Tenant when 
Tenant's obligations under this Lease have been completely fulfilled. Landlord 
shall be released from any obligation with respect to the Security Deposit upon 
transfer of this Lease and the Premises to a person or entity assuming 
Landlord's obligations under this Paragraph 5.

          6.      OPERATING EXPENSE PAYMENTS. During each month of the Lease
Term, on the same date that Base Rent is due, Tenant shall pay Landlord an 
amount equal to 1/12 of the annual cost, as estimated by Landlord from time to 
time, of Tenant's Proportionate Share (hereinafter defined) of Operating 
Expenses for the Project. Payments thereof for any fractional calendar month 
shall be prorated. The term "Operating Expenses" means all costs and expenses 
incurred by Landlord with respect to the ownership, maintenance, and operation 
of the Project including, but not limited to costs of: Taxes (hereinafter 
defined) and fees payable to tax consultants and attorneys for consultation and 
contesting taxes; insurance; utilities; maintenance; repair and replacement of 
all portions of the Project, including without limitation, paving and parking 
areas, roads, roofs, alleys, and driveways, mowing, landscaping, exterior 
painting, utility lines, heating, ventilation and air conditioning systems, 
lighting, electrical systems and other mechanical and building systems; amounts 
paid to contractors and subcontractors for work or services performed in 
connection with any of the foregoing; charges or assessments of any association 
to which the Project is subject; property management fees payable to a property 
manager, including any affiliate of Landlord, or if there is no property
manager, an administration fee of 15 percent of Operating Expenses payable to
Landlord; security services, if any; trash collection, sweeping and removal; and
additions or alterations made by Landlord to the Project of the Building in
order to comply with Legal Requirements (other than those expressly required
herein to be made by Tenant) or that are appropriate to the continued operation
of the Project or the Building as a bulk warehouse facility in the market area,
provided that the cost of additions or alterations that are required to be
capitalized for federal income tax purposes shall be amortized on a straight
line basis over a period equal to the lesser of the useful life thereof for
federal income tax purposes or 10 years. Operating Expenses do not include
costs, expenses, depreciation or amortization for capital repairs and capital
replacements required to be made by Landlord under Paragraph 10 of this Lease,
debt service under mortgages or ground rent under ground leases, costs of
restoration to the extent of net insurance proceeds received by Landlord with
respect thereto, leasing commissions, or the costs of renovating space for
tenants.

                  If Tenant's total payments of Operating Expenses for any year
are less than Tenant's Proportionate

                                      -2-
<PAGE>
 
Share of actual Operating Expenses for such year, then Tenant shall pay the 
difference to Landlord within 30 days after demand, and if more, then Landlord 
shall retain such excess and credit it against Tenant's next payments. For 
purposes of calculating Tenant's Proportionate Share of Operating Expenses, a 
year shall mean a calendar year except the first year, which shall begin on the 
Commencement Date, and the last year, which shall end on the expiration of this 
Lease.  With respect to Operating Expenses which Landlord allocates to the 
entire Project, Tenant's "Proportionate Share" shall be the percentage set forth
on the first page of this Lease as Tenant's Proportionate Share of the Project 
as reasonably adjusted by Landlord in the future for changes in the physical 
size of the Premises or the Project; and, with respect to Operating Expenses 
which Landlord allocates only to the Building, Tenant's "Proportionate Share" 
shall be the percentage set forth on the first page of this Lease as Tenant's 
Proportionate Share of the Building as reasonably adjusted by Landlord in the 
future for changes in the physical size of the Premises or the Building. 
Landlord may equitably increase Tenant's Proportionate Share for any item of 
expense or cost reimbursable by Tenant that relates to a repair, replacement, or
service that benefits only the Premises or only a portion of the Project or 
Building that includes the Premises or that varies with occupancy or use. The 
estimated Operating Expenses for the Premises set forth on the first page of 
this Lease are only estimates, and Landlord makes no guaranty or warranty that 
such estimates will be accurate.

     7.   UTILITIES. Tenant shall pay for all water, gas, electricity, heat, 
light, power, telephone, sewer, sprinkler services, refuse and trash collection,
and other utilities and services used on the Premises, all maintenance charges 
for utilities, and any storm sewer charges or other similar charges for 
utilities imposed by any governmental entity or utility provider, together with
 any taxes, penalties, surcharges or the like pertaining to Tenant's use of 
the Premises. Landlord may cause at Tenant's expense any utilities to be 
separately metered or charged directly to Tenant by the provider. Tenant shall 
pay its share of all charges for jointly metered utilities based upon 
consumption, as reasonably determined by Landlord. No interruption or failure of
utilities shall result in the termination of this Lease or the abatement of 
rent. Tenant agrees to limit use of water and sewer for normal restroom use.

     8.   TAXES. Landlord shall pay all taxes, assessments and governmental
charges (collectively referred to as "Taxes") that accrue against the Project
during the Lease Term, which shall be included as part of the Operating Expenses
charged to Tenant. Landlord may contest by appropriate legal proceedings the
amount, validity, or application of any Taxes or liens thereof. All capital
levies or other taxes assessed or imposed on Landlord upon the rents payable to
Landlord under this Lease and any franchise tax, any excise, transaction, sales
or privilege tax, assessment, levy or charge measured by or based, in whole or
in part, upon such rents from the Premises and/or the Project or any portion
thereof shall be paid by Tenant to Landlord monthly in estimated installments or
upon demand, at the option of Landlord, as additional rent; provided, however,
in no event shall Tenant be liable for any net income taxes imposed on Landlord
unless such net income taxes are in substitution for any Taxes payable
hereunder. If any such tax or excise is levied or assessed directly against
Tenant, then Tenant shall be responsible for and shall pay the same at such
times and in such manner as the taxing authority shall require. Tenant shall be
liable for all taxes levied or assessed against any personal property or
fixtures placed in the Premises, whether levied or assessed against Landlord or
Tenant.

     9.   INSURANCE. Landlord shall maintain all risk property insurance 
covering the full replacement cost of the Building. Landlord may, but is not 
obligated to, maintain such other insurance and additional coverages as it may 
deem necessary, including, but not limited to, commercial liability insurance 
and rent loss insurance. All such insurance shall be included as part of the 
Operating Expenses charged to Tenant. The Project or Building may be included in
a blanket policy (in which case the cost of such insurance allocable to the 
Project or Building will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums 
or additional insurance which Landlord reasonably deems necessary as a result of
Tenant's use of the Premises.

          Tenant, at its expense, shall maintain during the Lease Term: all risk
property insurance covering the full replacement cost of all property and 
improvements installed or placed in the Premises by Tenant at Tenant's expense; 
worker's compensation insurance with no less than the minimum limits required by
law; employer's liability insurance with such limits as required by law; and 
commercial liability insurance, with a minimum limit of $1,000,000 per 
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum 
combined general liability and umbrella limit of $2,000,000 (together with such 
additional umbrella coverage as Landlord may reasonably require) for property 
damage, personal injuries, or deaths of persons occurring in or about the 
Premises. Landlord may from time to time require reasonable increases in any 
such limits. The commercial liability policies shall name Landlord as an 
additional insured, insure on an occurrence and not a claims-made basis, be 
issued by insurance companies which are reasonably acceptable to Landlord, not 
be cancelable unless 30 days' prior written notice shall have been given to 
Landlord, contain a hostile fire endorsement and a contractual liability 
endorsement and provide primary coverage to Landlord (any policy issued to 
Landlord providing duplicate or similar coverage shall be deemed excess over 
Tenant's policies). Such policies or certificates thereof shall be delivered to 
Landlord by Tenant upon commencement of the Lease Term and upon each renewal of 
said insurance.
  
          The all risk property insurance obtained by Landlord and Tenant shall 
include a waiver of subrogation by the insurers and all rights based upon an 
assignment from its insured, against Landlord or Tenant, their officers, 
directors, employees, managers, agents, invitees, and contractors, in connection
with any loss or damage thereby insured against. Neither party nor its officers,
directors, employees, managers, agents, invitees or contractors shall be liable 
to the other for loss or damage caused by any risk coverable by all risk 
property insurance, and each party waives any claims against the other party, 
and its officers, directors, employees, managers, agents, invitees and 
contractors for such loss or damage. The failure of a party to insure its 
property shall not void this waiver. Landlord and its agents, employees and 
contractors shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained 
by Tenant or any person claiming through Tenant resulting from any accident or 
occurrence in or upon the Premises or the Project from any cause whatsoever, 
including without limitation, damage caused in whole or in part, directly or 
indirectly, by the negligence of Landlord or its agents, employees or 
contractors.

                                      -3-
<PAGE>
 
     10.  LANDLORD'S REPAIRS.  Landlord shall maintain, at its expense, the 
structural soundness of the roof, foundation, and exterior walls of the Building
in good repair, reasonable wear and tear and uninsured losses and damages caused
by Tenant, its agents and contractors excluded.  The term "walls" as used in 
this Paragraph 10 shall not include windows, glass or plate glass, doors or 
overhead doors, special store fronts, dock bumpers, dock plates or levelers, or 
office entries.  Tenant shall promptly give Landlord written notice of any 
repair required by Landlord pursuant to this Paragraph 10, after which Landlord 
shall have a reasonable opportunity to repair.

     11.  TENANT'S REPAIRS.  Landlord, at Tenant's expense as provided in 
Paragraph 6, shall maintain in good repair and condition the parking areas and 
other common areas of the Building, including, but not limited to driveways, 
alleys, landscape and grounds surrounding the Premises.  Subject to Landlord's 
obligation in Paragraph 10 and subject to Paragraphs 9 and 15, Tenant, at its 
expense, shall repair, replace and maintain in good condition all portions of 
the Premises and all areas, improvements and systems exclusively serving the 
Premises including, without limitation, dock and loading areas, truck doors, 
plumbing, water and sewer lines up to points of common connection, fire 
sprinklers and fire protection systems, entries, doors, ceilings and roof 
membrane, windows, interior walls, and the interior side of demising walls, and 
heating, ventilation and air conditioning systems.  Such repair and replacements
include capital expenditures and repairs whose benefit may extend beyond the 
Term.  Heating, ventilation and air conditioning systems and other mechanical 
and building systems serving the Premises shall be maintained at Tenant's 
expense pursuant to maintenance service contracts entered into by Tenant or, at 
Landlord's election, by Landlord.  The scope of services and contractors under 
such maintenance contracts shall be reasonably approved by Landlord.  Subject to
Paragraphs 9 and 15, Tenant shall bear the full cost of any repair or 
replacement to any part of the Building or Project that results from damage 
caused by Tenant, its agents, contractors, or invitees and any repair that 
benefits only the Premises.

     12.  TENANT-MADE ALTERATIONS AND TRADE FIXTURES.  Any alterations, 
additions, or improvements made by or on behalf of Tenant to the Premises 
("Tenant-Made Alterations") shall be subject to Landlord's prior written 
consent.  Tenant shall cause, at its expense, all Tenant-Made Alterations to 
comply with insurance requirements and with Legal Requirements and shall 
construct at its expense any alteration or modification required by Legal 
Requirements as a result of any Tenant-Made Alterations.  All Tenant-Made 
Alterations shall be constructed in a good and workmanlike manner by contractors
reasonably acceptable to Landlord and only good grades of materials shall be 
used.  All plans and specifications for any Tenant-Made Alterations shall be 
submitted to Landlord for its approval.  Landlord may monitor construction of 
the Tenant-Made Alterations.  Tenant shall reimburse Landlord for its costs in 
reviewing plans and specifications and in monitoring construction.  Landlord's 
right to review plans and specifications and to monitor construction shall be 
solely for its own benefit, and Landlord shall have no duty to see that such 
plans and specifications or construction comply with applicable laws, codes, 
rules and regulations.  Tenant shall provide Landlord with the identities and 
mailing addresses of all persons performing work or supplying materials, prior 
to beginning such construction, and Landlord may post on and about the Premises 
notices of non-responsibility pursuant to applicable law.  Tenant shall furnish 
security or make other arrangements satisfactory to Landlord to assure payment 
for the completion of all work free and clear of liens and shall provide 
certificates of insurance for worker's compensation and other coverage in 
amounts and from an insurance company satisfactory to Landlord protecting 
Landlord against liability for personal injury or property damage during 
construction.  Upon completion of any Tenant-Made Alterations, Tenant shall 
deliver to Landlord sworn statements setting forth the names of all contractors 
and subcontractors who did work on the Tenant-Made Alterations and final lien 
waivers from all such contractors and subcontractors.  Upon surrender of the 
Premises, all Tenant-Made Alterations and any leasehold improvements constructed
by Landlord or Tenant shall remain on the Premises as Landlord's property, 
except to the extent Landlord requires removal at Tenant's expense of any such 
items or Landlord and Tenant have otherwise agreed in writing in connection with
Landlord's consent to any Tenant-Made Alterations.  Tenant shall repair any 
damage caused by such removal.

          Tenant, at its own cost and expense and without Landlord's prior 
approval, may erect such shelves, bins, machinery and trade fixtures 
(collectively "Trade Fixtures") in the ordinary course of its business provided 
that such items do not alter the basic character of the Premises, do not 
overload or damage the Premises, and may be removed without injury to the 
Premises, and the construction, erection, and installation thereof complies with
all Legal Requirements and with Landlord's requirement set forth above.  Tenant 
shall remove its Trade Fixtures and shall repair any damage caused by such 
removal.

     13.  SIGNS.  Tenant shall not make any changes to the exterior of the 
Premises, install any exterior lights, decorations, balloons, flags, pennants, 
banners, or painting, or erect or install any signs, windows or door lettering, 
placards, decorations, or advertising media of any type which can be viewed from
the exterior of the Premises, without Landlord's prior written consent.  Upon 
surrender or vacation of the Premises, Tenant shall have removed all signs and 
repair, paint, and/or replace the building facia surface to which its signs are 
attached.  Tenant shall obtain all applicable governmental permits and approvals
for sign and exterior treatments. All signs, decorations, advertising media,
blinds, draperies and other window treatment or bars or other security
installations visible from outside the Premises shall be subject to Landlord's
approval and conform in all respects to Landlord's requirements.

     14.  PARKING.  Tenant shall be entitled to park in common with other 
tenants of the Project in those areas designated for nonreserved parking.  
Landlord may allocate parking spaces among Tenant and other tenants in the 
Project if Landlord determines that such parking facilities are becoming 
crowded.  Landlord shall not be responsible for enforcing Tenant's parking 
rights against any third parties.

                                      -4-
<PAGE>
 
     15.  RESTORATION. If at any time during the Lease Term the Premises are
damaged by a fire or other casualty, Landlord shall notify Tenant within 60 days
after such damage as to the amount of time Landlord reasonably estimates it will
take to restore the Premises. If the restoration time is estimated to exceed 6
months, either Landlord or Tenant may elect to terminate this Lease upon notice
to the other party given no later than 30 days after Landlord's notice. If
neither party elects to terminate this Lease or if Landlord estimates that
restoration will take 6 months or less, then, subject to receipt of sufficient
insurance proceeds, Landlord shall promptly restore the Premises excluding the
improvements installed by Tenant or by Landlord and paid by Tenant, subject to
delays arising from the collection of insurance proceeds or from Force Majeure
events. Tenant at Tenant's expense shall promptly perform, subject to delays
arising from the collection of insurance proceeds, or from Force Majeure events,
all repairs or restoration not required to be done by Landlord and shall
promptly re-enter the Premises and commence doing business in accordance with
this Lease. Notwithstanding the foregoing, either party may terminate this Lease
if the Premises are damaged during the last year of the Lease Term and Landlord
reasonably estimates that it will take more than one month to repair such
damage. Tenant shall pay to Landlord with respect to any damage to the Premises
the amount of the commercially reasonable deductible under Landlord's insurance
policy (currently $10,000) within 10 days after presentment of Landlord's
invoice. If the damage involves the premises of other tenants, Tenant shall pay
the portion of the deductible that the cost of the restoration of the Premises
bears to the total cost of restoration, as determined by Landlord. Base Rent and
Operating Expenses shall be abated for the period of repair and restoration in
the proportion which the area of the Premises, if any, which is not usable by
Tenant bears to the total area of the Premises. Such abatement shall be the sole
remedy of Tenant, and except as provided herein, Tenant waives any right to
terminate the Lease by reason of damage or casualty loss.

     16.  CONDEMNATION.  If any part of the Premises or the Project should be 
taken for any public or quasi-public use under governmental law, ordinance, or 
regulation, or by right of eminent domain, or by private purchase in lieu 
thereof (a "Taking" or "Taken"), and the Taking would prevent or materially 
interfere with Tenant's use of the Premises or in Landlord's judgment would 
materially interfere with or impair its ownership or operation of the Project, 
then upon written notice by Landlord this Lease shall terminate and Base Rent 
shall be apportioned as of said date.  If part of the Premises shall be Taken, 
and this Lease is not terminated as provided above, the Base Rent payable 
hereunder during the unexpired Lease Term shall be reduced to such extent as may
be fair and reasonable under the circumstances.  In the event of any such 
Taking, Landlord shall be entitled to receive the entire price or award from any
such Taking without any payment to Tenant, and Tenant hereby assigns to Landlord
Tenant's interest, if any, in such award.  Tenant shall have the right, to the 
extent same shall not diminish Landlord's award, to make a separate claim 
against the condemning authority (but not Landlord) for such compensation as may
separately awarded or recoverable by Tenant for moving expenses and damage to 
Tenant's Trade Fixtures, if a separate award for such items is made to Tenant.

     17.  ASSIGNMENT AND SUBLETTING.  Without Landlord's prior written consent, 
Tenant shall not assign this Lease or sublease the Premises or any part thereof 
or mortgage, pledge, or hypothecate its leasehold interest or grant any 
concession or license within the Premises and any attempt to do any of the 
foregoing shall be void and of no effect.  For purposes of this paragraph, a 
transfer of the ownership interests controlling Tenant shall be deemed an 
assignment of this Lease unless such ownership interests are publicly traded.  
Notwithstanding the above, Tenant may assign or sublet the Premises, or any part
thereof, to any entity controlling Tenant, controlled by Tenant or under common 
control with Tenant (a "Tenant Affiliate"), without the prior written consent of
Landlord.  Tenant shall reimburse Landlord for all of Landlord's reasonable 
out-of-pocket expenses in connection with any assignment or sublease.  Upon 
Landlord's receipt of Tenant's written notice of a desire to assign or sublet 
the Premises, or any part thereof (other than to a Tenant Affiliate), Landlord 
may, by giving written notice to Tenant within 30 days after receipt of Tenant's
notice, terminate this Lease with respect to the space described in Tenant's 
notice, as of the date specified in Tenant's notice for the commencement of 
the proposed assignment or sublease.

          Notwithstanding any assignment or subletting, Tenant and any guarantor
or surety of Tenant's obligations under this Lease shall at all times remain 
fully responsible and liable for the payment of the rent and for compliance with
all of Tenant's other obligations under this Lease (regardless of whether 
Landlord's approval has been obtained for any such assignments or sublettings). 
In the event that the rent due and payable by a sublessee or assignee (or a 
combination of the rental payable under such sublease or assignment plus any 
bonus or other consideration therefor or incident thereto) exceeds the rental 
payable under this Lease, then Tenant shall be bound and obligated to pay 
Landlord as additional rent hereunder all such excess rental and other excess 
consideration within 10 days following receipt thereof by Tenant.

          If this Lease be assigned or if the Premises be subleased (whether in 
whole or in part) or in the event of the mortgage, pledge, or hypothecation of 
Tenant's leasehold interest or grant of any concession or license within the  
Premises or if the Premises be occupied in whole or in part by anyone than 
Tenant, then upon a default by Tenant hereunder Landlord may collect rent from 
the assignee, sublessee, mortgage, pledgee, party to whom the leasehold interest
was hypothecated, concessionee or licensee or other occupant and, except to the 
extent set forth in the preceding paragraph, apply the amount collected to the 
next rent payable hereunder; and all such rentals collected by Tenant shall be 
held in trust for Landlord and immediately forwarded to Landlord.  No such 
transaction or collection of rent or application thereof by Landlord, however, 
shall be deemed a waiver of these provisions or a release of Tenant from the 
further performance by Tenant of its covenants, duties, or obligations 
hereunder.

     18.  INDEMNIFICATION.  Except for the negligence of Landlord, its agents, 
employees or contractors, and to the extent permitted by law, Tenant agrees to 
indemnify, defend and hold harmless Landlord, and Landlord's agents, employees 
and contractors, from and against any and all losses, liabilities, damages, 
costs and expenses (including attorneys' fees) resulting from claims by third 
parties for injuries to any person and damage to or theft or misappropriation or
loss of property occurring in or about the Project and arising from the use and
occupancy of the Premises or from any activity, work, or thing done, permitted
or suffered by Tenant in or about the Premises or due to any other act or
omission of Tenant, its subtenants, assignees, invitees, employees, contractors
and agents. The furnishing of insurance required hereunder shall not be deemed
to limit Tenant's obligations under of this Paragraph 18.

                                      -5-
<PAGE>
 
     19.       INSPECTION AND ACCESS. Landlord and its agents, representatives,
and contractors may enter the Premises at any reasonable time to inspect the
Premises and to make such repairs as may be required or permitted pursuant to
this Lease and for any other business purpose. Landlord and Landlord's
representatives may enter the Premises during business hours for the purpose of
showing the Premises to prospective purchasers and, during the last year of the
Lease Term, to prospective tenants. Landlord may erect a suitable sign on the
Premises stating the Premises are available to let or that the Project is
available for sale. Landlord may grant easements, make public dedications,
designate common areas and create restrictions on or about the Premises,
provided that no such easement, dedication, designation or restriction
materially interferes with Tenant's use or occupancy of the Premises. At
Landlord's request, Tenant shall execute such instruments as may be necessary
for such easements, dedications or restrictions.

     20.       QUIET ENJOYMENT.  If Tenant shall perform all of the covenants 
and agreements herein required to be performed by Tenant, Tenant shall, subject 
to the terms of this Lease, at all times during the Lease Term, have peaceful 
and quiet enjoyment of the Premises against any person claiming by, through or 
under Landlord.

     21.       SURRENDER.  Upon termination of the Lease Term or earlier 
termination of Tenant's right of possession, Tenant shall surrender the Premises
to Landlord in the same condition as received, broom clean, ordinary wear and 
tear and casualty loss and condemnation covered by Paragraphs 15 and 16 
excepted. Any Trade Fixtures, Tenant-Made Alterations and property not so 
removed by Tenant as permitted or required herein shall be deemed abandoned and 
may be stored, removed, and disposed of by Landlord at Tenant's expense, and 
Tenant waives all claims against Landlord for any damages resulting from
Landlord's retention and disposition of such property. All obligations of Tenant
hereunder not fully performed as of the termination of the Lease Term shall
survive the termination of the Lease Term, including without limitation,
indemnity obligations, payment obligations with respect to Operating Expenses
and obligations concerning the condition and repair of the Premises.

     22.       HOLDING OVER.  If Tenant retains possession of the Premises after
the termination of the Lease Term, unless otherwise agreed in writing, such
possession shall be subject to immediate termination by Landlord at any time,
and all of the other terms and provisions of this Lease (excluding any expansion
or renewal option or other similar right or option) shall be applicable during
such holdover period, except that Tenant shall pay Landlord from time to time,
upon demand, as Base Rent for the holdover period, an amount equal to 150% the
Base Rent in effect on the termination date, computed on a monthly basis for
each month or part thereof during such holding over. All other payments shall
continue under the terms of this Lease. In addition, Tenant shall be liable for
all damages incurred by Landlord as a result of such holding over. No holding
over by Tenant, whether with or without consent of Landlord, shall operate to
extend this Lease except as otherwise expressly provided, and this Paragraph 22
shall not be construed as consent for Tenant to retain possession of the
Premises.

     23.       EVENTS OF DEFAULT.  Each of the following events shall be an 
event of default ("Event of Default") by Tenant under this Lease:

               (i)    Tenant shall fail to pay any installment of Base Rent  or 
     any other payment required herein when due, and such failure shall continue
     for a period of 10 days from the date such payment was due.
     
               (ii)   Tenant or any guarantor or surety of Tenant's obligation 
     hereunder shall (A) make a general assignment for the benefit of creditors;
     (B) commence any case, proceeding or other action seeking to have an order
     for relief entered on its behalf as a debtor or to adjudicate it a bankrupt
     or insolvent, or seeking reorganization, arrangement, adjustment,
     liquidation, dissolution or composition of it or its debts or seeking
     appointment of a receiver, trustee, custodian or other similar official
     for it or for all or of any substantial part of its property (collectively
     a "proceeding for relief"); (C) become the subject of any proceeding for
     relief which is not dismissed within 60 days of its filing or entry; or (D)
     die or suffer a legal disability (if Tenant, guarantor or surety is a
     corporation, partnership or other entity).

               (iii)  Any insurance required to be maintained by Tenant pursuant
     to this Lease shall be cancelled or terminated or shall expire or shall be
     reduced or materially changed, except, in each case, as permitted in this
     Lease.

               (iv)   Tenant shall not occupy or shall vacate the Premises or 
     shall fail to continuously operate its business at the Premises for the
     permitted use set forth herein, whether or not Tenant is in monetary or
     other default under this Lease.

               (v)    Tenant shall attempt or there shall occur any assignment, 
     subleasing or other transfer of Tenant's interest in or with respect to
     this Lease except as otherwise permitted in this Lease.

               (vi)   Tenant shall fail to discharge any lien placed upon the 
     Premises in violation of this Lease within 30 days after any such lien or 
     encumbrance is filed against the Premises.

               (vii)  Tenant shall fail to comply with any provision of this 
     Lease other than those specifically referred to in this Paragraph 23, and
     except as otherwise expressly provided herein, such default shall continue
     for more than 30 days after landlord shall have given Tenant written notice
     of such default.


     24.       LANDLORD'S REMEDIES.  Upon each occurrence of any Event of
Default and so long as such Event of Default shall be continuing, Landlord may
at any time thereafter at its election: terminate this Lease or Tenant's right
of possession, (but Tenant shall remain liable as hereinafter provided) and/or
pursue any other remedies at law or in equity. Upon the termination of this
Lease or termination of Tenant's right of possession, it shall be lawful for
Landlord, without

                                      -6-

<PAGE>
 
formal demand or notice of any kind, to re-enter the Premises by summary 
dispossession proceedings or any other action or proceeding authorized by law 
and to remove Tenant and all persons and property therefrom.  If Landlord 
re-enters the Premises, Landlord shall have the right to keep in place and use,
or remove and store, all of the furniture, fixtures and equipment at the 
Premises.

           If Landlord terminates this Lease, Landlord may recover from Tenant
the sum of: all Base Rent and all other amounts accrued hereunder to the date of
such termination; the cost of reletting the whole or any part of the Premises,
including without limitation brokerage fees and/or leasing commissions incurred
by Landlord, and costs of removing and storing Tenant's or any other occupant's
property, repairing, altering, remodeling, or otherwise putting the Premises
into condition acceptable to a new tenant or tenants, and all reasonable
expenses incurred by Landlord in pursuing its remedies, including reasonable
attorneys' fees and court costs; and the excess of the then present value of the
Base Rent and other amounts payable by Tenant under this Lease as would
otherwise have been required to be paid by Tenant to Landlord during the period
following the termination of this Lease measured from the date of such
termination to the expiration date stated in this Lease, over the present value
of any net amounts which Tenant establishes Landlord can reasonably expect to
recover by reletting the Premises for such period, taking into consideration the
availability of acceptable tenants and other market conditions affecting
leasing. Such present values shall be calculated at a discount rate equal to the
90-day U.S. Treasury bill rate at the date of such termination.

           If Landlord terminates Tenant's right of possession (but not this 
Lease), Landlord may, but shall be under no obligation to, relet the Premises 
for the account of Tenant for such rent and upon such terms as shall be 
satisfactory to Landlord without thereby releasing Tenant from any liability 
hereunder and without demand or notice of any kind to Tenant.  For the purpose 
of such reletting Landlord is authorized to make any repairs, changes, 
alterations, or additions in or to the Premises as Landlord deems reasonably 
necessary or desirable.  If the Premises are not relet, then Tenant shall pay to
Landlord as damages a sum equal to the amount of the rental reserved in this 
Lease for such period or periods, plus the cost of recovering possession of the 
Premises (including attorney's fees and costs of suit), the unpaid Base Rent and
other amounts accrued hereunder at the time of repossession, and the costs 
incurred in any attempt by Landlord to relet the Premises.  If the Premises are 
relet and a sufficient sum shall not be realized from such reletting [after 
first deducting therefrom, for retention by Landlord, the unpaid Base Rent and 
other amounts accrued hereunder at the time of reletting, the cost of recovering
possession (including attorneys' fees and costs of suit), all of the costs and 
expense of repairs, changes, alterations, and additions, the expense of such 
reletting (including without limitation brokerage fees and leasing commissions) 
and the cost of collection of the rent accruing therefrom] to satisfy the rent 
provided for in this Lease to be paid, then Tenant shall immediately satisfy and
pay any such deficiency.  Any such payments due Landlord shall be made upon 
demand therefor from time to time and Tenant agrees that Landlord may file suit 
to recover any sums falling due from time to time.  Notwithstanding any such 
reletting without termination, Landlord may at any time thereafter elect in 
writing to terminate this Lease for such previous breach.

          Exercise by Landlord of any one or more remedies hereunder granted or 
otherwise available shall not be deemed to be an acceptance of surrender of the 
Premises and/or a termination of this Lease by Landlord, whether by agreement or
by operation of law, it being understood that such surrender and/or termination 
can be effected only by the written agreement of Landlord and Tenant. Any law, 
usage, or custom to the contrary notwithstanding, Landlord shall have the right 
at all times to enforce the provisions of this Lease in strict accordance with 
the terms hereof; and the failure of Landlord at any time to enforce its rights 
under this Lease strictly in accordance with same shall not be construed as 
having created a custom in any way or manner contrary to the specific terms, 
provisions, and covenants of this Lease or as having modified the same.  Tenant 
and Landlord further agree that forbearance or waiver by Landlord to enforce its
rights pursuant to this Lease or at law or in equity, shall not be a waiver of 
Landlord's right to enforce one or more of its rights in connection with any 
subsequent default.  A receipt by Landlord of rent or other payment with 
knowledge of the breach of any covenant hereof shall not be deemed a waiver of 
such breach, and no waiver by Landlord of any provision of this Lease shall be 
deemed to have been made unless expressed in writing and signed by Landlord.  To
the greatest extent permitted by law, Tenant waives the service of notice of 
Landlord's intention to re-enter as provided for in any statute, or to institute
legal proceedings to that end, and also waives all right of redemption in case 
Tenant shall be dispossessed by a judgment or by warrant of any court or judge. 
The terms "enter," "re-enter," "entry" or "re-entry," as used in this Lease, are
not restricted to their technical legal meanings.  Any reletting of the Premises
shall be on such terms and conditions as Landlord in its sole discretion may 
determine (including without limitation a term different than the remaining 
Lease Term, rental concessions, alterations and repair of the Premises, lease of
less than the entire Premises to any tenant and leasing any or all other 
portions of the Project before reletting the Premises).  Landlord shall not be 
liable, nor shall Tenant's obligations hereunder be diminished because of, 
Landlord's failure to relet the Premises or collect rent due in respect of such 
reletting.

     25.  TENANT'S REMEDIES/LIMITATION OF LIABILITY.  Landlord shall not be in 
default hereunder unless Landlord fails to perform any of its obligations 
hereunder within 30 days after written notice from Tenant specifying such 
failure (unless such performance will, due to the nature of the obligation, 
require a period of time in excess of 30 days, then after such period of time as
is reasonably necessary).  All obligations of Landlord hereunder shall be 
construed as covenants, not conditions; and, except as my be otherwise expressly
provided in this Lease, Tenant may not terminate this Lease for breach of 
Landlord's obligations hereunder.  All obligations of Landlord under this Lease 
will be binding upon Landlord only during the period of its ownership of the 
Premises and not thereafter.  The term "Landlord" in this Lease shall mean only 
the owner, for the time being of the Premises, and in the event of the transfer 
by such owner of its interest in the Premises, such owner shall thereupon be 
released and discharged from all obligations of Landlord thereafter accruing, 
but such obligations shall be binding during the Lease Term upon new owner for 
the duration of such owner's ownership.  Any liability of Landlord under this 
Lease shall be limited solely to its interest in the Project, and in no event 
shall any personal liability be asserted against Landlord in connection with 
this Lease nor shall any recourse be had to any other property or assets of 
Landlord.

                                      -7-
<PAGE>
 
     26. WAIVER Of JURY TRIAL. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY
JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS
LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

     27. SUBORDINATION. This Lease and Tenant's interest and rights hereunder
are and shall be subject and subordinate at all times to the lien of any first
mortgage, now existing or hereafter created on or against the Project or the
Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant agrees,
at the election of the holder of any such mortgage, to attorn to any such
holder. Tenant agrees upon demand to execute, acknowledge and deliver such
instruments, confirming such subordination and such instruments of attornment as
shall be requested by any such holder. Tenant hereby appoints Landlord attorney
in fact for Tenant irrevocably (such power of attorney being coupled with an
interest) to execute, acknowledge and deliver any such instrument and
instruments for and in the name of the Tenant and to cause any such instrument
to be recorded. Notwithstanding the foregoing, any such holder may at any time
subordinate its mortgage to this Lease, without Tenant's consent, by notice in
writing to Tenant, and thereupon this Lease shall be deemed prior to such
mortgage without regard to their respective dates of execution, delivery or
recording and in that event such holder shall have the same rights with respect
to this Lease as though this Lease had been executed prior to the execution,
delivery and recording of such mortgage and had been assigned to such holder.
The term "mortgage" whenever used in this Lease shall be deemed to include deeds
of trust, security assignments and any other encumbrances, and any reference to
the "holder" of a mortgage shall be deemed to include the beneficiary under a
deed of trust.

     28. MECHANIC'S LIENS. Tenant has no express or implied authority to create
or place any lien or encumbrance of any kind upon, or in any manner to bind the
interest of Landlord or Tenant in, the Premises or to charge the rentals payable
hereunder for any claim in favor of any person dealing with Tenant, including
those who may furnish materials or perform labor for any construction or
repairs. Tenant covenants and agrees that it will pay or cause to be paid all
sums legally due and payable by it on account of any labor performed or
materials furnished in connection with any work performed on the Premises and
that it will save and hold Landlord harmless from all loss, cost or expense
based on or arising out of asserted claims or liens against the leasehold estate
or against the interest of Landlord in the Premises or under this Lease. Tenant
shall give Landlord immediate written notice of the placing of any lien or
encumbrance against the Premises and cause such lien or encumbrance to be
discharged within 30 days of the filling or recording thereof; provided,
however, Tenant may contest such liens or encumbrances as long as such contest
prevents foreclosure of the lien or encumbrance and Tenant causes such lien or
encumbrance to be bonded or insured over in a manner satisfactory to Landlord
within such 30 day period.

     29. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time, within 10 days
after request of Landlord, to execute and deliver to Landlord, or Landlord's
designee, any estoppel certificate requested by Landlord, stating that this
Lease is in full force and effect, the date to which rent has been paid, that
Landlord is not in default hereunder (or specifying in detail the nature of
Landlord's default), the termination date of this Lease and such other matters
pertaining to this Lease as may be requested by Landlord. Tenants' obligation to
furnish each estoppel certificate in a timely fashion is a material inducement
for Landlord's execution of this Lease. No cure or grace period provided in this
Lease shall apply to Tenant's obligations to timely deliver an estoppel
certificate. Tenant hereby irrevocably appoints Landlord as its attorney in fact
to execute on its behalf and in its name any such estoppel certificate if Tenant
fails to execute and deliver the estoppel certificate within 10 days after
Landlord's written request thereof.

     30. ENVIRONMENTAL REQUIREMENTS. Except for Hazardous Material contained in
products used by Tenant in de minimis quantities for ordinary cleaning an office
purposes, Tenant shall not permit or cause any party to bring any Hazardous
Material upon the Premises or transport, store, use, generate, manufacture or
release any Hazardous Material in or about the Premises without Landlord's prior
written consent. Tenant, at its sole cost and expense, shall operate its
business in the Premises in strict compliance with all Environmental
Requirements and shall remediate in a manner satisfactory to Landlord any
Hazardous Materials released on or from the Project by Tenant, its agents,
employees, contractors, subtenants, or invitees. Tenant shall complete and
certify to disclosure statements as requested by Landlord from time to time
relating to Tenant's transportation, storage, use, generation, manufacture or
release of Hazardous Materials on the Premises. The term "Environmental
Requirements" means all applicable present and future statutes, regulations,
ordinances, rules, codes, judgments, orders or other similar enactments of any
governmental authority or agency regulating or relating to health, safety, or
environmental conditions on, under, or about the Premises or the environment,
including without limitation, the following: the Comprehensive Environmental
Response, Compensation and Liability Act; the Resource Conservation and Recovery
Act; and all state and local counterparts thereto, and any regulations or
policies promulgated or issued thereunder. The term "Hazardous Materials" means
and includes any substance, material, waste, pollutant, or contaminant listed or
defined as hazardous or toxic, under any Environmental Requirements, asbestos
and petroleum, including crude oil or any fraction thereof, natural gas liquids,
liquified natural gas, or synthetic gas usable for fuel (or mixtures of natural
gas and such synthetic gas). As defined in Environmental Requirements, Tenant is
and shall be deemed to be the "operator" of Tenant's "facility" and the "owner"
of all Hazardous Materials brought on the Premises by Tenant, its agents,
employees, contractors or invitees, and the wastes, by-products, or residues
generated, resulting, or produced therefrom.

          Tenant shall indemnify, defend, and hold Landlord harmless from and
against any and all losses (including, without limitation, diminution in value
of the Premises or the Project and loss of rental income from the Project),
claims, demands, actions, suits, damages (including, without limitation,
punitive damages), expenses (including, without limitation, remediation,
removal, repair, corrective action, or cleanup expenses), and costs (including,
without limitation, actual attorney's fees, consultant fees or expert fees and
including, without limitation, removal or management of any asbestos brought
into the property or disturbed in breach of the requirements of this Paragraph
30, regardless of

                                      -8-
<PAGE>
 
whether such removal or management is required by law) which are brought or
recoverable against, or suffered or incurred by Landlord as a result of any
release of Hazardous Materials for which Tenant is obligated to remediate as
provided above or any other breach of the requirements under this Paragraph 30
by Tenant, its agents, employees, contractors, subtenants, assignees or 
invitees, regardless of whether Tenant had knowledge of such noncompliance.  The
obligations of Tenant under this Paragraph 30 shall survive any termination of 
this Lease.

           Landlord shall have access to, and a right to perform inspections and
tests of, the Premises to determine Tenant's compliance with Environmental 
Requirements, its obligations under this Paragraph 30, or the environmental 
condition of the Premises.  Access shall be granted to Landlord upon Landlord's 
prior notice to Tenant and at such times so as to minimize, so far as may be 
reasonable under the circumstances, any disturbance to Tenant's operations. Such
inspections and tests shall be conducted at Landlord's expense, unless such
inspections or tests reveal that Tenant has not complied with any Environmental
Requirement, in which case Tenant shall reimburse Landlord for the reasonable
cost of such inspection and tests. Landlord's receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord holds
against Tenant.

     31.  RULES AND REGULATIONS. Tenant shall, at all times during the Lease
Term and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises and the Project. The current rules and regulations are
attached hereto. In the event of any conflict between said rules and regulations
and other provisions of this Lease, the other terms and provisions of this Lease
shall control. Landlord shall not have any liability or obligation for the
breach of any rules or regulations by other tenants in the Project.

     32.  SECURITY SERVICE.  Tenant acknowledges and agrees that, while 
Landlord may patrol the Project, Landlord is not providing any security services
with respect to the Premises and that Landlord shall not be liable to Tenant
for, and Tenant waives any claim against Landlord with respect to, any loss by
theft or any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.

     33.  FORCE MAJEURE.  Landlord shall not be held responsible for delays in 
the performance of its obligations hereunder when caused by strikes, lockouts, 
labor disputes, acts of God, inability to obtain labor or materials of 
reasonable substitutes therefor, governmental restrictions, governmental 
regulations, governmental controls, delay in issuance of permits, enemy or 
hostile governmental action, civil commotion, fire or other casualty, and other 
causes beyond the reasonable control of Landlord ("Force Majeure").

     34.  ENTIRE AGREEMENT.  This Lease constitutes the complete agreement of
Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties hereto.

     35.  SEVERABILITY.  If any clause or provision of this Lease is illegal, 
invalid or unenforceable under present or future laws, then and in that event, 
it is the intention of the parties hereto that the remainder of this Lease shall
not be affected thereby.  It is also the intention of the parties to this Lease 
that in lieu of each clause or provision of this Lease that is illegal, invalid 
or unenforceable, there be added, as a part of this Lease, a clause or provision
as similar in terms to such illegal, invalid or unenforceable clause or 
provision as may be possible and be legal, valid and enforceable.

     36.  BROKERS.  Tenant represents and warrants that it has dealt with no 
broker, agent or other person in connection with this transaction and that no 
broker, agent or other person brought about this transaction, other than the 
broker, if any, set forth on the first page of this Lease, and Tenant agrees 
to indemnify and hold Landlord harmless from and against any claims by any 
other broker, agent or other person claiming a commission or other form of 
compensation by virtue of having dealt with Tenant with regard to this leasing 
transaction.

     37.  MISCELLANEOUS. (a)  Any payments or charges due from Tenant to
Landlord hereunder shall be considered rent for all purposes of this Lease.

     (b)  If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, each shall be
jointly and severally liable for the obligations of Tenant.

     (c)  All notices required or permitted to be given under this Lease shall
be in writing and shall be sent by registered or certified mail, return receipt
requested, or by reputable national overnight courier service, postage prepaid,
or by hand delivery addressed to the parties at their addresses below, and with
a copy sent to Landlord at 14100 East 35th Place, Aurora, Colorado 80011.  
                           ---------------------------------------------
Either party may by notice given aforesaid change its address for all subsequent
notices.  Except where otherwise expressly provided to the contrary, notice 
shall be deemed given upon delivery.

     (d)  Except as otherwise expressly provided in this Lease or as otherwise 
required by law, Landlord retains the absolute right to withhold any consent or 
approval.

     (e)  At Landlord's request from time to time Tenant shall furnish Landlord 
with true and complete copies of its most recent annual and quarterly financial 
statements prepared by Tenant or Tenant's accountants and any other financial 
information or summaries that Tenant typically provides to its lenders or 
shareholders.

     (f)  Neither this Lease nor a memorandum of lease shall be filed by or on 
behalf of Tenant in any public record.  Landlord may prepare and file, and upon 
request by Landlord Tenant will execute, a memorandum of lease.


                                      -9-
<PAGE>
 
     (g)       The normal rule of construction to the effect that any 
ambiguities are to be resolved against the drafting party shall not be employed 
in the interpretation of this Lease or any exhibits or amendments hereto.

     (h)       The submission by Landlord to Tenant of this Lease shall have no
binding force or effect, shall not constitute an opinion for the leasing of the
Premises, nor confer any right or impose any obligations upon either party until
execution of this Lease by both parties.

     (i)       Words of any gender used in this Lease shall be held and 
construed to include any other gender, and words in the singular number shall be
held to include the plural, unless the context otherwise requires. The captions 
inserted in this Lease are for convenience only and in no way define, limit or 
otherwise describe the scope or intent of this Lease, or any provision hereof, 
or in any way affect the interpretation of this Lease. 

     (j)       Any amount not paid by Tenant within 10 days after its due date 
in accordance with the terms of this Lease shall bear interest from such due 
date until paid in full at the lesser of the highest rate permitted by 
applicable law or 15 percent per year. It is expressly the intent of Landlord 
and Tenant at all times to comply with applicable law governing the maximum rate
or amount of any interest payable on or in connection with this Lease. If 
applicable law is ever judicially interpreted so as to render usurious any 
interest called for under this Lease, or contracted for, charged, taken, 
reserved, or received with respect to this Lease, then it is Landlord's and 
Tenant's express intent that all excess amounts theretofore collected by 
Landlord be credited on the applicable obligation (or, if the obligation has 
been or would thereby be paid in full, refunded to Tenant), and the provision of
this Lease immediately shall be deemed reformed and the amounts thereafter 
collectible hereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit the 
recovery of the fullest amount otherwise called for hereunder.

     (k)       Construction and interpretation of this Lease shall be governed 
by the laws of the state in which the Project is located, excluding any 
principles of conflicts of laws.

     (l)       Time is of the essence as to the performance of Tenant's 
obligations under this Lease.

     (m)       All exhibits and addenda attached hereto are hereby incorporated
into this Lease and made a part hereof. In the event of any conflict between 
such exhibits or addenda and the terms of this Lease, such exhibits or addenda 
shall control.

     38.       LANDLORD'S LIEN/SECURITY INTEREST. Tenant hereby grants Landlord
a security interest, and this lease constitutes a security agreement, within the
meaning of and pursuant to the Uniform Commercial Code of the state in which the
Premises are situated as to all of Tenant's property situate in, or upon, or
used in connection with the Premises (except merchandise sold in the ordinary
course of business) as security for all of Tenant's obligations hereunder,
including, without limitation, the obligation to pay rent. Such personalty thus
encumbered includes specifically all trade and other fixtures for the purpose of
this Paragraph and inventory, equipment, contract rights, accounts receivable
and the proceeds thereof. In order to perfect such security interest, Tenant
shall execute such financing statements and file the same at Tenant's expense at
the state and county Uniform Commercial Code filing offices as often as Landlord
in its discretion shall require; and Tenant hereby irrevocably appoints Landlord
its agent for the purpose of executing and filing such financing statements on
Tenant's behalf as Landlord shall deem necessary.

     39.       LIMITATION OF LIABILITY OF TRUSTEES, SHAREHOLDERS, AND OFFICERS 
OF SECURITY CAPITAL INDUSTRIAL TRUST. Any obligation or liability whatsoever of
Security Capital Industrial Trust, a Maryland real estate investment trust,
which may arise at any time under this Lease or any obligation or liability
which may be incurred by it pursuant to any other instrument, transaction, or
undertaking contemplated hereby shall not be personally binding upon, nor shall
resort for the enforcement thereof be had to the property of, its trustees,
directors, shareholders, officers, employees or agents, regardless of whether
such obligation or liability is in the nature of contract, tort, or otherwise.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the 
day and year first above written.

<TABLE> 
<CAPTION> 

TENANT:                                                    LANDLORD:
<S>                                                        <C> 
Channell Commercial Corporation                            SCI NORTH CAROLINA PARTNERSHIP  
------------------------------------------------------     by: SCI North Carolina (1) Incorporated-General Partner

By: /s/ Dale Wooding                                        /s/  John W. Seiple
   ---------------------------------------------------     -------------------------------------------------------
Title: Vice President of Manufacturing                     by:   John W. Seiple
      ------------------------------------------------           Vice President
      
Address:                                                   Address:

                                                           780 Johnson Ferry Road
------------------------------------------------------     -------------------------------------------------------
                                                           Suite 350
------------------------------------------------------     -------------------------------------------------------
                                                           Atlanta, GA 30342
------------------------------------------------------     -------------------------------------------------------
</TABLE> 
                                     -10-
<PAGE>
 
                             RULES AND REGULATIONS
                             ---------------------


1.  The sidewalk, entries, and driveways of the Project shall not be obstructed
    by Tenant, or its agents, or used by them for any purpose other than ingress
    and egress to and from the Premises.

2.  Tenant shall not place any objects, including antennas, outdoor furniture,
    etc., in the parking areas, landscaped areas or other areas outside of its
    Premises, or on the roof of the Project.

3.  Except for seeing-eye dogs, no animals shall be allowed in the offices, 
    halls, or corridors in the Project.

4.  Tenant shall not disturb the occupants of the Project or adjoining buildings
    by the use of any radio or musical instrument or by the making of loud or
    improper noises.

5.  If Tenant desires telegraphic, telephonic or other electric connections in
    the Premises, Landlord or its agent will direct the electrician as to where
    and how the wires may be introduced; and, without such direction, no boring
    or cutting of wires will be permitted. Any such installation or connection
    shall be made at Tenant's expense.

6.  Tenant shall not install or operate any steam or gas engine or boiler, or
    other mechanical apparatus in the Premises, except as specifically approved
    in the Lease. The use of oil, gas or inflammable liquids for heating,
    lighting or any other purpose is expressly prohibited. Explosives or other
    articles deemed extra hazardous shall not be brought into the Project.

7.  Parking any type of recreational vehicles is specifically prohibited on or
    about the Project. Except for the overnight parking of operative vehicles,
    no vehicle of any type shall be stored in the parking areas at any time. In
    the event that a vehicle is disabled, it shall be removed within 48 hours.
    There shall be no "For Sale" or other advertising signs on or about any
    parked vehicle. All vehicles shall be parked in the designated parking areas
    in conformity with all signs and other markings. All parking will be open
    parking, and no reserved parking, numbering or lettering of individual
    spaces will be permitted except as specified by Landlord.

8.  Tenant shall maintain the Premises free from rodents, insects and other 
    pests.

9.  Landlord reserves the right to exclude or expel from the Project any person
    who, in the judgment of Landlord, is intoxicated or under the influence of
    liquor or drugs or who shall in any manner do any act in violation of the
    Rules and Regulations of the Project.

10. Tenant shall not cause any unnecessary labor by reason of Tenant's
    carelessness or indifference in the preservation of good order and
    cleanliness. Landlord shall not be responsible to Tenant for any loss of
    property on the Premises, however occurring, or for any damage done to the
    effects of Tenant by the janitors or any other employee or person.

11. Tenant shall give Landlord prompt notice of any defects in the water, lawn
    sprinkler, sewage, gas pipes, electrical lights and fixtures, heating
    apparatus, or any other service equipment affecting the Premises.

12. Tenant shall not permit storage outside the Premises, including without
    limitation, outside storage of trucks and other vehicles, or dumping of
    waste or refuse or permit any harmful materials to be placed in any drainage
    system or sanitary system in or about the Premises.

13. All moveable trash receptacles provided by the trash disposal firm for the
    Premises must be kept in the trash enclosure areas, if any, provided for
    that purpose.

14. No auction, public or private, will be permitted on the Premises or the 
    Project.

15. No awnings shall be placed over the windows in the Premises except with the 
    prior written consent of Landlord.

16. The Premises shall not be used for lodging, sleeping or cooking or for any
    immoral or illegal purposes or for any purpose other than that specified in
    the Lease. No gaming devices shall be operated in the Premises.

17. Tenant shall ascertain from Landlord the maximum amount of electrical
    current which can safely be used in the Premises, taking into account the
    capacity of the electrical wiring in the Project and the Premises and the
    needs of other tenants, and shall not use more than such safe capacity.
    Landlord's consent to the installation of electric equipment shall not
    relieve Tenant from the obligation not to use more electricity than such
    safe capacity.

18. Tenant assumes full responsibility for protecting the Premises from theft, 
    robbery and pilferage.

19. Tenant shall not install or operate on the Premises any machinery or
    mechanical devices of a nature not directly related to Tenant's ordinary use
    of the Premises and shall keep all such machinery free of vibration, noise
    and air waves which may be transmitted beyond the Premises.

                                     -11-
<PAGE>
 
                                 ADDENDUM ONE

                 ATTACHED TO AN A PART OF THE LEASE AGREEMENT
                       DATED SEPTEMBER 24 , 1997, BETWEEN
                                      ----
                        CHANNELL COMMERCIAL CORPORATION
                                     AND 
                    SCI NORTH CAROLINA LIMITED PARTNERSHIP




I.   MONTHLY BASE RENT

          Months  1-12:  $11,998.00 per month
          Months 13-24:  $12,365.00 per month
          Months 25-36:  $12,731.00 per month


II.  TERMINATION OF PRIOR LEASE

Landlord and Tenant agree that as to Tenant's 20,728 square foot lease (dated
December 3, 1996) at 10901-A South Commerce Boulevard, Charlotte, North Carolina
(the "Original Lease"), the obligations thereunder shall continue until the
Commencement Date of this Lease. Thereafter, provided that Tenant is not in
default of any of the terms and conditions of the Original Lease, effective on
the Commencement Date of this Lease, the Original Lease shall be deemed
terminated, provided further that upon vacating Tenant shall return the premises
at 10901-A South Commerce Boulevard in good working order and repair and in
clean condition including, but not limited to, all lights, dock doors, load
levelers (if any), plumbing fixtures, HVAC system, walls, ceilings, floors, and
interior doors. If a default under the Original Lease has occurred, then the
aforementioned termination shall be effective only upon such default being cured
by Tenant to Landlord's satisfaction. Additionally, notwithstanding anything to
the contrary herein contained, Tenant and Landlord acknowledge and agree that
each shall continue to be fully liable to the other to the extent set forth in
the Original Lease for any claim or liability accruing under said Original Lease
prior to such termination.


III. LANDLORD IMPROVEMENTS

Prior to the Commencement Date, Landlord, at its expense, shall put the Premises
in good working order (including office HVAC systems, gas fired unit heaters,
dock doors, load levelers, if any, plumbing fixtures, office and warehouse
lighting, and ceiling tiles) and clean condition, including providing new paint
and flooring throughout office areas. Subject to applicable ordinances and
building codes governing Tenant's right to occupy or perform in the Premises and
subject to the provisions of Paragraph 12 of the Lease, Tenant shall be allowed
to set up its office and warehouse operations and install its tenant
improvements, machinery, equipment, fixtures, or other property on the Premises
during the final stages of completion of construction and prior to the
Commencement Date provided that Tenant does not thereby interfere with the
completion of construction, and provided further that Tenant does hereby agree
to assume all risk of loss or damage to such machinery, equipment, fixtures, and
other personal property and to indemnify, defend, and hold Landlord harmless
from any loss or damage to such property, and all liability, loss, or damage
arising from any injury to the Project or the property of Landlord, its 
contractors, subcontractors, or materialmen, and any death or personal injury to
any person or persons arising out of such installations or early occupancy.
Tenant agrees to promptly pay for and/or reimburse Landlord for any utility
costs incurred at the Premises as a result of or in connection with such early
occupancy, if any.

<PAGE>
 
                                 ADDENDUM TWO

                 ATTACHED TO AND A PART OF THE LEASE AGREEMENT
                       DATED SEPTEMBER 24, 1997, BETWEEN

                        CHANNELL COMMERCIAL CORPORATION
                                      AND
                    SCI NORTH CAROLINA LIMITED PARTNERSHIP




I.  ADDITIONAL TENANT REMEDIES

Notwithstanding the provisions of Paragraph 25 hereof, if after 30 days from 
Landlord's receipt of proper written notice from Tenant of a Landlord repair, 
which is in fact required under the terms hereof, Landlord has not commenced 
such repair, then Tenant shall have the right to make such repair after giving 
Landlord five (5) days prior written notice of its intent to make such repair 
and Landlord's continued failure after receipt of said five (5) day notice to 
commence such repairs.  Landlord hereby agrees to reimburse Tenant for the 
reasonable out of pocket costs of such repairs within thirty (30) days after 
submission by Tenant to Landlord of an invoice therefore, accompanied by 
reasonable supporting documentation for the costs so incurred.



<PAGE>
 
           C O M M E R C E   P A R K  -  B U I L D I N G   N O .  6
          10701 South Commerce Boulevard, Charlotte, North Carolina




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                       10701-L South Commerce Boulevard






                           [FLOOR PLAN APPEARS HERE]







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                                   EXHIBIT A